[Federal Register Volume 67, Number 109 (Thursday, June 6, 2002)]
[Notices]
[Pages 39015-39026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14163]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Inspector General


Draft OIG Compliance Program Guidance for Ambulance Suppliers

AGENCY: Office of Inspector General (OIG), HHS.

ACTION: Notice and comment period.

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SUMMARY: This Federal Register notice seeks the comments of interested 
parties on draft compliance program guidance (CPG) developed by the 
Office of Inspector General (OIG) for the ambulance industry. Through 
this notice, the OIG is setting forth its general views on the value 
and fundamental principles of ambulance industry CPG, and the specific 
elements

[[Page 39016]]

that ambulance providers/suppliers should consider when developing a 
CPG initiative.

DATES: To ensure consideration, comments must be delivered to the 
address provided below by no later than 5 p.m. on July 22, 2002.

ADDRESSES: Please mail or deliver written comments to the following 
address: Office of Inspector General, Department of Health and Human 
Services, Attention: OIG-415-CPG, Room 5246, Cohen Building, 330 
Independence Avenue, SW., Washington, DC 20201.
    We do not accept comments by facsimile (FAX) transmission. In 
commenting, please refer to file code OIG-415-CPG. Comments received 
timely will be available for public inspection as they are received, 
generally beginning approximately 2 weeks after publication of a 
document, in Room 5541 of the Office of Inspector General at 330 
Independence Avenue, SW., Washington, DC 20201 on Monday through Friday 
of each week from 8 a.m. to 4:30 p.m.

FOR FURTHER INFORMATION CONTACT: Sonya Castro (202) 619-2078 or Joel 
Schaer (202) 619-1306, Office of Counsel to the Inspector General.

SUPPLEMENTARY INFORMATION:

Background

    The ambulance industry has experienced a number of instances of 
ambulance provider and supplier fraud and abuse and has expressed 
interest in increasing the awareness of the industry to assist in 
protecting against such conduct. In response to the industry's 
concerns, the OIG has, to date, written several Advisory Opinions on a 
variety of ambulance-related issues \1\ and has published final 
rulemaking concerning a safe harbor for ambulance restocking 
arrangements.\2\
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    \1\ See footnote 23 in section V.F. of the draft compliance 
program guidance.
    \2\ See 66 FR 62979; December 4, 2001.
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    In an effort to provide further guidance, the OIG published a 
Federal Register notice on August 17, 2000 (65 FR 50204) that solicited 
comments, recommendations and other suggestions from concerned parties 
and organizations on how best to develop compliance guidance for 
ambulance suppliers to reduce the potential for fraud and abuse. The 
OIG expects that final guidance will outline the most common and 
prevalent fraud and abuse risk areas for the ambulance industry, and 
provide direction on how to (1) address various risk areas; (2) prevent 
the occurrence of instances of fraud and abuse; and (3) develop 
corrective actions when those risks or instances of fraud and abuse are 
identified.

Public Input and Comment in Developing Final CPG

    In response to our earlier solicitation notice, the OIG received 37 
comments from various organizations and associations. In developing 
this notice for formal public comment, we have considered those 
specific comments as well as previous OIG issuances, such as OIG-issued 
Advisory Opinions, and have consulted with the Centers for Medicare and 
Medicaid Services and the Department of Justice.
    To ensure that all parties have an opportunity to provide input, we 
are publishing this CPG in draft form, and welcome specific comments 
from all interested parties. The OIG will consider all comments that 
are received within the above-cited time frame, incorporate any 
specific recommendations, as appropriate, and prepare a final version 
of the CPG thereafter for publication in the Federal Register.

Draft Compliance Program Guidance for Ambulance Suppliers (May 2002)

I. Introduction

    In keeping with the previous efforts of the Office of Inspector 
General (OIG) to provide guidance to various health care industry 
sectors on sound compliance program measures, the OIG is publishing 
this draft compliance program guidance (CPG) \1\ for the ambulance 
industry and other parties that are affected by the services provided 
by ambulance suppliers.\2\ This CPG is divided into five separate 
sections with an appendix:
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    \1\ In its solicitation of information and recommendations for 
developing guidance for the ambulance industry (published in the 
Federal Register on August 17, 2000 (65 FR 50204), the OIG indicated 
that it expected to refer to the ambulance compliance guidance as a 
``compliance risk guidance.'' After additional input and to remain 
consistent with the name and format of prior OIG compliance 
guidances, the OIG has decided to call this document a compliance 
program guidance.
    \2\ Ambulance providers are all Medicare-participating 
institutional providers that submit claims for Medicare ambulance 
services (hospitals, including critical access hospitals; skilled 
nursing facilities; and home health agencies). The term supplier 
means an entity that is other than a provider. For purposes of this 
document, we will refer to both ambulance suppliers and providers as 
ambulance suppliers.
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     Section I is a brief introduction about this CPG;
     Section II provides information about the basic elements 
of a compliance program for ambulance suppliers;
     Section III of this document discusses various fraud and 
abuse and compliance risks associated with ambulance services covered 
under the Medicare program;
     Section IV briefly summarizes compliance risks related to 
Medicaid coverage for transportation services; and
     Section V discusses various risks the ambulance industry 
faces under the anti-kickback statute. The Appendix provides relevant 
statutory and regulatory citations as well as brief discussions of 
additional potential risk areas to consider when developing a 
compliance program.
    The OIG is especially interested in the comments and suggestions 
the ambulance industry and affiliated providers may have regarding this 
draft CPG. The OIG recognizes that the ambulance industry is made up of 
entities of enormous variation: Some ambulance companies are large, 
many are small; some are for-profit, many are not-for-profit; some are 
affiliated with hospitals, many are independent; and some are operated 
by municipalities or counties, while others are commercially owned. 
Consequently, this guidance is not intended to be a one-size-fits-all 
guide on ambulance supplier compliance programs. Rather, like the 
previous OIG CPGs, this guidance is intended as a helpful tool for 
those entities that are considering establishing a voluntary compliance 
program, or for those that have already done so and are seeking to 
analyze, improve or expand existing programs.\3\ As with the OIG's 
previous guidance, the guidelines discussed in this CPG are not 
mandatory. Nor do they represent an all-inclusive document containing 
all the components of a compliance program. Other OIG outreach efforts, 
as well as other Federal agency efforts to promote compliance, can also 
be used in developing a compliance guidance.
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    \3\ To date, the OIG has issued compliance program guidance for 
the following nine industry sectors: (1) Hospitals; (2) clinical 
laboratories; (3) home health agencies; (4) durable medical 
equipment suppliers; (5) third-party medical billing companies; (6) 
hospices; (7) Medicare+Choice organizations offering coordinated 
care plans; (8) nursing facilities; and (9) individual and small 
group physician practices. The guidances listed here and referenced 
in this document are available on the OIG website at www.oig.hhs.gov 
in the Fraud Prevention and Detection section.
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A. Scope of the Compliance Program Guidance
    This guidance focuses on compliance measures related to services 
furnished primarily to the Medicare program, and to a limited extent, 
other Federal health care programs. (See, e.g., section IV for a brief 
discussion of Medicaid

[[Page 39017]]

ambulance coverage.) Issues related to private payor claims and 
services covered by private payors may also be covered by an ambulance 
supplier compliance program if the supplier so desires.
B. Basic Elements of a Compliance Program
    While information and guidance furnished in this CPG may form the 
basic framework for developing a compliance program, this guidance is 
not by itself a compliance program. The basic components that have 
become accepted as the building blocks of an effective compliance 
program are: (1) Developing compliance policies and procedures; (2) 
designating a compliance officer or contact person(s); (3) conducting 
appropriate training and education; (4) conducting internal monitoring 
and reviews; (5) responding appropriately to detected offenses and 
developing corrective actions; (6) developing open lines of 
communication; and (7) enforcing disciplinary standards through well-
publicized guidelines. The components of a compliance program are 
briefly discussed below with a more in-depth discussion in section II 
of this CPG.

1. Development of Compliance Policies and Procedures

    The ambulance supplier should develop and distribute written 
standards of conduct, as well as written policies and procedures, which 
promote the ambulance supplier's commitment to compliance and address 
specific areas of potential fraud or abuse. These written policies and 
procedures should be reviewed periodically (e.g., annually) and revised 
as appropriate to ensure they are current and relevant. (See section 
II.A.1 of this CPG for a more in-depth discussion of the development of 
policies and procedures.)

