OIG & Cost Sharing for 911 Dispatch Service

Although a proposed arrangement by a municipal fire department to share certain costs related to dispatch and other services with hospital-based ambulance providers that participate in the local 911 emergency dispatch system could potentially generate prohibited remuneration under the anti-kickback statute if the requisite intent to induce or reward referrals of federal health care program business were present, the Office of Inspector General (OIG) would not impose administrative sanctions under §§1128(b)(7) or 1128A(a)(7) of the Social Security Act (as those sections relate to the federal anti-kickback law, according to an OIG advisory opinion

The city’s fire department coordinates the 911 emergency medical services (EMS) system component, which encompasses pre-hospital treatment and transport. The fire department provides the majority of EMS tours in the city through its own ambulances; however, various hospitals also participate as EMS providers in the 911 system on a voluntary basis without separate compensation from the city. The fire department and the hospitals operate separately and separately bill their patients or their patients’ insurers for their services, including Medicare and Medicaid beneficiaries. All EMS ambulances, whether they are operated by the fire department or a participating hospital, are assigned a designated street corner location to which they return after responding to a call. Ambulances are required by state and regional protocols as well as the ambulance agreements to transport patients to the nearest appropriate hospital;EMS crew members may not “steer” or otherwise unlawfully transport patients to the participating hospital that is operating the ambulance.

 According to OIG, the proposed arrangement would implicate the anti-kickback statute because participating hospitals, which are potential referral recipients, would be required to bear a portion of the costs as a condition of providing EMS in the city. Some of the EMS would be reimbursable under the federal health care programs. OIG concluded that the following factors included in the proposed arrangement, in combination, would mitigate the risk of federal health care program fraud or abuse.

  • The proposed arrangement would be part of a comprehensive scheme by the city to manage the delivery of EMS through the fire department, which is legally empowered to direct the provision of the EMS in the city. The fire department certified that it has entered into the ambulance agreements in a manner that conforms to applicable law governing such agreements.
  • The proposed arrangement would be structured so that each hospital’s payment would reasonably approximate its proportionate share of the costs, therefore, the hospitals would not be overpaying the source of the referrals, which represents the typical anti-kickback concern.
  • The amount due from a particular hospital would be determined based on the number of scheduled tours and not on either the number or nature of services it provides during those tours or the number of transports to the participating hospital; therefore, the amounts paid by the participating hospitals would not be tied to the volume or value of referrals between the parties.
  • The proposed arrangement would be limited to EMS, would not involve substantive change in the dispatch procedures already utilized by the fire department on behalf of the city, it would be unlikely to increase the risk of over utilization and also would be unlikely to lead to increased costs to the federal health care programs.
  • The proposed arrangement should not have an adverse impact on competition. Any hospital licensed by the state that obtained an ambulance operating certificate from the state’s Department of Health authorizing the provision of ambulance services in the city could request to participate. If the fire department determined that the additional EMS resources would satisfy an operational need in the area in which the interested hospital was licensed to operate and that such participation would operationally benefit the 911 system, the hospital would be permitted to participate. 

 OIG said it might have reached a different result if the participating hospitals would pay the city or the fire department remuneration not directly related to the provision of the EMS that are the subject of the ambulance agreements such as free or reduced cost equipment.