New OIG Demands Target Mistaken Medicare Payments

The HHS Office of Inspector General is targeting ambulance services in a recent round of demands it has launched even as services continue to struggle financially during the pandemic. OIG is now seeking monetary damages from ambulance services that may have transported patients from a skilled nursing facility while the patient was in a Part A stay.

A number of ambulance companies across the U.S. have recently received letters from OIG legal counsel saying they “may be liable for civil monetary penalties and assessments or exclusion under the Civil Monetary Penalties Law” because the ambulance service “repeatedly filed Medicare claims for ambulance transportation to and from skilled nursing facilities (SNFs) where such transportation should have been covered by the SNF consolidated billing payment (and where the ambulance provider should have sought payment from the SNF).”

The OIG indicates in these letters that it has “preliminarily determined” the amount of the improper claims—typically over a four-year period—and provides the ambulance service with the amount, which in most letters we have seen has been in the hundreds of thousands of dollars. On top of that amount—which presumably is the amount overpaid to the ambulance service—the OIG says it may impose civil monetary penalties (CMPs) of up to $20,000 for each item or service and an assessment of damages of up to three times the total amount claimed for each item or service. (For a one-way ambulance transport, that would be two items of service: One service is the base rate, and the second is the mileage.) In our experience the OIG has insisted on demanding twice the amount of the alleged overpayment as damages in these cases—so for a case involving an alleged $125,000 in overpayments, the OIG will demand $250,000. That can be very intimidating.

At the Mercy of the SNF

Whether you have received one of these OIG demand letters yet or not, you should understand where this issue is coming from. In February 2019 the OIG released a report titled “Medicare Paid Twice for Ambulance Services Subject to Skilled Nursing Facility Consolidated Billing Requirements.” The report found approximately $20 million was overpaid by Medicare Part B for claims that should have been paid to the ambulance service by the SNF under consolidated billing rules. You can read that report here.

In that report the OIG found CMS did not have proper edits in place in its claim-processing systems and that ambulance services did not have “adequate controls” to prevent improper billing. The OIG made no mention of the fact that the SNFs are the ones that actually know the patient’s Part A status and whether an ambulance service should be paid by them or is separately billable by the ambulance service under Part B.

Many ambulance transports for routine services are the responsibility of the SNF, and the ambulance service must seek payment from the SNF. But there are also a significant number of transports that are exceptions to this rule, and these should be billed by the ambulance service to Medicare Part B. Some of these exceptions include transports for emergency services, MRIs or CT scans, radiation therapy, and other circumstances outlined in the Medicare Claims Processing Manual, Chapter 15, Section 30.2.2 and 42 CFR 410.40.

But which of those transports are the SNF’s responsibility, and how are you to know when the patient is in a Part A stay? Well, you are really at the mercy of the SNF to tell you these things, as there is no effective way of making that determination with CMS resources. And the OIG does not seem to acknowledge that the SNF—which received money from Medicare to cover routine ambulance service as part of its bundled payment—is the gatekeeper to this information.

And in some cases SNFs may even have misrepresented the purpose of the transport to lead the ambulance service to believe it fits one of the exceptions to allow for direct Part B billing. For example, a SNF could schedule an ambulance for a bed-confined patient, telling them the patient is going for an MRI (a transport the ambulance service should bill separately to Medicare Part B), yet the patient only obtains routine x-rays (a transport that should be the financial responsibility of the SNF). Or the SNF will simply represent that the patient is not in a Part A stay and that Part B should be billed when in fact the patient is in a Part A stay.

Two additional action points: 1) Consider auditing transports to and from skilled nursing facilities to assess whether any were improperly billed to Medicare Part B; and 2) review your contracts with your facilities to ensure they are obligated to provide you with accurate information concerning the Part A status of patients and if any of the Part A exceptions are present.

Chris Kelly and Steve Wirth are attorneys with Page, Wolfberg & Wirth, LLC. They have authored or coauthored hundreds of articles, blogs, and book chapters on a wide range of EMS leadership, reimbursement, risk management, compliance, and workplace law topics. They can be reached at ckelly@pwwemslaw.com or swirth@pwwemslaw.com. This article is not intended as legal advice.