2. Designation of a Compliance Officer

    The ambulance supplier should designate a compliance officer and 
other appropriate bodies (e.g., a compliance committee) charged with 
the responsibility for operating and monitoring the organization's 
compliance program. The compliance officer should be a high-level 
individual in the organization who reports directly to upper 
management, such as the chief executive officer or Board of Directors. 
The OIG recognizes that an ambulance supplier may tailor the job 
functions of a compliance officer position by taking into account the 
size and structure of the organization, existing reporting lines, and 
other appropriate factors.

3. Education and Training Programs

    Compliance programs must include as a key element the regular 
training and education of employees and other appropriate individuals. 
Training content should be tailored appropriately and should be 
delivered in a way that will maximize the chances that the information 
will be understood by the target audience. This CPG discusses training 
in more detail in section II.A.2.

4. Internal Monitoring and Reviews

    Ambulance suppliers should develop and use appropriate monitoring 
methods to detect and identify problems, and to help reduce the future 
likelihood of problems. Claims and system reviews are a common internal 
monitoring method and are discussed in greater detail in section II.A.3 
of this CPG.

5. Responding Appropriately to Detected Misconduct

    Ambulance suppliers should develop policies and procedures directed 
at ensuring that the organization responds appropriately to detected 
offenses, including the initiation of appropriate corrective action. An 
organization's response to detected misconduct will vary based on the 
facts and circumstances of the offense. However, the response should 
always be appropriate to resolve and correct the situation in a timely 
manner. The organization's compliance officer, and legal counsel in 
some circumstances, should be involved in situations when serious 
misconduct is identified.

6. Developing Open Lines of Communication

    Ambulance suppliers should create and maintain a process, such as a 
hotline or other reporting system, to receive and process complaints 
and to ensure effective lines of communication between the compliance 
officer and all employees. Further, procedures should be adopted to 
protect the anonymity of complainants, where the complainant desires to 
remain anonymous, and to protect whistleblowers from retaliation.

7. Enforcing Disciplinary Standards Through Well-Publicized Guidelines

    Ambulance suppliers should develop policies and procedures to 
ensure that there are appropriate disciplinary mechanisms and standards 
that are applied in an appropriate and consistent manner. These 
policies and standards should address situations in which employees or 
contractors violate, whether intentionally or negligently, internal 
compliance policies, applicable statutes, regulations, or other Federal 
health care program requirements.\4\
    Developing and implementing a compliance program may require 
significant resources and time. An individual ambulance supplier is 
best situated to tailor compliance measures to its own organizational 
structure and financial capabilities. In addition, compliance programs 
should be reviewed periodically to account for changes in the health 
care industry, Federal health care statutes and regulations, relevant 
payment policies and procedures, and identified risks.
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    \4\ The term ``Federal health care programs'' is applied in this 
CPG as defined in 42 U.S.C. 1320a-7b(f), which includes any plan or 
program that provides health benefits, whether directly, through 
insurance, or otherwise, which is funded directly, in whole or in 
part, by the United States Government (i.e., through programs such 
as Medicare, Federal Employees' Compensation Act, Black Lung, or the 
Longshore and Harbor Workers' Compensation Act) and any State health 
plan (e.g., Medicaid, or a program receiving funds from block grants 
for social services or child health services). Also, for purposes of 
this CPG, the term ``Federal health care program requirements'' 
refers to statutes, regulations, rules, requirements, directives, 
and instructions governing the Medicare and other Federal health 
care programs.
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    Accordingly, the OIG has attempted to take into consideration the 
Centers for Medicare and Medicaid Services' (CMS) recent adoption of 
the fee schedule for payment of ambulance services. The CMS's ambulance 
fee schedule is the product of a negotiated rulemaking process and will 
replace the current retrospective, reasonable cost reimbursement system 
for providers and the reasonable charge system for suppliers of 
ambulance services.\5\ As appropriate, the OIG may update or supplement 
this CPG to address new identified risk areas following the 
implementation of the ambulance fee schedule.
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    \5\ The CMS's final ambulance fee schedule was published in the 
Federal Register on February 27, 2002 (67 FR 9100) and went into 
effect on April 1, 2002.
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II. Elements of a Compliance Program for Ambulance Suppliers

    Like other sectors of the health care industry, most ambulance 
suppliers are honest suppliers trying to deliver quality ambulance 
transportation services. However, like other health care industry 
sectors, the ambulance industry has seen its share of fraudulent and 
abusive practices. The OIG has reported and pursued a number of 
different fraudulent practices in the ambulance transport field 
involving, among others:
     Situations when individuals had other acceptable means of 
transportation;
     Medically unnecessary trips;

[[Page 39018]]

     Submission of excessive claims;
     Trips were claimed but not rendered;
     Misrepresentation of the transport destination to make it 
appear as if the transport was covered;
     False documentation;
     Billing for each patient transported in a group as if he/
she was transported separately; and
     Upcoding from basic life support to advanced life support 
services.
    To help reduce the incidence and prevalence of fraudulent or 
abusive conduct, an ambulance supplier should consider the following 
guidance and adapt the OIG's suggestions to conform with any unique 
ambulance supplier elements.
A. Evaluation and Risk Analysis
    It is prudent for ambulance suppliers conducting a risk analysis to 
begin by performing an evaluation of internal operations as well as 
factors that affect such operations (e.g., Federal health care program 
requirements). In many cases, such evaluation will result either in the 
creation and adoption of written policies and procedures or the 
revision thereof. The evaluation process may be simple and 
straightforward or it may be fairly complex and involved. For example, 
an evaluation of whether an ambulance supplier's existing written 
policies and procedures accurately reflect current Federal health care 
program requirements is straightforward. However, an evaluation of 
whether an ambulance supplier's actual practices conform to its 
policies and procedures may be more complex and require several 
analytical evaluations to determine whether system weaknesses are 
present. Even more complex is an evaluation of an ambulance supplier's 
practices when there are no pre-existing written policies and 
procedures and the subsequent analysis of whether the particular 
supplier's practices comply with applicable statutes, regulations, and 
other program requirements.
    The evaluation process should furnish ambulance suppliers with a 
snapshot of their strengths and weaknesses and thus assist providers in 
recognizing areas of potential risk. We suggest that ambulance 
suppliers evaluate a variety of practices and factors, including their 
policies and procedures, employee training and education, employee 
knowledge and understanding, claims submission process, coding and 
billing, accounts receivable management, documentation practices, 
management structure, employee turnover, contractual arrangements, 
changes in reimbursement policies, and payor expectations.

1. Policies and Procedures

    Because policies and procedures represent the written standard for 
daily operations, an ambulance supplier's policies and procedures 
should describe the normal operations of an ambulance supplier and the 
applicable rules and regulations. Further, written policies and 
procedures should go through a formal approval process within the 
organization and should be evaluated on a routine basis, and updated as 
needed, to reflect current ambulance practices (assuming these 
practices are appropriate and comport with the relevant statutes, 
regulations, and program requirements). In addition, ambulance 
suppliers should review policies and procedures to ensure that they are 
representative of actual practices. For example, an ambulance 
supplier's policy for reviewing ambulance call reports (ACR) should not 
state that it will review 100 percent of its ACRs, unless the ambulance 
supplier is capable of performing and enforcing such comprehensive 
reviews. If certain policies and practices become genuinely 
impractical, we recommend that such policies and procedures be updated 
to reflect alternative, acceptable practices that conform to legal and 
regulatory requirements.

