In response to an ambulance supplier's proposal to
routinely waive cost-sharing amounts for the provision of emergency
ambulance services, the Department of Health and Human Services
Office of the Inspector General (OIG) issued an advisory opinion on September 11, 2012,
stating that the arrangement could potentially violate the
anti-kickback statute and that the OIG could potentially impose
Under the proposed agreements, the ambulance supplier would
provide services for a number of municipalities on a part-time,
scheduled basis, at times when volunteer first aid squads that
routinely provide ambulance services are unavailable. The ambulance
supplier would charge insurance providers, including Medicare, for
such services, but would waive any copayments or cost-sharing
obligations owed by individual residents. While the municipalities
require these routine waivers, they will not cover the costs of the
cost-sharing fees on behalf of their residents. The OIG maintains
that failure on the part of the municipalities to make the
copayments or to permit the ambulance supplier to bill residents
for the copayments implicates the anti-kickback statute.
The OIG is quick to point out that such routine waivers of
cost-sharing or "insurance only billing" has long been a
concern because of the risk that "[s]uch waivers may
constitute prohibited remuneration to induce referrals." The
opinion references a 1994 Special Fraud Alert, in which the OIG
explains that the only permissible exception to the prohibition
against waiving copayments is in consideration of an
individual's financial hardship. Such waivers must be
assessed on an individual basis and providers must not use them
Of note, the OIG distinguishes its conclusion in this opinion
from a 1999 advisory opinion in which the OIG stated
it would not impose sanctions against an ambulance service
providing backup (as opposed to part-time) emergency ambulance
services when the volunteer first aid squad was unavailable to
respond to an emergency. The OIG notes that in the 1999 fact
scenario, the volunteer first aid squad was, at all times, the
primary supplier of emergency ambulance services, and the backup
ambulance supplier only provided its services in isolated and
unanticipated circumstances. In contrast, under this proposed
agreement, the ambulance supplier would provide its services in a
scheduled and predictable manner, creating a risk that its waiver
of cost-sharing obligations was an inducement for future
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