OIG Permits 6 Fire Departments to Follow Neighboring Departments’ Billing Practices

On August 14, 2018 the Office of Inspector General (OIG) posted Advisory Opinion No. 18-08, allowing six government-operated fire departments to enter into a mutual aid agreement and to bill for services according to the billing practices in the jurisdiction where the services are rendered.  In other words, the OIG said these Fire Departments could follow the billing practices of a neighboring Department when providing mutual aid, even if the those billing practices were different than their own. 

Quick Background

Six Fire Departments from the same county proposed a mutual aid agreement where they would provide unscheduled, backup emergency ambulance services in adjoining Fire Departments’ jurisdictions when neighboring Fire Departments needed reinforcement.  All of the Fire Departments bill patients’ insurers, including Federal health care programs (such as Medicare and Medicaid) when furnishing emergency ambulance services to insured patients. All six departments also charge “ambulance user fees” to patients who are not covered by Federal health care programs.  Here's where they differ:

• Four of the Fire Departments bill both residents and nonresidents for cost-sharing amounts (deductibles, copayments) for the emergency ambulance services they provide in their respective jurisdictions. 
• Two of the Fire Departments bill only nonresidents for such cost-sharing amounts. Those two Departments treat revenue from local taxes as payment in full for any cost-sharing amounts their respective residents may owe.  The OIG has permitted these types of cost-sharing waivers in past Advisory Opinions, and has issued a Safe-Harbor for Government Ambulance Services regarding the practice.   

The Proposed Arrangement

The Fire Departments proposed to bill patients according to the practices of the Fire Departments in the jurisdiction they rendered the backup services.   For example, if Fire Department 1 provided backup emergency ambulance services in Fire Department 5’s jurisdiction to a resident of that jurisdiction, Fire Department 1 would not attempt to collect the individual’s otherwise applicable cost-sharing amount for the services, even though Fire Department 1 would have attempted to collect the cost-sharing amount for those same services if it provided them within its own jurisdiction. Additionally, if the patient was not a Federal health care program beneficiary, then Fire Department 1 would bill the patient for the applicable ambulance user fee set forth in Fire Department 5’s fee schedule.

What the OIG Said

The OIG said although the proposed arrangement implicates the Federal anti-kickback statute (AKS) (because Departments would in some cases be waiving cost-sharing amounts for Federal health care program beneficiaries), the arrangement posed a “low risk of fraud and abuse under the [AKS].” Meaning, the OIG would permit the proposed arrangement and would not impose penalties under the AKS on the six Fire Departments.  The OIG gave a couple of reasons why, including the fact that the arrangement: (1) would not take into account the volume or value of Federal health care program referrals or other business generated among the Fire Departments; and (2) would be unlikely to increase utilization of ambulance services or costs since individuals within a particular Fire Department’s jurisdiction would be treated the same for billing purposes, regardless of which Fire Department provided emergency ambulance services.

Important Reminder: This Opinion applies only to the six Fire Departments that made the request from the OIG.  If you have questions about cost-sharing waivers, reciprocal billing practices, or other compliance matters, contact PWW.    

To find out more, join us for the abc360 Compliance Update, where we’ll break down what this opinion means and reveal potential changes the Government is considering regarding the AKS. Registration is now open for all four 2018 - 2019 locations.