On December 20, 2022, OIG issued a favorable Advisory Opinion allowing for the political subdivision of a State and its Department of Health EMS division (Requestor) to accept the provision of emergency transportation services and EMS communications center coordination services pursuant to an EMS Agreement (EMS Agreement) from a private ambulance company (Ambulance Supplier), to which it also subleases office and parking space pursuant to a separate sublease agreement.

Requestor entered into the EMS Agreement after engaging in a competitive bidding process in connection with an RFP to identify an exclusive provider of ambulance transports in a designated geographic area and to operate Requestor’s EMS communications center. The exclusive contract was awarded to the Ambulance Supplier. Under the arrangement, Ambulance Supplier subleases certain space and equipment from Requestor, and also pays Requestor for certain rent-related expenses, in connection with the operation of the EMS communications center. Finally, Ambulance Supplier agreed to pay Requestor for certain maintenance costs related to leasehold improvements on the leased space and equipment.

Requestor does not pay Ambulance Supplier for its provision of services except with respect to transports of patients for whom the Requestor is financially responsible for (e.g., inmates and jail detainees). Ambulance Supplier’s primary compensation consists of payments from patients and payors, including Medicare and Medicaid.

OIG determined that although payments by Ambulance Supplier to Requestor for space and equipment rental, rent-related expenses and maintenance would produce remuneration prohibited by the Federal anti-kickback statute (AKS) if the requisite intent were present, OIG would not impose sanctions on the Requestor.

OIG considered the following factors in deciding that the arrangement ultimately provided a low risk of fraud and abuse under the AKS:

1. The arrangement appears to be a reasonable means for the parties to fulfill their obligations under the EMS Agreement because the remuneration being paid all stems from the sublease agreement which furthers the purposes of the EMS Agreement.
2. Ambulance Supplier only pays for expenses related to the subleased space and equipment, and Ambulance Supplier does not assume any rent-related expenses for space or equipment used by Requestor, nor will Requestor profit from the receipt of rent-related expense payments.
3. Requestor also does not profit from the maintenance services provided to Ambulance Supplier, which are reasonable for the purposes of the EMS Agreement.
4. The items rented do not exceed that which is reasonably necessary to accomplish the commercially reasonable business purpose of the rental as required under the EMS Agreement.
5. The rent-related expenses are fair market value and were not computed to take into account the volume or value of referrals; and were not adjusted based on proximity or convenience to sources of referrals or business otherwise generated for which payment may be made by a Federal health care program.

The full text of the OIG Advisory Opinion is available here.