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OIG Releases Important New Advisory Opinion

November 21, 2013

FROM: Page, Wolfberg & Wirth, LLC
RE: OIG Releases Important New Advisory Opinion

The Office of Inspector General (OIG) released Advisory Opinion 13-17, and for the first time ruled that a municipal, County-run EMS agency could extend their policy on using tax revenues to cover copayments and deductibles to non-residents as well as residents. Though the OIG, in numerous prior Advisory opinions, had ruled that public EMS agencies could treat taxes paid by residents as prepayment of their out-of-pocket costs, this is the first Advisory Opinion in which the OIG expressly extended that policy to non-residents. 

In Advisory Opinion 13-17, the County, which provides 911 services only, noted that it collects "ample" taxes from non-residents to offset the amounts owed for emergency ambulance services that are not paid by insurance. Taxes paid to the County by non-residents include, for example, hotel/motel tax, real property tax on in-County property owned by non-residents, taxes on certain personal property used in businesses owned by non-residents, and taxes paid by entities conducting operations in the County that employ non-residents. Because the County determined that it had collected ample taxes from non-residents as well as residents, the County proposed to extend their policy using tax revenues to cover the out-of-pocket expenses of non-residents as well as residents. The OIG reported that CMS confirmed that Medicare's longstanding policy, as set forth in Section 50.3.1 of the Medicare Benefit Policy Manual, Chapter 16, would apply to non-residents as well as residents.That CMS policy states:

"A [state or local government] facility which reduces or waives its charges for patients unable to pay, or charges patients only to the extent of their Medicare and other health insurance coverage, is not viewed as furnishing free services and may therefore receive program payment." 

CMS also confirmed to the OIG that the word "facility" in this policy also covered public ambulance companies that are Medicare Part B suppliers. Therefore, the OIG approved the arrangement, and for the first time ruled that a municipal ambulance service could use taxes paid by non-residents to cover the out-of-pocket expenses owed by non-residents for emergency ambulance services in the same manner as the County uses taxes paid by residents to cover their out-of-pocket costs.

To read the complete Advisory Opinion, click HERE.

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