OIG Approves Municipality’s Plan to Bill Insurance and Waive Co-Pays for Treatment-in-Place Emergency Medical Services

The Department of Health and Human Services, Office of Inspector General (“OIG”) recently released a favorable advisory opinion, OIG Advisory Opinion No. 24-09 (the “Opinion”) to a municipal corporation (the “Requestor” or the “EMS Provider”) that provides emergency medical services (“EMS”) to county residents. In the Opinion, OIG analyzes the EMS Provider’s proposal to bill patients’ insurance plans (but waive patients’ cost-sharing amounts) when it provides EMS without an associated ambulance transport. The EMS Provider inquired whether the contemplated billing scheme (the “Proposed Billing Arrangement”) would constitute grounds for sanctions under the civil monetary penalty provisions at section 1128A(a)(5) and (7) of the Social Security Act (the “Act”), as those sections relate to the commission of acts described in section 1128B(b) of the Act (the “Federal anti-kickback statute” or “AKS”) or prohibition of inducements to beneficiaries (the “Beneficiary Inducements CMP”). The EMS Provider also sought confirmation that the Proposed Billing Arrangement would not expose it to sanctions under the exclusion authority at section 1128(b)(7) of the Act. OIG concluded that while the Proposed Billing Arrangement would generate prohibited remuneration if the requisite intent were present, OIG would not impose administrative sanctions.

The Advisory Opinion

The Opinion Requestor is the largest emergency ambulance supplier in its state and is the primary 911 response agency for its county. In the course of its services, the EMS Provider sometimes furnishes care to a patient at the emergency response scene but does not transport the patient by ambulance to a hospital or skilled nursing facility. Neither Medicare Part B nor the EMS Provider’s state Medicaid program covers this treatment-in-place (“TIP”) service, though some Medicare Advantage plans and some neighboring state Medicaid programs do. The EMS Provider historically has not charged for TIP.

Under the Proposed Billing Arrangement, the EMS Provider would begin to charge for TIP services. The charge would be based on the level of care provided to the patient, would not exceed amounts submitted for the same level of care furnished in connection with an ambulance transport, and would be imposed without regard to the public or private nature of the patient’s health insurance. Further, the EMS Provider would not bill patients for any cost-sharing amounts owed to the EMS Provider under the patient’s health insurance. The cost-sharing waiver would apply uniformly to all patients treated in place, and the EMS Provider would not later claim the waived cost-sharing amounts as a bad debt or otherwise shift the waiver cost to a federal health care program, other payors, or individuals.

OIG observed that the cost-sharing waivers would result in remuneration implicating both the anti-kickback statute and the prohibition on beneficiary inducements because the remuneration could induce a federal healthcare program beneficiary to seek the EMS Provider’s services, which would then be reimbursable by Medicare or a state health care program. OIG noted that there are statutory exceptions to what constitutes “remuneration” under the CMP and regulatory safe harbors shielding certain practices from sanction under the AKS. But an arrangement must fit squarely into the exception or safe harbor to be protected.

OIG determined that the Proposed Billing Arrangement would not fall squarely within any exception to the definition of “remuneration” for purposes of the Beneficiary Inducements CMP or any safe harbor to the AKS. The Proposed Billing Arrangement did not meet the CMP exception for waivers of beneficiary cost-sharing obligations because patients would receive the waiver without regard to their financial need. The Proposed Billing Arrangement also missed the AKS safe harbor because the EMS Provider’s TIP services are not reimbursable by Medicare Part B or the EMS Provider’s state Medicaid program, which is a requirement for the harbor’s protection.

Despite the inapplicability of any CMP exception or AKS safe harbor, OIG decided that the risk of fraud and abuse presented by the Proposed Billing Arrangement is sufficiently low for OIG to issue a favorable advisory opinion. It provided four reasons. First, the uniformity with which the EMS Provider would apply its cost-sharing waiver policy reduces the risk that the Proposed Billing Arrangement would be a means to favor certain patients. Additionally, the Proposed Billing Arrangement would be consistent with prior guidance issued regarding cost-sharing waivers provided by municipally owned EMS ambulance services. Second, in most instances, the Proposed Billing Arrangement would result in no costs to federal healthcare programs, as neither Medicare part B nor the EMS Provider’s state’s Medicaid program covered TIP services. Further, the TIP services may result in patients receiving quicker, more efficient, and more appropriate care. Third, even when reimbursable by a federal healthcare program, the TIP services could potentially lower costs for federal health care programs due to improved care quality and avoidance of unnecessary trips to hospital emergency departments. Finally, the Proposed Billing Arrangement would be unlikely to meaningfully affect a patient’s decision to use the EMS Provider’s services.

