[Federal Register Volume 67, Number 39 (Wednesday, February 27, 2002)]
[Rules and Regulations]
[Pages 9100-9135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4548]
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Part IV
Department of Health and Human Services
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Centers for Medicare and Medicaid Services
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42 CFR Parts 410 and 414
Medicare Program; Fee Schedule for Payment of Ambulance Services and
Revisions to the Physician Certification Requirements for Coverage of
Nonemergency Ambulance Services; Final Rule
Federal Register / Vol. 67, No. 39 / Wednesday, February 27, 2002 /
Rules and Regulations
[[Page 9100]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 410 and 414
[HCFA-1002-FC]
RIN 0938-AK30
Medicare Program; Fee Schedule for Payment of Ambulance Services
and Revisions to the Physician Certification Requirements for Coverage
of Nonemergency Ambulance Services
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
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SUMMARY: This final rule establishes a fee schedule for the payment of
ambulance services under the Medicare program, implementing section
1834(l) of the Social Security Act. As required by that section, the
proposed rule on which this final fee schedule for ambulance services
is based was the product of a negotiated rulemaking process that was
carried out consistent with the Federal Advisory Committee Act and the
Negotiated Rulemaking Act of 1990. The fee schedule described in this
final rule will replace the current retrospective reasonable cost
payment system for providers and the reasonable charge system for
suppliers of ambulance services. In addition, this final rule requires
that ambulance suppliers accept Medicare assignment; codifies the
establishment of new Health Care Common Procedure Coding System (HCPCS)
codes to be reported on claims for ambulance services; establishes
increased payment under the fee schedule for ambulance services
furnished in rural areas based on the location of the beneficiary at
the time the beneficiary is placed on board the ambulance; and revises
the certification requirements for coverage of nonemergency ambulance
services.
DATES: Effective date: April 1, 2002.
Comment date: We will consider comments on portions of the
regulation with respect to the following sections of the Medicare,
Medicaid, and State Child Health Insurance Program Benefits Improvement
and Protection Act (BIPA), Pub. L. 106-554: the provisions implementing
the portion of section 205 relating to cost reimbursement for ambulance
services furnished by certain critical access hospitals (CAHs)
(Sec. 414.601 and Sec. 414.610(a)); the provisions implementing section
221, establishing the rate for rural ambulance mileage greater than 17
miles and up to 50 miles (Sec. 414.610(c)(5)); the provisions
implementing section 423 with regard to immediate payment of the full
ambulance services fee schedule amount for in-county ground mileage
under certain circumstances (Sec. 414.615(g)), if we receive them at
the appropriate address, as provided below, no later than 5 p.m. on
April 29, 2002.
ADDRESSES: Mail written comments (an original and 3 copies) to the
following address only: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1002-FC, PO Box
8013, Baltimore, MD 21244-8013.
To ensure that mailed comments are received in time for us to
consider them, please allow for possible delays in delivering them.
If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses: Room 443-G, Hubert H.
Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201,
or, Room C5-14-03, 7500 Security Boulevard, Baltimore, MD 21244-8013.
Comments mailed to the above addresses may be delayed and received
too late for us to consider them.
Because of staff and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code CMS-1002-FC. Comments received timely will be available
for public inspection as they are received, generally beginning
approximately 3 weeks after publication of a document, in Room C5-12-08
at 7500 Security Blvd, Baltimore, MD, on Monday through Friday of each
week from 8:30 a.m. to 5 p.m. Please call (410) 786-7197 to view these
comments.
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I. Background
The Medicare program pays for transportation services for Medicare
beneficiaries when other means of transportation are contraindicated.
Ambulance services are divided into different levels of ground
(including water) and air ambulance services based on the medically
necessary treatment provided during transport. These services include
the levels of service listed below, which we define later in this rule.
For Ground:
Basic Life Support (BLS)
Advanced Life Support, Level 1 (ALS1)
Advanced Life Support, Level 2 (ALS2)
Specialty Care Transport (SCT)
Paramedic ALS Intercept (PI)
For Air:
Fixed Wing Air Ambulance (FW)
Rotary Wing Air Ambulance (RW)
Currently payment levels for ambulance services depend, in part,
upon the entity that furnishes the services. Providers (hospitals,
including critical access hospitals, skilled nursing facilities, and
home health agencies) are paid on a retrospective reasonable cost
basis. Suppliers, which are entities that are independent of any
provider, are paid on a reasonable charge basis. This final rule
establishes a fee schedule payment system for all such services.
A. History of Medicare Ambulance Services
1. Original Statutory Coverage of Ambulance Services
Under section 1861(s)(7) of the Social Security Act (the Act),
Medicare part B (Supplementary Medical Insurance) covers and pays for
ambulance services, to the extent prescribed in regulations, when the
use of other methods of transportation would be contraindicated. The
House Ways and Means Committee and Senate Finance Committee Reports
that accompanied the 1965 Social Security Amendments suggest that the
Congress intended that (1) the ambulance benefit cover
[[Page 9101]]
transportation services only if other means of transportation are
contraindicated by the beneficiary's medical condition, and (2) only
ambulance service to local facilities be covered unless necessary
services are not available locally, in which case, transportation to
the nearest facility furnishing those services is covered (H.R. Rep.
No. 213, 89th Cong., 1st Sess. 37 and S. Rep. No. 404, 89th Cong., 1st
Sess., Pt I, 43 (1965)). The reports indicate that transportation may
also be provided from one hospital to another, to the beneficiary's
home, or to an extended care facility.
2. Medicare Regulations for Ambulance Services
Our regulations relating to ambulance services are located at 42
CFR part 410, subpart B. Section 410.10(i) lists ambulance services as
one of the covered medical and other health services under Medicare
part B. Ambulance services are subject to basic conditions and
limitations set forth at Sec. 410.12 and to specific conditions and
limitations included at Sec. 410.40.
On January 25, 1999, we published a final rule with comment period
(64 FR 3637) to revise and update Medicare policy concerning ambulance
services. It identified destinations to which ambulance services are
covered, established requirements for the vehicles and staff used to
furnish ambulance services, and clarified coverage of nonemergency
ambulance services for Medicare beneficiaries. This rule also
implemented section 4531(c) of the Balanced Budget Act of 1997 (BBA),
Pub. L. 105-33, concerning Medicare coverage for paramedic intercept
services in rural communities.
We published a final rule on March 15, 2000 (65 FR 13911)
responding to public comments received on the January 25, 1999 final
rule with comment period regarding Medicare coverage of, and payment
for, paramedic intercept ambulance services in rural communities. It
also implemented section 412 of the Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of 1999 (BBRA), Pub. L. 106-113, by
adding a new definition of a rural area.
3. Negotiated Rulemaking Process
Section 1834(l)(1) of the Act provides that the ambulance fee
schedule be established through the negotiated rulemaking process
described in the Negotiated Rulemaking Act of 1990 (Pub. L. 101-648, 5
U.S.C. 581-590). Negotiations were conducted by a committee chartered
under the Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2). The
Negotiated Rulemaking Committee on the Medicare Ambulance Services Fee
Schedule (the Committee) consisted of individuals associated with
national organizations that represent interests that are likely to be
significantly affected by the fee schedule. There was a public
solicitation through the Federal Register on January 22, 1999 (64 FR
3474) for participation in the negotiated rulemaking process.
(Additional information about the negotiations can be found in the
January 22, 1999 Federal Register notice or may be accessed at our
Internet Web site at http://www.hcfa.gov/medicare/ambmain.htm.)
The Committee discussed various issues related to the ambulance fee
schedule and a consensus Committee Statement was signed on February 14,
2000.
4. Proposed Rule
In our proposed rule, we discussed the negotiated rulemaking
procedure used to formulate our policy for the ambulance fee schedule
and proposed additions to part 414 based on recommendations of the
Committee. We discussed operational and regional variations, cost of
living differences, services furnished in rural areas, and mileage. The
structure of the fee schedule, the ambulance inflation factor, and
phase-in methodology were also discussed.
In addition, we proposed changes unrelated to the Committee's
consensus statement on matters including coverage of ambulance
services, physician certification requirements, payment during the
first year, and billing method. We discussed local or State law related
to ambulance services, mandatory assignment, and miscellaneous payment
policies, including multiple patients, pronouncement of death, multiple
arrivals, and BLS services furnished in an ALS vehicle.
We presented our methodology for determining the conversion factor
(CF) and for implementing the fee schedule. We discussed expenditure
control for ambulance services and adjustments to account for
inflation. Finally, to seek input on the desirability and flexibility
of developing a code set to describe patients' conditions, we included
an addendum containing a list of medical conditions.
In accordance with the negotiated rulemaking procedures, we
proposed the following additions to part 414 based on the
recommendations of the Committee.
1. Definitions and levels of services. In part 414, we proposed to
add subpart H, Sec. 414.605 to define several levels of ground
ambulance services ranging from BLS to specialty care transport. (Note
that the term ``ground'' refers to both land and water transportation.
The definitions and RVUs for each of the levels of service were
described in Sec. 414.605, ``Definitions.'') Also, we proposed that the
rate per ground mile for all ground ambulance services would be the
same for each level of service.
We stated in the proposed rule that there would be two levels of
air ambulance services to distinguish fixed wing from rotary wing
(helicopter) aircraft. In addition, to recognize the operational cost
differences of the two types of aircraft, there would be two distinct
payment amounts for air ambulance mileage. The air ambulance services
mileage rate would be calculated per actual loaded (patient onboard)
miles flown, expressed in statute miles (that is, ground, not nautical,
miles.)
The Committee used an industry consensus document, described below,
as the basis for defining the levels of ambulance service.
During 1990, the development of a training blueprint and the
evaluation of current levels of training and certification for
prehospital providers were identified as priority needs for national
emergency medical services (EMS). As a result, the National EMS
Training Blueprint Project was formed.
In May 1993, representatives of EMS organizations adopted the
National EMS Education and Practice Blueprint consensus document
(Blueprint). As stated in the National EMS Education and Practice
Blueprint, Executive Summary, printed September 1993, ``The Blueprint
divides the major areas of prehospital instruction and/or core
performance into 16 `core elements.' '' For each core element, the
Blueprint recommends that there be four levels of prehospital EMS
providers ``corresponding to various knowledge and skills in each of
the core elements.'' At the ``First Responder'' level, personnel use a
limited amount of equipment to perform initial assessments and
interventions. The ``EMT-Basic'' has the knowledge and skill of the
First Responder, but is also qualified to function as the minimum staff
for an ambulance. ``EMT-Intermediate'' personnel has the knowledge and
skills identified at the First Responder and EMT-Basic levels, but is
also qualified to perform essential advanced techniques and to
administer a limited number of medications. The ``EMT-Paramedic,'' in
addition to having the competencies of an EMT-
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Intermediate, has enhanced skills and can administer additional
interventions and medications.
Since the release of the Blueprint, a consensus panel of EMS
educators has recommended that the Department of Transportation,
National Highway Traffic and Safety Administration (DOT/NHTSA) revise
the document. DOT/NHTSA has accepted the recommendation of the panel
and expects to release a revised Blueprint or an equivalent document in
the near future.
To request a copy of the National Emergency Medical Services
Education and Practice Blueprint, please fax your request to: NHTSA/EMS
Division, (202) 366-7721. Please include your name and address. Because
of staffing and resource limitations NHTSA will forward the requested
document via regular mail.
We proposed the following seven levels of ambulance services.
a. Basic Life Support (BLS)--When medically necessary, the
provision of basic life support (BLS) services as defined in the
National Emergency Medical Services EMS Education and Practice
Blueprint for the Emergency Medical Technician-Basic (EMT-Basic)
including the establishment of a peripheral intravenous (IV) line.
b. Advanced Life Support, Level 1 (ALS1)--When medically necessary,
this is the provision of an assessment by an advanced life support
(ALS) ambulance provider or supplier or the furnishing of one or more
ALS interventions. An ALS assessment is performed by an ALS crew and
results in the determination that the beneficiary's condition requires
an ALS level of care, even if no other ALS intervention is performed.
An ALS provider or supplier is defined as a provider or supplier whose
staff includes an individual trained to the level of the EMT-
Intermediate or Paramedic as defined in the National EMS Education and
Practice Blueprint. An ALS intervention is defined as a procedure
beyond the scope of an EMT-Basic as defined in the National EMS
Education and Practice Blueprint. These definitions are discussed later
in the ``Discussion of Public Comments on the Proposed Rule'' section.
c. Advanced Life Support, Level 2 (ALS2)--When medically necessary,
the administration of at least three different medications or the
provision of one or more of the following ALS procedures:
Manual defibrillation/cardioversion.
Endotracheal intubation.
Central venous line.
Cardiac pacing.
Chest decompression.
Surgical airway.
Intraosseous line.
d. Specialty Care Transport (SCT)--When medically necessary, for a
critically injured or ill beneficiary, a level of interhospital service
furnished beyond the scope of the paramedic as defined in the National
EMS Education and Practice Blueprint. This is necessary when a
beneficiary's condition requires ongoing care that must be furnished by
one or more health professionals in an appropriate specialty area (for
example, nursing, emergency medicine, respiratory care, cardiovascular
care, or a paramedic with additional training).
e. Paramedic ALS Intercept (PI)--These services are defined in
Sec. 410.40(c) ``Paramedic ALS Intercept Services''. These are ALS
services furnished by an entity that does not provide the ambulance
transport. Under limited circumstances, Medicare payment may be made
for these services. (To obtain additional information about paramedic
ALS intercept services, please refer to the March 15, 2000 final rule
(65 FR 13911).)
f. Fixed Wing Air Ambulance (FW)--We proposed that fixed wing air
ambulance services would be covered when the point from which the
beneficiary is transported to the nearest hospital with appropriate
facilities is inaccessible by land vehicle, or great distances or other
obstacles (for example, heavy traffic) and the beneficiary's medical
condition is not appropriate for transport by either BLS or ALS ground
ambulance.
g. Rotary Wing Air Ambulance (RW)--We proposed that rotary wing
(helicopter) air ambulance services are covered when the point from
which the beneficiary is transported to the nearest hospital with
appropriate facilities is inaccessible by ground vehicle, or great
distances or other obstacles (for example, heavy traffic) and the
beneficiary's medical condition is not appropriate for transport by
either BLS or ALS ground ambulance.
B. Current Payment System
The Medicare program pays for ambulance services on a reasonable
cost basis when furnished by a provider and on a reasonable charge
basis when furnished by a supplier. (For purposes of this discussion,
the term ``provider'' means all Medicare-participating institutional
providers that submit claims for Medicare ambulance services
(hospitals, including critical access hospitals (CAHs); skilled nursing
facilities (SNFs); and home health agencies (HHAs).) The term
``supplier'' means an entity that is other than a provider. See
Sec. 400.202.) The reasonable charge methodology bases payment for
ambulance services furnished by ambulance suppliers on the lowest of
the customary, prevailing, actual, or inflation indexed charge (IIC).
The following describes the current reasonable charge billing
methods for ambulance services:
Method 1: A single, all-inclusive charge reflecting all
services, supplies, and mileage.
Method 2: One charge reflecting all services and supplies
(base rate) with a separate charge for mileage.
Method 3: One charge for all services and mileage, with a
separate charge for supplies.
Method 4: Separate charges for services, mileage, and
supplies.
C. Organization of the Preamble
The headings for the discussion of various policy issues in this
final rule correspond to the headings used in the September 2000
proposed rule. For the convenience of the reader, the analysis of
comments and their responses are integrated with the discussion of each
issue.
D. Recent Legislation
We do not intend for the aggregate amount of payments under the
ambulance fee schedule to be lower than the aggregate amount of
payments under the current system. Consequently, as described below, we
will adjust the conversion factor (CF) and air ambulance rates if
actual experience under the fee schedule is different from the
assumptions used to determine the initial CF and air ambulance rates.
We estimate that total spending (the sum of Medicare program
payments and beneficiary copayments) for ambulance services over the
next five years will be:
------------------------------------------------------------------------
Payments
Calendar year ($ billion)
------------------------------------------------------------------------
2002....................................................... 2.7
2003....................................................... 2.8
2004....................................................... 2.9
2005....................................................... 3.0
2006....................................................... 3.1
------------------------------------------------------------------------
These estimates are based on the assumption that the ambulance
inflation factor will be 2.2 percent for 2002 and 2.5 percent for years
2003 through 2006, that the ratio of services furnished at the various
levels of intensity (for example, BLS versus ALS1 versus ALS2, etc.)
will not change and that there will be an increase in Medicare
beneficiary enrollment of 0.9, 0.8, 0.9, 1.3 and 1.0 percent in the
years 2002 through 2006, respectively. To the extent that any of
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these assumptions are different from actual experience, actual payments
will be higher or lower than these estimates.
As we indicated in the proposed rule, we will monitor payment data
and evaluate whether the assumptions used to establish the original CF
(for example, the ratio of the volume of BLS services to ALS services)
are accurate. If the actual proportions among the different levels of
service are different from the projected amounts, we will adjust the CF
accordingly and apply this adjusted CF prospectively. Similarly, if the
level of low charge billing is significantly different from the assumed
level, we will also adjust the CF and apply such an adjusted CF
prospectively.
Over the past 20 years, the Congress has been moving towards fee
schedules and prospective payment systems for Medicare payment. In the
case of ambulance services, the reasonable charge methodology has
resulted in a wide variation of payment rates for the same service. In
addition, this payment methodology is administratively burdensome,
requiring substantial recordkeeping for historical charge data. The
Congress, under the BBA, mandated the establishment of a national fee
schedule for payment of ambulance services.
1. Balanced Budget Act of 1997 (BBA)
Section 4531(b)(2) of the BBA added a new section 1834(l) to the
Social Security Act (the Act). Section 1834(l) of the Act requires the
establishment of a national fee schedule for payment of ambulance
services under Medicare part B through negotiated rulemaking. This
section also requires that in establishing the ambulance fee schedule,
we will--
Establish mechanisms to control increases in expenditures
for ambulance services as a benefit under part B of the Medicare
program;
Establish definitions for ambulance services that link
payments to the types of services furnished;
Consider appropriate regional and operational differences;
Consider adjustments to payment rates to account for
inflation and other relevant factors;
Phase in the fee schedule in an efficient and fair manner;
and,
Require that payment for ambulance services be made only
on an assignment-related basis.
In addition, the BBA requires that ambulance services covered under
Medicare be paid based on the lower of the actual billed charge or the
ambulance fee schedule amount. The law also provides, in a paragraph
entitled ``Savings,'' that total payments during the first year of the
ambulance fee schedule may be no more than what would have been paid if
the ambulance fee schedule were not in effect. In addition, we are
implementing the provisions of a regulation proposed in June 1997 that
we would have made final prior to the fee schedule, but decided instead
to implement coincident with the fee schedule, as discussed below.
Section 4531(c) of BBA 1997 provided for payment of paramedic
advanced life support (ALS) intercept services directly to the entity
furnishing those services under limited circumstances. Paramedic ALS
intercept services are ALS services delivered by paramedics that
operate separately from the agency that provides the ambulance
transport. This type of service is most often provided for an emergency
ambulance transport in which a local volunteer ambulance that can
provide only basic life support (BLS) level service is dispatched to
transport a beneficiary. If the beneficiary needs ALS services such as
EKG monitoring, chest decompression, or IV therapy, another entity
dispatches a paramedic to meet the BLS ambulance at the scene or once
the ambulance is on the way to the hospital. The ALS paramedics then
provide their services to the beneficiary. One statutory criteria for
payment is that the service must be furnished in a rural area. Other
criteria (for example, the transporting entity must be volunteer)
limited the application of this provision. The program defined a rural
area as one that was outside any area defined by the Office of
Management and Budget as a Metropolitan Statistical Area, (MSA) or New
England County Metropolitan Area (NECMA).
2. Balanced Budget Refinement Act of 1999
Section 412 of the BBRA provided a new definition for the term
``rural'' in the context of the Medicare coverage provision for
paramedic ALS intercept services. The BBRA states that, effective for
services furnished on or after January 1, 2000:
``An area shall be treated as a rural area if it is designated
as a rural area by any law or regulation of the State or if it is
located in a rural census tract of a metropolitan statistical area
(as determined under the most recent Goldsmith modification,
originally published in the Federal Register on February 27, 1992
(57 FR 6725).''
This definition applies only to the Medicare paramedic ALS intercept
benefit implemented at Sec. 410.40(c). This is a very limited benefit
and to date we know of only one State (New York) with areas that meet
the statutory requirements. (See the March 15, 2000 final rule on
``Coverage of, and Payment for, Paramedic Intercept Ambulance
Services'' (65 FR 13911).) For all other ambulance services, the
definition of ``rural'' specified in this final rule will apply.
