How to meet 7 criteria for safe harbor

The safe harbors for ambulance restocking proposed by the Office of the Inspector General (OIG) in Washington, DC, clarify existing regulations, according to Robert Suter, DO, MHA, FACEP, regional medical director of the North Texas region for Questcare Emergency Services in Dallas.

In late 1997, the OIG issued an advisory opinion stating that an ambulance restocking arrangement violated the anti-kickback statute, says Suter. The following year, the OIG issued three advisory opinions that differed significantly from the 1997 opinion, he notes. Those proposed the establishment of a safe harbor for ambulance restocking. The OIG said restocking serves a public interest by ensuring that ambulances are fully stocked with current medications, sanitary linens, and other supplies that are compatible with equipment used in local EDs, he explains.

On May 22, 2000, the OIG published a proposed rule that would establish those safe harbors, Suter reports. "Under the proposed rule, ambulance safe harbor restocking must meet the conditions of one of two categories." Those categories only pertain to emergency ambulance services, not routine ambulance transports, he emphasizes. They are:

• ambulance providers paying the hospital fair market value for the replenished drugs or supplies used for the transport of an emergency patient;

• arrangements made between the hospital and emergency provider in which the hospital contemporaneously restocks drugs and supplies used during the transport of an emergency patient.

Under the first scenario, commercially reasonable and appropriate payment arrangements must be made in advance, notes 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. Nonprofit receiving facilities can sell to a nonprofit ambulance provider at cost, he notes.

Some hospitals have "apothecary" arrangements for sales of certain medications and supplies to local physician offices and other health care delivery agencies, in compliance with state pharmaceutical laws, notes Augustine. "With this apothecary relationship, the hospital could sell supplies and medications to local emergency service providers," he says.

Follow 7 criteria to the letter

Suter says the second category contains seven criteria you must meet to qualify for a safe harbor:

1. Hospitals must restock on an equal basis for all ambulance providers that bring emergency patients to the receiving facility.

2. Restocking arrangements must be part of a comprehensive and coordinated effort to improve the EMS delivery system in the relevant service area. They must be open to all emergency ambulance providers and hospitals in the area and must be implemented with and monitored by a regional EMS council or equivalent.

3. Restocking arrangements must be in writing.

4. The hospital must not bill any federal health care program or beneficiary for the restocked drugs or supplies or write off the cost of the drugs or supplies as bad debt.

5. Ambulance providers may not bill any federal health care program or beneficiary separately for the replenished drugs or supplies.

6. The hospital and ambulance supplier must maintain records of the restocked drugs and supplies and make the records available to the secretary of the Department of Health and Human Services upon request.

7. The hospital and ambulance supplier must otherwise comply with all federal, state, and local laws regulating emergency medical care and the provision of drugs and medical supplies, including the laws relating to the handling of controlled substances.

To ensure compliance with the criteria, follow these steps:

If you don’t have a restocking program in place, work with a regional EMS organization to develop one. The agencies should form an oversight entity, commonly called a regional EMS council, with a written plan of organization and a written restocking program, Augustine advises. "Then a plan for restocking should be developed, placed in writing, and signed by all involved agencies," he says. "Ideally, all hospitals in a region will participate."

The EMS agency must be a member of the EMS delivery system in the area and must comply with the OIG’s criteria and other relevant laws, Augustine notes. "The hospital may want to create a file of signature forms which state these components and are signed by an appropriate representative of the EMS agency," he suggests.

Develop a coordinated record-keeping program for all items that are distributed to ambulance providers. Keep a list of agencies that have signed the restocking agreement, Augustine advises. "Also, maintain some record of EMS agencies that rarely come to that hospital to transport patients but are not part of the regional arrangement. This does happen at times and is not a huge issue for hospitals."

Consider a restocking form

Implement an exchange or restocking record, he suggests. "Many hospitals currently use a restocking form, which is completed by the EMS agency that transported the patient. EMS personnel complete the form, restock, and go back in service. The hospital uses the form to track drug distribution, inventories, costs, and shortages."

Larger hospitals may want to designate a supply technician who oversees the restocking during busy times, says Augustine. "The hospital will likely want to summarize the supplies used into regular reports, and keep either the reports or the stack of completed resupply forms on file," he explains.

The ambulance agency will need to maintain records of which hospitals resupplied which items, he says.


James Augustine, MD, FACEP, Premier Health Care Services, 8111 Timberlodge Trail, Dayton, OH 45458. Phone: (937) 435-1072, ext. 102. Fax: (937) 435-8626. E-mail: