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Here’s a hint if you want your deals to pass anti-kickback muster with OIG: Make sure that whatever you’re proposing improves patient care — and gives no single provider an advantage.
Those are the conclusions you can draw from OIG’s new advisory opinion (No. 98-13). The agency gave a green light to a program in which hospitals restocked ambulance supplies for free, even though regulators found it could violate the anti-kickback statute.
The opinion was requested by eight fire departments who have formed a local emergency services council. The council runs a program in which hospitals restock supplies consumed when ambulances deliver patients to their doors. The hospitals bill the cost of the supplies to the patients.
OIG concedes that such an arrangement could induce ambulance companies to refer patients to certain hospitals. Even though all local hospitals participate, some could do so out of fear of being left out, the agency notes.
Indeed, in an advisory opinion last year (No. 97-6), OIG concluded that a plan by a company owning two hospitals to restock municipal ambulances would be "highly suspect."
But in this case, OIG says that while restocking could technically be a kickback, it wouldn’t take action unless there was a specific intent to affect referrals. One reason is that is the program is not a unilateral arrangement for specific providers. It’s part of a countywide effort to improve emergency services.
This is the key that providers should keep in mind, says attorney John Cook, at Cook Goetz Rogers in Bloomfield Hills, MI. Because all hospitals are involved and all are providing similar supplies under a consistent program, no single hospital can get a competitive advantage by, say, providing free gas to ambulances while the others don’t, Cook adds.
This is important for any provider offering free goods or services. For example, hospitals offering the free use of their facilities for blood drives should consider doing it as part of a larger community-wide program, to avoid any suspicion that the freebies will induce referrals.
Indeed, Jerry Sill, general counsel for the Missouri Hospital Association in Jefferson City, says some hospitals in his state are opting to charge ambulance companies for supplies. Some providers may have the notion that they can bill without really making any attempt to collect. But Sill warns that this in turn raises the question of whether selling goods without any intention of collecting could be considered a kickback.