Analysis

OIG’s acceptance of this municipal EMS Provider’s plan to charge insurance for its TIP service, yet waive cost-sharing amounts to patients, reflects longstanding guidance given to ambulance suppliers regarding potential risks under the anti-kickback and beneficiary inducement statutes. OIG has found that a municipality requiring a contracted ambulance service provider to waive billing city residents for copayments or deductibles implicated the anti-kickback statute and could result in sanctions. (See, e.g., HHS OIG Adv. Op. 01-12 at *2).  But it recognizes that “insurance only” billing by municipalities that operate their own emergency ambulance services raises different questions, and there is an important difference between a municipally owned ambulance company voluntarily waiving copayments for its own residents and a municipality requiring a private company to bill “insurance only” as a condition of getting the municipality’s EMS business, including Medicare business. (Id.).

In its March 2003 Compliance Program Guidance for Ambulance Suppliers, referred to in this Advisory Opinion, OIG warned that an ambulance provider should not offer anything of value to cities or other EMS sponsors in order to secure an EMS contract. It noted that while a city or other state political subdivision could not require a contracting ambulance supplier to waive copayments for its residents, one that owns and operates its own ambulance service is permitted to waive cost-sharing amounts for its residents under a special CMS rule. (See Medicare Benefit Policy Manual, ch. 16. § 50.3.1 (providing that “a [state or local government] facility¹ which reduces or waives its charges for patients unable to pay, or charges patients only to the extent of their Medicare and other health insurance coverage, is not viewed as furnishing free services and may therefore receive program payment.”)).

Many EMS providers are facing rising costs and declining revenues, often necessitating securement of new payment streams. This is especially so where providers furnish costly services not reimbursable by federal health programs, such as TIP services. While the OIG recognizes in this Advisory Opinion that TIP services may result in patients receiving appropriate care more quickly and efficiently, which in turn may lower costs for federal health care programs overall, TIP services are currently not reimbursable by Medicare. During the COVID-19 public health emergency, CMS waived the Medicare reimbursement requirement that an ambulance service includes patient transport to a Medicare-covered destination (e.g., a hospital) when such transport did not occur because of community-wide EMS protocols in place due to the public health emergency. This TIP waiver has lapsed.

Nonetheless, other efforts are underway to garner Medicare reimbursement for TIP services. In 2001, CMS began a voluntary five-year payment model called “Emergency Triage, Treat, and Transport” (“ET3”), which provided greater flexibility to ambulance care teams to address emergency health care needs of Medicare beneficiaries following a 911 call. Under this model, CMS expanded the list of Medicare-reimbursable ambulance transport destinations and also reimbursed for treatment in place. The model allowed beneficiaries to access the most appropriate emergency services at the right time and place. As a result, the ET3 Model aimed to improve quality and lower costs by reducing avoidable transports to the ED and unnecessary hospitalizations following those transports. The program was ended early, but a March 2023 external fiscal analysis shows that the average net savings to Medicare per Medicare beneficiary was $537.53 when a patient was treated-in-place instead of taking an ambulance ride to the hospital emergency room, which is one of the most expensive places to receive health care.

Per the National Association of Emergency Medical Technicians, this data validates the economic value of EMS TIP payment models and the need for Congressional action to enable payment for TIP. Bipartisan legislation has been introduced in both the House and Senate that would require CMS to undertake a new five-year test of an emergency medical services treatment-in-place model under the Medicare program. Additionally, over a dozen states provide reimbursement for TIP services—now including New York state which, effective October 1, 2024, will reimburse EMS for providing treatment-in-place for patients with Medicaid coverage.

The reimbursement landscape for EMS TIP services is complex and evolving. The issues raised in this Advisory Opinion reinforce that EMS providers should work with experienced counsel when considering potential revenue streams to ensure that appropriate safeguards are in place to avoid penalties under the AKS or the Beneficiary Inducements CMP. For more information on OIG Advisory Opinion No. 24-09 or other issues addressed herein, please contact AGG Healthcare attorney Lisa Churvis.

[1] Notwithstanding the use of the term “facility,” CMS has confirmed that the identical provision in CMS Carrier Manual section 2309.4 (the predecessor to the above-cited manual) would apply to a state or municipal ambulance company that is a Medicare Part B supplier. HHS OIG Adv. Op. 03-09 at *7.