3. The Medicare, Medicaid, and State Child Health Insurance Program
Benefits Improvement and Protection Act of 2000 (BIPA)
BIPA provided the following changes to the ambulance fee schedule
that have been incorporated into this rule.
a. Critical Access Hospital (CAH)
The proposed rule would have applied the ambulance fee schedule to
all entities furnishing ambulance services to Medicare beneficiaries.
Section 205 of BIPA provided that CAHs, or entities owned and operated
by them, are paid for ambulance services based on reasonable cost if
there is no other ambulance provider or supplier within a 35-mile
drive. As a result, these entities are exempt from the ambulance fee
schedule described in this final rule. These entities are also exempt
from the current cost-per-trip inflation cap applicable to providers.
This cap, established by section 4531(a)(1) of the BBA, limits
increases in the cost per trip of ambulance services from one year to
the next by the consumer price index for all urban consumers, reduced
by 1 percentage point. Implementation of section 205 of BIPA requires
us to establish a process for a CAH to qualify for this exemption. Such
a process was addressed in a separate final rule, ``Medicare Program;
Changes to the Hospital Inpatient Prospective Payment Systems and Rates
and Costs of Graduate Medical Education; Fiscal Year 2002 Rates, Etc.;
Final Rules,'' published August 1, 2001 (66 FR 39828). The payment
policy component is addressed in this rule.
Comment: Some commenters believe that we should pay all CAHs based
on cost payment for ambulance services because, in their view, section
1834(g) of the Act requires that CAHs be paid on a reasonable cost
basis for all services, not just their services to inpatients and
outpatients.
Response: The Congress, in section 205 of BIPA, specifically
provides that ambulance services furnished on or after December 21,
2000 by a CAH or an entity owned and operated by a CAH be paid on a
reasonable cost basis if the CAH or entity is the only provider or
supplier located within a 35-mile drive of the CAH or entity. BIPA did
not grant CMS broad authority to pay other CAHs on a cost basis.
Therefore, CAHs that do not fall within the ambit of section 205
[[Page 9104]]
of BIPA will be paid under the ambulance fee schedule.
b. Rural Ambulance Mileage
The proposed rule would have established payment for rural mileage
greater than 17 miles at the same rate as mileage within urban areas.
Section 221 of BIPA provided that the payment rate for rural ambulance
mileage greater than 17 miles and up to 50 miles be increased by not
less than one-half of the additional payment per mile established for
the first 17 miles of a rural ambulance trip. We are establishing this
rate at one-half of the additional payment per mile established for the
first 17 miles of a rural ambulance trip. This amount is the minimum
that is required by the plain language of the law and is not
discretionary. We believe that proposed rulemaking, which would be
necessary to set the amount at a level higher than the minimum, is
impracticable in this instance for timely implementation the law. This
is consistent with the amount established by the Congress for the
period prior to April 1, 2002. We are waiving proposed rulemaking for
this provision and will implement it as a final rule with comment
period. Therefore, we will accept public comments on this policy.
c. Inflation Factor
The proposed rule would have increased the per trip payments for
services furnished in 2001 over the per trip payments for these
services furnished in 2000 by an amount equal to the change in the CPI-
U reduced by one percent. Section 423 of BIPA provided that the
ambulance inflation factor for services furnished during the period
July 1, 2001 through December 31, 2001 be equal to 4.7 percent, an
increase of two percentage points over the rate in the proposed rule.
We have implemented this provision without proposed rulemaking because
it was self-implementing, not discretionary for CMS, and did not
require us to interpret the law. For that reason, we find notice and
comment rulemaking unnecessary.
d. Ground Ambulance Mileage
The proposed rule would have paid for all ground ambulance mileage
during a four-year transition period based on a blend of the current
payment rate and the fee schedule rate. Section 423 provided that there
will be no phased-in blended payment for mileage for ambulance
suppliers paid by carriers in those States in which, prior to the fee
schedule, the carrier's payment to all suppliers did not include
separate payment for all in-county ambulance mileage. Mileage paid by
these carriers in these States will be paid based on the full fee
schedule amount. This provision does not apply to providers. Because
the law does not permit CMS to exercise any discretion in implementing
the policy, we find notice and comment rulemaking unnecessary.
Therefore, we are waiving proposed rulemaking for this provision and
will implement it as a final rule with comment. Therefore, we will
accept public comments on this policy.
E. Components of Ambulance Fee Schedule Payment Amounts
Ambulances may be ground, water or air. We proposed that the
payment amount for each ambulance service paid under the ambulance fee
schedule would be the sum of a base payment amount and a mileage rate.
The base payment amount for each air ambulance service paid under the
ambulance fee schedule would be the product of two primary factors: (1)
A nationally uniform unadjusted base rate; and (2) a geographic
adjustment factor for an ambulance fee schedule area.
We proposed that the base payment amount for each ground or water
ambulance service paid under the ambulance fee schedule would be the
product of three factors--
(1) A nationally uniform relative value for the service;
(2) A geographic adjustment factor for an ambulance fee schedule
area; and
(3) A nationally uniform conversion factor (CF) for the service.
We are proceeding with these proposals in this final rule. A detailed
description of these factors is discussed in this final rule.
Relative value units (RVUs) measure the value of ambulance services
relative to the value of a base level ambulance service. Thus, if the
value of the resources necessary to furnish service B is twice the
value of the resources needed to furnish service A, service B will have
twice as many RVUs as service A. RVUs are multiplied by a CF expressed
as a dollar value to produce a payment amount. The RVUs represent, on
average, the relative resources associated with the various levels of
ambulance services. RVUs for each level of service were established by
the Committee.
Because the fee schedule is based on the relative values of
different levels of ground ambulance services relative to a basic life
support ground ambulance service, a factor is needed to convert the
relative value to a dollar amount which is the national base payment
rate. In order to determine the CF, the general approach is first to
determine the total amount of money available and divide that total by
the total number of relative value units that we estimate will be in
the fee schedule for the base year. As we describe in more detail
below, we used 1998 Medicare ambulance claims data to determine the
total RVUs in this calculation.
Section 1834(1)(3) of the Act states that, in establishing the
ambulance fee schedule, the Secretary must ensure that the aggregate
amount of payment made for ambulance services in calendar year (CY)
2000 (originally expected to be the first year of the fee schedule)
does not exceed the aggregate amount of payment that would have been
made absent the fee schedule. In the January 22, 1999 notice concerning
the meetings of the Committee, we stated that we were postponing final
agency action, pending establishment of the ambulance fee schedule, on
a proposal to base payment on the level of service (ALS or BLS)
actually needed by the beneficiary. We stated our position that the
savings that would have been realized through implementation of that
policy in 1998 should not be lost to the Medicare program. We estimated
that $65 million in program savings would have been realized in 1998 if
this policy had been in effect at that time.
Section 4531(b)(3) of the BBA, which added section 1834(l)(3) to
the Act, provided that the fee schedule was to be effective for
ambulance services furnished on or after January 1, 2000. However,
because of other statutory obligations, the scope of systems changes
required to implement the ambulance fee schedule, and the need to
ensure that our computerized systems were compliant with the Year 2000
(Y2K) requirements, we could not meet this statutory deadline.
In the September 12, 2000 proposed rule, we indicated our intention
to implement the fee schedule beginning January 1, 2001. However,
although the proposed rule was largely based on an agreement reached as
part of a negotiated rulemaking process with representatives of the
ambulance industry and other interests, we received over 340 public
comments. We did not have sufficient time to carefully consider all
comments and publish a final rule in time to implement the fee schedule
by January 1, 2001. This final rule establishes an implementation date
of April 1, 2002. Our objective is to have the ambulance fee schedule
become effective as soon as we can, in this case, April 1, 2002.
F. Negotiated Rulemaking Process
Section 1834(l)(1) of the Act provided that the ambulance fee
schedule be
[[Page 9105]]
established through the negotiated rulemaking process described in the
Negotiated Rulemaking Act of 1990 (Pub. L. 101-648, 5 U.S.C. 581-590).
Prior to using negotiated rulemaking under the Negotiated Rulemaking
Act, the head of an agency must generally consider whether the
following conditions exist:
There is a need for a rule.
There are a number of identifiable interests that will be
significantly affected by the rule.
There is a reasonable likelihood that a committee can be
convened with a balanced representation of persons who--
+ Can adequately represent the interests identified; and,
+ Are willing to negotiate in good faith to reach a consensus on
the proposed rule.
There is a reasonable likelihood that a committee will
reach a consensus on the proposed rule within a fixed timeframe.
The negotiated rulemaking procedure will not unreasonably
delay the notice of proposed rulemaking and the issuance of a final
rule.
The agency has adequate resources and is willing to commit
its resources, including technical assistance, to the committee.
The agency, to the maximum extent possible consistent with
the legal obligations of the agency, will use the consensus of the
committee as the basis for the rule proposed by the agency for notice
and comment.
Negotiations were conducted by a committee chartered under the
Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2). We used the
services of an impartial convener to help identify interests that would
be significantly affected by the proposed rule (including residents of
rural areas) and the names of organizations who were willing and
qualified to represent those interests. The Negotiated Rulemaking
Committee on the Medicare Ambulance Services Fee Schedule (the
Committee) consisted of individuals associated with national
organizations that represent interests that were likely to be
significantly affected by the fee schedule. (Additional information
about the negotiations can be found in the January 22, 1999 Federal
Register notice or may be accessed at our Internet Web site at http://www.hcfa.gov/medicare/ambmain.htm.)
To the extent that the proposed rule accurately reflects the
Committee Statement, signed on February 14, 2000, each member of the
Committee has agreed not to comment on those issues on which consensus
was reached.
G. Interaction With the Proposed Rule Published on June 17, 1997
On June 17, 1997, we published a proposed rule (62 FR 32715) in the
Federal Register to revise and update the Medicare ambulance services
regulations at Sec. 410.40. Specifically, we proposed: To base Medicare
payment on the level of ambulance service required to treat the
beneficiary's condition; to clarify and revise the policy on coverage
of nonemergency ambulance services; and to set national vehicle, staff,
billing, and reporting requirements. As noted above, section 1834(1)(2)
of the Act provides, in part, that in establishing the ambulance fee
schedule, the Secretary establish definitions for ambulance services
that link payments to the types of services furnished. One of the
provisions of the June 17, 1997 proposed rule would have defined
ambulance services as either BLS or ALS and linked Medicare payment to
the type of service required by the beneficiary's condition. We
received a large number of comments on this provision, and, in general,
commenters were very concerned about our proposal.
II. Discussion of Public Comments on the Proposed Rule
In response to the publication of the September 2000 proposed rule,
we received approximately 340 comments. We received comments from,
among others, national ambulance organizations, emergency physician
groups and State emergency programs. The majority of the comments
addressed issues related to medical condition descriptions lists,
physician certification, and definitions of services.
As stated previously, the headings for the policy issues in this
final rule correspond to the headings used in the September 2000
proposed rule. For the convenience of the reader, the analysis of
comments and their responses are integrated with the discussion of each
issue.
A. Proposals Based on Negotiated Rulemaking
In our proposed rule, published September 12, 2000, we discussed
the negotiated rulemaking procedures used to formulate our policy for
the ambulance fee schedule.
Comment: One commenter stated that we should reconvene the
Committee to consider the comments received in response to the proposed
rule and also reconvene the Committee annually to consider all future
adjustments.
Response: We have decided not to reconvene the Committee. We have
adhered to the Committee's recommendations in all cases in which the
Committee addressed an issue. Furthermore, some issues were excluded
from the negotiation process, and therefore, were not within the
purview of the Committee. Also, we believe that reconvening the
Committee would significantly postpone the implementation of the
regulation.
Comment: Commenters from various regions stated that their
organizations were not represented on the Committee.
Some commenters believe that the North American Association of
Public Utility Models (NAPUM) should have been included as a
participant in the negotiated rulemaking process. NAPUM could have
shared its Public Utility Model EMS system in the development of the
ambulance fee schedule.
Another commenter stated that the fixed wing air ambulance
organizations were not properly represented at the negotiated
rulemaking meetings and, therefore, the payment rates for fixed wing
air mileage are inadequate.
Response: There was a public solicitation through the Federal
Register (January 22, 1999) for participation in the negotiated
rulemaking process. All interested parties who responded to this public
notice were given due consideration by the neutral convener whom we
retained for this purpose. Also, the Association of Air Medical
Services (AAMS), which has approximately 130 members that are fixed
wing providers, represented the air ambulance industry.
In the proposed rule, we proposed the following additions to part
414 based on the recommendations of the Committee.
1. Definitions and Levels of Services
In part 414, we proposed to add subpart H, Sec. 414.605 that would
define several levels of ground ambulance services ranging from BLS to
specialty care transport (SCT). (Note that the term ``ground'' refers
to both land and water transportation. The definitions and RVUs for
each of the levels of service are described in Sec. 414.605,
``Definitions.'') Also, this section proposed that the mileage rate
paid under the fee schedule per ground mile would be the same for each
level of ground ambulance service.
In the course of establishing national standards for ALS and BLS
during 1990, the development of a training blueprint and the evaluation
of current levels of prehospital provider training and certification
were identified by the national emergency medical services (EMS)
industry as a priority need for EMS. As a result, the National EMS
Training Blueprint Project was formed.
[[Page 9106]]
In May 1993, representatives of EMS organizations adopted the
Blueprint consensus document. This consensus document was used as the
basis for defining the levels of service. As stated in the Blueprint,
Executive Summary, printed September 1993, ``The Blueprint divides the
major areas of prehospital instruction and/or core performance into 16
`core elements.' '' For each core element, the Blueprint recommended
that there be four levels of prehospital EMS providers ``corresponding
to various knowledge and skills in each of the core elements.'' At the
First Responder level, personnel use a limited amount of equipment to
perform initial assessments and interventions.
The EMT-Basic has the knowledge and skill of the First Responder,
but is also qualified to function as the minimum staff for an
ambulance. EMT-Intermediate personnel has the knowledge and skills
identified at the First Responder and EMT-Basic levels, but is also
qualified to perform essential advanced techniques and to administer a
limited number of medications. The EMT-Paramedic, in addition to having
the competencies of an EMT-Intermediate, has enhanced skills and can
administer additional interventions and medications.
After the release of the Blueprint, a consensus panel of EMS
educators had recommended that DOT/NHTSA revise the document. The
Department of Transportation, National Highway Traffic and Safety
Administration (DOT/NHTSA) has accepted the recommendation of the panel
and is expected to release a revised Blueprint or an equivalent
document in the near future.
To request a copy of the National Emergency Medical Services
Education and Practice Blueprint, please fax your request to: NHTSA/EMS
Division, (202) 366-7721. Please include your name and address. Because
of staffing and resource limitations, NHTSA will forward the requested
document via regular mail.
Levels of Ambulance Services
Payment for all ambulance services under the fee schedule will be
based on a base rate payment. In addition, there will be a separate
payment for mileage.
In the proposed rule, we stated that there would be two levels of
air ambulance services to distinguish fixed wing from rotary wing
(helicopter) aircraft. In addition, to recognize the operational cost
differences of the two types of aircraft, there would be two distinct
payment amounts for air ambulance mileage. The air ambulance services
mileage rate would be calculated per actual loaded (patient on board)
miles flown, expressed in statute miles (that is, ground, not nautical,
miles).
In the proposed rule, we proposed the seven levels of ambulance
services shown below. We expressed the qualifications for staff at the
various levels in terms of the Blueprint. As just noted, we are
revising the proposed qualifications to indicate that the vehicle
staffing will comply with existing State and local laws for each level
of service.
a. Basic Life Support (BLS)--In the proposed rule, we stated that,
when medically necessary, the provision of basic life support (BLS)
services is defined in the National Emergency Medicine Services (EMS)
Education and Practice Blueprint for the Emergency Medical Technician-
Basic (EMT-Basic) including the establishment of a peripheral
intravenous (IV) line.
b. Advanced Life Support, Level 1 (ALS1)--In the proposed rule, we
stated that, when medically necessary, this level of service requires
the provision of an assessment by an advanced life support (ALS)
ambulance provider or supplier and the furnishing of one or more ALS
interventions. An ALS assessment is performed by an ALS crew and
results in the determination that the beneficiary's condition requires
an ALS level of care, even if no other ALS intervention is performed.
The proposed rule also stated that an ALS provider or supplier is
defined as a provider trained to the level of the EMT-Intermediate or
Paramedic as defined in the National EMS Education and Practice
Blueprint. We proposed to define an ALS intervention as a procedure
beyond the scope of an EMT-Basic as defined in the National EMS
Education and Practice Blueprint.
c. Advanced Life Support, Level 2 (ALS2)--In the proposed rule, we
stated that this level of service is defined by, when medically
necessary, the administration of at least three different medications
or the provision of one or more of the following ALS procedures:
Manual defibrillation/cardioversion.
Endotracheal intubation.
Central venous line.
Cardiac pacing.
Chest decompression.
Surgical airway.
Intraosseous line.
d. Specialty Care Transport (SCT)--In the proposed rule, we stated
that this level of service is defined by, when medically necessary, for
a critically injured or ill beneficiary, a level of interhospital
service furnished beyond the scope of the paramedic as defined in the
National EMS Education and Practice Blueprint. We stated that this
service would be necessary when a beneficiary's condition requires
ongoing care that must be furnished by one or more health professionals
in an appropriate specialty area (for example, nursing, emergency
medicine, respiratory care, cardiovascular care, or a paramedic with
additional training).
e. Paramedic ALS Intercept (PI)--In the proposed rule, we stated
that these services would be defined in Sec. 410.40(c) ``Paramedic ALS
Intercept Services.'' These are ALS services furnished by an entity
that does not provide the ambulance transport. Under limited
circumstances, Medicare payment may be made directly to the entity
furnishing paramedic services. (To obtain additional information about
paramedic ALS intercept services, please refer to the March 15, 2000
final rule (65 FR 13911).)
f. Fixed Wing Air Ambulance (FW)--In the proposed rule, we stated
that fixed wing air ambulance services would be covered when the point
from which the beneficiary is transported to the nearest hospital with
appropriate facilities is inaccessible by land vehicle, or great
distances or other obstacles (for example, heavy traffic) and the
beneficiary's medical condition is not appropriate for transport by
either BLS or ALS ground ambulance.
g. Rotary Wing Air Ambulance (RW)--In the proposed rule, we stated
that rotary wing (helicopter) air ambulance services would be covered
when the point from which the beneficiary is transported to the nearest
hospital with appropriate facilities is inaccessible by ground vehicle,
or great distances or other obstacles (for example, heavy traffic) and
the beneficiary's medical condition is not appropriate for transport by
either BLS or ALS ground ambulance.
Comment: In the context of determining when payment would be made
at the ALS rate versus the BLS rate, some commenters disagreed with the
definitions provided in the National Emergency Medical Services
Education and Practice Blueprint (the Blueprint), stating that State
definitions and standards differed from this document. Some States
license as paramedics individuals who have not completed all of the
hours or modules required by the Department of Transportation's
National Standard Paramedic Curriculum. Technically, these individuals
would not be ``trained to the level'' of a paramedic as defined in the
Blueprint and the resulting National Standard Paramedic Curriculum.
Commenters suggested that the definition of a
[[Page 9107]]
paramedic should be a person who is licensed by the State at an ALS
level, regardless of whether the level of the training of the person
meets the definition of ``paramedic'' as described in the Blueprint or
National Standard Paramedic Curriculum.
Several commenters also noted that the definition of BLS is
confusing regarding establishment of a peripheral intravenous (IV)
line. They further commented that, in many States, BLS personnel are
not permitted by State law to establish IV lines. To clarify the
definition, the commenters recommended that we make it clear that, when
an IV line is established by an ALS crew, this is an ALS intervention
that qualifies the trip as an ALS transport.
Response: As a basis for defining the levels of service in the
proposed rule, we incorporated the knowledge and skills outlined in the
Blueprint. After considering the observations made by commenters and
recognizing that the Department of Transportation, National Highway
Traffic and Safety Administration has agreed to revise the Blueprint in
the near future, we concluded that the knowledge and skill levels
outlined in the Blueprint may be contrary to some existing State
training standards and requirements. We have chosen instead, to rely on
vehicle staffing requirements contained in existing State and local
laws. Therefore, we are revising Sec. 414.605 to indicate that payment
will be made at the ALS1 level if the service furnished is beyond the
skill level of an EMT-Basic in accordance with State and local laws.
Comment: Several commenters noted that the definition of ALS1
differed from that in the Committee Statement. Specifically, the
conjunction used in the Committee Statement between ``assessment by an
advanced life support (ALS) ambulance provider or supplier'' and ``the
furnishing of one or more ALS interventions'' was ``and/or'' rather
than ``and.'' In addition, commenters pointed out that the ALS2
definition differed slightly between the preamble of the proposed rule
and the proposed regulation text. For ALS2, commenters addressed the
Committee Statement definition which was based on the supplier's
provision of ``three different medications or the provision of one or
more of the following ALS procedures:
Manual defibrillation/cardioversion.
