Don’t bill Medicare for restocked supplies

Under the May 22, 2000, proposed safe harbor rule published by the Office of the Inspector General, you won’t be able to bill Medicare for items you restock ambulances with, so there will be no way to recover those costs, notes Michael Williams, president of the Abaris Group, a consulting firm in Walnut Creek, CA, specializing in emergency services.

That’s bad news for ED managers, especially coupled with the implementation of ambulatory payment classifications (APCs) and other revenue-limiting trends, emphasizes Williams.

You can’t change beneficiaries

It appears that the hospital must absorb the cost of all medications, supplies, and linens provided to Medicare beneficiaries, says James Augustine, MD, FACEP, chief executive officer of Premier Health Care Services, a Dayton, OH-based physician management group that provides ED staffing and consulting. The hospital and EMS agency also can’t charge the beneficiary for the cost of any drugs or supplies, he explains.

Payments to ambulance agencies for emergency ambulance transport services typically include the cost of supplies used, which could include those restocked at a hospital, says Augustine. "But the hospital cannot bill for any of those medicines or supplies," he says.

That restriction can be a significant economic burden for the hospital, because many Medicare beneficiaries might require the use of medicines, linens, or supplies during their care and transportation, Augustine says. "The hospital will have to absorb these costs, with fixed reimbursements for admitted Medicare patients through DRGs and for other patients through APCs."

The hospital can bill non-Medicare patients, commercial third-party payers, and Medicaid for restocked supplies, medications, and linens, he says.

If there is any possibility that an EMS agency will charge a patient for supplies used in the field, you should have procedures to prevent billing the Health Care Financing Administration (HCFA) for those same supplies, warns Robert Suter, DO, MHA, FACEP, regional medical director of the North Texas region for Questcare Emergency Services in Dallas.

In addition, the hospital needs to have accounting procedures so if you are not billing for the supplies, you also are not writing the cost off as "bad debt," because that also is partially reimbursed in HCFA calculations, Suter notes.