2. Training and Education

    Ensuring that a supplier's employees and agents receive adequate 
education and training is essential to minimizing risk. Employees 
should clearly understand what is expected of them, and for what they 
will be held accountable. Suppliers should also document and track the 
training they provide to employees and pertinent personnel.
    An ambulance supplier should consider offering two types of 
compliance training: compliance program training and job-specific 
training. If an ambulance supplier is implementing a formal compliance 
program, employees should be trained on the elements of the program, 
the importance of the program to the organization, the purpose and 
goals of the program, what the program means for each individual, and 
the key individuals responsible for ensuring that the program is 
operating successfully. Compliance program education should be 
available to all employees, even those whose job functions are not 
directly related to billing or patient care.
    Ambulance suppliers should also train employees on specific areas 
with regard to their particular job positions and responsibilities, 
whether or not as part of a formal compliance plan. The intensity and 
the nature of the specific training will vary by employee type. 
Training employees on the job functions of other people in the 
organization may also be an effective training tool. Such appropriate 
cross-training improves employees' overall awareness of compliance and 
job functions, thereby increasing the likelihood that an individual 
employee will recognize non-compliance. Training should be provided on 
a periodic basis to keep employees current on ambulance supplier 
requirements, including, for example, the latest payor requirements. 
Ambulance suppliers should conduct or make available training for 
employees at least yearly and more often as needed.
    Generally, employees who attend interactive training better 
comprehend the material presented. Interactive training offers 
employees the chance to ask questions and receive feedback. When 
possible, ambulance suppliers should use ``real'' examples of 
compliance pitfalls provided by personnel with ``real life'' 
experience, such as emergency medical technicians and paramedics.
    The OIG is cognizant that offering interactive, live training often 
requires significant personnel and time commitments. As appropriate, 
ambulance suppliers may wish to consider seeking, developing, or using 
other innovative training methods. Computer or internet modules may be 
an effective means of training if employees have access to such 
technology and if a system is developed to allow employees to ask 
questions. The OIG cannot endorse any commercial training product--it 
is up to each ambulance supplier to determine if the training methods 
and products are effective and appropriate.
    Whatever form of training ambulance suppliers provide, the OIG also 
recommends that employees complete a post compliance training test or 
questionnaire to verify comprehension of the material presented. This 
will allow a supplier to assess the effectiveness and quality of its 
training materials and techniques. Additionally, training materials 
should be updated as appropriate and presented in a manner that is 
understandable by the average trainee. Finally, the OIG suggests that 
the employees' attendance at, and completion of, training be tracked 
and appropriate documentation maintained.

[[Page 39019]]

3. Assessment of Claims Submission Process

    Ambulance suppliers should conduct periodic claims reviews to 
verify that a claim ready for submission, or one that has been 
submitted and paid, contains the required, accurate, and truthful 
information required by the payor. An ambulance claims review should 
focus, at a minimum, on the documentation present in the ACR, the 
medical necessity of the transport as determined by payor requirements, 
the coding of the claim, the co-payment collection process, and the 
subsequent payor reimbursement. The claims reviews should be conducted 
by individuals with experience in coding and billing and they should be 
familiar with the different payors' coverage and reimbursement 
requirements for ambulance services. The reviewers should be 
independent and objective in their approach. Claims reviewers who 
analyze claims that they themselves prepared or supervised often lack 
sufficient independence to accurately evaluate the claims submissions 
process and the accuracy of individual claims. Additionally, the 
appearance of a lack of independence may also hinder the effectiveness 
of a claims review.
    Depending on the purpose and scope of a claims review, there are a 
variety of ways to conduct the review. The claims review may focus on 
particular areas of interest (i.e., coding accuracy) or it may include 
all aspects of the claims submission and payment process. The universe 
\6\ from which the claims are selected will comprise the area of focus 
for the review. Once the universe of claims has been identified, an 
acceptable number of claims should be randomly selected. Because the 
universe of claims will vary as will the variability of items in the 
universe, the OIG cannot specify a generally acceptable number of 
claims for purposes of a claims review. However, the number of claims 
sampled and reviewed should sufficiently ensure that the results are 
representative of the universe of claims from which the sample was 
pulled.
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    \6\ The term ``universe'' is referred to in this CPG to mean the 
generally accepted definition used when performing a statistical 
analysis. Specifically, the term ``universe'' means the total number 
of sampling units from which the sample was selected.
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    Ambulance suppliers should not only monitor identified errors, but 
also evaluate the source or cause of the errors. For example, an 
ambulance supplier may identify through a review a certain claims error 
rate. Upon further evaluation, the ambulance supplier may determine 
that the errors were a result of inadequate documentation. Further 
evaluation may reveal that the documentation deficiencies involve a 
limited number of individuals who work on a specific shift. It is the 
ambulance supplier's responsibility to identify such weaknesses and to 
promptly correct them. In this example, at a minimum, additional 
employee training would be required along with the repayment of any 
identified overpayment. Such a detailed and logical process of analysis 
will make claims reviews useful tools for identifying risks, correcting 
weaknesses, and preventing future occurrences of errors.
    Ambulance suppliers should also consider using a baseline audit to 
develop a benchmark from which to measure performance. This audit will 
establish a consistent methodology for selecting and examining records 
in future audits. It is helpful to chart and track the results of each 
of the audits to document progress. The results of each subsequent 
audit will indicate whether further actions are appropriate. Comparing 
audit results from different audits will generally yield useful results 
only when the audits analyze the same or similar information and when 
matching methodologies are used. For example, results of audits of a 
supplier's compliance with the physician certification statement 
requirements for non-emergency transports and a supplier's compliance 
with ambulance and vehicle licensure cannot be readily compared. The 
trending information may need to be broken out and separately analyzed 
to track compliance.
    As part of its compliance efforts, an ambulance supplier should 
document (i) how often audits or reviews are conducted and (ii) the 
information reviewed for each audit. In addition, the results of such 
reviews should be compared to previous findings to determine if a 
problem persists or if the supplier's corrective actions are working. 
The ambulance supplier should not only use internal benchmarks, but 
should utilize external information, if available, to establish 
benchmarks (e.g., data from other ambulance suppliers, associations, or 
from carriers). Additionally, risk areas may be identified from the 
results of the audits.
    If, as a result of the audit, a material deficiency is identified 
that could be a potential criminal, civil, or administrative violation, 
the ambulance supplier may disclose the matter to the OIG via the 
Provider Self-Disclosure Protocol.\7\ The Provider Self-Disclosure 
Protocol was designed to allow providers/suppliers to disclose 
voluntarily potential violations in their dealings with the Federal 
health care programs.
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    \7\ The OIG encourages that providers/suppliers police 
themselves, correct underlying problems, and work with the 
Government to resolve any problematic practices. The OIG's Provider 
Self-Disclosure Protocol, published in the Federal Register on 
October 30, 1998 (63 FR 58399), sets forth the steps, including a 
detailed audit methodology, that may be undertaken if suppliers wish 
to work openly and cooperatively with the OIG. The Provider Self-
Disclosure Protocol is open to all health care providers and other 
entities and is intended to facilitate the resolution of matters 
that, in the provider's reasonable assessment, may potentially 
violate Federal criminal, civil, or administrative laws. The 
Provider Self-Disclosure Protocol is not intended to resolve simple 
mistakes or overpayment problems. The OIG's Self-Disclosure Protocol 
can be found on the OIG web site at www.oig.hhs.gov.
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a. Pre-Billing Review of Claims

    As a general matter, ambulance suppliers should review claims on a 
pre-billing basis to identify errors before claims are submitted. If 
there is insufficient documentation to support the claim, the claim 
should not be submitted for payment until it is determined by a 
responsible person within the organization that the appropriate, 
adequate documentation exists to support the claim. Pre-billing reviews 
also allow suppliers to review the medical necessity of their claims 
before they are submitted for reimbursement. If, as a result of the 
pre-billing claims review process, a pattern of claim submission or 
coding errors is identified, the ambulance supplier should develop a 
responsive action plan (see section II.C), which would include a plan 
to ensure that overpayments are identified and repaid.

b. Paid Claims

    In addition to a pre-billing review, a review of paid claims may be 
necessary to determine error rates and quantify overpayments and/or 
underpayments. The post-payment review may help ambulance suppliers in 
identifying billing or coding software system problems. Any 
overpayments identified from the review should be promptly returned to 
the appropriate payor in accordance with payor policies.

c. Claims Denials

    Ambulance suppliers periodically should review their claims denials 
from payors to determine if denial patterns exist. If a pattern of 
claims denials is detected, the patterns should be evaluated to 
determine the cause and appropriate course of action. Employee 
education regarding proper

[[Page 39020]]

documentation, coding, or medical necessity may be appropriate. If an 
ambulance supplier believes its carrier or payor is not adequately 
explaining the basis for its denials, the ambulance supplier should 
seek clarification in writing.