Endotracheal intubation.
Central venous line.
Cardiac pacing.
Chest decompression.
Surgical airway.
Intraosseous line.''
The proposed definition at Sec. 414.605 stated ``three different
medications and the provision of one or more of the following ALS
procedures:
Manual defibrillation/cardioversion.
Endotracheal intubation.
Central venous line.
Cardiac pacing.
Chest decompression.
Surgical airway.
Intraosseous line.''
Response: We agree with the commenters that the conjunction was
inconsistent with the Committee Statement and, therefore, we are
revising the regulation text to be consistent with the Committee
Statement. We note, however, that we are using the conjunction ``or''
because this term carries the same meaning as ``and/or.''
Comment: Many commenters stated that the proposed definition of ALS
assessment is confusing. The definition states that the ALS assessment
is one ``performed by an ALS crew that results in the determination
that the beneficiary's condition requires an ALS level of care.'' The
commenters stated that, in order to be consistent with the Committee
Statement, the definition should state that an ALS assessment is one
performed by an ALS crew to determine whether the beneficiary's
condition requires an ALS level of care. Some commenters suggested that
the definition should be revised as follows: `` `Advanced Life Support
(ALS) assessment' is an assessment of a beneficiary with a medical
condition requiring assessment by an ALS crew to determine whether ALS
interventions are needed or may be needed during transport.''
Response: We agree, and we have clarified the definition of ALS
assessment accordingly. We are also clarifying that the ALS assessment
is relevant only in an emergency case. While the Committee Statement is
silent on this point, we believe that the ALS assessment would not be
required in non-emergency or scheduled situations.
Comment: Many commenters stated that we should provide payment for
all drugs, both low and high cost. Commenters stated that we had
refused to negotiate on the issue of a separate payment for drugs in
addition to and apart from the fee schedule payment for the ambulance
transport, on the grounds that all drug costs should be included in the
base rate. The commenters believe that this position fails to take into
account the fact that many ambulance systems are now being forced to
pay for drugs that were previously paid for outside of the Medicare
payment. These costs, they argue, were not captured in the aggregate
ambulance payment amount which we calculated and upon which we would
calculate the CF. Therefore, they argue, these costs would not be
reflected in the base rates. One way drugs were paid for in the past
outside the Medicare ambulance benefit was that a hospital would
restock the ambulance without charge for any drugs that had been used.
Commenters argue that, if hospitals do not continue restocking,
ambulance suppliers will have to bear the cost of these drugs from a
base rate that the commenters believe is already too low. The
commenters believe that we should allow separate payments for drugs in
addition to the ambulance fee schedule payment.
Response: Medicare's drug benefit does not permit a discrete
payment for drugs furnished on board an ambulance. Drugs in ambulances
have been included in ambulance payment only because they have been
considered to be ambulance supplies. The law permits payment for a drug
furnished on board an ambulance only if the drug is considered an
element of the ambulance service. At the same time, the law does not
permit payment under the ambulance benefit other than through the
ambulance fee schedule.
As noted above, the BBA required that total payments during the
first year of the fee schedule be no more than what would have been
paid if the ambulance fee schedule were not in effect. The law provides
no means to increase program payments for ambulance services that use
new high-cost drugs. It provides only the inflation factor to increase
rates under the ambulance fee schedule. With this constraint in mind,
the Committee considered, within the structure of the fee schedule,
establishing a separate RVU for drugs provided as ambulance supplies
above a certain threshold cost. However, the Committee rejected this
option. Therefore, payment for these items is included in the base
rates for all levels of service.
Comment: Commenters questioned whether oxygen, saline and aspirin
are considered medications for purposes of meeting the alternate
criterion for the ALS2 level of service that the ambulance supplier
provide three different medications.
Response: The proposed definition for an ALS2 level of service
provides that this level of service is defined by, when medically
necessary, the administration of at least three different medications
or the provision of one or more of the following ALS procedures:
Manual defibrillation/cardioversion.
[[Page 9108]]
Endotracheal intubation.
Central venous line.
Cardiac pacing.
Chest decompression.
Surgical airway.
Intraosseous line.
Only medications requiring a higher level of skill to administer are
considered medications for purposes of this definition. We are
clarifying in the final rule that payment at the ALS2 level requires
the administration of at least three medications by intravenous push/
bolus or by continuous infusion, excluding crystalloid, hypotonic,
isotonic, and hypertonic solutions (for example, Dextrose, Normal
Saline, Ringer's Lactate). Therefore, oxygen, saline and aspirin are
not considered as medications for the purpose of determining whether an
ALS2 level of care has been furnished.
Comment: Many commenters wanted to know whether three doses of the
same medication on one transport warrant classifying the service as an
ALS2 service.
Response: Three separate administrations of the same medically
necessary medication (of the kind specified in the criteria for ALS2)
during a single transport qualifies for payment at the ALS2 level.
Comment: Many commenters requested clarification regarding SCT. In
particular, the commenters asked that we further define the phrase
``paramedics with additional training.'' A commenter suggested that we
include a reference to any State or local standards or protocols that
define SCT training above and beyond the paramedic curriculum and a
reference to a curriculum approved by the medical director of an EMS or
ambulance system and shared with the carrier.
Response: As indicated in the response concerning the Blueprint,
above, we are revising Sec. 414.605 to indicate that vehicle staffing
must be in compliance with existing State and local laws. We now define
``paramedics with additional training'' in terms of State or local
authority that governs the licensing and certification of EMS personnel
in the State in which a paramedic is licensed. It seems possible, even
likely that there is no comparable definition in every State.
Comment: Some commenters asked whether the code for the SCT level
service may be used as a code for a trip from a facility to an air
ambulance and from the air ambulance to the final facility destination.
Response: Yes, the SCT level of service may be used in transporting
a beneficiary from the hospital to an air ambulance and then from the
air ambulance to the second hospital, if the SCT criteria are met.
Comment: Some commenters believe that paramedic intercept services
will suffer because of the failure in the fee schedule to recognize
paramedic intercept in States other than New York as a cost-effective
means of the delivery of prehospital care. Commenters stated that it is
important to provide adequate payment for paramedic intercept in all
areas of the country.
Response: As described in the regulations in Sec. 410.40(c) (and
also in Program Memorandum B-00-01 issued in January, 2000), under the
Medicare statute, payment may be made directly to the intercept
supplier for intercept services only if--
(a) The intercept service is provided in a rural area under a
contract with one or more volunteer ambulance services;
(b) The volunteer ambulance supplier is certified to provide
ambulance services;
(c) The volunteer ambulance supplier provides services only at the
BLS level at the time of the intercept; and
(d) The volunteer ambulance supplier is prohibited by State law
from billing anyone for the service furnished. The entity providing the
intercept services must also be qualified to provide services under
Medicare and must bill all patients receiving its intercept services.
At this time, to the best of our knowledge, only the State of New
York has areas that meet these four criteria. In all other areas, the
BLS level ambulance supplier must bill the program for an appropriate
level of service. If the paramedic intercept supplier wants to receive
payment, it would have to make an agreement with the volunteer supplier
regarding payment.
Comment: One commenter asked whether the new levels of ALS2 and SCT
under the fee schedule would be blended with the current ALS emergency
code payment rates during the transition period.
Response: For both ALS2 and SCT, the ``old'' portion of the blended
amount is the allowance for ALS emergency services.
2. Emergency Response Adjustment Factor
We proposed to add Sec. 414.610(c)(1) to state that, for the BLS
and ALS1 levels of service, an ambulance service that qualifies as an
emergency response service would be assigned higher RVUs to recognize
the additional costs incurred in responding immediately to an emergency
medical condition. An immediate response is one in which the ambulance
supplier begins as quickly as possible to take the steps necessary to
respond to the call. No emergency response adjustment factor applies to
PI, ALS2, SCT, FW, or RW.
Comment: Some commenters stated that the definition of ``emergency
response'' for purposes of the fee schedule in the implementing
instructions (Program Memorandum AB-00-88) is inconsistent with the
definition in the proposed rule and with the definition in the
Committee Statement. The definition in AB-00-88 is:
An emergency response is one that, at the time the ambulance
supplier is called, is provided after the sudden onset of a medical
condition manifesting itself by acute symptoms of sufficient severity
such that the absence of immediate medical attention could reasonably
be expected to result in placing the beneficiary's health in serious
jeopardy; in impairment to bodily functions; or in serious dysfunction
to any bodily organ or part.
The definition in the Committee Statement is:
For the BLS and ALS1 levels of service, an ambulance service that
qualifies as an emergency response will be assigned a higher relative
value to recognize the additional costs incurred in responding
immediately to an emergency medical condition. An immediate response is
one in which the ambulance provider begins as quickly as possible to
take the steps necessary to respond to the call. There is no emergency
modifier for PI, ALS2, or SCT.
Response: We agree with the commenter, and we will be changing the
definition of ``emergency response'' in the final regulation to conform
to the definition in the Committee Statement with one exception. We
have decided to delete from the Committee Statement's definition the
phrase ``emergency medical condition'' because the purpose of the
higher payment for the emergency medical condition is to recognize the
additional cost required in order to be prepared to respond immediately
to a call (for example, from a ``911'' service) when it is received
without regard to the condition of the beneficiary. The nature of the
beneficiary's condition is considered in determining whether an
ambulance transport was medically necessary and in determining the
level of service (for example, BLS-Emergency, ALS1-Emergency or ALS2).
However, the emergency rate is paid based on the immediate response to
the 911-type call and not based on the services furnished
[[Page 9109]]
to the beneficiary. Therefore, we are revising the definition as
follows:
Emergency response means responding immediately at the BLS or ALS1
level of service to a 911 call or the equivalent in areas without a 911
call system. An immediate response is one in which the ambulance
supplier begins as quickly as possible to take the steps necessary to
respond to the call.
We note that the definition of ``emergency response'' here is
intended only to describe the circumstances under which higher payment
would be made for services and its use is limited to this context. It
would have no effect on other program definitions of ``emergency.''
3. Operational Variations
We proposed to add Sec. 414.610(a), which would state that the
ambulance fee schedule applies to all entities that furnish ambulance
services, regardless of type. All public or private, for profit or not-
for-profit, volunteer, government-affiliated, institutionally-
affiliated or owned, or wholly independent supplier ambulance
companies, however organized, would be paid according to this ambulance
fee schedule, with the exception of CAHs as discussed above.
4. Regional Variations
a. Cost of living differences
In our proposed rule, we proposed that the payment for ambulance
services would be adjusted to reflect the varying costs of conducting
business in different regions of the country. We stated that we would
adjust the payment by a geographic adjustment factor (GAF) equal to the
practice expense (PE) portion of the geographic practice cost index
(GPCI) for the Medicare physician fee schedule. (For purposes of this
document, we use the abbreviation ``GPCI'' to mean the PE portion of
the GPCI.) The GPCI is an index that reflects the relative costs of
certain components of a physician's cost of doing business (for
example, employee salaries, rent, and miscellaneous expenses) in one
area of the country as compared to another. The geographic areas would
be the same as those used for the physician fee schedule. (A detailed
discussion of the physician fee schedule areas can be found in the July
2, 1996 proposed rule (61 FR 34615) and the November 22, 1996 final
rule (61 FR 59494).)
We proposed that the GPCI would be applied to 70 percent of the
base payment rate for ground ambulance services; this percentage
approximates the portion of ground ambulance service costs that are
represented by salaries. Similarly, we proposed that the GPCI would be
applied to 50 percent of the base payment rate for air ambulance
services. The GPCI would not be applied to the mileage payment rate. In
addition, the applicable GPCI would be based on the geographic location
at which the beneficiary is placed on board the ambulance.
We proposed to use the most recent GPCI; the physician fee schedule
law requires that the GPCI be updated every 3 years. The latest
revision became effective January 1, 2001. The updated data were
published in the November 1, 2000 final rule on the physician fee
schedule (65 FR 65585).
Comment: A few commenters stated that the practice expense portion
of the physician fee schedule GPCI does not properly reflect the cost
of living when calculating payment for ambulance services.
Response: We proposed using the practice expense portion of the
GPCI, as described in the physician fee schedule final rule published
in the Federal Register on November 1, 2000 (65 FR 65585). We based our
proposal on the Committee Statement that using the PE of the GPCI is
the most appropriate means available to measure the geographic
differences in the costs of providing ambulance services. The
components of the PE portion of the GPCI (for example, personnel and
supplies) are similar to the components of ambulance services and the
geographical variations in these costs for ambulances would therefore
be similar to the cost variations for physician practices. Also, based
on data available to the Committee, it recommended, and we agree, that
the labor share of the costs of ambulance services is approximately 70
percent of the ground and 50 percent of the air ambulance cost.
Therefore, the GPCI will apply to only 70 percent of the ground and 50
percent of the air ambulance base rates. We are not adjusting the
mileage rates.
Comment: Some commenters believe that both legs of a round trip
should be paid on the basis of the initial point of pick-up of the
beneficiary, and that both legs of a scheduled round trip crossing GPCI
or State lines should be billed to the carrier with jurisdiction for
the initial point of pick-up. The commenters state that, given the
proposed rule, suppliers may have to bill different carriers for each
of two legs on the same round trip. Also, beneficiaries are likely to
be confused by bills which indicate different charges for each leg of a
round trip, if it does not begin in a rural area. Finally, rural
suppliers could lose the rural adjustment for the second leg of a round
trip. Some commenters also believe the point of pick-up is not the best
criterion for establishing level of payment. There were some commenters
who felt that the GPCI should be matched to the location of the
ambulance company. Also, some commenters wanted clarification on trips
originating in another carrier jurisdiction.
Response: The Committee determined that the most equitable way to
apply the GPCI, as well as the rural adjustment payment, was by the
point of pick-up and not by the destination, location of the ambulance
company, or where the ambulance is garaged. One concern identified by
the Committee with using the location of the company or the place where
the ambulance is garaged was the relative ease of moving the location
of the company or garage to achieve higher payment. A second issue was
that any individual trip in a rural area would likely be longer and
prevent an ambulance from furnishing an additional trip, thereby
reducing utilization, whether the ambulance was garaged in an urban or
rural area. Considering each leg of a round trip separately gives
effect to the Committee's determinations. Moreover, considering each
leg separately achieves administrative simplicity and greater
administrative accuracy in making payments.
Comment: One commenter suggested that the Medicare hospital area
wage index be used in place of the GPCI, since many of the ambulance
providers are hospital-based.
Response: The Committee decided to use the GPCI, not the hospital
area wage index. As stated above, the components of the ambulance
service are more similar to the components of the PE portion of the
GPCI than they are to the components of the hospital wage index. Also,
fewer than 15 percent of ambulance services furnished to Medicare
beneficiaries are hospital-based, so we do not see the hospital wage
index as more appropriate than the GPCI. Thus, we will continue to use
the practice expense GPCIs from the physician fee schedule.
b. Services furnished in rural areas
We proposed to add Sec. 414.610(c)(1)(v), which stated that, for
ground ambulance services in rural areas, a 50 percent increase is
applied to the mileage rate for each of the first 17 miles; the regular
(urban) mileage allowance applies to every mile over 17 miles. For air
ambulance services, we stated, in rural areas, that a 50 percent
increase is applied to the total payment for air services, both mileage
and base rate. We proposed the 50 percent rural increase for the first
17 miles in
[[Page 9110]]
consideration of the circumstances of isolated, essential ambulance
suppliers (that is, when there is only one ambulance service in a given
geographic area) which may not furnish many trips over the course of a
typical month because of a small rural population. While we recognize
that this methodology is not sufficiently precise to limit the rural
bonus payment to only those rural ambulances that are isolated,
essential, low-volume (the definition of rural we are proposing is not
as precise as other alternatives), we proposed an adjustment to
increase the rate of payment for mileage if the location at which the
beneficiary is placed on board the ambulance is located in a rural
area. We proposed to define a rural area to be an area outside a
Metropolitan Statistical Area (MSA) or a New England County
Metropolitan Area, or an area within an MSA identified as rural, using
the Goldsmith modification.
The Goldsmith modification evolved from an outreach grant program
sponsored by the Office of Rural Health Policy of the Health Resources
and Services Administration (HRSA) of the Department of Health and
Human Services. This program was created to establish an operational
definition of rural populations lacking easy geographic access to
health services in large counties with metropolitan cities. Using 1980
census data, Dr. Harold F. Goldsmith and his associates created a
methodology for identifying rural census tracts located within a large
metropolitan county of at least 1,225 square miles. However, these
census tracts are so isolated by distance or physical features that
they are more rural than urban in character. Additional information
regarding the Goldsmith modification can be found on the Internet at
http://www.ruralhealth.hrsa.gov/Goldsmith.htm.
We could not easily adopt and implement, within the constraints
necessary to implement the fee schedule timely, a methodology for
recognizing geographic population density disparities other than MSA/
non-MSA. However, we will consider alternative methodologies that may
more appropriately address payment to isolated, low-volume rural
ambulance suppliers. Thus, the rural adjustment in this rule is a
temporary proxy to recognize the higher costs of certain low-volume
rural suppliers.
Several difficult issues will need to be resolved to establish more
precise criteria for suppliers that should receive the rural
adjustment. Examples of such issues include: (1) Appropriately
identifying an ambulance supplier as rural; (2) identifying the
supplier's total ambulance volume (because Medicare has a record only
of its Medicare services); and (3) identifying whether the supplier is
isolated, because some suppliers might not furnish services to Medicare
beneficiaries (thus, Medicare would have no record of their existence)
and one of these suppliers might be located near an otherwise
``isolated'' supplier. Addressing these issues in some cases will
require the collection of data that are currently unavailable. We
intend to work with the industry and with the Office of Rural Health
Policy to identify and collect pertinent data as soon as possible.
We stated in our proposed rule that the application of the rural
adjustment would be determined by the geographic location at which the
beneficiary is placed on board the ambulance. Under the proposed rule,
the rural adjustment would have been made using the following
methodology:
Ground--A 50 percent add-on applied to only the mileage
payment rate for the first 17 loaded miles and a 25 percent add-on
applied to only the mileage payment rate for miles 18 through 50.
Air--A 50 percent add-on applied to the base rate and to
all of the loaded mileage.
Comment: Several commenters expressed concern that there should be
a more precise definition of low-volume rural ambulance suppliers and
that the rural payment rate should be higher. They suggested that we
could use data from the Office of Rural Health (ORH) or the
Administration on Aging that would give a more precise determination
than the MSA/non-MSA classification. Another commenter suggested using
any areas that are designated as rural by the State. One commenter
suggested that until a better rural adjustment is implemented, rural
suppliers and providers should be paid under their current payment
methodologies.
Response: We are exploring alternative means for identifying low-
volume rural suppliers. We are exploring data from other sources,
including the ORH, which has sponsored a study, Rural-Urban Commuting
Areas (RUCA). This study was performed by the University of Washington
Rural Health Research Center. We anticipate that a more precise
definition of low-volume rural suppliers will reduce the number of
suppliers who qualify for the higher rural payment, allowing us to
better target the payment increases to these suppliers while adhering
to the aggregate payment limit provided in the law. We do not have the
legal authority to exempt rural ambulance services from the fee
schedule and pay them under the current methodology with the exception
of certain CAHs. (See discussion of section 205 of BIPA.) In addition,
BIPA provided that the payment rate for rural ambulance mileage greater
than 17 miles and up to 50 miles be increased by not less than one-half
of the additional payment per mile established for the first 17 miles
of a rural ambulance trip.
Comment: A few commenters suggested that we adopt a more precise
means of identifying rural areas for the fee schedule, using zip codes
rather than MSAs as the basis for identification.
Response: We are currently using zip codes to identify areas.
However, we identify all zip codes as urban or rural, based on whether
the zip code is located in an MSA or not, including the Goldsmith
modifications. The zip code is the basis for determining point of pick-
up and the payment of claims. As stated above, we are examining other
alternatives for identifying rural and urban areas more precisely.
Comment: Some commenters asked if the rural modifier applies if the
supplier bills less than $5 for mileage.
Response: The law requires that payment be based on the lower of
the fee schedule amount or the actual charge. If the supplier/
provider's charge for mileage is less than the rural mileage fee
schedule amount, then payment is based on the lower actual billed
amount.
Comment: One commenter suggested that we double the payment to
small, rural hospital ambulance providers in the following categories:
sole community provider hospitals, hospitals eligible for the CAH
program, and hospitals under 100 beds.
