Ambulance restocking could violate federal law, despite safe harbor
Follow rules closely to avoid violating federal anti-kickback laws
Do you give paramedics meal vouchers? Do you restock supplies for one local ambulance company but not another? Do you offer paramedics free educational services? You probably will be surprised to learn that those common ED practices could constitute a violation of federal anti-kickback laws, according to a proposed rule from the Office of the Inspector General (OIG) in Washington, DC. (See box, p. 98, for information on obtaining a copy of the May 22, 2000, rule.)
The primary concern raised by the OIG is that hospitals might inappropriately influence the destination of ambulances by offering "free" medications and supplies when other hospitals might not offer such items, says Douglas M. Wolfberg, Esq., an attorney with Page, Wolfberg, & Wirth, a national EMS, ambulance, and medical transportation law firm in Mechanicsburg, PA.
The OIG concluded that those perks might constitute "illegal remuneration," which is prohibited under the federal anti-kickback statute, explains Wolfberg. The OIG’s recently published proposed rule will establish a safe harbor for EDs that restock ambulances, he notes.
The safe harbor doesn’t guarantee you are in the clear, however, warns Robert Suter, DO, MHA, FACEP, regional medical director of the North Texas region for Questcare Emergency Services in Dallas. "You are still at risk for violating federal law," he says. "The fines are potentially unlimited, up to the amounts received by the hospital from Medicare."
The proposed rule gives EDs seven criteria to qualify for safe harbors for ambulance restocking, explains Michael Williams, president of the Abaris Group, a consulting firm in Walnut Creek, CA, specializing in emergency services. "But this doesn’t exonerate EDs. Rather, this provides a carefully proscribed template for you to follow," he says. "If followed precisely, it should provide protection." (See story on how to ensure compliance with the seven criteria for safe harbors established by the OIG, p. 99.)
Still, you might follow the seven criteria and be guilty of a kickback if the OIG concludes the restocking event was intended to induce a referral, Williams says. (See story on avoiding giveaways, p. 100.)
The restocking issue has opened many ED providers’ eyes to practices and behaviors that could be risky from a fraud and compliance standpoint, he emphasizes. "It pays to be alert and informed."
Experts: Don’t stop restocking
Although no EDs have been cited or fined for violations of the ambulance restocking rule yet, the threat of penalties and fines is real, warns Williams. "The practice of restocking ambulances by hospitals has been widespread and common practice. However, it is only recently that the OIG has begun to alert providers of this issue."
Under federal fraud statutes, hospitals that practice restocking are at great risk of a citation or fine and have been for many years, he stresses. "Remember, each restocking event is a potential violation."
Still, many ED management experts insist that ambulance restocking is in the best interest of patient care. "If an ambulance brings you patients, then gets another call and hasn’t made it back to the station yet to get supplies, what happens then?" asks Suter. "They can’t carry unlimited supplies on an ambulance."
Ambulances need to have their par levels of supplies, especially in the case of a community disaster with multicasualties, says Suter. "Not restocking because you are afraid of HCFA [Health Care Financing Administration] is not in your community’s best interest," he says. It’s true that never giving anything to EMS is the absolute safest thing to do, he says. "But that’s similar to saying the best way to not commit malpractice is to not see any patients. You need to make sure you are restocking in a legal way."
Here are ways to comply with the safe harbors established by the OIG for ambulance restocking:
• Address the issue at a system level. Unless you charge ambulance providers fair market value for restocked items, make sure that your restocking program is part of a coordinated EMS council program, says Wolfberg. (See sample agreement for ambulance restocking, inserted in this issue.)
Rather than putting the onus of ambulance restocking on individual hospitals or EDs, address decisions regarding restocking issues at a system level, urges Linda Honeycutt, EMT-P, EMS programs coordinator for Providence Hospital and Medical Centers in Novi, MI. All hospitals in a region should meet with the area’s EMS agencies to adopt a regional policy, she suggests.