4. System Reviews and Safeguards

    Periodic review and testing of a supplier's coding and billing 
systems are also essential to detect system weaknesses. One reliable 
systems review method is to analyze in detail the entire process by 
which a claim is generated, including how a transport is documented and 
by whom, how that information is entered into the supplier's automated 
system (if any), coding and medical necessity determination protocols, 
billing system processes and controls, including any edits or data 
entry limitations, and finally the claims generation, submission, and 
subsequent payment tracking processes. A weakness or deficiency in any 
part of the supplier's system can lead to improper claims, undetected 
overpayments, or failure to detect system defects.
    Each ambulance supplier should have computer or other system edits 
to ensure that minimum data requirements are met. For example, 
documentation of ambulance transports must now indicate the point of 
pick-up of the beneficiary. Under CMS's new fee schedule for ambulance 
services, each transport claim that does not have an originating zip 
code listed should be ``flagged'' by the system. Other edits should be 
established to detect improper claims, such as emergency codes used 
when the destination is something other than an emergency room. A 
systems review is especially important when documentation or billing 
requirements are modified or when an ambulance supplier changes its 
billing software or claims vendors. As appropriate, ambulance suppliers 
should communicate with their carrier when they are implementing 
significant changes to their system to alert the carrier to any 
unexpected delays, or increases or decreases in claims submissions.
    Ambulance suppliers have the responsibility of ensuring that their 
electronic or computer billing systems are not automatically inserting 
information that is not supported by the documentation of the medical 
or trip sheets (e.g., whether physician signature was obtained). 
Billing systems targeting optimum efficiency may be set with defaults 
to indicate, for example, that a physician's signature was obtained 
following an emergency room transport. Conversely, if information is 
automatically inserted onto a claim submitted for reimbursement, and 
that information is false, the ambulance supplier's claims will be 
false. If a required field on a claim form is missing information, the 
system should flag such a claim prior to its submission.

5. Sanctioned Suppliers

    Federal law prohibits Medicare payment for services furnished by an 
excluded individual, such as an excluded ambulance crew-member. 
Accordingly, with respect to its existing employees and contractors, 
ambulance suppliers should periodically (at least yearly) check the 
OIG's and General Services Administration's (GSA) web sites to ensure 
that they do not employ or contract with individuals or entities that 
have been recently convicted of a criminal offense related to health 
care or who are listed as debarred, excluded or otherwise ineligible 
for participation in Federal health care programs. Additionally, 
ambulance suppliers should query the OIG and GSA exclusion and 
debarments lists before they employ or contract with new employees and 
new contractors. The OIG and GSA websites are listed at www.oig.hhs.gov 
and www.arnet.gov/epls respectively, and contain specific instructions 
for searching the exclusion and debarment databases.\8\
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    \8\ Ambulance suppliers should read the OIG's September 1999 
Special Advisory Bulletin, entitled ``The Effect of Exclusion From 
Participation in the Federal Health Care Programs,'' published in 
the Federal Register on October 7,1999 (64 FR 58851) and is located 
at www.oig.hhs.gov/frdalrt, for more information regarding excluded 
individuals and entities and the effect of employing such 
individuals or entities.
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    B. Identification of Risks
    This ambulance CPG discusses many of the areas that the ambulance 
industry, the OIG, and CMS have identified as common risks for many 
ambulance suppliers. Apart from the risks identified in this CPG, 
ambulance suppliers of all types (e.g., small, large, rural, emergency, 
non-emergency) should identify if they have any unique risks attendant 
to their business relationships or processes. An ambulance supplier may 
have certain unique characteristics that will affect its risk areas. 
For example, small, rural not-for-profit ambulance suppliers may 
identify risk areas different from those of a large, for-profit 
ambulance chain that competes with multiple other ambulance suppliers. 
This CPG may not identify or discuss all risks that an ambulance 
supplier may itself identify. Moreover, the CPG may ascribe more or 
less risk to a particular practice area than an ambulance supplier 
would encounter based on its own internal findings and circumstances. 
Because there are many different types of risk areas, ambulance 
suppliers should prioritize their identified risks to ensure that the 
various areas are addressed appropriately.
    To stay abreast of risks affecting the ambulance and other health 
care industries, the OIG recommends that ambulance suppliers review OIG 
publications regarding ambulance services, including OIG Advisory 
Opinions, OIG Fraud Alerts, Office of Evaluations and Inspections (OEI) 
reports, and Office of Audit Services (OAS) reports, all located on the 
OIG's web site at www.oig.hhs.gov. A review of industry specific trade 
publications will also help ambulance suppliers stay current on the 
industry changes. Ambulance suppliers, like others in the health care 
industry, should devote the necessary resources to ensure compliance 
with relevant requirements. Effective internal controls will help to 
prevent or reduce instances of mistakes, errors, fraud and/or abuse.
C. Response to Identified Risks
    Following an ambulance supplier's process of evaluation and 
identification of its risks, a reasonable response should be developed 
to address appropriately identified risk areas. Determining how 
identified problems respond to corrective actions may require continual 
oversight. However, developing timely and appropriate responsive 
actions demonstrates to an ambulance supplier's employees and other 
interested parties (e.g., payors, the OIG, etc.) its level of 
commitment to address problems and concerns.
    Ambulance suppliers should develop protocols and reasonable 
timeframes for responding to identified problems. Ambulance suppliers 
can identify in advance and through a written protocol how certain 
situations will be addressed, including the internal reporting 
obligations and involvement, if appropriate, of legal counsel. Such 
response protocols should include a monitoring process by which the 
issue will be revisited on an as needed basis.

III. Specific Fraud and Abuse Risks Associated with Medicare Ambulance 
Coverage and Reimbursement Requirements

    Ambulance suppliers should, at a minimum, review and understand 
applicable ambulance coverage requirements. Ambulance suppliers that 
are not complying with applicable requirements should take appropriate 
prompt corrective action to follow the

[[Page 39021]]

standards set forth. The new Medicare ambulance fee schedule covers 
seven levels of service including Basic Life Support (BLS), Advanced 
Life Support, Level 1 (ALS1), Advanced Life Support, Level 2 (ALS2), 
Specialty Care Transport, Paramedic ALS Intercept, Fixed Wing Air 
Ambulance, and Rotary Wing Air Ambulance.\9\ Generally, Medicare Part B 
covers ambulance transports if applicable vehicle and staff 
requirements, medical necessity requirements, billing and reporting 
requirements, and origin and destination requirements are met. Medicare 
Part B will not pay for ambulance services if Part A has paid directly 
or indirectly for the same services (e.g., a transport from a skilled 
nursing facility to a hospital).
---------------------------------------------------------------------------

    \9\ The Negotiated Rulemaking Committee on the Medicare 
Ambulance Services Fee Schedule used the National EMS Education and 
Practice Blueprint as the basis for defining the levels of ambulance 
service.
---------------------------------------------------------------------------

A. Medical Necessity
    There have been a number of transportation fraud cases against the 
Medicare and Medicaid programs involving medically unnecessary 
transport. Consequently, medical necessity is a risk area that should 
be addressed in an ambulance supplier's compliance program. Medicare 
Part B covers ambulance services only if the beneficiary's medical 
condition contraindicates another means of transportation. The medical 
necessity requirements vary depending on the status of the ambulance 
transport (i.e., emergency transport vs. non-emergency transport). If 
the medical necessity requirement is met, Medicare Part B covers 
ambulance services when a beneficiary is transported:
     To a hospital, a critical access hospital (CAH), or a 
skilled nursing facility (SNF) from anywhere, including another acute 
care facility or SNF;
     To his or her home from a hospital, CAH, or SNF; or
     Round trip from a hospital, CAH, or SNF to an outside 
supplier to receive medically necessary therapeutic or diagnostic 
services.

