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On Dec. 21, the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) approved an ambulance-restocking arrangement that it admits could violate the anti-kickback statute from a technical standpoint.
The larger question for several health care attorneys who reviewed the OIG’s opinion is why the OIG is spending so much time answering requests for advisory opinions about similar ambulance-restocking arrangements.
"The logic behind the opinion seems pretty sound," says Dan Mulholland, a partner with Horty Springer in Pittsburgh. "I have always wondered why they were so concerned about ambulance restocking, because I think the potential for mischief is fairly low."
Paul DeMuro, a partner in the San Francisco office of Latham and Watkins, explains that ever since the OIG took the position several years ago, certain ambulance-restocking arrangements implicate the anti-kickback statute; any hospital involved in such an arrangement felt it had to obtain a favorable advisory opinion.
"We have seen a plethora of advisory opinions in ambulance restocking," he says. "They believe it implicates the statute, so you have to get protection for it."
In this advisory, the hospital requesting the opinion had been restocking on an emergency basis only to volunteer companies that did not bill for their services. The hospital will continue to restock other ambulance services during emergency prehospital transports, but those ambulance services must pay fair-market value for the restocked items.
"The provision by a hospital of free supplies and medications to an ambulance provider fits squarely within the meaning of remuneration for the purposes of the anti-kickback statute," warns the OIG.
But the OIG goes on to say that the while an inference may be drawn that one purpose of the remuneration is to induce the ambulance provider to that particular hospital, it would not impose sanctions under the conditions presented.
"The fact that the hospital offers free restocking only offered to volunteer ambulance companies that do not bill for their services does not change our analysis," explains the OIG. That is because the hospital has a "legitimate interest" in containing the cost of the program and limiting the scope of the program to volunteer services, and that presents "a reasonable distinction" that is not related to the volume or value of referrals, the OIG contends.
According to DeMuro, the OIG’s legal analysis included in the opinion is not markedly different from previous advisories. "Basically, what they have said is that the likelihood of this increasing costs to the Medicare program or influencing referrals is not great," he concludes.