Response: The Committee Statement does not include such a
provision, and we would point out that, because of the requirements of
section 1834(l)(3) of the Act, increased payments under such a
provision would need to be offset by reduced payments to other
ambulance providers and suppliers. Moreover, there is no authority to
exempt these small rural hospitals from the fee schedule except as
provided by the Congress in section 205 of BIPA. That section provides
that only CAHs that are the only ambulance service provider/supplier
within a 35-mile drive will be exempt from the fee schedule and will be
paid based on their reasonable cost.
5. Mileage
We proposed adding Sec. 414.610(c)(1)(iii) that would state that
[[Page 9111]]
mileage would be paid separately from the base rate. The payment for
mileage reflects the costs attributable to the use of the ambulance
vehicle (for example, maintenance and depreciation) which increase as
the vehicle's mileage increases. Based on the Committee's agreement,
the mileage rates for the base year 1998 would be as follows: $5 per
mile for ground ambulance, $6 per mile for fixed wing ambulance, and
$16 per mile for rotary wing ambulance. These rates will be adjusted by
the ambulance inflation factor. However, payment for some mileage in
rural areas is made at a higher rate as discussed in section II.A.4.b.
of this final rule.
6. Structure of the Fee Schedule for Ambulance Services
We proposed in Sec. 414.610(a) that the fee schedule payment for
ambulance services would equal a base rate payment plus payments for
mileage and applicable adjustment factors. (See Table 1 for a
description of the structure of the ambulance fee schedule.)
7. Ambulance Inflation Factor
We proposed adding Sec. 414.615, ``Transition methodology for
implementing the ambulance fee schedule,'' which would state that the
ambulance fee schedule would include the ambulance inflation factor
specified in section 1834(l)(3) of the Act (recently amended by BIPA)
and discussed below.
8. Phase-in Methodology
We proposed adding Sec. 414.615 that would provide for a 4-year
transition period, as the result of the Committee agreement. (The
phase-in schedule is described in section IV of this preamble.)
B. Proposed Changes Not Based on Negotiated Rulemaking
In the September 12, 2000 proposed rule, we proposed changes to
certain policies that were not within the scope of the negotiated
rulemaking process. These proposed changes were as follows:
1. Coverage of Ambulance Services
In Sec. 410.40(b), we proposed revising the introductory language
to provide a cross-reference to Sec. 414.605 for a description of the
specific levels of services. We proposed to revise paragraph
Sec. 410.40(d)(1) to state that transportation includes fixed wing and
rotary wing ambulances. Also, we proposed revising Sec. 410.40(d)(3) by
adding two options to document medical necessity.
2. Physician Certification Requirements
On January 25, 1999, we published a final rule (64 FR 3637) that
updated Medicare coverage policy concerning ambulance services. That
final rule provided the documentation requirements for coverage of
nonemergency ambulance services for Medicare beneficiaries. The rule
requires ambulance suppliers to obtain, from the beneficiary's
attending physician, a written order certifying the medical necessity
of nonemergency scheduled and unscheduled ambulance transports. The
final rule became effective February 24, 1999.
Our present regulations (at Secs. 410.40(d)(2) and 410.40(d)(3))
set forth the requirements for scheduled and unscheduled nonemergency
ambulance transports. The regulations require ambulance suppliers to
obtain, from the beneficiary's attending physician, a written physician
statement certifying the medical necessity of requested ambulance
transports.
Section 410.40(d)(3)(i) specifies that, in cases when a beneficiary
living in a facility and under the direct care of a physician requires
nonemergency, unscheduled transport, the physician's certification can
be obtained up to 48 hours after transport. After publication of this
rule, we were made aware of instances in which ambulance suppliers,
despite having provided ambulance transports, were experiencing
difficulty in obtaining the necessary physician certification
statements within the required 48-hour timeframe.
While we still believe that the 48-hour timeframe is the
appropriate standard, we recognize that there may be instances when,
not through fault of their own, it may not be possible for the
ambulance suppliers to meet the requirement. Therefore, we have
determined that there is a need to revise and clarify this requirement
(as described in Sec. 410.40, ``Coverage of ambulance services,''
paragraph (d)(3)).
We proposed that, before submitting a claim, the ambulance supplier
must obtain--
(1) A signed physician certification statement from the attending
physician; or
(2) If the ambulance supplier is unable to obtain a signed
physician certification statement from the attending physician, a
signed physician certification must be obtained from either the
physician, physician assistant, nurse practitioner, clinical nurse
specialist, registered nurse, or discharge planner who is employed by
the hospital or facility where the beneficiary is being treated and who
has personal knowledge of the beneficiary's condition at the time the
transport is ordered or the service was furnished (the term ``physician
certification statement'' will also be applicable to statements signed
by other authorized individuals); or
(3) If the supplier is unable to obtain the required statement as
described in (1) and (2) above within 21 calendar days following the
date of service, the ambulance supplier must document its attempts to
obtain the physician certification statement and may then submit the
claim. Acceptable documentation must include a signed return receipt
from the U.S. Postal Service or similar delivery service. A signed
return receipt will serve as documentation that the ambulance supplier
attempted to obtain the required physician certification statement from
the beneficiary's attending physician.
In all cases, the appropriate documentation must be kept on file
and, upon request, presented to the carrier or intermediary. It is
important to note that the presence of the signed physician
certification statement does not necessarily demonstrate that the
transport was medically necessary. The ambulance supplier must meet all
coverage criteria in order for payment to be made.
Comment: Several commenters, including a national ambulance
association and an association representing medical professionals,
state that the proposed regulation permits physician certification
statements to be signed by physician assistants (PA), nurse
practitioners (NP), and clinical nurse specialists (CNS), but only if
employed by the facility in which the beneficiary is being treated. The
commenters state, however, that, in most cases, practitioners are
employed not by the facility but by the attending physician. The
commenters recommended that the requirements of Sec. 410.40(d)(3)(iii)
be revised to specify that, in keeping with Medicare regulations, the
PA, NP, or CNS may also be employed by the attending physician.
Response: We agree with the commenters and are revising
Sec. 410.40(d)(3)(iii) to clarify that the PA, NP, or CNS may be
employed either by the facility or by the beneficiary's attending
physician.
Comment: Many commenters recommended that we revise
Sec. 410.40(d)(3)(iv) to conform to Program Memorandum B-00-09 that
clarified the circumstances under which a physician
[[Page 9112]]
certification is required for both scheduled and unscheduled
transports.
Response: Program Memorandum B-00-09 was issued in response to an
inquiry that specifically addressed the 48-hour time requirement set
forth in Sec. 410.40(d)(3)(i). The program memorandum specifies that,
in cases where a beneficiary who is living in a facility and who is
under the direct care of a physician requires nonemergency, unscheduled
transport, the physician's certification can be obtained 48 hours after
transport has been provided. Based on comments, we are, however,
revising the regulation to clarify that Sec. 410.40(d)(3) is applicable
to nonrepetitive, nonemergency, scheduled ambulance services. In
specifying that the rule applies to nonrepetitive transports, we are
aware that Sec. 410.40(d)(2), as currently written, contains a
requirement that suppliers obtain the required documentation no earlier
than 60 days before the date the service is furnished. We are revising
Sec. 410.40(d)(2) to clarify that the 60-day requirement is applicable
only to repetitive transports, not nonrepetitive ones.
Comment: Many commenters, including a national ambulance
association, expressed a concern that carriers may be interpreting the
revised definition of ``bed confined'' to mean that the beneficiary be
bed-confined even in cases where the medical condition of the
beneficiary would otherwise indicate that transportation by means other
than ambulance would be contraindicated. The commenters recommended
that Sec. 410.40(d)(1) be revised as follows:
For nonemergency transportation, transportation by ambulance is
appropriate if the beneficiary is bed-confined or if his or her medical
condition, regardless of bed confinement, is such that transportation
by ambulance is medically required. In determining whether a
beneficiary is bed-confined, the following criteria must be met:
(i) The beneficiary is unable to get up from the bed without
assistance.
(ii) The beneficiary is unable to ambulate.
(iii) The beneficiary is unable to sit in a chair or wheelchair.
Response: In the June 17, 1997 proposed rule (62 FR 32719), these
three criteria were developed to define bed-confinement. These criteria
identify individuals who may need ambulance services: we identified as
bed-confined only those individuals who are ``completely confined to
bed and unable to tolerate any activity out of bed.'' Subsequent
instructional guidelines (PM AB-99-53, AB-99-83, AB-00-103) were issued
in an effort to clarify that the bed-confined criteria are not meant to
be the sole criteria in determining medical necessity; bed-confinement
is one factor to be considered. It is important that all factors
relating to the beneficiary's condition are considered in evaluating
whether the medical necessity criteria for ambulance services have been
met. As always, it is the responsibility of the ambulance supplier to
furnish complete and accurate documentation of the beneficiary's
condition to demonstrate that the ambulance service being furnished
meets the medical necessity criteria.
It is not our intent either to require that the bed-confined
condition be met in every case in order for an ambulance transport to
be covered or to mandate coverage of an ambulance transport solely
because a beneficiary is bed-confined.
We agree with the commenters that our proposed revision was
unclear. We are revising proposed Sec. 410.40(d)(1). In addition to the
identifying criteria on bed-confinement, the final rule will now state
that:
For nonemergency ambulance transportation, transportation by
ambulance is appropriate if the beneficiary is bed-confined and it
is documented that the beneficiary's medical condition is such that
other methods of transportation are contraindicated, or if his or
her medical condition, regardless of bed-confinement, is such that
transportation by ambulance is medically required. In determining
whether a beneficiary is bed-confined, the following criteria must
be met: * * *
3. Payment During the First Year
As explained below in more detail, we stated that we would use the
universe of claims paid in 1998 (reduced by the $65 million savings
that would have been realized through implementation of the BLS and ALS
definitions proposed in the June 17, 1997 proposed rule (62 FR 32718))
to establish the CF and would index the 1998 dollars to CY 2002 dollars
using the compounded inflation factors derived from section 1834(l)(3)
of the Act. (The transition and the inflation factors are described in
Sec. 414.615.)
4. Billing Method
In proposed Sec. 414.610, we stated that, after the transition
period, we would bundle into the base rate payment all items and
services furnished within the ambulance benefit. This would eliminate
billing on an itemized basis for any items and services related to the
ambulance service (for example, oxygen, drugs, extra attendants, and
EKG testing). In addition, only the base rate code and the mileage code
would be used to bill Medicare. (This decision was made in accordance
with section 1834(l)(7) of the Act, which gives us the authority to
specify a uniform coding system, as well as with section 1834(l)(2)(B)
of the Act.) During the transition period, suppliers who currently use
billing methods 3 or 4 may continue to bill for supplies separately
(see section I.B. for a description of these billing methods).
5. Local or State Ordinances
In proposed Sec. 414.610, we stated that, regardless of any local
or State ordinances that contain provisions on ambulance staffing or
furnishing of all ambulance services by ALS suppliers, we would pay the
appropriate ambulance fee schedule rate for the services that are
actually required by the condition of the beneficiary. We proposed this
policy pursuant to the Medicare statutory requirement (see section
1834(l)(2)(B) of the Act) to use definitions of services that link
payments to the types of services furnished.
6. Mandatory Assignment
In proposed Sec. 414.610, we stated that, effective January 1,
2001, all payments for ambulance services must be made on an
assignment-related basis, as mandated by section 1834(l)(6) of the Act.
Ambulance suppliers must accept the Medicare allowed charge as payment
in full and not bill the beneficiary any amount other than unmet Part B
deductible or coinsurance amounts. There is no transitional period for
mandatory assignment.
Comment: One commenter asked whether the fee schedule and mandatory
assignment apply when Medicare is the secondary payer.
Response: Yes, both the ambulance fee schedule and mandatory
assignment apply when Medicare is the secondary payer.
Comment: Several commenters objected to the requirement of
mandatory assignment for claims when the fee schedule is implemented.
They claim that because the rates in some areas are so low, some
ambulance suppliers will go out of business without balance billing.
One commenter indicated that we have the discretion to delay
implementation of mandatory assignment until the end of the phase-in
period. The commenter also requested clarification that mandatory
assignment pertains only to services that are covered by Medicare.
Response: Mandatory assignment is required by section 1834(l)(6) of
the Act.
[[Page 9113]]
We do not agree that there is discretion to delay its implementation
until the fee schedule is fully phased-in. The implementation date
given in the proposed rule will be changed to coincide with the actual
implementation of the fee schedule. Historically, ninety-five percent
of ambulance services have been submitted under assignment, and, while
the fee schedule redistributes payments, we do not anticipate that the
assignment requirement is a major issue nationally. It is correct that
mandatory assignment pertains only to Medicare covered services.
Comment: Some commenters asked whether the provider/supplier may
bill the beneficiary for the non-covered charges for transportation to
a facility beyond the nearest appropriate facility, or whether
mandatory assignment prevents the provider/supplier from billing for
this additional mileage.
Response: Mandatory assignment does not preclude billing for this
additional mileage. Mandatory assignment refers only to services that
are covered by the Medicare program.
Comment: Some commenters asked about the correlation between
``Medicare+Choice'' (M+C) plan payments and the ambulance fee schedule.
The commenters asked if the amount paid by M+C plans is affected by the
fee schedule amounts and if the liability of M+C enrollees is affected
by the mandatory assignment requirement for the fee schedule.
Response: For ambulance services that are under contract with the
plan, Medicare rates do not affect the payment amounts by the M+C or
the enrollee's copay. For ambulance services that are not under
contract (for example, out-of-area emergency transports), the M+C is
liable for the Medicare allowance in that area less any copay that the
beneficiary pays pursuant to the M+C plan's rule for coinsurance.
7. Miscellaneous Payment Policies
The following payment policies were in effect before publication of
the proposed rule; however, we used the proposed rule as an opportunity
to clarify them.
a. Multiple Patients
Occasionally, an ambulance will transport more than one patient at
a time. (For example, this may happen at the scene of a traffic
accident.) In this case, we proposed to prorate the payment as
determined by the ambulance fee schedule among all of the patients in
the ambulance. If two patients were transported at one time, and one
was a Medicare beneficiary and the other was not, we would make payment
based on one-half of the ambulance fee schedule amount for the level of
medically appropriate service furnished to the Medicare beneficiary.
The Medicare Part B coinsurance, deductible, and assignment rules would
apply to this prorated payment.
Similarly, if both patients were Medicare beneficiaries, payment
for each beneficiary would be made based on half of the ambulance fee
schedule amount for the level of medically appropriate services
furnished to each beneficiary. The Medicare Part B coinsurance,
deductible, and assignment rules would apply to these prorated amounts.
Comment: Some commenters disagree with our paying only the rate for
one trip if two patients are transported. The commenters contend that
it is not true that transporting two or more patients in the same
vehicle costs no more than transporting one patient. Additional time
will be required to load and unload each patient. Each patient will
require specific individual care. The supplier will also incur
additional liability for each patient for whom it is responsible. The
commenters believe that one mileage fee should be paid, but that two
base rates should be paid.
Response: With respect to multiple patient transports, we agree
with the commenters that there would be, on average, a higher cost for
multiple patient transports than for those with only a single patient
onboard. While commenters stated that an extra attendant would be
onboard and additional supplies would be used for multiple patients, we
do not believe this would always be true. Therefore, if two patients
are transported simultaneously, for each Medicare beneficiary we will
allow 75 percent of the payment allowance for the base rate applicable
to the level of care furnished to that beneficiary. If three or more
patients are transported simultaneously, then the payment allowance for
the Medicare beneficiary (or each of them) is equal to 60 percent of
the service payment allowance applicable for the level of care
furnished to the beneficiary. However, a single payment allowance for
mileage would continue to be prorated by the number of patients
onboard. Also, we are establishing a modifier to identify these claims.
b. Pronouncement of Death
In the proposed rule, we stated that there are three rules that
apply to ambulance services and the pronouncement of death. First, if
the beneficiary was pronounced dead by an individual who is licensed to
pronounce death in that State prior to the time that the ambulance is
called, no payment would be made. Second, if the beneficiary is
pronounced dead after the ambulance is called but before the ambulance
arrives at the scene, payment for an ambulance trip would be made at
the BLS rate, but no mileage would be paid. Third, if the beneficiary
is pronounced dead after being loaded into the ambulance, payment would
be made following the usual rules (that is, the same level of payment
would be made as if the beneficiary had not died).
Comment: Some commenters suggested that we pay at the ALS rate if
the crew attempts to resuscitate, even though they may fail. Also, some
commenters believe that the pronouncement of death needs to be
clarified further, so that unnecessary transportation will be limited.
Response: Program payment may be made only for medically necessary
ambulance transports. There is no basis for us to pay under the
ambulance benefit for services such as attempts to resuscitate, if no
ambulance transport occurs. In this final rule, we are setting forth
the following criteria to apply in the pronouncement of death:
If the beneficiary is pronounced dead by an individual who
is authorized by the State to pronounce death prior to the time the
ambulance is called, no payment will be made.
If the beneficiary is pronounced dead by an individual who
is authorized by the State to pronounce death prior to the arrival of
the ambulance, but after it is called, a BLS base rate payment will be
made (except for air, as noted in the comment and response below). No
payment for mileage will be made.
If the beneficiary is pronounced dead by an individual who
is authorized by the State to pronounce death during the transport of
the ambulance, the same payment rules apply as if the beneficiary were
alive.
Comment: Some commenters suggested that, in the case where a
beneficiary dies while an air ambulance is enroute to the scene, we pay
air ambulance at the air base rate, not the BLS ground rate.
Response: We agree with the commenters. We will not pay mileage
because there is no transport, but we will pay the applicable air base
rate.
c. Multiple Arrivals
We stated in the proposed rule that, when multiple units respond to
a call for services, we would pay the entity that provides the
transportation for the beneficiary. The transporting entity would bill
for all services furnished, as stated in current policy. For example,
if
[[Page 9114]]
BLS and ALS entities respond to a call and the BLS entity furnishes the
transportation after an ALS assessment is furnished, the BLS entity
would bill using the ALS1 rate. We would pay the BLS entity at the ALS1
rate. The BLS entity and the ALS entity would have to negotiate between
themselves payment for the ALS assessment.
Comment: Some commenters stated that the discussion of multiple
arrivals in the proposed rule is confusing. They state that, although
the issue was not discussed by the Committee, our discussion appears to
be inconsistent with the industry's understanding that the ALS level of
service may be billed only if an ALS supplier/provider is involved in
the actual transportation.
Response: According to the definition of ``ALS assessment'' that we
are promulgating in this final rule, an assessment may result in the
determination that no ALS level service is required and, in that
instance, an ALS1-Emergency level payment may be made to the
transporting BLS ambulance supplier even if no ALS paramedic rides
onboard.
Comment: One commenter stated that when two ALS ambulances respond,
the ambulance fee schedule payment should be divided between them
according to the services each provided.
Response: We have always construed the Medicare law as permitting
payment for services only to the entity that provides the services, in
this case, ambulance transport. Any suppliers that furnish services
other than the transport must look to the transporting supplier for
payment for other services. As described above, there is a limited
provision of the law for paramedic intercept services under which the
Congress permitted payment to be made directly to the entity furnishing
the intercept service, but only under special circumstances provided in
the regulations in Sec. 410.40(c). However, a provider (for example, a
hospital or skilled nursing facility) may furnish ambulance services
under arrangements in accordance with section 1861(w) of the Act. In
this case, the provider may bill for the ambulance service, even if
another supplier furnished the transport, if the service is furnished
pursuant to an arrangement between the two entities in accordance with
the law.
d. BLS Services in an ALS Vehicle
The proposed rule stated that effective with implementation of the
fee schedule, claims would be paid at the BLS level where an ALS
vehicle is used but no ALS level of service is furnished. Claims would
be filed using the appropriate BLS code. Like the other rules
describing levels of service, these rules would be applicable on the
effective date of this rule; there would be no transitional period for
the rule.
Comment: Several commenters stated that our decision to pay at the
BLS rate for the use of an ALS vehicle when no ALS service is furnished
has the effect of not recognizing all-ALS mandates by local authorities
(situations where the local government mandates that all ambulances
within its jurisdiction be equipped to provide an ALS level of
service). The commenters stated that this policy, which will result in
an immediate budget savings for Medicare of approximately $70 million
in 2002, should be phased in on the same schedule as the other
regulatory changes. The commenters believe that we should apply the
transition provisions in the negotiated rule to all payment changes,
including those stemming from our decision to pay BLS rates when BLS
services are provided using an ALS vehicle. Because we did not propose
to phase in this policy (that is, we are not continuing to pay at the
ALS level under the old portion of the transition payment), the
commenters believe that many emergency medical systems will be
threatened and Medicare beneficiaries will be at risk of not having
access to emergency and other medical transportation services.
Response: While we continue to believe that BLS services should be
paid at the BLS rate, even when an ALS vehicle is used, we agree with
the comment to phase in the implementation of this policy. Therefore,
when an ALS vehicle is used to furnish non-emergency BLS services only,
the ``old'' portion of the blended rate will be at the ``old'' ALS non-
emergency payment level and the ``new'' portion of the blended rate
will be at the BLS fee schedule amount.