1. Upcoding

    Notwithstanding local or state ordinance requirements regarding 
ambulance staffing and all-ALS mandated services,\10\ ambulance 
suppliers should use caution to bill, at the appropriate level, for 
services actually provided. The Federal Government has prosecuted a 
number of ambulance cases involving upcoding from BLS to ALS related to 
both emergency and non-emergency transports. In 1999, for example, an 
OIG investigation determined that an ambulance supplier was not only 
billing for ALS services when BLS services were provided, but the 
ambulance supplier did not employ an ALS certified individual to 
perform the necessary ALS services. This supplier paid civil penalties 
and signed a 5-year Corporate Integrity Agreement (CIA).
---------------------------------------------------------------------------

    \10\ Payment for ALS transports provided at the BLS level will 
be phased in over CMS's ambulance fee schedule transition period.
---------------------------------------------------------------------------

2. Non-Emergency Transports

    There have also been a number of Medicare fraud cases involving (i) 
non-emergency transports to non-covered destinations and (ii) 
transports that were not medically necessary. An OIG OEI report \11\ 
issued in December 1998 found that a high number of non-emergency 
transports for which Medicare claims were submitted were medically 
unnecessary as defined by Medicare's criteria.\12\ The report 
indicated, for example, that certain surveyed patients had been sitting 
unaided in a chair the day of and the day after the ambulance 
transport. Another patient was found sitting in a wheelchair when the 
ambulance arrived and refused assistance to get back to bed. These 
patients did not meet the Medicare coverage criteria for non-emergency 
transports and could have been transported by means other than by 
ambulance.
---------------------------------------------------------------------------

    \11\ OIG Report, OEI-09-95-00412 is available on the OIG's web 
site at www.oig.hhs.gov/oei.
    \12\ Medicare's ambulance fee schedule identifies non-emergency 
transport as appropriate if the beneficiary is bed confined and it 
is documented that the beneficiary's medical condition is such that 
other methods of transportation are contraindicated, or if his or 
her medical condition, regardless of bed-confinement, is such that 
transportation by ambulance is medically required. In determining 
whether a beneficiary is bed-confined, the following criterial must 
be met: (1) The beneficiary is unable to get up from bed without 
assistance; (2) the beneficiary is unable to ambulate; and (3) the 
beneficiary is unable to sit in a chair or wheelchair. 42 CFR 
410.40(d).
---------------------------------------------------------------------------

    In addition, an August 2001 report \13\ conducted by the OIG's OAS 
at the request of a Medicare Part B carrier, determined that an 
ambulance supplier received significant overpayments. For example, of 
the 100 trip sheets reviewed by the OIG, 99 of the trip sheets did not 
indicate whether the beneficiary was bed-confined.
---------------------------------------------------------------------------

    \13\ August 20, 2001, OIG Report, A-03-01-00001 is available on 
the OIG's web site at www.oig.hhs.gov/oas.
---------------------------------------------------------------------------

    There are instances when an ambulance supplier receives a call for 
assistance or transport of a patient who does not meet the medical 
necessity requirements. Due to various patient care and liability 
reasons, ambulance suppliers often transport patients who do not appear 
to meet Medicare's non-emergency medical necessity requirements. If an 
ambulance supplier determines that a transport is not covered by 
Medicare, the ambulance supplier should attempt to obtain a signed 
Advanced Beneficiary Notice (ABN) from the Medicare beneficiary. As 
part of the ABN process, the ambulance supplier should explain to the 
beneficiary that the service may not be covered by Medicare, in which 
case the patient will be responsible for payment of the transport and 
other non-covered services.
    Under no circumstances should ambulance suppliers intentionally 
mischaracterize the condition of the patient at the time of transport 
in an effort to claim inappropriately that the transport was medically 
necessary under Medicare coverage requirements. In instances where it 
is not clear whether the service will be covered by Medicare, the 
ambulance provider should nonetheless appropriately document the 
condition of the patient and maintain records of the transport.
Scheduled and Unscheduled Transports
    Because of the potential for abuse in the area of non-emergency 
transports, Medicare has criteria for the coverage of non-emergency 
scheduled and unscheduled ambulance transports. For example, physician 
certification statements (PCS) should be obtained by an ambulance 
supplier to verify that the transport was medically necessary.\14\ The 
PCSs should provide adequate information on the transport provided for 
each individual beneficiary and each PCS must be signed by an 
appropriate physician or other appropriate health care 
professional.\15\ Pre-signed and/or mass produced PCSs are not 
acceptable because they increase the opportunity for abuse.
---------------------------------------------------------------------------

    \14\ CMS (formerly the Health Care Financing Administration 
(HCFA)) Program Memorandum B-00-09 describes different options for 
ambulance suppliers having difficulty obtaining PCSs. See 42 CFR 
410.40(d)(3)(iii), (iv). For beneficiaries not under the direct care 
of a physician, whether they reside at home or in a facility, a PCS 
is not required. Id. Sec. 410.40(d)(3)(ii).
    \15\ 42 CFR 410.40(d).
---------------------------------------------------------------------------

    Medicare does not cover transports for routine doctor and dialysis 
appointments when beneficiaries do not meet the Medicare medical 
necessity requirements. For example, Medicare does not normally pay for 
non-emergency scheduled or unscheduled ambulance transportation to a 
physician's office from a personal residence or nursing facility when a

[[Page 39022]]

patient is able to ambulate. Similarly, ambulance services that are 
rendered for convenience or because other methods of more appropriate 
transportation are not available, do not meet Medicare's medical 
necessity requirements and claims for such services should not be 
submitted to Medicare for payment. For example, an ambulance provider 
was required to pay over $1 million dollars to the Federal Government 
and enter into a CIA with the OIG for billing for medically unnecessary 
ambulance trips and for non-covered ambulance trips to doctors' 
offices.
B. Documentation, Billing, and Reporting Risks
    Currently, the HCFA 1491 or 1500 forms are the approved forms for 
requesting Medicare payment for ambulance services. Inadequate or 
faulty documentation is a key risk area for ambulance suppliers. The 
compilation of correct and accurate documentation (whether electronic 
or hard copy) is generally the responsibility of all the ambulance 
personnel, including the dispatcher who receives a request for 
transportation, the personnel transporting the patient, and the coders 
and billers submitting claims for reimbursement. When documenting a 
service, ambulance personnel should not make assumptions or inferences 
to compensate for a lack of information or contradictory information on 
a trip sheet, ACR, or other medical source documents.\16\
---------------------------------------------------------------------------

    \16\ On December 28, 2000, the Department of Health and Human 
Services (HHS) released its final rule implementing the privacy 
provisions of the Health Insurance Portability and Accountability 
Act of 1996. The rule became effective in April 2001, and regulates 
access, use, and disclosure of personally identifiable health 
information by covered entities (health providers, plans, and 
clearinghouses). Guidance on an ambulance supplier's compliance with 
the HHS Privacy Regulations is beyond the scope of this CPG; 
however, it will be the responsibility of ambulance suppliers to 
comply. Most health plans and providers must comply with the rule by 
April 14, 2003. In the meantime, many organizations are considering 
and analyzing the privacy issues.
---------------------------------------------------------------------------

    To ensure that adequate and appropriate information is documented, 
an ambulance supplier should gather and record, at a minimum, the 
following:
     Dispatch instructions, if any;
     Reasons why transportation by other means was 
contraindicated;
     Reasons for selecting the level of service;
     Information on the bed-confined status of the individual;
     Who ordered the trip;
     Time spent on the trip;
     Dispatch, arrival at scene, and destination times;
     Mileage traveled;
     Pick up and destination codes;
     Appropriate zip codes; and
     Services provided, including drugs or supplies.

1. HCPCS and Diagnosis Code Selection

    The appropriate diagnosis and procedure codes (e.g., ICD-9, HCPCS/
CPT) should be used when submitting claims for reimbursement. The codes 
reported on the ambulance trip sheets or claim forms should be selected 
to describe most accurately the illness, injury, signs or symptoms 
associated with the patient and transport. Although ICD-9 codes are 
universally known as diagnosis codes, coders use them to describe signs 
and symptoms.\17\ Coders are taught that the patient's condition should 
be coded to the highest level of certainty and specificity. Diagnostic 
code information should not be based on past medical history or prior 
conditions, unless such information also specifically relates to the 
patient's condition at the time of transport.
---------------------------------------------------------------------------

    \17\ Only licensed physicians and certain other licensed 
practitioners can make determinations on a patient's diagnosis.
---------------------------------------------------------------------------

    False or uncertain diagnoses should never be added to the trip 
sheets or claims to justify reimbursement. If there is a question on 
the proper code to use when coding from the trip sheet or preparing a 
bill that cannot be appropriately resolved within the organization's 
proper chain of command, the ambulance supplier should seek guidance, 
in writing, from its local carrier. In addition to obtaining written 
guidance, ambulance suppliers should maintain documentation of 
communication with its carrier. If the ambulance supplier experiences 
difficulty in obtaining clarification, it should submit with the claim 
a narrative explaining the issue and the basis for the selected choice. 
Copies of any carrier correspondence should be appropriately maintained 
by the ambulance supplier.

