At the urging of Ohio lawmakers, the Department of Health and Human Services has begun writing a new regulation intended to clarify when hospitals can give free supplies to ambulance crews and when such help is an illegal kickback.

Rep. Bob Ney, R-Ohio, was elated. Since 1996, he had been asking the agency to state the rules clearly so that hospitals wouldn't have to worry about expensive fines.

"This is a reversal," he said Monday. "We won one with the fed bureaucracy."

Mary Yost of the Ohio Hospital Association said a dozen or so hospitals in the state had stopped letting ambulance crews restock the medicine, bandages, or other supplies used en route to their emergency rooms, but most continued the practice and hoped for the best.

The regulation was intended to take away any incentive for an ambulance crew to choose one competing hospital over another -- a legitimate concern in some urban areas, but not an issue in most rural counties.

Ney had introduced legislation designed to lift the fear of prosecution from many hospitals that may have inadvertently ran afoul of anti-kickback statutes by replacing ambulance supplies at no charge, and HHS said its decision to rewrite the regulation was a response to that legislation.

In a letter to Ney, HHS suggested its rewritten rules would be better than a new law. The letter said a proposed rule would be published in the Federal Register by the end of the year.

"The legislation had a tremendous chance to pass," Ney said. "We had a lot of support across the country."

Before introducing his bill, Ney, Rep. David Hobson and other Ohio lawmakers had devoted a lot of time to letters and phone calls seeking a clarification in the law that would satisfy the staff lawyers who were warning hospitals about the risk of $10,000 fines for replenishing ambulance crews' bandages.

Some volunteer and municipal ambulance organizations run on such tight budgets that the hospitals' free restocking policy is all that keeps them afloat, Ney said: "Without this I think you would literally see the demise of some squads."

The government scrutinizes financial dealings to check for double-billing -- for instance, if both the ambulance and the hospital charge Medicare for the same medicine or bandage -- and to search for illegal kickback arrangements.