In addition, we are revising the definition of an ALS assessment
needed to qualify for an ALS1-Emergency level of payment from the
proposed definition. An emergency ambulance trip may be paid as an
ALS1-Emergency even when the only ALS service furnished is an ALS
assessment. This revision in the final rule will increase the trips
paid at the ALS1-Emergency level, rather than at the BLS-Emergency
level. Where the only ALS service furnished is an ALS assessment for an
emergency, the ``old'' portion of the blended rate will be at the ALS
emergency rate. We have also increased the amount of spending upon
which the CF is based by the amount of savings that had been attributed
to this policy.
III. Methodology for Determining the Conversion Factor
As discussed in the September 12, 2000 proposed rule (65 FR 55078),
our approach to determining the conversion factor (CF) was:
(1) To use the most recent complete year of ambulance claims;
(2) To translate those claims into the format that would have been
used under the fee schedule; and
(3) To calculate the CF, that, when applied to the RVUs for each
level of service, results in the same total program payment for those
claims, less $67 million that would have been saved if the fee schedule
legislation had not been passed. (Under the final rule, as discussed in
section III.D, we have decided not to subtract this amount in
calculation of the CF.)
We would then inflate this CF in accordance with the inflation
factor prescribed in the statute. (See section 1834(l)(3) of the Act,
as amended by section 423 of BIPA.) We used 1998 as the base year
because this was the most recent complete year for which claims data
were available. For claims processed by carriers (that is, claims from
independent ambulance suppliers), we used allowed charge data. For
claims processed by fiscal intermediaries (FIs) for provider-based
ambulance services, we used the submitted charges on the Medicare
claims multiplied by the cost-to-charge ratio applicable to the
ambulance costs for each provider.
We modified the claims data in several ways to calculate the
proposed fee schedule and its impact. First, we separated all claims
into two groups:
Carrier-processed claims for ambulance services (8 million
in 1998).
FI processed claims for ambulance services (900,000 in
1998).
A. Carrier-Processed Claims
We had to adjust some of the 1998 claims for purposes of the
proposed ambulance fee schedule calculation. Some of the claims did not
report mileage and, because mileage will be required for each ambulance
service under the fee schedule, an adjustment had to be made for the
missing miles (see above). In other cases, the billing codes under the
old system did not translate directly into services that would be paid
under the proposed fee schedule. Below is a more detailed explanation
of the adjustments that were made to the 1998 base year data in order
to accommodate missing data.
1. Mileage
Approximately 1.1 million claims for ground ambulance services did
not
[[Page 9115]]
show any mileage. The proposed fee schedule for ambulance services will
provide a payment for the trip and a payment per statute mile for the
loaded mileage traveled. Therefore, in calculating the proposed CF, we
added mileage to those claims that did not report mileage. We did so by
assigning the mode value (that is, the number of miles billed most
often) per trip in urban areas (1.0 miles) and the mode value or
mileage per trip in rural areas (1.0 miles).
Current billing instructions provide that only one ambulance trip
may be billed per line on a claim. Because billing rules prohibit more
than one trip to be reported on a line, we assumed any number greater
than one was an error. Therefore, we did not count multiple trips
billed on the same line of a claim. This reduced the total trip count
processed by carriers by approximately 1 percent. This reduction of
about 1 percent in the number of trips resulted in an increase of about
1 percent in the average allowed charge per trip.
Comment: Some commenters stated that some billers do not bill for
mileage and will continue not to bill mileage after the fee schedule is
implemented. Commenters stated that in other cases a supplier's
submitted charge for mileage is lower than the fee schedule rural
mileage rate and asked that the Medicare carrier automatically increase
the supplier's charge by 50 percent before comparing the submitted
charge to the fee schedule rural mileage rate. (This comparison is made
because the law requires that payment be based on the lower of the
actual submitted charge or the fee schedule amount.) Also, commenters
stated that some billers have a lower charge for mileage that would
offset their higher charge for the ambulance base rate service, but
that this will not be considered when we process the claim for the base
rate for purposes of the fee schedule.
Response: In the process of setting the conversion factor (CF), we
found over one million claims that should have reported mileage but did
not. As stated above, we assigned a value of 1 mile to each of these
claims. This was the mode value of mileage for both urban and rural
ambulance claims. The average value was 7 miles for urban and 17 miles
for rural claims. Assuming 1 mile each for claims without mileage
results in a higher CF than would have resulted if we used the average
number of miles. We will monitor claims data after the fee schedule is
initially implemented and recalibrate the CF to reflect actual, as
opposed to projected, billing practices.
With respect to comments that we take into account suppliers that
have high service charges but low mileage charges, we do not believe
that this result is necessary or practical. Section 1833(a)(1)(R) of
the Act states that CMS pays the lower of ``the actual charge for the
services'' or fee schedule. While some commenters argued that we should
be comparing total charges (that is, base rate plus mileage) rather
than looking at the service and mileage separately, we believe
comparing the components of the charge is equally consistent with the
law. Moreover, the entire Medicare claims processing system is set up
to process claims on an individual line-item basis. To change the
claims processing system would jeopardize timely implementation of the
fee schedule.
Comment: Many commenters suggested that the urban/rural designation
for round trips should be based on the original point of pick-up,
rather than from each point of pick-up.
Response: Each trip consisting of a point of pick-up and a
destination is considered to be a trip on its own and must be billed,
processed and paid individually.
Comment: One commenter presented this hypothetical: beneficiary
becomes ill on a cruise near Alaska. Beneficiary is airlifted. The
nearest facility cannot adequately care for the beneficiary. The
nearest facility that can adequately attend to the beneficiary is in
Anchorage, Alaska. The beneficiary lives in the continental United
States. The beneficiary requests to be sent to Seattle, Washington. Can
this be done?
Response: The program covers mileage only to the nearest facility
equipped to treat the beneficiary. Any additional mileage is not
covered by Medicare. However, the beneficiary may arrange with the
ambulance supplier to pay the difference.
2. Billing Codes
We determined that the billing codes that represent items and
services included under the ambulance fee schedule are all billing
codes submitted by ambulance suppliers in the range of Health Care
Common Procedure Coding System (HCPCS) A0030 through A0999 (excluding
HCPCS code A0888, which is not covered by Medicare) and Common
Procedural Terminology-Fourth Edition (CPT-4) \1\ codes 93005 and
93041. HCPCS billing codes A0030 through A0999 represent ambulance
services, supplies, and equipment that are covered by the ambulance fee
schedule, and CPT codes 93005 and 93041 represent electrocardiogram
(EKG) services that may be billed by ambulance suppliers. In addition,
we incorporated all HCPCS billing codes in the range of A4000 through
Z9999; these services could have been paid by a carrier to an ambulance
supplier only if they represented items and services covered under the
Medicare ambulance benefit. We excluded all other CPT billing codes in
the range of 00001 through 99999 (except the two EKG codes listed
above) because they represent services not covered by the ambulance fee
schedule.
---------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyright 2001 of the
American Medical Association. All Rights Reserved. Applicable FARS/
DFARS Apply.
---------------------------------------------------------------------------
Next, we adjusted all billing codes that represented an ALS vehicle
when no ALS service was furnished. We removed the actual allowed
charges on these claims and replaced them with the charges that would
have been allowed by the carrier for the corresponding BLS level of
service (that is, emergency for emergency and nonemergency for
nonemergency).
Comment: Several commenters stated that our decision to pay at the
BLS rate for the use of an ALS vehicle when no ALS service is furnished
has the effect of not recognizing all-ALS mandates by local authorities
(situations where the local government mandates that all ambulances
within its jurisdiction be equipped to provide an ALS level of
service). The commenters stated that this reduction in the amount of
spending used to set the CF was inappropriate.
Response: While we continue to believe that BLS services should be
paid at the BLS rate, even when an ALS vehicle is used, we have decided
to increase the amount of spending upon which the CF is based by the
amount of savings that had been attributed to this policy.
3. Crosswalking the Old Billing Codes to the New Billing Codes
We converted the old billing codes in the base year data to the new
billing codes as they will be under the final fee schedule. The old BLS
codes convert directly to the final BLS codes. The old air ambulance
codes (fixed wing and helicopter) convert to the final air ambulance
codes. The old water ambulance code converts to the final BLS-Emergency
code. The old mileage codes distinguished ALS miles from BLS miles;
both of these old codes will convert to the single proposed mileage
code. Codes used to report air mileage will convert to the final codes
for fixed and rotary wing mileage, respectively. All air miles will be
reported in statute miles. As mentioned earlier, we
[[Page 9116]]
converted the codes for an ALS vehicle when no ALS services were
furnished to the corresponding BLS codes. The conversion of the
remaining old ALS codes (for example, when ALS services were furnished)
to final ALS codes is less straightforward because there are more
levels of ALS service under the final fee schedule than currently
exist. All nonemergency ALS codes convert to the ALS1 (nonemergency)
code. Based on advice from various members of the Committee, for
purposes of calculating the CF, we proposed converting the old
emergency ALS codes according to the following formulas:
For claims on which both the origin and destination was a
hospital: 33 percent will convert to specialty care transport (SCT), 5
percent to advanced life support, level two (ALS2), and the remainder
to ALS1-Emergency.
For all other claims: 8.3 percent will convert to ALS2,
and the remainder to ALS1-Emergency.
Comment: Commenters stated that the projected volume of 8.3 percent
of current ALS emergency claims that will be billed under the fee
schedule at the ALS2 rate is too high. The commenters stated that the
projection provided by the Committee was only 2.3 percent.
Response: This comment was in error. We have verified with the
Committee that the 8.3 percent projection was correct.
4. Low Billers
A concern was raised about low billers of ambulance services. Low
billers are suppliers who currently bill less than the maximum charge
allowed by Medicare. There are several reasons low billers exist. For
example, an entity may have a low charge because the cost of its
operation is subsidized by local taxes (for example, a municipal
ambulance company); the entity may use volunteers; its charge may be
regulated by local ordinances, limited by an inflation-indexed charge
that is part of the Medicare program's current reasonable charge
policy, or restricted for other reasons.
In the proposed rule, we stated that we have neither a means to
estimate the extent to which low billing will continue after the fee
schedule is implemented and the inflation-indexed charge limit no
longer applies, nor a means to estimate the extent to which volunteer
and municipal ambulances will choose not to file Medicare claims at the
fee schedule amounts to which they could be entitled. Therefore, given
the uncertainty of suppliers' future behavior, we proposed not to
attempt to adjust the CF based on assumptions that low billing will or
will not continue. We also stated that we will monitor payment and
billing data and recalculate the CF as appropriate.
Because the total ambulance service payment amount is based on the
actual allowed charges from the base year (1998), the CF will reflect
historical charges for some suppliers that may have been lower than the
reasonable charges of other suppliers. At the same time, if low billers
of ambulance services continue to charge less than the ambulance fee
schedule amount, we will continue to pay the lower amount as the law
requires. Therefore, some members of the ambulance industry have urged
us to increase the fee schedule CF, anticipating that, otherwise,
savings would result from billers who continue to charge less than they
could, in this case, less than the fee schedule amount. We have
estimated that in the base year 1998, if all low billers had billed the
maximum charges allowed by Medicare, total allowed charges for
ambulance services would have been approximately $150 million more than
they were. Approximately half of this amount is attributable to charges
that are 70 percent of the maximum allowed charges or greater. Assuming
that billers whose current charge is 70 percent or more of the maximum
will charge the full fee schedule amount and that one-half of the
entities whose current charge is less than 70 percent of the maximum
allowed charge may continue to bill at less than the fee schedule
amount, approximately $39 million in the base year 1998 might continue
to be attributed to low billing. Adjusted for inflation, this amount
(annualized) is approximately $42 million in 2002.
Comment: We received many comments questioning our approach to low
billers. In particular, commenters believe that we were calculating the
CF in such a way that we would inappropriately achieve between $75
million and $150 million in savings by assuming all low billers would
begin to bill at the full amount allowed under the fee schedule.
Commenters stated that we were obligated to ensure that the
implementation of the fee schedule was budget neutral.
Response: We believe some commenters misunderstood our reasoning
when we referred to the fact that an approximately $150 million
difference existed in 1998 between ambulance suppliers' actual charges
and the maximum charges allowed by Medicare and that approximately half
of this amount (about $77 million) is attributable to charges that are
70 percent of the maximum allowed charge or greater. For those
suppliers already charging 70 percent or greater of the maximum charges
allowed, our reasoning was that they are likely to increase their
charges when the inflation-indexed charge limit no longer applies.
While we continue to believe that future billing behavior is
unpredictable, we have decided to make an adjustment in the CF in
response to this comment. We will increase the CF to account for
approximately $39 million in the base year 1998 (one-half of the amount
attributable to the difference by which charges are less than 70
percent of the maximum allowed by Medicare ($77 million)). In light of
the lack of available data to project how many low billers will
increase their charges, we have decided to assume that one-half of the
remaining low billers (representing the billers whose charge is less
than 70 percent of the maximum) may continue to bill at less than the
fee schedule because we agree that some low billers may not increase
their charges up to the fee schedule amount. We will review this issue
as part of the annual review to determine whether a further adjustment
is warranted. If the level of low charge billing is significantly
different from the assumed level, we will adjust the CF and apply such
an adjusted CF prospectively. We also note that, in other
circumstances, we have made assumptions that resulted in a higher CF.
For example, as discussed above, in the process of setting the CF,
there were over one million claims that should have reported mileage
but did not. We assigned a value of one mile to each of these claims.
This has resulted in a higher CF than if we had assigned a higher
mileage estimate to these claims.
B. FI Processed Claims
Because all FI processed claims contained mileage, we did not make
any adjustment for mileage. However, we did have to determine the codes
that represented items and services included under the ambulance fee
schedule. In the case of claims filed by hospital-based ambulance
providers, services furnished in the emergency room and other
outpatient departments of the hospital are reported on the same claim
that is used to report the ambulance service. Therefore, it is
impossible to know from the claims data where any of the nonambulance
services were furnished. Because most of these nonambulance services
were of the kind that would likely have been furnished in the
hospital's emergency room, we did not include the data on them in data
for the proposed ambulance fee schedule. Rather, we determined that
[[Page 9117]]
the billing codes that will be covered by the ambulance fee schedule
are all billing codes representing ambulance services submitted by
hospitals (for example, in the range of HCPCS codes A0030 through A0999
(excluding HCPCS code A0888, which is not covered by Medicare)).
Codes that represented the use of an ALS vehicle, but when no ALS
level of service was furnished, were converted to the corresponding BLS
billing code. However, in this case, no adjustment was made for payment
because the correct data were already available since payment for these
claims would have been made on a cost basis corrected to the proper
amount at cost settlement.
Comment: A few commenters stated that the regulations do not
address the issue of bad debt for ambulance services. Medicare has
traditionally paid for hospitals' bad debts for uncollected beneficiary
deductibles and copayments. The commenters believe that Medicare should
be responsible for payment of reasonable costs associated with bad debt
for ambulance services as well.
Response: There is no provision under the fee schedule for payment
of bad debts. The law requires that the program pay 80 percent of the
lower of the fee schedule amount or the billed charge and that the
beneficiary is liable for the Part B coinsurance and any unmet Part B
deductible amounts. Furthermore, sharing in bad debts for providers and
not for independent suppliers would result in greater program payments
to providers than suppliers for furnishing the same service. We believe
that doing so would be antithetical to payment under a fee schedule.
C. Air Ambulance
To establish a consistent system of RVUs that could be applied to
ground and air ambulance services, we must know the cost per service in
each setting. Unfortunately, these data do not exist. One member of the
Committee presented data and stated that the data, when combined with
an analysis by an economist, demonstrated that the total costs in 1998
for air ambulance services were between a minimum of approximately
$134.8 million and a maximum of $168 million. The higher amount
exceeded the billed charges for air ambulance services. Because
definitive cost data do not exist, the Committee decided to compromise
by setting a range of total air ambulance costs between $134.8 million
and $158 million within which we would set an amount reflecting
incurred costs.
We considered several approaches in an attempt to accurately
estimate the appropriate amount for air ambulance services within the
range prescribed by the Committee.
We considered using cost data from a ground ambulance services
survey acquired by an independent source that was hired by a member of
the Committee. We tried to compare the results of this survey to cost
data from our estimate. Because the study was only a self-reporting
survey and did not report audited costs, and because the results varied
widely and were substantially different from our estimate, we could not
establish an estimate based on the survey that fell within the range
prescribed by the Committee.
We converted old billing codes to the proposed billing codes in the
same way as discussed above for the carrier-processed claims. Using the
billed charge adjusted by the provider's cost-to-charge ratio, we are
able to estimate the provider's Medicare-allowable cost for all
ambulance services. However, we are unable to estimate with any
certainty the split of air ambulance services costs and ground
ambulance services costs from the same provider because Medicare cost-
apportioning rules do not require data to be furnished in such detail.
Originally, we assumed that the same cost-to-charge ratio within a
provider applies to both air and ground ambulance services charges.
However, because this assumption may not be correct, and because it
results in an amount below the range specified by the Committee, we did
not pursue this methodology.
Next, we considered using the billed charges for ambulance
services. Over 80 percent of ground ambulance services are furnished by
independent (not provider-based) ambulance suppliers. However, the
average adjusted charge (that is, the charge adjusted by the provider's
cost-to-charge ratio) for ALS and BLS ground ambulance services,
excluding mileage, furnished by provider-based ambulance services is
more than 65 percent greater than the average charge for independent
ambulance services suppliers ($342 vs. $206 per trip). Assuming the
appropriate payment for ground ambulance services is the average
allowed charge for the independent suppliers, the amount of money
misallocated to provider-based ground ambulance services substantially
exceeds the amount that would represent a total payment for air
ambulance services at the maximum recommended by the Committee ($158
million). This large discrepancy between the payment rates for
provider-based and independent supplier ground ambulance services, and
the fact that suppliers are able to furnish services at the lower rate,
led us to conclude that the program cost apportionment process caused
too much of providers' ambulance costs to be allocated to provider-
based ground ambulance services and not enough of these costs were
allocated to provider-based air ambulance services. We believe that the
appropriate payment for ground ambulance services is closer to the
independent supplier charge. Consequently, we have chosen the maximum
air ambulance total amount designated by the Committee, that is, $158
million.
Comment: A few commenters mentioned that the cap on per trip
payment inflation imposed on providers by section 4531 of the BBA of
1997, which states that the Secretary shall not recognize the costs per
trip in excess of costs recognized as reasonable for ambulance services
provided on a per trip basis during the previous fiscal year increased
for inflation, is currently applied as a combined cost per trip cap for
both ground and air ambulance trips. This, they state, is inappropriate
because the mix of air and ground trips may change from year to year.
The commenter stated that there should be separate caps for ground and
air ambulance trips.
Response: We have interpreted this provision of the law as
requiring a single combined cost per trip inflation payment cap for
providers, because the law refers to total ``costs per trip.'' We do
not believe that the law contemplates the construction suggested by
commenters. We also note that this issue arises only during the
transition period. Once the fee schedule is fully implemented, there
will be no provider-specific cost per trip limit.
Comment: A few commenters wanted further clarification on the
methodology used to set the air ambulance fee schedule rates. Some
commenters stated that the air ambulance payment rates should not be
increased to the point of the air ambulance recovering its cost when
payments for the ground ambulance will be reduced further to an amount
below its cost. Another commenter stated that it is not reasonable to
set the air amount based on charges for ground services.
Response: We do not have cost data to specifically distinguish the
cost for air or ground services. The Committee recommended a range of
$134.8-$158 million, and we determined the appropriate amount within
that range. Because we believe that we have
[[Page 9118]]
providers' total costs for all ambulance services, we chose to use a
proxy for the approximate charge (average charge for independent
suppliers) for ground and subtract that amount from the total provider
ambulance cost to estimate an appropriate amount for the air cost
portion.
Considering the large discrepancy between the payment rates for
provider-based and independent supplier ground ambulance services, we
believe that the appropriate payment for these ground ambulance
services is closer to the independent supplier charge for the following
reasons: (1) Over 80 percent of ground ambulance services are furnished
by independent (not provider-based) suppliers, and (2) 95 percent of
suppliers' claims are paid on an assigned basis (that is, suppliers
accept the Medicare allowed charge as payment in full). Consequently,
we have chosen the maximum air ambulance total amount recommended by
the Committee, which is $158 million. Choosing an amount lower than
$158 million would lead us to pay ground ambulance rates at closer to
the hospital-based rate than the independent supplier rate, which we
believe to be unwarranted.
Comment: Some commenters cited abrupt and erratic increases in gas
prices as a reason for the cost of air ambulance exceeding the proposed
fee schedule rates. The impact will especially be felt for those
providers whose aircraft consume from 60 to 103 gallons per hour.
