2016-698 Emergency Svc - North State Medical Transport - Application for Services Franchise by Ordinance

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Policy for Contractual Arrangements with Health Facilities I. INTRODUCTION A.As part of its business operations, NSMT enters into contractual relationships with various health facilities, such as hospitals and skilled nursing facilities (SNFs) ("health facilities"), to provide medical transportation and other services to patients of these facilities. Because health facilities are generally in a position to refer or influence the referral of patients to NSMT, and in some cases NSMT may be in a position to refer or influence the referral of patients to them (i.e., through the delivery of 911 patients), such contracts must be reviewed to assure compliance with state and federal anti-kickback statutes. B. The purpose of this Policy is to provide guidance to NSMT personnel in competing effectively for hospital and nursing home contracts ("health facility contracts")while remaining in compliance with the anti-kickback statute. That statue has been interpreted by the HHS Office of Inspector General("OIG") as prohibiting discounts on transports for which a health facility is financially responsible under Medicare Part A ("facility- responsible business") if even "one purpose" of the discount is to induce the referral of Medicare Part B or other federal fee for service business ("federal FFS business"). The OIG refers to trading discounts on facility- responsible business for referrals of federal FFS business as "swapping". II. GENERAL REQUIREMENTS FOR HEALTH FACILITY CONTRACTS NSMT's policy is to compete as aggressively and effectively as possible for health facility contracts within the bounds of the law. To accomplish this,the following guidelines will apply to health facility contracts. These guidelines are based in part on the OIG's anti-kickback safe harbor for services contracts and also on other guidance provided by the OIG. A. Contracts with health facilities shall be in writing, be signed by both parties, specify all the services that NSMT will perform for the facility, and have a term of at least one year(subject to earlier termination for cause). 1. An exception may be made to the requirement of a one year term in contracts where the health facility is charged rates equal to or greater than the Medicare allowable. 2. Exceptions to the requirement of a one year term may be made in contracts where the rates charged to the facility are below the Medicare rate then in effect only following approval by NSMT CEO. B. The rates payable by the facility must be consistent with the fair market value of the services rendered by NSMT, and may not be determined in a manner that takes into account the value or volume of any federal FFS business referred by the facility. 1. It is permissible to offer a health facility rates on its facility-responsible business which are equal to or greater than the Medicare allowable rate in effect at the time. 2. In the event NSMT wishes to negotiate with a health facility rates which are below the Medicare allowable then in effect,the discount below the allowable must be justified based on legitimate business factors. Such factors do not include the expectation of federal FFS business, since granting a discount on facility-responsible business for the purpose of securing referrals of federal FFS business is precisely the conduct that is prohibited by the anti-kickback statute. 29