2. Origin/Destination Requirements--Loaded Miles \18\
---------------------------------------------------------------------------

    \18\ Loaded miles refers to the number of miles that the patient 
is physically on board the emergency vehicle.
---------------------------------------------------------------------------

    Medicare only covers transports for the time that the patient is 
physically in the ambulance. Effective January 1, 2001, ambulance 
suppliers must furnish the ``point of pick-up'' zip code on each 
ambulance claim form.\19\ Under the new Medicare ambulance fee 
schedule, the point of pick-up will determine the mileage payment rate 
as well as whether a rural adjustment factor will be applied to the 
base rate. The ambulance supplier should document the address of the 
point of pick-up to verify that the zip code is accurate.
---------------------------------------------------------------------------

    \19\ HCFA Program Memorandum Transmittal AB-00-118, issued on 
November 30, 2000.
---------------------------------------------------------------------------

    The ambulance crew should accurately report the mileage traveled 
from the point of pick-up to the destination. Medicare covers ambulance 
transports to the nearest available treatment facility. If the nearest 
facility is not appropriate (e.g., because of traffic patterns or lack 
of equipment), the beneficiary should be taken to the next closest and 
appropriate facility. If a beneficiary requests a transport to a 
facility other than the nearest appropriate facility, the ambulance 
supplier should inform the patient that he or she may be responsible 
for payment of the additional mileage incurred.

3. Multiple Payors--Coordination of Benefits

    Ambulance suppliers should make every attempt to determine whether 
Medicare, Medicaid, or other Federal health care programs should be 
billed as the primary or as the secondary insurance. Claims for payment 
should not be submitted to more than one payor, except for purposes of 
coordinating benefits (e.g., Medicare as secondary payer). Section 
1862(b)(6) of the Social Security Act (42 U.S.C. 1395y(b)(6)) states 
that an entity that knowingly, willfully, and repeatedly fails to 
provide accurate information relating to the availability of other 
health benefit plans shall be subject to a civil monetary penalty 
(CMP).
    The OIG recognizes, particularly for ambulance suppliers that may 
have incomplete insurance information from a transported patient, that 
there are instances when the secondary payor is not known or cannot be 
determined before the ambulance transportation claim is submitted. In 
such situations, if it is determined that an inappropriate or duplicate 
payment is received, the payment should be refunded to the appropriate 
payor in a timely manner. Accordingly, ambulance suppliers should 
develop a system to track and quantify credit balances to return 
overpayments when they occur.
C. Medicare Part A Payment for ``Under Arrangements'' Services
    In certain instances, including transports for patients of a SNF, 
hospital or CAH, Medicare Part A covers ambulance transports. Ambulance 
suppliers that provide such inpatient transports ``under arrangements'' 
should not bill Medicare for these transports. Medicare reimburses the 
facility under

[[Page 39023]]

the Part A payment for the patient's entire Part A stay, including any 
pre-discharge ambulance transports. Thus, ambulance suppliers should 
not submit a claim to Medicare Part A or B for a service that was 
provided under arrangement with a Part A provider. In addition, all 
such arrangements should be carefully reviewed to ensure that there is 
no violation of the anti-kickback statute, as more fully described in 
section V of this CPG.

IV. Medicaid Ambulance Coverage

    The Medicaid program, a joint Federal and State health insurance 
program, provides funds for health care providers and suppliers that 
perform or deliver medically necessary services for eligible Medicaid 
recipients. Medicaid regulations, to which ambulance suppliers must 
adhere, vary depending on the applicable State regulations. However, 
two Federal regulations form the basis for all Medicaid reimbursement 
for transportation services and ensure a minimum level of coverage for 
transportation services. All States that receive Federal Medicaid funds 
are required to assure transportation for Medicaid recipients to and 
from medical appointments (42 CFR 431.53). Federal regulations further 
define medical transportation and describe costs that can be reimbursed 
with Medicaid funds (42 CFR 440.170(a)).
    In short, Medicaid often covers ambulance transports that are not 
typically covered by Medicare, such as coverage of transports in 
wheelchair vans, cabs and ambulettes. The State Medicaid Fraud Control 
Units and Federal law enforcement have pursued many fraud cases related 
to transportation services billed to Medicaid programs. Ambulance 
suppliers should review the Medicaid regulations governing their State 
or service territories to ensure that any billed services meet 
applicable Medicaid requirements.

V. Kickbacks and Inducements

A. What Is the Anti-Kickback Statute?
    The anti-kickback statute prohibits the purposeful payment of 
anything of value (i.e., remuneration) in order to induce or reward the 
generation of Federal health care program business, including Medicare 
and Medicaid business.\20\ (See section 1128B(b) of the Social Security 
Act (42 U.S.C. 1320a-7b).) It is a criminal prohibition that subjects 
violators to possible imprisonment and criminal fines. In addition, 
violations of the anti-kickback statute may give rise to CMPs and 
exclusion from the Federal health care programs. Both parties to an 
impermissible kickback transaction may be liable: the party offering or 
paying the kickback and the party soliciting or receiving it. The key 
inquiry under the statute is whether the parties intend to pay, or be 
paid, for referrals. An ambulance supplier should neither make nor 
accept payments intended to generate Federal health care program 
business.
---------------------------------------------------------------------------

    \20\ In addition to Medicare and Medicaid, the Federal health 
care programs include, but are not limited to, TRICARE, Veterans 
Health Care, Public Health Service programs, and the Indian Health 
Services. [20]:
---------------------------------------------------------------------------

B. What Are the ``Safe Harbors''?
    The Department has promulgated ``safe harbor'' regulations that 
describe payment practices that do not violate the anti-kickback 
statute, provided the payment practice fits squarely within a safe 
harbor. The safe harbor regulations can be found at 42 CFR 1001.952 and 
on the OIG web page at http://www.dhhs.gov/progorg/oig/ak/index.htm#. 
The safe harbor regulations are voluntary regulations. Thus, failure to 
comply with a safe harbor does not mean that an arrangement is illegal. 
Rather, arrangements that do not fit must be analyzed under the anti-
kickback statute on a case-by-case basis to determine if there is a 
violation. To minimize the risk of a violation, ambulance suppliers 
should structure arrangements to take advantage of the protection 
offered by the safe harbors. Among the safe harbors potentially 
relevant to ambulance suppliers are the safe harbors for space and 
equipment rentals, personal services and management contracts, 
discounts, employees, price reductions offered to health plans, shared 
risk arrangements, and ambulance restocking arrangements.\21\
---------------------------------------------------------------------------

    \21\ 42 CFR 1001.952 (b), (c), (d), (h), (i), (t), (u) and (v). 
[21]:
---------------------------------------------------------------------------

C. What Is ``Remuneration'' for Purposes of the Statute?
    Under the anti-kickback statute, ``remuneration'' means virtually 
anything of value. A prohibited kickback payment may be in paid cash or 
in-kind, directly or indirectly, covertly or overtly. Almost anything 
of value can be a kickback, including, but not limited to, money, 
goods, services, free rent, meals, travel, gifts, and investment 
interests. Paying for referrals need not be the only or primary purpose 
of a payment; as courts have found, if any one purpose of the payment 
is to induce or reward referrals, the statute is violated. (See section 
1128B of the Social Security Act (42 U.S.C. 1320a-7b).)
D. Who Is a Referral Source for Ambulance Suppliers?
    Any person or entity in a position to generate Federal health care 
program business for an ambulance supplier is a potential referral 
source. Typically, these sources include, but are not limited to, 
governmental ``9-1-1'' or comparable emergency medical dispatch 
systems, private dispatch systems, first responders, hospitals, nursing 
facilities, assisted living facilities, home health agencies, physician 
offices and patients.
E. For Whom Are Ambulance Suppliers Sources of Referrals?
    In some circumstances, ambulance suppliers furnishing ambulance 
services may be sources of referrals (i.e., patients) for hospitals, 
other receiving facilities, and second responders. Ambulance suppliers 
that furnish other types of transportation, such as ambulette or van 
transportation, may also be sources of referrals for other providers of 
Federal heath care program services, such as physician offices, 
diagnostic facilities, and certain senior centers. In general, 
ambulance suppliers, particularly those furnishing emergency services, 
have relatively limited abilities to generate business for other 
providers or inappropriately steer patients to certain emergency 
providers.
F. How Can Ambulance Suppliers Avoid Risk Under the Anti-Kickback 
Statute?
    Because of the gravity of the penalties under the anti-kickback 
statute, ambulance suppliers are strongly encouraged to consult with 
experienced legal counsel about any financial relationships with 
potential referral sources. In addition, ambulance suppliers should 
review OIG guidance related to the anti-kickback statute, including 
advisory opinions, fraud alerts and Special Advisory Bulletins. 
Ambulance suppliers concerned about particular existing or proposed 
arrangements may obtain binding advisory opinions from the OIG.\22\
---------------------------------------------------------------------------