Response: We believe that if increases in the cost of fuel occur,
they will be accounted for by the inflation update factor applied to
the ambulance fee schedule. We have set the rates for air at the
maximum recommended by the Committee.
D. Calculation of the CF
We determined the total number of ambulance trips and loaded miles
and the total amount of charges allowed by Medicare for ambulance
services in the base year of 1998. In estimating the total volume of
services at the new levels described under the fee schedule, we coded
those cases in which an ALS vehicle was used in a nonemergency
transport, but no ALS services were furnished, as BLS nonemergency
services. Where an ALS vehicle was used in an emergency transport, we
coded the transport as ALS1 if no ALS services were furnished because
we assumed that an ALS assessment would always be performed; under the
fee schedule, the criteria for ALS1 includes such an assessment.
To calculate the CF for ground ambulance services, we used the
following procedures:
We multiplied the volume of services for each level of
ground ambulance service by the respective RVUs recommended by the
Committee (including application of the practice expense of the GPCI
and of the rural mileage rate as described above).
We summed those products to arrive at the total number of
RVUs.
We subtracted the total allowed amount for air ambulance
services ($158 million as discussed above) from the total charges
allowed by Medicare for ambulance services, which results in the total
amount of charges allowed by Medicare for ground ambulance services.
We subtracted the total amount of allowed charges for
ground mileage from this total charge amount.
We divided the remaining charge amount by the total number
of RVUs for ground services and applied the cumulative ambulance
inflation factor for the period 1998 through 2002, which results in a
CF for ground ambulance trips of $170.54.
We made five (5) changes from the calculation of the CF described
in the proposed rule (which was $157.52). First, at the time of the
proposed rule, we failed to crosswalk the emergency cases in which an
ALS vehicle was used, but no ALS service was furnished, to the category
of ALS1-Emergency services under the fee schedule; instead, we counted
them as BLS-Emergency services. Second, there was a miscalculation of
the number of rural ambulance miles that are less than or equal to 17
in the 1998 base data. Third, in this final rule, we added
approximately $42 million (the annualized amount for 2002) as an
estimate of the amount of low billing that will occur under the fee
schedule and, thus, the amount that will be available for other ground
ambulance services. This is discussed further in section V.B. Fourth,
we changed the inflation adjustment for 2001 to conform to the
inflation adjustments contained in section 423 of BIPA. Fifth, we added
back to the total amount used to calculate the CF the savings that
would have accrued to the program had we implemented the policy
proposed in June 1997 that would pay at the BLS rate for services
furnished at the BLS level even though an ALS vehicle was used.
We followed a similar procedure to determine the fee schedule
amount for air ambulance services. Because there are only two kinds of
air ambulance--fixed wing and rotary wing--we did not calculate RVUs
and a CF, but calculated the actual fee schedule amounts directly. We
divided the total number of billed air ambulance services into the
total amount of payment available for these services ($158 million).
The amounts in the base year (1998) are $2,286.52 and $2,658.42 for
fixed wing and rotary trips, respectively. These numbers would then
also be adjusted by the cumulative inflation factor provided in section
1834(l) of the Act. (The inflation factor is discussed in more detail
below.)
We will monitor payment data and evaluate whether our assumptions
used to establish the original CF (for example, the ratio of the volume
of BLS services to ALS services) are accurate. If the actual
proportions among the different levels of service are different from
the projected amounts, we will adjust the CF accordingly and apply this
adjusted CF prospectively.
Comment: One commenter recommended a third air rate for air
ambulance services furnished in remote, frontier areas such as Alaska.
The commenter stated that the cost of furnishing these services is
considerably higher than standard rural areas because of the sparse
population and large distances that must be traveled.
Response: We are not making this change to the fee schedule.
Consistent with the Committee Statement, there will be two air rates:
fixed wing and rotary wing (helicopter). As explained under the section
for rural modifiers, there will be a 50 percent add-on applied to the
base rate and to all of the loaded mileage for air ambulance services
in rural areas. Therefore, longer trips will be paid proportionately
more than shorter trips.
Comment: Many commenters from various regions believe that the fee
schedule rates are too low and that suppliers and providers will
substantially lose profits. Some commenters suggested that, for various
reasons, they should be exempt from the fee schedule and continue to be
paid under the current system. For example, a commenter described the
EMS system in New Jersey as unique and stated that placing New Jersey
ambulance suppliers under the fee schedule would actually result in a
higher cost to Medicare because it would ultimately force volunteer
ambulance companies to close.
Response: Section 1834(l) of the Act requires that the Secretary
establish a fee schedule for ambulance services through negotiated
rulemaking. Although the statute does call for consideration of
appropriate regional and operational differences in the
[[Page 9119]]
design of the fee schedule, it does not authorize exemptions or waivers
for individual providers or suppliers or groups of those providers or
suppliers. However, with the enactment of BIPA, the Congress created
one limited exemption from the fee schedule--CAHs that do not have
another ambulance supplier within a 35-mile drive.
The Congress required that the fee schedule be implemented in such
a way that Medicare payments for ambulance services would not exceed
what they would have been absent the new fee schedule. The fee schedule
will increase payments for providers and suppliers with unusually low
rates, and decrease payments for those who have historically received
payments above the national average, while still accounting for
geographic differences in costs and other factors. In anticipation of
such shifts, the Congress provided for a phase-in period to allow
ambulance providers time to adjust to the new payment rates.
IV. Implementation Methodology
Currently, payment of ambulance services follows one of two
methodologies, depending on the type of ambulance biller. Claims from
ambulance service suppliers are paid based on a reasonable charge
methodology, whereas claims from providers are paid based on the
provider's interim rate (which is a percentage based on the provider's
historical cost-to-charge ratio multiplied by the submitted charge) and
then cost-settled at the end of the provider's fiscal year.
In the September 12, 2000 proposed rule, we stated that the
ambulance fee schedule would be phased in over a 4-year period. The
transition was to begin on January 1, 2001 and the fee schedule was to
be phased in on a CY basis. However, as explained above, we will
implement the fee schedule beginning April 1, 2002. Therefore, for
dates of service (DOS) beginning April 1, 2002, suppliers/providers
would be paid based on 80 percent of the respective current payment
allowance (as described in Program Memorandum AB-00-87) applicable to
this time period plus 20 percent of the ambulance fee schedule amount.
(See Sec. 414.615 for additional information.) Based on comments
received, we will phase-in implementation of the ambulance fee schedule
under a 5-year transition, as follows:
------------------------------------------------------------------------
Former payment Fee schedule
percentage percentage
------------------------------------------------------------------------
Year One (4/2002-12/2002)............... 80 20
Year Two (CY 2003)...................... 60 40
Year Three (CY 2004).................... 40 60
Year Four (CY 2005)..................... 20 80
Year Five (CY 2006)..................... 0 100
------------------------------------------------------------------------
Comment: Many commenters expressed concern over whether providers,
suppliers, carriers, and CMS are fully prepared for the ambulance fee
schedule implementation and whether all of the necessary steps to
ensure successful implementation have been taken. Specifically,
commenters believe there was insufficient time between the close of the
comment period on November 13, 2000, and January 1, 2001, to:
Educate intermediaries, carriers and all ambulance
suppliers and beneficiaries in order to provide a smooth transition to
the new system.
Change our computer programs (and for suppliers to change
theirs) and test these changes before placing them online.
The fee schedule creates new codes, new requirements (for example,
zip code for point of pick-up), new levels of service, and a transition
blending methodology. The commenters stated that neither suppliers nor
beneficiaries will understand how they are to be paid. Several
commenters requested that we delay the implementation from January 1,
2001, to a later date.
Response: Although the proposed rule was largely based on an
agreement reached as part of a formal, negotiated rulemaking process
with representatives of the ambulance industry and other interested
parties, we received a large volume of comments. We did not have
sufficient time to carefully consider all comments and publish a final
rule in time to implement the fee schedule by January 1, 2001.
Therefore, payment under the fee schedule structure (that is, a blend
of fee schedule amounts and current payments) did not begin on that
date. This has allowed suppliers additional time to adjust to the
proposed payment methodology.
The proposed rule was published in the Federal Register on
September 12, 2000 (65 FR 55078). Suppliers have also had access to the
formal instructions we issued to contractors with respect to the
systems changes necessary to implement the fee schedule. In addition,
we held a training conference with intermediaries and carriers on
November 16 and 17, 2000, on all issues related to the fee schedule.
Contractors conducted training efforts directly with ambulance
suppliers during December 2000. We will continue our training efforts
as we implement the new billing codes.
Comment: One commenter suggested that we cancel implementation of
the ambulance fee schedule.
Response: We are required by the Congress under section 1834(l) of
the Act to implement a fee schedule for ambulance services.
Comment: Two commenters stated that information in the Medicare and
You publication was insufficient regarding the ambulance fee schedule.
Response: The Medicare and You publication is a handbook that
provides a general synopsis of all services in Medicare: the level of
detail concerning payment policy and implementation of the ambulance
fee schedule in that publication are aimed at the general reader and
not necessarily ambulance suppliers. Payment policies for ambulance
services are published in detail in the Federal Register and
subsequently in the CFR.
Comment: A few commenters disagreed with the phase-in schedule for
the implementation of the ambulance fee schedule, stating that the
implementation period was too short and not ``in an efficient and fair
manner'' as required by the statute. The commenters stated that the
phase-in is on a 3-year basis rather than a 4-year basis, as stated in
the proposed rule. A few commenters wanted immediate, 100 percent
implementation of the ambulance fee schedule, while others suggested
other timeframes for a phase-in. Some commenters suggested a slower
transition for providers as opposed to suppliers. Also, a few
commenters recommended that SCT service payments be fully and
[[Page 9120]]
immediately implemented separately from the rest of the fee schedule.
Response: We agree that suppliers and providers need additional
time to adjust to the fee schedule. Therefore, we will change the
phase-in schedule from the proposed 4 years to a 5-year transition, as
shown above. Thus, the overall phase-in is reflected in a 5-year span,
with year 5 being at 100 percent of the fee schedule.
Comment: A few commenters requested that phase-in of the fee
schedule should be by fiscal year for hospitals rather than by calendar
year.
Response: We have decided not to phase in the fee schedule for
providers based on each provider's fiscal year. As described above in
section III.C., in general, Medicare's payment per trip to providers is
considerably higher than the payment per trip to suppliers. Allowing a
phase-in schedule on the provider's fiscal year would provide an
advantage for some providers over independent suppliers because the fee
schedule would be implemented unevenly across ambulance entities.
Comment: One commenter asked whether the limitation on review (in
section 1834(l)(5) of the Act) refers only to the rates established
under the ambulance fee schedule.
Response: The limitation on review, by its own terms, prohibits
both administrative and judicial review of the amounts established
under the fee schedule, including all the ``considerations'' contained
in section 1834(l)(2) of the Act, for example, the definitions for
ambulance services and appropriate regional and operational
differences. Thus, review of all these issues is precluded.
Revisions and Additions to HCPCS Codes
Claims will be processed using the billing codes created for the
ambulance fee schedule and contained in the proposed rule. From these
codes, the amount for the portion of the payment based on the current
system (80 percent in CY 2002) will be derived using the HCPCS
crosswalks as shown below.
We have already changed ``old'' HCPCS ambulance codes in order to
implement the ambulance fee schedule, effective January 1, 2001. The
HCPCS codes formerly used to report ambulance services could not be
used effective January 1, 2001, except for those HCPCS codes under
which a method 3 or method 4 biller may bill for supplies separately
(since such billing may continue during the transition period) and
those codes previously used to bill for mileage. These codes will be
used until the fee schedule is fully implemented.
The following chart shows how the former codes crosswalk to the
final new codes under the ambulance fee schedule. Additionally, the
chart shows ``old'' HCPCS codes that will not have a corresponding code
under the final ambulance fee schedule. The items and services
represented by these codes will be bundled into the base rate services.
Codes Not Valid Under the New Fee Schedule (Codes Terminate
Effective 01/01/06): A0382, A0384, A0392, A0396, A0398, A0420, A0422,
A0424, A0999.
HCPCS Code Changes:
----------------------------------------------------------------------------------------------------------------
New HCPCS
Current HCPCS Code Code Descriptions of final new codes
----------------------------------------------------------------------------------------------------------------
A0380, A0390................................................... A0425 Ground mileage (per statute
mile).
A0306, A0326, A0346, A0366..................................... A0426 Ambulance service, advanced life
support, non-emergency
transport, level 1 (ALS1).
A0310, A0330, A0350, A0370..................................... A0427 Ambulance service, advanced life
support, emergency transport,
level 1 (ALS1-Emergency).
A0300, A0304 *, A0320, A0324 *, A0340, A0344 *, A0360, A0364 *. A0428 Ambulance service, basic life
support, non-emergency transport
(BLS).
A0050, A0302, A0308 **, A0322, A0328 **, A0342, A0348 **, A0429 Ambulance service, basic life
A0362, A0368 **. support, emergency transport
(BLS-Emergency).
A0030.......................................................... A0430 Ambulance service, conventional
air services, transport, one way
(fixed wing (FW)).
A0040.......................................................... A0431 Ambulance service, conventional
air services, transport, one way
(rotary wing (RW)).
Q0186.......................................................... A0432 Paramedic ALS intercept (PI),
rural area, transport furnished
by a volunteer ambulance company
which is prohibited by State law
from billing third party payers.
A0433 Advanced life support, Level 2
(ALS2). The administration of at
least three different
medications and/or the provision
of one or more of the following
ALS procedures: Manual
defibrillation/cardioversion,
endotracheal intubation, central
venous line, cardiac pacing,
chest decompression, surgical
airway, intraosseous line.
A0435 Air mileage; fixed wing (per
statute mile).
A0436 Air mileage; rotary wing (per
statute mile).
A0434 Specialty Care Transport (SCT).
In a critically injured or ill
beneficiary, a level of inter-
facility service provided beyond
the scope of the Paramedic. This
service is necessary when a
beneficiary's condition requires
ongoing care that must be
provided by one or more health
professionals in an appropriate
specialty area (for example,
nursing, emergency medicine,
respiratory care, cardiovascular
care, or a paramedic with
additional training).
Q3019 Ambulance service, Advanced Life
Support (ALS) vehicle used,
emergency transport, no ALS
level service furnished.
Q3020 Ambulance service, Advanced Life
Support (ALS) vehicle used, non-
emergency transport, no ALS
level service furnished.
----------------------------------------------------------------------------------------------------------------
* A new code will be established to indicate during the transition period that where an ALS vehicle was used in
a non-emergency situation to furnish only BLS services, the service will be ALS-nonemergency for the old
portion of the blended payment and BLS for the Fee Schedule portion of the blended payment.
** A new code will be established to indicate during the transition period that where an ALS vehicle was used in
an emergency response and furnished only BLS services, the service will be ALS-Emergency for the old portion
of the blended payment and BLS-Emergency for the Fee Schedule portion of the blended payment.
Payment to new suppliers that have not billed Medicare in the past
will be subject to the transition period rules. New suppliers will be
assigned an allowed charge under the current reasonable charge rules
(for new
[[Page 9121]]
suppliers, the allowed charge is set at the 50th percentile of all
charges for the service) and will receive the same blended transition
payments as other ambulance suppliers. In all cases, the transitional
payment will be subject (as will the fully implemented fee schedule
payment) to the Part B coinsurance and deductible requirements.
Currently, we pay the provider's claims based on the provider's
interim rate (the provider's submitted charge multiplied by the
provider's past year's cost-to-charge ratio). That interim rate is:
Cost-settled at the end of the provider's fiscal year, and
Limited by the statutory inflation factor, contained in
section 4531 of the BBA, applied to the provider's allowed cost per
ambulance trip from the previous year.
The fee schedule transition will begin on April 1, 2002 and the fee
schedule will be phased in on a calendar year basis. Therefore, for
providers that file cost reports on a basis other than a calendar year
(January 1-December 31) cost-reporting period, for cost-reporting
periods beginning after April 1, 2002, two different rates will be
blended. Effective for services furnished during 2002, the proposed
blended amount for provider claims will equal the sum of 80 percent of
the current payment system amount and 20 percent of the ambulance fee
schedule amount. Although some providers may receive substantially
lower payments than at present, the Committee recommended this
particular phase-in, and we believe that our implementing payment under
the fee schedule at only 20 percent in the first year will give
ambulance providers a period of time to adjust to the new payment
amounts. For dates of service in CY 2003, the blended amount will equal
the sum of 60 percent of the current payment system amount and 40
percent of the ambulance fee schedule amount. For dates of service in
CY 2004, the blended amount will equal the sum of 40 percent of the
current payment system amount and 60 percent of the ambulance fee
schedule amount. For dates of service in CY 2005, the blended amount
will equal the sum of 20 percent of the current payment system amount
and 80 percent of the ambulance fee schedule amount. For dates of
service in CY 2006 and beyond, the payment amount will equal the
ambulance fee schedule amount. In all cases, the fee schedule portion
of the blended rate equals the blending percentage multiplied by the
lower of the fee schedule amount or the actual billed charges. The
program's payment in all cases will be subject to the Part B
coinsurance and deductible requirements.
To assure that providers receive the correct payment amount during
the transition period, all submitted charges attributable to ambulance
services furnished during a cost-reporting period will be aggregated
and treated separately from the submitted charges attributable to all
other services furnished in the hospital. Also, providers must maintain
statistics necessary for the Provider Statistics and Reimbursement
report to ensure that the ambulance fee schedule portion of the blended
transition payment will not be cost-settled at cost settlement time.
New providers will not have a cost per trip from the prior year.
Therefore, there will be no cost per trip inflation limit applied to
new providers in their first year of furnishing ambulance services.
New suppliers will use the CY 2000 allowed charge assigned for new
suppliers in accordance with standard program procedures as described
above, adjusted for each year of the transition period by the ambulance
inflation factor that we announce.
Section 1834(l) of the Act also requires that all payments made for
ambulance services under the proposed fee schedule be made on an
assignment-related basis. Pursuant to section 1842(b)(18)(A) and (B) of
the Act, incorporated by reference in section 1834(l)(6) of the Act,
ambulance suppliers will have to accept the Medicare allowed charge as
payment in full and not bill or collect from the beneficiary any amount
other than the unmet Part B deductible and Part B coinsurance amounts.
Violations of this requirement may subject suppliers to sanctions. The
law provides that mandatory assignment applies to all services ``for
which payment is made under'' section 1834(l) of the Act; therefore,
there will be no transitional period for mandatory assignment of
claims. Nor is there any transition to the mechanisms and definitions
required by the law. Thus, for instance, the level of services
definitions (for example, that claims will be paid for the fee schedule
portion of the blended payment at the BLS level if an ALS vehicle was
used but no ALS level of service was furnished) will not be subject to
transition.
Comment: One commenter stated that we should share the new HCPCS
codes with other payers in the interest of consistency among all
payers.
Response: HCPCS codes, when established, are routinely shared with
all payers.
Comment: A few commenters asked about HCPCS code A0888 (noncovered
ambulance mileage) and whether it is being included in the crosswalk of
old codes to new ones or is being terminated when the fee schedule is
implemented.
Response: HCPCS code A0888 is the code for noncovered ambulance
mileage (for example, mileage traveled beyond the closest appropriate
facility). This code has not been deleted and may continue to be used
as it was previously.
Comment: Some commenters suggested that we maintain current HCPCS
codes for ambulance services for use by other payers.
Response: The new codes have been established in accordance with
standard procedures that include approval by a national coding
committee with representatives from private payers. As a result, HCPCS
codes in effect prior to January 1, 2001, for ambulance services have
been terminated and replaced by new codes.
Comment: Some commenters asked how payment would be made for new
services that did not exist prior to the establishment of the new HCPCS
codes (implemented January 1, 2001).
Response: We may determine that a new level of service is necessary
to accommodate new expensive technologies. However, the Congress
provided only for an inflation factor each year to update the aggregate
amount paid under the fee schedule. There is no other provision for
increasing the aggregate amount paid for ambulance services in
successive years. Therefore, if a new code representing a new level of
service is created, the CF would have to be recalculated to preserve
this statutory payment limit.
Comment: A few commenters believe that, during the phase-in,
suppliers should be allowed to bill for waiting time and an extra
attendant.
Response: The phase-in builds upon suppliers' current payments as
well as on the fee schedule. Therefore, to the extent that suppliers
are currently allowed by their carrier to bill under the reasonable
charge system for waiting time and an extra attendant, they may
continue to bill in that way during the phase-in only.
Fee Schedule Amounts and Examples of Payment
The table below represents the fee schedule amounts for 2002 under
this rule. Note that actual payment rates for 2002 will be a blend of
the fee schedule amount and the payment allowances applicable for 2002.
