As previously discussed, on April 3, 2020, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a process for inquiries to be submitted to OIG about whether administrative enforcement discretion would be provided for certain arrangements directly connected to the 2019 novel coronavirus (COVID-19). OIG established this process to provide regulatory flexibility to ensure necessary care responding to COVID-19, particularly with respect to the federal anti-kickback statute (AKS) and civil monetary penalty (CMP) beneficiary inducement prohibition provisions. OIG responses are publicly available through a frequently asked questions (FAQ) posting on the OIG COVID-19 portal. OIG has continued to update this FAQ since its initial publication, including the most recent inquiry discussed in our April 13 post and also providing guidance on the following question:

What are the implications, under OIG’s administrative sanction authorities, of an ambulance provider or supplier waiving or discounting beneficiary cost-sharing obligations (required by the Medicare program) resulting from ground ambulance services paid for by the Medicare program under a waiver established pursuant to section 1135(b)(9) of the Social Security Act?

OIG responded to the unique context where Medicare will make retroactive ground ambulance payments for certain patients not transported to a local hospital due to COVID-19 by responding in the affirmative that such ambulance providers and suppliers would not need to collect beneficiary cost-sharing payments to receive such Medicare reimbursement. Such retroactive billing was authorized in the American Rescue Plan for the services described below, and the Secretary of HHS utilized this authority to waive certain statutory reimbursement requirements the same day as OIG issued this FAQ.

Ordinarily, an ambulance provider or supplier waiving or discounting beneficiary cost-sharing obligations implicate the AKS and the beneficiary inducement CMP. Under the Ambulance Fee Schedule, Medicare Part B pays 80 percent of the approved amount, and the beneficiary is responsible for the remaining 20 percent as well as the applicable Part B deductible, if it has not yet been met. The government typically has concerns that providers waving the copayment amount would incentivize the patient to receive further covered services from that provider. However, OIG believes that such copayment waivers and discounts represent a sufficiently low risk of fraud and abuse here when the ground ambulance services are billed in accordance with the Secretary’s waiver, which is effective retroactively to Medicare claims for services rendered on or before March 1, 2020 (to be paid at the usual base rate if the service qualifies, without payment for mileage), i.e., OIG will not require ground ambulance providers to collect beneficiary cost-sharing before they submit Medicare bills for such services.

In response to the ongoing pandemic, many state, local, and municipal authorities established communitywide emergency medical service (EMS) protocols requiring or allowing ambulance providers and suppliers to treat certain patients “in place” who, but for those EMS protocols, would have been transported to a Medicare-covered destination. Medicare billing typically requires such transportation before a ground ambulance provider can receive Medicare reimbursement. As noted above, on May 5, 2021, in response to these protocols and with authority granted by the American Rescue Plan, HHS waived the transportation requirement for ground ambulance services furnished in response to a 911 call when transportation that was ordinarily provided did not occur due to the COVID-19 EMS protocols. HHS also gave guidance that documentation will need to be maintained to support medical necessity and the qualifying communitywide EMS protocols and provided to CMS contractors upon request.

Routine waivers of cost sharing obligations implicate the AKS and the CMP provision prohibiting inducements to beneficiaries and may result in overutilization or inappropriate utilization of items and services reimbursable by Federal health care programs. OIG understands, however, that beneficiary obligations that arise as a result of billing by ambulance providers or suppliers after the waiver’s announcement could result in the perception of “surprise billing” to patients, particularly when the patient did not receive transportation and now up to a year later the ambulance bills Medicare. In addition, ground ambulance services prior to the waiver would have been performed with no expectation that the Medicare program would reimburse for these services when they did not involve actual transport. Therefore, a retroactive waiver of cost-sharing obligations by ground ambulance providers and supplies for instances in which no ambulance transport was provided but for which the Medicare program retroactively reimburses for these specified services is unlikely to induce the use of those providers or any other services in the future.

While OIG did not say as much, it is also likely that these services being emergent by definition also likely impacted its view with respect to cost-sharing obligation waivers being unlikely to induce additional services. Accordingly, under the unique circumstance of the COVID-19 pandemic, and in the context of the waiver cited above, OIG believes ground ambulance providers and suppliers can waive or discount beneficiary cost sharing obligations for claims billed in accordance with this waiver as sufficiently low risk of fraud and abuse.

The issuing of the OIG FAQ, in conjunction with HHS’s waiver, should be well received by the ambulance community as helpful protection consistent with the American Rescue Plan’s intent. That said, unlike some of the other recent FAQs, this FAQ is unlikely to have wider applicability, although its guidance on cost-sharing waivers being as limited as OIG expressed could remind providers that even during the COVID-19 pandemic, they should have appropriate processes and protocols to collect mandatory cost-sharing from their patients both for Medicare and commercial insurance.

McGuireWoods will continue to monitor OIG’s release of further FAQs as additional providers utilize this inquiry mechanism. Providers may welcome the flexibility provided by OIG exercising enforcement discretion during the COVID-19 pandemic, recognizing the statements do not bind all investigative bodies who could take a different view. OIG will likely continue to require such arrangements to end at the end of the COVID-19 public health emergency declaration, and therefore, providers should plan for the post-pandemic period depending on the arrangement when utilizing these statements.

For related commentary, please see:
Providers May Offer Incentives to Federal Beneficiaries for Receiving COVID-19 Vaccine (June 9, 2021)
Free FQHC COVID-19 Testing Approved by OIG (March 22, 2021)
Per-Click Compensation for Philanthropic Entity’s COVID-19 Vaccine Site Low Risk of Fraud According to OIG (March 2, 2021)
OIG Responds to Free/Discounted Lodging and Free Antibody COVID-19 Test Inquiries (August 27, 2020)
OIG Responds to Physician Group COVID-19 Personal Protective Equipment Arrangement Inquiry (May 17, 2020)
OIG Updates Enforcement Responses to COVID-19 Arrangement Inquiries (May 13, 2020)
OIG Requests Inquiries on Enforcement Related to COVID-19 Arrangements (April 13, 2020)