    \22\ The procedures for applying for advisory opinions are set 
forth at 42 CFR part 1008 and on the OIG web page at 
www.oig.hhs.gov/advopn/index.htm. All OIG advisory opinions are 
published on the OIG web page. Several published opinions involve 
ambulance arrangements and may provide useful guidance for ambulance 
suppliers. These include OIG Advisory Opinions 97-6, 98-3, 98-7, 98-
13, 99-1, 99-2, 99-5, 00-7, 00-9, 00-11, 01-10, 01-11, 01-12, 01-18, 
02-2 and 02-3.
---------------------------------------------------------------------------

    Ambulance suppliers should exercise common sense when evaluating 
existing

[[Page 39024]]

or prospective arrangements under the anti-kickback statute. One good 
rule of thumb is that all arrangements for items or services between 
potential referral sources should be fair market value in an arm's-
length transaction not taking into account the volume or value of 
existing or potential referrals. For each arrangement, ambulance 
suppliers should carefully and accurately document how fair market 
value is determined (e.g., by market comparables, open competitive 
bidding, cost basis, etc.). Discounts should be accurately reflected 
and appropriately disclosed on all claims and cost reports filed with 
the Federal health care programs, and accurate and complete records 
should be kept of all discount arrangements. Ambulance suppliers should 
consult the safe harbor for discounts (42 CFR 1001.952(h)) when 
entering into discount arrangements.
    Another good rule of thumb is that ambulance suppliers should 
exercise caution when selling services to purchasers who are also in a 
position to generate Federal health care program business for the 
ambulance supplier (e.g., skilled nursing facilities that purchase 
ambulance services for private pay and Part A patients, but refer Part 
B and Medicaid patients to the ambulance supplier). Any link or 
connection between the price offered to the seller and referrals of 
Federal program business will implicate the anti-kickback statute. In 
other words, ambulance suppliers should not offer purchasers with 
Federal health care program business a price that is lower than the 
price they would charge a purchaser with a comparable volume of 
business and no Federal health care program referrals.
    A third good rule of thumb is that an ambulance supplier should not 
offer or provide gifts, free items or services, or other incentives of 
greater than nominal value to referral sources and should not accept 
such gifts and benefits from parties soliciting referrals from the 
ambulance supplier. In general, token gifts used on an occasional basis 
to demonstrate good will or appreciation (e.g., logo key chains, mugs 
or pens) will be considered to be nominal in value.
G. Are There Particular Arrangements to which Ambulance Suppliers 
Should be Alert?
    Ambulance suppliers should review the following arrangements with 
particular care: \23\
---------------------------------------------------------------------------

    \23\ This list of arrangements is intended to be illustrative, 
not exhaustive, of potential areas of risk under the anti-kickback 
statute.
---------------------------------------------------------------------------

1. Arrangements for Emergency Medical Services (EMS)

    Contracts with cities or other EMS sponsors for the provision of 
emergency medical services may raise anti-kickback concerns. Ambulance 
suppliers should not offer anything of value to cities or other EMS 
sponsors in order to secure an EMS contract, nor should they condition 
an EMS contract on obtaining non-EMS ambulance business.\24\ While 
cities and other EMS sponsors may charge ambulance suppliers amounts to 
cover the costs of services provided to the suppliers, they should not 
solicit inflated payments in exchange for access to EMS patients, 
including access to dispatch services under ``9-1-1'' or comparable 
systems.
---------------------------------------------------------------------------

    \24\ In general, ambulance suppliers may offer cities or other 
municipal entities free or reduced cost services for uninsured, 
indigent patients.
---------------------------------------------------------------------------

2. Arrangements With Other Responders

    It many situations, it is common practice for a paramedic intercept 
or other first responder to treat a patient in the field, with a second 
responder transporting the patient to the hospital. In some cases, the 
first responder is in a position to influence the selection of the 
transporting entity. While fair market value payments for services 
actually provided by the first responder are appropriate, inflated 
payments by ambulance suppliers to generate business are prohibited, 
and the Government will scrutinize such payments to ensure that they 
are not disguised payments to generate calls to the transporting 
entity.

3. Arrangements With Hospitals and Nursing Facilities

    Because hospitals and nursing facilities are key sources of non-
emergency ambulance business, ambulance suppliers need to take 
particular care when entering into arrangements with such institutions. 
(See, in particular, the second rule of thumb described above.)

4. Arrangements With Patients

    Arrangements that offer patients incentives to select particular 
ambulance suppliers may violate the anti-kickback statute, as well as 
the CMP law prohibition against giving inducements to Medicare and 
Medicaid beneficiaries.\25\ Potentially prohibited areas include, but 
are not limited to, routine waivers of copayments, \26\ ``insurance 
programs'' offering patients purported coverage for the ambulance 
supplier's services only, and free goods and services. Ambulance 
suppliers may waive copayments based on good faith individualized 
assessments of financial need, so long as the availability of financial 
hardship waivers is not advertised.\27\
---------------------------------------------------------------------------

    \25\ The CMP law prohibits giving anything of value to a 
Medicare or Medicaid beneficiary that the giver knows, or should 
know, is likely to influence the beneficiary to choose a particular 
practitioner, provider, or supplier of items or services payable by 
Medicare or Medicaid. (See section 1128A(a)(5) of the Social 
Security Act (42 U.S.C 1320a-7a(a)(5)). The statute contains several 
narrow exceptions, including financial hardship copayment waivers, 
incentives to promote the delivery of preventive care services, and 
health plan differentials in copayments. In addition, items or 
services of nominal value (less than $10 per item or service or $50 
in the aggregate annually) and any payment that fits into an anti-
kickback safe harbor are permitted.
    \26\ See Special Fraud Alert: Routine Waiver of Copayments or 
Deductibles Under Medicare Part B, 59 FR 65372, 65374 (1994) 
contained on the OIG web page at http://oig.hhs.gov/frdalrt/index.htm).
    \27\ Under a special rule, ambulance suppliers owned and 
operated by a State or a political subdivision of a State, such as a 
municipality or a fire district, may waive Medicare copayments for 
residents. See CMS Carrier Manual section 2309.4; CMS Intermediary 
Manual section 3153.3A. This rule does not apply to private 
ambulance suppliers providing services under contract. However, 
States and political subdivisions of States may pay uncollected, 
out-of-pocket copayments on behalf of residents. Such payments may 
be made through lump sum or periodic payments, if the aggregate 
payments reasonably approximate the otherwise uncollected copayment 
amounts.
---------------------------------------------------------------------------

V. Conclusion

    This ambulance compliance risk guidance is intended as a resource 
for ambulance suppliers to decrease the incidence of errors, fraud and 
abuse that occur due to, among other factors, lack of knowledge, 
inadequate training and inadvertent noncompliance. The Government has 
increased its scrutiny of the health care industry in part in an effort 
to decrease errors and/or fraudulent and abusive practices. Similarly, 
we encourage ambulance suppliers to scrutinize their internal practices 
via their compliance efforts.
    Compliance programs should reflect each ambulance supplier's 
individual and unique circumstances. It has been the OIG's experience 
that those health care providers that have developed compliance 
programs not only better understand applicable Federal health care 
program requirements, but also better understand their internal 
operations. We are hopeful that this guidance will be a valuable tool 
in the development and continuation of ambulance suppliers' compliance 
programs.

Appendix A--Additional Risk Areas

1. ``No Transport'' Calls and Pronouncement of Death

    If an ambulance supplier responds to an emergency call, but no 
transportation of a patient is subsequently required due to the

[[Page 39025]]

patient's death or patient's refusal to be transported, there are 
three Medicare rules that apply. If an individual is pronounced dead 
prior to the time the ambulance was requested, there is no payment. 
If the individual is pronounced dead after the ambulance has been 
requested, but before any services are rendered, a BLS payment will 
be made and no mileage will be paid. If the individual is pronounced 
dead after being loaded into the ambulance, the same payment rules 
apply as if the beneficiary were alive. Ambulance suppliers should 
accurately represent the time of death and request payment based on 
the aforementioned criteria.