Also, ED managers should work closely with legal counsel to implement an ambulance resupply program, Wolfberg recommends. The program should comply with the hospital’s legal obligations and address the significant community benefits from ambulance restocking arrangements, he says.
• Create a specific list of items to be restocked. You’ll need a paper trail of what was restocked and how it was paid for, says Williams. "You can’t restock ambulances by just taking items off the shelves without telling anyone," he emphasizes.
Adhere to a list of specific items that are allowed to be restocked, Honeycutt advises. "In our area, a list of exchangeable items was developed by ED representatives and EMS providers through the EMS medical control authority," she says. The only supplies on the exchange list are IV equipment and supplies, and pillows when a patient is wearing one as a splint, Honeycutt says. (See "Oakland County Medical Control Authority IV Ancillary Supply Exchange List," inserted in this issue.)
The group ensured that the ambulance services were not already being reimbursed for the listed items, says Honeycutt. "This standardized list, as well as drug boxes, are the only exchangeable items that are sanctioned. Consequently, hospitals are not perceived to be competing with one another for ambulance business." (See story on billing for restocked supplies, p. 101.)
• Use patient transportation protocols. Use patient transportation protocols to direct the EMS crews in choosing the patient’s destination facility, recommends Honeycutt. (See Oakland’s transportation procedure, inserted in this issue.)
Basically, her facility’s protocols state that unstable patients will be transported to the closest appropriate facility, explains Honeycutt. Stable patients will be transported to the facility of their choice. "If they have no preference, the patient then goes to the closest appropriate facility," she says.
• Develop a policy for restocking. According to Suter, your ED policy for ambulance restocking should clearly state the following:
— whether supplies are replaced;
— if that restocking includes drugs;
— what "high cost" supplies are included;
— which agencies are eligible;
— how staff should do charge capture or accounting. (See "Drug Box Exchange Program Standing Orders," inserted in this issue.)
• Be consistent with restocking. Don’t engage in a unilateral restocking arrangement with select ambulances, advises Wolfberg. "You should not be restocking for the purpose of outdoing other hospitals’ restocking program as a competitive tool for admissions."
Don’t discriminate between EMS agencies on any basis, warns Suter. "At one point, the draft guidelines made distinctions between public and private, profit and nonprofit, volunteer and paid services," he says. "This language has been dropped."
Above all, don’t replace supplies for your local 911 provider and not replace them for the regional private transport service, Suter advises. "Don’t play favorites," he says. "Enter into agreements with all or none to avoid the appearance of courting favor with agencies capable of referring patients to you and not to others."
Executive Summary
A proposed rule to create safe harbors for EDs that restock ambulances was published by the Office of the Inspector General, but EDs are still at risk for violations.
• Even common practices such as providing free food, waiving education tuition, and restocking ambulance supplies could violate federal anti-kickback laws.
• Violations of the anti-kickback statute place a hospital at risk of losing its Medicare status.
• The proposed rule gives EDs seven criteria to qualify for safe harbors for ambulance restocking.
Sources
• Linda Honeycutt, EMT-P, Providence Hospital and Medical Centers, 47601 Grand River Ave., Suite B-226, Novi, MI 48374. Phone: (248) 465-4764. Fax: (248) 465-4224. E-mail: [email protected].
• Robert Suter, DO, MHA, FACEP, Questcare, 101 E. Park Blvd., Suite 911, Plano, TX 75074. Phone: (972) 881-8353. Fax: (972) 422-2208. E-mail: [email protected].
• Mike Williams, The Abaris Group, 700 Ygnacio Valley Road, Suite 250, Walnut Creek, CA 94596. Phone: (888) EMS-0911. Fax: (925) 946-0911. Web: www.theabaris.com.
• Douglas M. Wolfberg, Esq., Page, Wolfberg, & Wirth, LLC, 5002 Lenker St., Suite 202, Mechanicsburg, PA 17050. Phone: (717) 763-8070, ext. 204. Fax: (717) 763-8027. E-mail: mailto:[email protected]. Web: www.pwwemslaw.com.
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