[[Page 9122]]
Table 1.--2002 Fee Schedule for Payment of Ambulance Services
--------------------------------------------------------------------------------------------------------------------------------------------------------
Amount Rural Rural
Unadjusted adjusted Amount not ground ground
Service level RVUs CF base rate by GPCI adjusted Loaded mileage mileage
(UBR)+ (70% of (30% of mileage (miles 1- (miles 18-
UBR) UBR) 17) 50)*
--------------------------------------------------------------------------------------------------------------------------------------------------------
BLS..................................................... 1.00 170.54 $170.54 $121.65 $52.14 $5.47 $8.21 $6.84
BLS-Emergency........................................... 1.60 170.54 272.86 191.00 81.86 5.47 8.21 6.84
ALS1.................................................... 1.20 170.54 204.65 143.26 61.40 5.47 8.21 6.84
ALS1-Emergency.......................................... 1.90 170.54 324.03 226.82 97.21 5.47 8.21 6.84
ALS2.................................................... 2.75 170.54 468.99 328.29 140.70 5.47 8.21 6.84
SCT..................................................... 3.25 170.54 554.26 387.98 166.28 5.47 8.21 6.84
PI...................................................... 1.75 170.54 298.45 208.91 89.54 (1) No Mileage Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Amount Amount not
Unadjusted adjusted by adjusted Rural air Loaded Rural air
Service level base rate GPCI (50% (50% of base rate** mileage mileage***
(UBR) of UBR) UBR)
----------------------------------------------------------------------------------------------------------------
FW................................ $2,314.51 $1,157.26 $1,157.26 $3,471.77 $6.57 $9.86
RW................................ 2,690.96 1,345.48 1,345.48 4,036.44 17.51 26.27
----------------------------------------------------------------------------------------------------------------
\*\ A 50 percent add-on to the mileage rate (that is, a rate of $8.21 per mile) for each of the first 17 miles
identified as rural. A 25 percent add-on to the mileage rate (that is, a rate of $6.84 per mile) for miles 18
through 50 identified as rural. The regular mileage allowance applies for every mile over 50 miles.
\**\ A 50 percent add-on to the air base rate is applied to air trips identified as rural.
\***\ A 50 percent add-on to the air mileage rate is applied to every mile identified as rural.
The payment rate for rural air ambulance (rural air mileage rate and rural air base rate) is 50 percent more
than the corresponding payment rate for urban services (that is, the sum of the base rate adjusted by the
geographic adjustment factor and the mileage).
\+\ This column illustrates the payment rates without adjustment by the GPCI. The conversion factor (CF) has
been inflated for CY 2002.
Legend for Table 1
ALS1--Advanced Life Support, Level 1
ALS2--Advanced Life Support, Level 2
BLS--Basic Life Support
CF--Conversion Factor
FW--Fixed Wing
GPCI--Practice Expense Portion of the Geographic Practice Cost Index
from the Physician Fee Schedule
PI--Paramedic ALS Intercept
RVUs--Relative Value Units
RW--Rotary Wing
SCT--Specialty Care Transport
UBR--Unadjusted Base Rate
Formulas--The amounts in the above chart are used in the following
formulas to determine the fee schedule payments--
Ground
Ground-Urban: Payment Rate = [(RVU*(0.30 + (0.70*GPCI) ))*CF] +
[MGR*#MILES].
Ground-Rural: Payment Rate =
[(RVU*(0.30+(0.70*GPCI) ))*CF] +
[(((1+RG1)*MGR)*#MILES17)+ (((1 + RG2)*MGR)*#MILES18-50) +
(MGR*#MILES>50)] (Sign before number 17 was erroneously published in
the proposed rule.)
Air
Air-Urban: Payment Rate = [((UBR*0.50) + ((UBR*0.50)*GPCI) )] +
[MAR*#MILES].
Air-Rural: Payment Rate = [(1.00 + RA)*((UBR*0.50)*GPCI) )] +
[(1.00+RA)*(MAR*#MILES)].
Legend for Formulas
Symbol and Meaning
= less than or equal to
> = greater than
* = multiply
CF = conversion factor (ground = $159.56; air = 1.0)
GPCI = practice expense portion of the geographic practice cost
index from the physician fee schedule
MAR = mileage air rate (fixed wing rate = 6.49, helicopter rate =
17.30)
MGR = mileage ground rate (5.40)
#MILES = number of miles the beneficiary was transported
#MILES17 = number of miles the beneficiary was transported less than
or equal to 17
#MILES18-50 = number of miles beneficiary was transported between 18
and 50
#MILES>50 = number of miles the beneficiary was transported greater
than 50
RA = rural air adjustment factor (0.50 on entire claim)
Rate = maximum allowed rate from ambulance fee schedule
RG1 = rural ground adjustment factor amount: first 17 miles (0.50 on
first 17 miles)
RG2 = rural ground adjustment factor amount: miles 18 through 50
(0.25 on miles 18 through 50)
RVUs = relative value units (from chart)
UBR = the payment rates without adjustment by the GPCI (unadjusted
base rate)
Notes: The GPCI is determined by the address (zip code) of the
point of pickup.
Examples Demonstrating Use of Fee Schedule Amounts
The examples in the table and in the discussion below demonstrate
the use of the ambulance fee schedule amounts during the first year
(2002). Examples 1 through 4 relate to independent supplier claims, and
Example 5 relates to hospital-based supplier claims.
Table 2.--Examples Demonstrating Use of Fee Schedule Amounts
----------------------------------------------------------------------------------------------------------------
Reasonable 2002 fee
Example Reasonable charge IIC x 2002 fee schedule x Total allowed
charge IIC 80% schedule 20% charge
----------------------------------------------------------------------------------------------------------------
1............................... $315.62 $252.50 $343.66 $68.73 $321.23
2............................... 292.44 233.95 425.62 85.12 319.07
3............................... 1,982.26 1,585.81 2,987.23 597.45 2,183.26
4............................... 1,564.80 1,251.84 6,250.83 1,250.17 2,502.01
[[Page 9123]]
(Erroneously given in proposed rule in Example
4 as:
$4,599.69 $919.94 $2,171.78)
----------------------------------------------------------------------------------------------------------------
Example 1: Ground Ambulance, Urban (Independent Supplier)
A Medicare beneficiary residing in Baltimore, Maryland, was
transported via ground ambulance from his or her home to the nearest
appropriate hospital 2 miles away. An emergency response was required,
and ALS services, including an ALS assessment, were furnished.
Therefore, the level of service is ALS1-Emergency.
Assuming that the beneficiary was placed on board the ambulance in
Baltimore, it will be an urban trip. Therefore, no rural payment rate
will apply. In Baltimore, the GPCI = 1.038. The fee schedule amount
will be calculated as follows--
Payment Rate = [(RVU*(0.30 + (0.70*GPCI))) *CF] + [MGR*#MILES]
Payment Rate = [(1.90*(0.30 + (0.70*1.038))) *170.54] + [5.47*2.00]
Payment Rate = [(1.90*(0.30 + 0.727)) *170.54] + [10.94]
Payment Rate = [(1.90*1.027)*170.54] + [10.94]
Payment Rate = [1.951*170.54] + [10.94]
Payment Rate = [332.724] + [10.94]
Payment Rate = 343.664
Payment Rate = $343.66 (subject to Part B deductible and coinsurance
requirements)
Because 2002 will be the first year of a 5-year transition period,
the ambulance fee schedule payment rate will be multiplied by 20
percent and added to 80 percent of the payment calculated by the
current payment system. The payment rate for Year 2 (CY 2003) will be
calculated by multiplying the ambulance fee schedule payment rate by 40
percent and adding the result to 60 percent of the current payment
system amount. The payment rate for Year 3 (CY 2004) will be calculated
by multiplying the ambulance fee schedule payment rate by 60 percent
and adding the result to 40 percent of the current payment system
amount. The payment rate for Year 4 (CY 2005) will be calculated by
multiplying the ambulance fee schedule payment rate by 80 percent and
adding the result to 20 percent of the current payment system amount.
The payment for Year 5 (CY 2006) will be based solely on the ambulance
fee schedule.
The applicable codes are A0427 and A0425. Assuming application of
the inflation indexed charge (IIC) in 2002, the reasonable charge
allowance for this service in Maryland is $315.62 ($303.00 for the base
trip plus $6.31 x 2 miles).
Assuming that the Part B deductible has been met, the program will
pay 80 percent, and the beneficiary's liability will be 20 percent,
representing the Part B coinsurance amount, and the total allowed
charge for this service during CY 2002 will be:
------------------------------------------------------------------------
Beneficiary
Medicare payment (80%) liability (20%)
------------------------------------------------------------------------
$256.98................................................ $64.25
------------------------------------------------------------------------
Example 2: Ground Ambulance, Rural (Independent Supplier)
A Medicare beneficiary residing in Cottle County, Texas was
transported via ground ambulance from his or her home to the nearest
appropriate facility located in Quanah, Texas. Cottle County, where the
beneficiary was placed on board the ambulance, is a non-MSA and,
therefore, is, for purposes of this fee schedule, rural. A rural
mileage rate will apply. The total distance from the beneficiary's home
to the facility is 36 miles. A BLS nonemergency assessment was
performed. Under this rule, the level of service will be BLS
(nonemergency).
For this part of Texas, the GPCI = 0.880. The proposed ambulance
fee schedule amount will be calculated as follows--
36 mile trip = 17 miles at the 50% rural mileage increased rate plus 19
miles at the 25% rural mileage increased rate.
Payment Rate = [(RVU*(0.30 + (0.70*GPCI)))*CF] + [(((1+
RG1)*MGR)*#MILES17)+ (((1+RG2)*MGR)*# MILES18-50) +
(MGR*#MILES>50)]
Payment Rate = [(1.00*(0.30 + (0.70*0.880))) *170.54] + [(((1.00 +
0.50)*5.47)*17.00)+ (((1.00 + 0.25)*5.47) *19.00) + (5.47*0.00)]
Payment Rate = [(1.00*(0.30 + 0.616)) *170.54] + [((1.50*5.47)*17.00)+
((1.25*5.47)*19.00) + (0.00)]
Payment Rate = [(1.00*0.916)*170.54] + [(8.21*17.00) + (6.84*19.00) +
(0.00)]
Payment Rate = [0.916*170.54] + [139.49 + 129.91 + 0.00]
Payment Rate = [156.215] + [269.40]
Payment Rate = 425.615
Payment Rate = $425.62 (subject to Part B deductible and coinsurance
requirements)
The total allowed charge for this service during 2002 under our
ambulance fee schedule is based on the following codes:
Old HCPCS Code(s) = A0300 and A0380
New HCPCS Code(s) = A0428 and A0425
Assuming application of the inflation indexed charge (IIC) in 2002,
the reasonable charge rate for this service in Texas will be $292.44
($152.76 for HCPCS A0300, $3.88 x 36 miles for A0380).
Assuming that the Part B deductible was met, the program will pay
80 percent, and the beneficiary's liability will be 20 percent,
representing the Part B coinsurance amount and the total allowed charge
for this service during 2002 will be:
------------------------------------------------------------------------
Beneficiary
Medicare payment (80%) liability
(20%)
------------------------------------------------------------------------
$255.26................................................. $63.81
------------------------------------------------------------------------
Example 3: Air Ambulance, Urban (Independent Supplier)
A Medicare beneficiary was involved in an automobile accident along
a busy interstate near Detroit, Michigan. A helicopter transported the
beneficiary to the nearest appropriate facility located within the city
limits of Detroit. The total distance from the accident to the facility
was 14 miles. The level of service was rotary wing.
Assuming that the patient was placed on board the air ambulance
within the Detroit MSA, and because this is not a Goldsmith county, the
trip will be urban. Therefore, no rural payment rate will apply. In the
Detroit metropolitan area, the GPCI = 1.038. The ambulance fee schedule
amount will be calculated as follows--
[[Page 9124]]
Payment Rate = [((UBR*0.50)+((UBR*0.50) *GPCI))]+[MAR*#MILES]
Payment Rate = [((2690.96*0.50)+((2690.96*0.50) *1.038))]+[17.51*14.00]
Payment Rate = [(1345.48+(1345.48*1.038) )]+[245.14]
Payment Rate = [(1345.48+1396.608 )]+[245.14]
Payment Rate = [2742.088]+[245.14]
Payment Rate = 2987.228
Payment Rate = $2,987.23 (subject to Part B deductible and coinsurance
requirements)
The total allowed charge for this service during 2002 is based on
the following codes:
Old HCPCS Code = A0040
New HCPCS Code = A0431 and A0436
Assuming application of the inflation indexed charge (IIC) in 2002,
the reasonable charge rate for this service in Michigan is $1,982.26.
Assuming that the Part B deductible has been met, the program will
pay 80 percent, and the beneficiary's liability will be 20 percent,
representing the Part B coinsurance amount; and the total allowed
charge for this service during 2002 will be:
------------------------------------------------------------------------
Beneficiary
Medicare payment (80%) liability (20%)
------------------------------------------------------------------------
$1,746.61.............................................. $436.65
------------------------------------------------------------------------
Example 4: Air Ambulance, Rural (Independent Supplier)
A Medicare beneficiary was transported via helicopter from a rural
county in Arizona to the nearest appropriate facility. The total
distance from point of pick-up to the facility was 86 miles. The level
of service was rotary wing.
Because the point of pick-up was in a rural, non-MSA area, this
transport will be a rural trip under this rule. Therefore, a rural
payment rate will apply. In Arizona, the GPCI = 0.978. The ambulance
fee schedule amount will be calculated as follows--
Payment Rate = [(1.00+RA)*((UBR*0.50)+ ((UBR*0.50)*GPCI))]+
[(1.00+RA)*(MAR*#MILES)]
Payment Rate = [(1.00+0.50)*((2690.96*0.50)+ ((2690.96*0.50)*0.978))]+
[(1.00+0.50)*(17.51*86.00)]
Payment Rate = [(1.50)*(1345.48+ (1345.48*0.978) )]+[1.50*1505.86]
Payment Rate = [(1.50)*(1345.48+1315.879 )]+[2258.79]
Payment Rate = [1.50*2661.359]+[2258.79]
Payment Rate = [3992.039]+[2258.79]
Payment Rate = 6250.829
Payment Rate = $6,250.83 (subject to Part B deductible and coinsurance
requirements)
The total allowed charge for this service during 2002 is based on
the following codes:
Old HCPCS Code = A0040
New HCPCS Code = A0431 and A0436
Assuming application of the inflation indexed charge (IIC) for the
example in question, in 2002 the reasonable charge rate for this
service in Arizona will be $1,564.80.
Assuming that the Part B deductible has been met, the program will
pay 80 percent and 20 percent will be the beneficiary's liability and
the total allowed charge for this service during 2002 will be:
------------------------------------------------------------------------
Beneficiary
Medicare payment (80%) liability (20%)
------------------------------------------------------------------------
$2,001.61.............................................. $500.40
------------------------------------------------------------------------
(These figures were erroneously given in the proposed rule as:
------------------------------------------------------------------------
Beneficiary
Medicare payment (80%) liability (20%)
------------------------------------------------------------------------
$1,737.42.............................................. $434.36)
------------------------------------------------------------------------
Example 5: Ground Ambulance, Rural (Hospital-Based Supplier)
A Medicare beneficiary residing in a rural area in the state of
Iowa was transported via ground ambulance from her home located in a
rural area (non-MSA) to the nearest appropriate facility (Hospital A).
Because the point of pick-up is in a rural area, under our final rule,
a rural payment rate will apply. The total distance from the
beneficiary's home to Hospital A is 14 miles. A BLS nonemergency
transport was furnished. The level of service will be BLS
(nonemergency).
For Iowa, the GPCI = 0.876. The ambulance fee schedule amount will
be calculated as follows--
14 mile trip = 14 miles at the rural mileage rate plus 0 miles at the
regular urban rate.
The HCPCS codes to be used under the fee schedule are A0428 and
A0425.
Payment Rate = [(RVU*(0.30 + (0.70*GPCI)))*CF] + [(((1 + RG1)*MGR)*
#MILES17)+(((1 + RG2)*MGR)*# MILES18-50) + (MGR*#MILES>50)]
Payment Rate = [(1.00*(0.30 + (0.70*0.876))) *170.54] + [(((1.00 +
0.50) *5.47)*14.00) + (((1.00+0.25) *5.47)*0.00) + (5.47*0.00)]
Payment Rate = [(1.00*(0.30 + 0.613)) *170.54] + [((1.50*5.47)*14.00) +
((1.25*5.47)*0.00) + (0.00)]
Payment Rate = [(1.00*0.913)*170.54] + [(8.205*14.00) + (6.838 *0.00) +
(0.00)]
Payment Rate = [0.913*170.54] + [114.87 + 0.00 + 0.00]
Payment Rate = [155.703] + [114.87]
Payment Rate = 270.573
Payment Rate = $270.57 (subject to Part B deductible and coinsurance
requirements)
Since 2002 will be the first year of a 5-year transition period,
the ambulance fee schedule payment rate will be multiplied by 20
percent. The portion of the total payment under the final fee schedule
for 2002 is:
Payment Rate = Fee Schedule * Transition Percentage
Payment Rate = 270.57*0.2
Payment Rate = 54.114
Payment Rate = $54.11
The remaining 80 percent of the payment rate is determined by the
current payment system. For FIs, the current payment calculation is as
follows.
Assume that Hospital A's charge (HCB) for a BLS-nonemergency
service is $220.00, its charge for mileage (HCM) is $4.00 per mile, and
its past year's cost-to-charge ratio (CCR) is 0.9.
Assuming that the beneficiary's Medicare Part B deductible has been
met, the beneficiary's coinsurance liability for 2002 will be $55.10,
calculated as follows:
Total Charge = HCB + (HCM*#MILES)
Total Charge = 220.00 + (4*14)
Total Charge = 220.00 + 56
Total Charge = $276.00 (Current system)
For 2002, the coinsurance is equal to 20 percent of:
Total rate = (0.80*Current System) + (0.20*FS)
Total rate = (0.80*276.00) + (54.71)
Total rate = (220.80) + (54.71)
Total rate = $275.51
Coinsurance = 0.20*275.51 = $55.10
For 2002, the transition payment rate is equal to:
Transition payment rate = [0.80*current rate] + [0.20*FS]
Transition Payment Rate = [0.80*((HCB)+(HCM*#MILES)) *CCR]+[0.20*FS]
Transition Payment Rate = [0.80*((220.00) + (4*14))*0.9] + [54.11]
Transition Payment Rate = [0.80*((220.00)+(56)) *0.9] + [54.11]
Transition Payment Rate = [0.80*(276.00)*0.9] + [54.11]
Transition Payment Rate = [198.72] + [54.11]
Transition Payment Rate = $252.83
[[Page 9125]]
Assuming the part B deductible is met:
Medicare program payment = (transition payment rate)-(coinsurance)
Medicare program payment = 252.83 - 55.10
Medicare program payment = $197.73
V. Mechanisms To Control Expenditures for Ambulance Services
We do not anticipate that the number of ambulance services
furnished will increase to offset the effects of lower payments per
service, and the Committee did not suggest mechanisms to control
expenditures. However, we will monitor payment data and evaluate
whether our assumptions used to calculate the original CF (for example,
the ratio of the volume of BLS services to ALS services or the number
of low billers) are accurate. If the actual proportions of the various
levels of service are different (higher or lower) than those projected,
we will adjust the CF accordingly.
VI. Adjustments To Account for Inflation and Other Factors
In setting the CF for CY 2002, we are adjusting the base year data
from 1998 for inflation. Section 4531 of the Balanced Budget Act of
1997, as amended by section 423 of BIPA, prescribes the inflation
factor to be used in determining the payment allowances for ambulance
services paid under the current Medicare payment system. The inflation
factor is equal to the projected consumer price index for all urban
consumers (U.S. city average) (CPI-U) minus 1 percentage point from
March-to-March for claims paid under cost payment (providers) and from
June-to-June for claims paid under the reasonable charge system
(carrier processed claims). The base year for our data is 1998. The
inflation factors as percents are:
------------------------------------------------------------------------
March-to-March June-to-June
(provider claims) (carrier claims)
(percentage) (percentage)
------------------------------------------------------------------------
1999/1998......................... 0.9 1.1
2000/1999......................... 2.4 2.0
2001/2000*........................ 3.7 3.7
2002/2001......................... 2.2 2.2
------------------------------------------------------------------------
Compounded inflation factor * (DOS 9.50 9.29
= 1/1/02-12/31/02)...............
------------------------------------------------------------------------
* For date of service (DOS) during the 6-month period 1/1/01-6/30/01,
the inflation factor was 2.7 percent, and for the 6-month period 7/1/
01-12/31/01, the statutory inflation factor is 4.7 percent for an
average of 3.7 percent for 2001.