2. Multiple Patient Transports

    On occasion, it may be necessary for an ambulance to transport 
multiple patients concurrently. If more than one patient is 
transported concurrently in one ambulance, the amount billed should 
be consistent with the multiple transport guidelines established by 
the carrier in that region. Under CMS's new ambulance fee schedule 
rules for multiple transports, Medicare will pay a percentage of the 
payment allowance for the base rate applicable to the level of care 
furnished to the Medicare beneficiary (e.g., if two patients are 
transported simultaneously, 75 percent of the applicable base rate 
will be reimbursed for each of the Medicare beneficiaries). 
Coinsurance and deductible amounts will apply to the prorated 
amounts.

3. Multiple Ambulances Called to Respond to Emergency Call

    On occasion, more than one ambulance supplier responds to an 
emergency call and is present to transport a beneficiary. These are 
often referred to as ``dual transports.'' In such cases, only the 
transporting ambulance supplier may bill Medicare for the service 
provided. The non-transporting ambulance company should receive 
payment directly from the transporting supplier based on a 
negotiated arrangement if that company's ambulance crew had provided 
services to the patient, but had not actually transported the 
patient to a treatment facility.\28\ On occasion, when multiple 
ambulance crews respond to a call, a BLS ambulance may have provided 
the transport, but the level of services provided may have been at 
the ALS level. If a BLS supplier is billing at the ALS level because 
of the services furnished by an additional ALS crew member, 
appropriate documentation should accompany the claim to indicate to 
the carrier that dual transportation was provided. In any event, 
only one supplier may submit the claim for payment.
---------------------------------------------------------------------------

    \28\ These payments should be fair market value for services 
actually rendered by the non-transporting supplier, and the parties 
should review these payment arrangements for compliance with the 
anti-kickback statute.
---------------------------------------------------------------------------

4. Billing Medicare ``Substantially in Excess'' of Usual Charges

    Ambulance suppliers generally may not charge Medicare or 
Medicaid patients substantially more than they usually charge 
everyone else. If they do, they are subject to exclusion by the 
OIG.\29\ This exclusion authority is not implicated unless the 
supplier's charge for Medicare or Medicaid patients is substantially 
more than its median non-Medicare/Medicaid charge. A supplier should 
identify as a risk area its billing practices if it is discounting 
close to half of its non-Medicare/Medicaid business. Thus, ambulance 
suppliers should review charging practices with respect to Medicare 
and Medicaid billing to ensure that they are not charging Medicare 
or Medicaid substantially more than they usually charge other 
customers.
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    \29\ The OIG may exclude from participation in the Federal 
health care programs any provider that submits or causes to be 
submitted bills or requests for payment (based on charges or costs) 
under Medicare or Medicaid that are substantially in excess of such 
providers' usual charges or costs, unless the Secretary finds good 
cause for such bills or requests. See section 1128(b)(6) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(6)).
---------------------------------------------------------------------------

Appendix B--OIG-HHS Contact Information

    The OIG's web site (www.oig.hhs.gov) contains various links 
describing the following: (1) The OIG's four different components 
(Audit Services, Investigations, Evaluations and Inspections, 
Counsel to the IG); (2) External Information such as how to 
subscribe to the OIG's mailing list and OIG's Hearing Testimony; (3) 
Compliance Tools that include a list of the OIG's Compliance 
Guidance, Corporate Integrity Agreements, and Self-Disclosure 
Information; (4) Fraud Detection and Prevention efforts including 
anti-kickback information, Advisory Opinions, and Fraud Alerts & 
Bulletins; and (5) Reports and Publications. Such information is 
frequently updated and is a useful tool for ambulance providers 
seeking additional OIG resources.
    Also listed on the OIG's web site is the OIG Hotline Number. One 
method for providers to report potential fraud, waste and abuse 
problems is to contact the OIG Hotline number. All HHS and 
contractor employees have a responsibility to assist in combating 
fraud, waste, and abuse in all departmental programs. As such, 
providers are encouraged to report matters involving fraud, waste 
and mismanagement in any departmental program to the OIG. The OIG 
maintains a hotline that offers a confidential means for reporting 
these matters.

Contacting the OIG Hotline

By Phone: 1-800-HHS-TIPS (1-800-447-8477)
By Fax: 1-800-223-8164
By E-Mail: [email protected]
By TTY: 1-800-377-4950
By Mail: Office of Inspector General, Department of Health and Human 
Services, Attn: HOTLINE, 330 Independence Ave., SW, Washington, DC 
20201

    When contacting the hotline, please provide the following 
information to the best of your ability:

--Type of Complaint:
    Medicare Part A
    Medicare Part B
    Indian Health Service
    TRICARE
    Other (please specify)
--HHS Department or program being affected by your allegation of 
fraud, waste, abuse/mismanagement:
    Centers for Medicare and Medicaid Services (formerly Health Care 
Financing Administration)
    Indian Health Service
    Other (please specify)
--Please provide the following information (however, if you would 
like your referral to be submitted anonymously, please indicate such 
in your correspondence or phone call):
    Your Name
    Your Street Address
    Your City/County
    Your State
    Your Zip Code
    Your E-mail Address
--Subject/Person/Business/Department that allegation is against:
    Name of Subject
    Title of Subject
    Subject's Street Address
    Subject's City/County
    Subject's State
    Subject's Zip Code
--Please provide a brief summary of your allegation and the relevant 
facts.

Appendix C--Carrier Contact Information

1. Medicare

    A complete list of contact information (address, phone number, 
e-mail address) for Medicare Part A Fiscal Intermediaries, Medicare 
Part B Carriers, Regional Home Health Intermediaries, and Durable 
Medical Equipment Regional Carriers can be found on the CMS web site 
at www.hcfa.gov/medicare/incardir.htm.

2. Medicaid

    Contact information (address, phone number, e-mail address) for 
each State Medicaid director can be found on the CMS web site at 
www.hcfa.gov/medicaid/mcontact.htm. In addition to a list of State 
Medicaid directors, the web site includes contact information for 
each State survey agency and the CMS Regional Offices.

3. Ambulance Fee Schedule

    Information related to the development of the ambulance fee 
schedule is located at www.hcfa.gov/medicare/ambmain.htm.

Appendix D--Internet Resources

1. Office Of Inspector General (www.oig.hhs.gov)

    This web site includes a variety of information relating to 
Federal health care programs, including the following:

Components

     Audit Services
     Investigations
     Evaluation and Inspections
     Counsel to the IG
     Management and Policy

Compliance Tools

     Compliance Guidance
     Corporate Integrity Agreements

[[Page 39026]]

     Self-Disclosure Information

Press Information

     Subscribe to Mailing List
     OIG News
     Hearing Testimony

Fraud Detection and Prevention

     Anti-Kickback Information
     Advisory Opinion
     Fraud Alerts and Bulletins

Reports and Publications

     Audit Reports
     Evaluation Reports
     Semi-Annual Reports
     Orange Book
     Red Book
     Work Plan
     Regulations and Federal Register Notices

2. Centers for Medicare and Medicaid Services (www.hcfa.gov)

    This web site includes information on a wide array of topics, 
including the following:

a. Medicare

     National Correct Coding Initiative
     Intermediary-Carrier Directory
     Payment
     Program Manuals
     Program Transmittals and Memorandum
     Provider Billing/CMS Forms
     Statistics and Data

b. Medicaid CMS Regional Offices

     Letters to State Medicaid Directors
     Medicaid Hotline Numbers
     Policy and Program Information
     State Medicaid Contacts
     State Medicaid Manual
     State Survey Agencies
     Statistics and Data

3. CMS Medicare Training (www.hcfa.gov/learning)

    This web site provides computer-based training on the following 
topics:
     CMS 1500 Form
     Fraud and Abuse
     ICD-9-CM Diagnosis Coding
     Medicare Secondary Payer
     Introduction to the World of Medicare
     CMS 1450 (UB92)

4. Government Printing Office (www.access.gpo.gov)

    This web site provides access to Federal statutes and 
regulations pertaining to Federal health care programs.

5. The U.S. House of Representatives Internet Library (http:/
/.uscode.house.gov/usc.htm)

    This web site provides access to the United States Code, which 
contains laws pertaining to Federal health care programs.

    Dated: May 20, 2002.
Janet Rehnquist,
Inspector General.

[FR Doc. 02-14163 Filed 6-5-02; 8:45 am]
BILLING CODE 4152-01-P