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OIG Issues Advisory Opinion Re: Municipal Payment for Medical Transportation Services

October 15, 2014 | No Comments
Posted by Beth Christian

The OIG has issued an Advisory Opinion regarding a municipality’s use of tax revenues for payment of a stipend to a volunteer ambulance squad to cover the cost of co-payments and deductibles that would otherwise be incurred by residents, as well as the cost of transports provided to residents without insurance coverage.  In Advisory Opinion 14-09, the OIG concluded that the arrangement would not constitute grounds for the imposition of civil monetary penalties.  The OIG also concluded that while the arrangement could potentially violate the anti-kickback law if the requisite intent to induce or reward referrals were present, the OIG would not impose administrative sanctions in connection with the arrangement.  Under the arrangement reviewed by the OIG, the volunteer ambulance squad did not bill residents of the municipality, some of whom were Medicare and Medicaid beneficiaries.  The OIG relied on the earlier guidance it had issued within its Compliance Program Guidance for Ambulance Suppliers, which state in pertinent part that:

A city or other political subdivision of a state…may not require a contracting ambulance supplier to waive copayments for residents, but it may pay uncollected, out-of-pocket copayments on behalf of its residents.  Such payments may be made through lump sum or periodic payments, if the aggregate payments reasonably approximate the otherwise uncollected cost-sharing amounts.

The OIG found that because the municipality pays the ambulance supplier an annual stipend that the ambulance supplier has certified reasonably approximates out-of- pocket amounts for residents, the non-billing of residents for cost-sharing amounts did not constitute a routine waiver that implicates the anti-kickback statute or the civil monetary penalty law.


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