What the OIG report on questionable billing means for ambulance transports

Every ambulance provider should review and update their billing and claims policies and procedures


By Kevin Fairlie

In September of 2015, the Office of the Inspector General at the U.S. Department of Health and Human Services released a report titled "Inappropriate Payments and Questionable Billing for Medicare Part B Ambulance Transports." The report was a result of a study conducted by the OIG in which it analyzed Medicare Part B claims for ambulance transports from Jan. 1, 2012 to June 30, 2012. The study involved 7.3 million transports totaling $2.9 billion in Medicare payments that were submitted by 15,614 unique ambulance suppliers and included 2.9 million Medicare beneficiaries.

The OIG stated that it conducted the study because "Medicare has been historically vulnerable to fraud involving ambulance transports." Further, the report indicated that in 2012, Medicare Part B paid $5.8 billion for ambulance transports, almost double the amount it paid in 2003, and that billing for ambulance transports "warrants scrutiny, given its rapid growth and its vulnerability to fraud and abuse."

How was the study conducted?
The report provides insight into how the OIG collects data to analyze inappropriate billing in the ambulance industry. Specifically, the OIG pulled data from the National Claims History Physician/Supplier Part B claims file; the 2012 Inpatient, Outpatient, Skilled Nursing Facility (SNF) and Hospice Standard Analytical Files; and the 2012 Denominator File from the Medicare Enrollment Database. The OIG then developed these seven measures of questionable billing for ambulance services in order to analyze the data.

  1. No Medicare service at the origin or destination
  2. Excessive mileage for urban transports
  3. High number of transports per beneficiary
  4. Compromised beneficiary number
  5. Inappropriate or unlikely transport level
  6. Beneficiary sharing
  7. Transports to or from partial hospitalization programs

The measures were created and based upon Medicare coverage and billing requirements for ambulance services, along with results of prior OIG analyses and fraud investigations as well as consultations with fraud investigators both within and outside the OIG.

Specific OIG findings
The OIG concluded that there were both improper payments for ambulance transports and questionable billing by ambulance suppliers during the first half of 2012. Specifically, it found that Medicare paid $24 million in the first half of 2012 for ambulance transports that did not meet certain program requirements regarding the transport’s destination. For example, the OIG found that Medicare inappropriately paid $17.4 million for transports where the beneficiary did not receive Medicare services at a covered destination (hospital, dialysis facility or SNF).

The study also found that Medicare paid $30 million for transports for which the beneficiaries did not receive Medicare services at the pick-up or drop-off locations, or anywhere else. To be covered by Medicare, transports must be for the purpose of receiving or returning from a service covered by Medicare. 

1 in 5 ambulance suppliers found to have questionable billing
The report states that Medicare paid out $207 million for transportation related to these questionable areas which involved "about one in five ambulance suppliers." It stated, as an example, that a supplier may have had an unusually high average mileage for the transports that it provided to beneficiaries residing in urban areas. The study also found that questionable billing is geographically concentrated in metropolitan areas throughout the U.S.

OIG recommendations for fraud control
The report ultimately makes recommendations to the Centers for Medicare & Medicaid Services to enhance fraud and abuse safeguards involving the ambulance providers. The OIG is focused on fraudulent, or as this report states, "questionable" billing for ambulance services. This report only strengthens that understanding and reinforces the notion that the federal government, through the OIG and CMS, is now focused on uncovering and eliminating improper billing for ambulance services like no other time in history.

These are the five OIG recommendations to CMS to strengthen oversight of fraud and abuse with ambulance suppliers:

  1. CMS should determine whether a temporary moratorium on ambulance supplier enrollment in additional geographic areas is warranted.
  2. CMS should require ambulance suppliers to include the National Provider Identifier of the certifying physician on transport claims that require certification.
  3. CMS should increase its monitoring of ambulance billing.
  4. CMS should determine the appropriateness of claims billed by ambulance suppliers identified in the report and take appropriate action.
  5. CMS should implement new claims processing edits or improve existing edits to prevent inappropriate payments for ambulance transports.

CMS has already concurred with the first four recommendations. It partially concurred with the OIG’s final recommendation stating that it will review data on claims identified in this report. The OIG report stated that CMS should use the results of its review to implement new, or modify existing, claims processing edits needed to prevent inappropriate payments.

In light of these recommendations it is always appropriate for ambulance agencies to review billing and claim policies and procedures. CMS and the OIG are watching closely and every ambulance provider should be reviewing and updating these documents and practices regularly. Additionally, given that the OIG hired a high level official with specific oversight on health care corporate compliance programs at roughly the same time they released this report, now is also the time to review your corporate compliance plan and ensure that it is an active and ongoing program and not just a set of documents. 

About the author
Kevin Fairlie is a healthcare attorney who specializes in representing EMS corporations and agencies. Fairlie is the former general counsel for a large multi-state EMS agency and has held numerous EMS leadership positions including serving as CEO. He is the founding member of Fairlie Law, LLC, which is a national healthcare and EMS law firm.

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