In addition, the Committee acknowledged that the statutory
provisions in section 1834(l)(3)(B) of the Act, regarding annual
updates to the fee schedule, will be used to make adjustments to
account for inflation. That section of the Act provides for an annual
update to the ambulance fee schedule based on the percentage increase
in the CPI-U for the 12-month period ending with June of the previous
year. Section 4531 of the BBA provided that, for 2001 and 2002, the
increase in the CPI-U would be reduced by 1.0 percentage point for each
year. However, this section was amended by BIPA, which mandated that
the inflation factor for the period July 1, 2001 through December 31,
2001 be 4.7 percent.
As we indicated in the proposed rule, we will monitor payment data
and evaluate whether certain assumptions used to establish the original
CF (for example, the ratio of the volume of BLS services to ALS
services) are accurate. Where appropriate, we will adjust the CF
accordingly.
In addition, we note that the inflation factor also applies to all
mileage rates.
Comment: Some commenters stated that the inflation factor referred
to in the proposed rule is not correct for the year 2001. They stated
that it should be the change in the CPI-U over the one-year period
ending with June 30, 2000, minus one percent. The commenters
recommended that, since the statutory inflation factor for 2001 is the
CPI-U increase for the 12-month period ending in June of the previous
year, we should be using that factor for the 2001 update, rather than
an estimate for the 12-month period ending in June of 2001.
Response: We agree. However, the Congress has since enacted a
change in the ambulance inflation factor for part of 2001. Section 423
of BIPA provides that this factor be increased to 4.7 percent for the
period July 1, 2001 through December 31, 2001.
Comment: Some commenters requested that we limit any adjustments to
the CF to include only adjustments for the factors mentioned in the
preamble. They state, for example, that the industry has no control
over total volume of services and believe that we should not reduce the
CF to offset increased charges resulting from any possible increase in
total ambulance trips.
Response: We are not reducing the CF to offset increased program
payments that result from an increase in the total volume of ambulance
trips.
Comment: One commenter stated that operational costs in California
(for example, personnel, insurance, fuel) are higher than other areas
and the fee schedule should recognize these higher costs.
Response: Differences in operational costs due to location are
reflected in the fee schedule through the GPCI. This index is derived
from cost-of-living factors in the operation of a physician's office,
such as personnel, insurance, electricity. The Committee believed that
this index was the most appropriate of the indices available to use for
the ambulance fee schedule.
VII. Medical Conditions Lists
When the Congress mandated that the ambulance fee schedule be
developed through the negotiated rulemaking process, we deferred final
action on our earlier proposal to base Medicare payment on the level of
ambulance service required to treat the beneficiary's condition. The
proposed ambulance coverage rule, published on June 17, 1997 (62 FR
32715), also included diagnostic codes based on the International
Classification of Diseases, 9th revision, Clinical Modification (ICD-9-
CM) that would have described the nature of the beneficiary's medical
condition. Use of the ICD-9-CM codes would have assisted ambulance
suppliers in billing the medically necessary level of ambulance
service.
While we did not propose a medical conditions list in the September
2000 proposed rule (65 FR 55078), and while a medical conditions list,
or codes for such a list, were not an official part of the negotiated
rulemaking process, some of the negotiated rulemaking participants and
other medical professionals, including carrier medical directors,
emergency room physicians, and the Emergency Nurses Association,
[[Page 9126]]
came together as an ad hoc workgroup to discuss this issue. Their aim
was to develop a list of medical conditions, not diagnoses, that
generally require ambulance services and to identify the appropriate
level of care for these conditions. The identified condition(s) would
describe the beneficiary's medical condition, as presented to the
ambulance crew upon arrival on the scene. The workgroup's final report
was submitted to the Committee as a recommendation for further
consideration.
We published the list of medical conditions as Addendum A in the
September 12, 2000 proposed rule (66 FR 55096). Suppliers and providers
may submit these conditions on their Medicare claims. If they choose to
do so, the condition must be reported in the ``remarks'' field on the
claim. We will instruct Medicare contractors that they may not deny or
reject claims solely because a supplier or provider has reported on the
claim one of the conditions from the list of conditions. Also, the
presence of a condition, in and of itself, does not establish the
ambulance service as reasonable and necessary. Regardless of the
presence of the condition on the claim, ambulance suppliers and
providers must maintain and, upon request by the Medicare contractor,
submit documentation sufficient to show that the service was reasonable
and necessary. In other words, the presence of an identified condition
on the claim will not make the claim payable if the beneficiary could
have been safely transported by other means.
We noted in the proposed rule that we have solicited information
from interested parties on the need for such a list and the development
of codes used in association with such a list that would best support
the processing of claims for ambulance services. We also noted that,
while we were not requiring the use of the conditions list at that
time, we intended to work with members of the industry and other
affected parties to develop a more complete set of conditions as well
as a coding system that could be used under the fee schedule. Any such
coding system, after August 16, 2002, would have to be created
consistent with the electronic claim standards developed pursuant to
the Health Insurance Portability and Accountability Act of 1996, Public
Law 104-91 (HIPAA), described in the Federal Register on August 17,
2000 (65 FR 50311).
Comment: The majority of the comments on this subject stated that
the list of condition descriptions should be adopted as written. Some
commenters recommended that we not implement the fee schedule until we
can implement the medical conditions list. The commenters stated that a
coding system, upon which the new fee schedule is based, should include
a means for suppliers and providers to indicate on the claim the
symptoms presented by the beneficiary to the ambulance crew at the time
of arrival on the scene that justify the level of service they furnish.
Commenters also expressed concern that the medical conditions list
is necessary for providers and suppliers to be able to report the
appropriate level of service. One commenter noted that implementing the
fee schedule without the medical conditions list will cause great
hardship and confusion for ambulance suppliers and carriers regarding
billing and claims processing.
Response: The ambulance fee schedule is based upon HCPCS codes that
reflect the level of services provided to the beneficiary. We have set
forth in this final rule the seven levels of service upon which payment
for ground ambulance services will be based. Although the medical
conditions may be used as a guide to indicate the appropriate level of
ground ambulance service, they are not necessary in order to proceed
with the implementation of the fee schedule. The ambulance fee
schedule, which is simply a pricing mechanism, does not depend upon the
use of a coding system denoting the list of conditions.
Under the current billing rules for ambulance services, Medicare
carriers may request that suppliers document that the trip was
medically necessary and that the appropriate level of service was
provided. Currently, suppliers provide this documentation by using--(a)
an explanation on the claims forms, (b) ICD-9-CM diagnosis codes, and/
or (c) medical records.
As we stated above and in the proposed rule, we agree that a
medical conditions list would help the ambulance supplier to identify
the level of service at which a claim may be paid and would also aid
Medicare contractors in their efforts to ensure that claims for
ambulance services are paid appropriately. We understand the importance
of implementing a uniform set of condition codes that all providers and
suppliers can use. While this regulation does not contain such a set of
codes, we pledge to work with the ambulance providers and suppliers,
including hospitals, to develop a uniform set of codes over the next
year. If a provider or supplier wishes to use the existing set of ICD-
9-CM diagnosis codes, we will instruct our carriers and intermediaries
to review that set of codes.
However, when the issue of a list of medical conditions was raised
in the Committee, we advised the Committee that, while defining the
levels of ambulance service was within the scope of the Committee,
establishing the medical conditions that justify those levels of
payment was not within that scope. Furthermore, we advised that
recommendations about a coding system would have to be consistent with
the regulations published pursuant to HIPAA. The HIPAA standards for
electronic transactions final rule (65 FR 50312), which was published
on August 17, 2000, established, among other things, Standards for the
health care claims or equivalent encounter information transaction (45
CFR 162.1102). In general, the standards for that transaction require a
specific format, the ASC X12N 837, and specify the use of certain
medical data code sets when the transaction is transmitted
electronically by an entity subject to the rule. Under HIPAA, the ASC
X12N 837 and the specified code sets for the health care claims
transactions do not currently support the use of condition descriptions
lists. However, HIPAA provides for the maintenance and modification of
adopted standards and for the adoption of new standards, as set forth
in the regulations at Sec. 162.910. Therefore, it is possible that, in
the future, the health claims standards could be modified or expanded,
or new standards created, in accordance with the procedures set forth
in regulations, to accommodate condition descriptions lists.
Comment: Commenters did not agree on the appropriate coding system
to be used for the conditions list. Some commenters believe that ICD-9
or ICD-10 codes should be associated with the condition descriptions,
while others believe that we should not specify ICD-9 or ICD-10 codes
as an appropriate system to determine medical conditions. Still others
suggested that most conditions in the list could be mapped to existing
ICD-9-CM codes, and the remaining conditions could be mapped to HCPCS
codes. This approach would avoid the large expense to providers of
implementing another coding system.
Response: As noted above, there are many factors to be considered
before we make a final decision regarding the development of an
ambulance-specific medical condition coding system. We also note that
the example in the proposed rule mistakenly referenced ICD-10-CM codes
and should have referenced ICD-9-CM codes.
[[Page 9127]]
Comment: One commenter stated that we should require Medicaid to
use the new medical condition codes.
Response: States are not obligated to adopt Medicare guidelines for
ambulance services.
IX. Provisions of the Final Rule
A. BIPA
BIPA provides the following changes to the ambulance fee schedule
that have been incorporated into this rule.
Critical Access Hospital (CAH)--The proposed rule would
apply the ambulance fee schedule to all entities furnishing ambulance
services to Medicare beneficiaries. Section 205 of BIPA provides that
CAHs, or entities owned and operated by them, are paid for ambulance
services based on reasonable cost, if there is no other ambulance
provider or supplier within a 35-mile drive. As a result, these
entities are exempt from the ambulance fee schedule described in this
final rule. These entities are also exempt from the current cost-per-
trip inflation cap applicable to providers. This cap, established by
section 4531(a)(1) of the BBA, limits increases in the cost per trip of
ambulance services from each year to the next by the consumer price
index for all urban consumers, reduced by 1 percentage point.
Implementation of section 205 of BIPA requires us to establish a
process for a CAH to qualify for this exemption. Such a process was
addressed in a separate final rule, ``Medicare Program; Changes to the
Hospital Inpatient Prospective Payment Systems and Rates and Costs of
Graduate Medical Education; Fiscal Year 2002 Rates, etc.; Final
Rules,'' published August 1, 2001 (66 FR 39828). The payment policy
component is addressed in this rule.
Rural Ambulance Mileage--The proposed rule would pay rural
mileage greater than 17 at the same rate as mileage within urban areas.
Section 221 of BIPA provided that the payment rate for rural ambulance
mileage greater than 17 miles and up to 50 miles be increased by not
less than one-half of the additional payment per mile established for
the first 17 miles of a rural ambulance trip. We are waiving proposed
rulemaking for this provision because we believe this amount is the
minimum that is required by the plain language of the law and is not
discretionary. We believe that proposed rulemaking, which would be
necessary to set the amount at a level higher than the minimum, is
impracticable in this instance for timely implementation of the law and
will therefore implement it as a final with comment. Therefore, we will
accept public comments on this policy.
Inflation Factor--The proposed rule would increase the per
trip payments for services furnished in 2001 over the per trip payments
for these services furnished in 2000 by an amount equal to the change
in the CPI-U reduced by one percent. Section 423 of BIPA provided that
the ambulance inflation factor for services furnished during the period
July 1, 2001 through December 31, 2001 be equal to 4.7 percent. We have
implemented this provision without proposed rulemaking because it was
self-implementing and neither permitted nor required interpretation.
Ground Ambulance Mileage--The proposed rule would pay for
all ground ambulance mileage during a four-year transition period based
on a blend of the current payment rate and the fee schedule rate.
Section 423 of BIPA also provided that all mileage furnished by
suppliers and paid by carriers would be paid at the full fee schedule
amount without any phased-in blended payment, but only in those States
in which, prior to the fee schedule, the carrier paid separately for
all mileage outside the county from which the beneficiary was
transported, but did not pay separately for any in-county ambulance
mileage. This provision does not apply to providers. We are waiving
proposed rulemaking for this provision because we believe this amount
is the minimum that is required by the plain language of the law and is
not discretionary. We believe that proposed rulemaking is impracticable
in this instance for implementation of the law and will therefore
implement it as a final with comment. Therefore, we will accept public
comments on this policy.
B. Inflation
First, we corrected the inflation factor for 2001 to be equal to
the percentage increase in the CPI-U minus one percent for the 12-month
period ending in June of the previous year. This factor is applied to
services furnished in the period January 1, 2002 through December 31,
2002.
Second, we clarify that the ambulance inflation factor applies to
all mileage rates.
C. Physician Certification
We added a provision which states that the health care professional
who may certify the necessity of an unscheduled non-emergency ambulance
transport may be an employee of the attending physician. Previously, we
had required this person to be an employee of the facility in which the
beneficiary was receiving treatment. We also clarified that all of the
Medicare regulatory requirements and State licensure requirements for
these health care professionals apply.
We changed the requirement for certification for non-repetitive
scheduled non-emergency ambulance transports. These transports no
longer require certification in advance. They are now treated the same
as unscheduled non-emergency ambulance transports for certification
purposes. Certification in advance is now required only for repetitive
scheduled non-emergency ambulance transports.
In addition, we added the words ``provider or'' to clarify that the
same certification requirements apply to both providers and suppliers.
D. Bed-Confined
We clarified that bed-confinement is not necessarily sufficient
justification for the medical necessity of a non-emergency ambulance
transport. Other documentation may also be required. Other conditions
in beneficiaries who are not bed-confined may also justify the medical
necessity of a non-emergency transport by ambulance.
E. Future Adjustments to the Conversion Factor
We clarified the factors for which we will adjust the CF. We will
not, for example, adjust the CF in response to an increase in the total
number of ambulance transports over the number of transports in the
previous year. We will adjust the CF if actual experience under the fee
schedule is significantly different from the assumptions used to
calculate the CF (for example, the relative volumes of the different
levels of service or the extent of charges below the fee schedule (that
is, ``low billers'')).
F. Adjustment for ``Low Billing''
We have decided to assume that one-half of these ``low billers''
(that is, those billers whose charge is less than 70 percent of the
maximum allowed by Medicare) would continue to charge an amount that is
lower than the fee schedule amount. Therefore, we have increased the CF
to account for approximately $42 million that we anticipated as the
difference between the aggregate fee schedule amount and actual charges
that will be significantly less than the fee schedule amount (that is,
``low billing'').
G. Ambulance Blueprint
We changed the criteria in the definitions of the services that
constitute a BLS level and an ALS level of care from those in the
national
[[Page 9128]]
Blueprint to the criteria contained in State and local laws.
H. ALS Assessment
We changed the definition of ALS assessment to conform to the
definition in the Committee Statement and to clarify that an ALS
assessment is recognized only in an emergency situation.
I. Emergency Response Definition
In the proposed rule, we stated that an emergency response means
responding immediately to an emergency medical condition. An immediate
response is one in which the ambulance supplier begins as quickly as
possible to take the steps necessary to respond to a call. We deleted
the phrase ``emergency medical condition'' from the definition of
``emergency response.'' We clarified that the additional payment for
emergency response is for the additional overhead cost of maintaining
the resources required to respond immediately to a call and not for the
cost of furnishing a certain level of service to the beneficiary. We
also clarified that ``emergency response'' refers only to a BLS or ALS1
level of service.
J. Delayed Implementation
We will implement the fee schedule on April 1, 2002. The proposed
rule had stated implementation would be January 1, 2001.
K. Drug Administration Which Supports an ALS2 Level of Services
We clarified the types of drugs that must be administered to the
beneficiary in order for the ambulance transport during which the
administration occurs to qualify for payment at the ALS2 level. We also
clarified that three separate administrations of the same drug
qualifies for the ALS2 level of care.
L. Multiple Patients
We changed the amount paid for transports in which there is more
than one patient onboard the ambulance. In the proposed rule, we stated
that a single transport fee would be allowed and distributed equally
among the patients. In this final rule, we provide that payment will be
made as follows. If two patients are transported simultaneously, for
each Medicare beneficiary, we will allow 75 percent of the payment
allowance for the base rate applicable to the level of care furnished
to that beneficiary. If three or more patients are transported
simultaneously, then the payment allowance for the Medicare beneficiary
(or each of them) is equal to 60 percent of the service payment
allowance applicable for the level of care furnished to the
beneficiary. However, a single payment allowance for mileage would
continue to be prorated by the number of patients onboard.
M. Changes to the Conversion Factor
Several changes have been made to the calculation of the CF from
the methodology described in the proposed rule. The inflation factor
used for calendar year 2001 was set at 3.7 percent. This is the
annualized inflation factor provided by BIPA which has the effect of an
inflation factor of 2.7 percent for the period January 1, 2001 through
June 30, 2001, and 4.7 percent for the period July 1, 2001 through
December 31, 2001 (as described above). Second, the CF was increased to
reflect the assumption that some ``low billers'' (as described above)
will continue to submit charges less than the fee schedule amount.
Third, we corrected the number of rural miles equal to or less than 17
miles that were billed in calendar year 1998. Fourth, we revised our
assumption with respect to the number of services that we believe will
be billed at the ALS1-Emergency level because a supplier that provides
an ``ALS assessment'' may receive payment for an ALS1-Emergency level
of service. Fifth, we added back to the total amount used to calculate
the CF the savings that would have accrued to the program had we
implemented the policy proposed in June 1997 that would pay at the BLS
rate for services furnished at the BLS level even though an ALS vehicle
was used.
N. Deceased Beneficiary
We have clarified that, in the case of an air ambulance responding
to a call for a beneficiary who was pronounced dead while the ambulance
was enroute to the scene, payment will be made in the amount of the
appropriate air base rate and not in the amount of a BLS ground rate.
No payment will be made for mileage.
O. Medical Conditions List
We have specified that suppliers and providers may choose to submit
a condition from the list of conditions and, if they do submit a
condition, they must report that condition in the ``remarks'' field on
the claim. Contractors may not deny or reject claims solely because a
supplier or provider has reported a condition on the claim. Also, the
presence of a condition, in and of itself, does not establish whether
the services were reasonable and necessary. Regardless of the presence
of the condition on the claim, ambulance suppliers and providers must
maintain and, upon request by the Medicare contractor, submit
documentation sufficient to show that the service was reasonable and
necessary.
P. Transition Period
The transition period has been changed from the four-year
transition in the proposed rule. The final rule provides a five-year
transition with blended payments as follows:
------------------------------------------------------------------------
Former
payment Fee schedule
percentage percentage
------------------------------------------------------------------------
Year One (4/2002-12/2002)............... 80 20
Year Two (CY 2003)...................... 60 40
Year Three (CY 2004).................... 40 60
Year Four (CY 2005)..................... 20 80
Year Five (CY 2006)..................... 0 100
------------------------------------------------------------------------
Q. Payment for BLS Services Furnished by ALS Vehicle During Transition
Period
In the proposed rule, we stated that during the transition period
the ``old'' portion of the blended payment for BLS services furnished
using an ALS vehicle would be the payment allowance for a BLS trip. In
the final rule, we are phasing in this policy and the ``old'' portion
of the blended payment will be at the allowance for an ALS trip.
X. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), we are required to
provide 30-day notice in the Federal Register and solicit public
comment
[[Page 9129]]
when a collection of information requirement is submitted to the Office
of Management and Budget (OMB) for review and approval. In order to
fairly evaluate whether an information collection should be approved by
OMB, section 3506(c)(2)(A) of the PRA requires that we solicit comment
on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements.
Coverage of Ambulance Services (Sec. 410.40(d)(2))
This section is revised so that it no longer requires that an
ambulance provider or supplier, before furnishing nonemergency,
scheduled, nonrepetitive services to a beneficiary obtain a written
order from the beneficiary's attending physician certifying that the
services are medically necessary prior to the date the service is
furnished.
Coverage of Ambulance Services (Sec. 410.40(d)(3)(iii))
This section states that if the ambulance provider or supplier is
unable to obtain a signed physician certification statement from the
beneficiary's attending physician, a signed certification statement
must be obtained from either the physician assistant (PA), nurse
practitioner (NP), clinical nurse specialist (CNS), registered nurse
(RN), or discharge planner, who has personal knowledge of the
beneficiary's condition at the time the ambulance transport is ordered
or the service is furnished. This individual must be employed by the
beneficiary's attending physician, or by the hospital or facility where
the beneficiary is being treated and from which the beneficiary is
transported. Medicare regulations for PAs, NPs, and CNSs apply and all
applicable State licensure laws apply.
The burden associated with this requirement is the time and effort
necessary for the required hospital or physician's employee to provide
the certification. We estimate that there will be approximately 5,000
certifications on an annual basis at an estimated 5 minutes per
certification. Therefore, the annual national burden associated with
this requirement is 417 hours.
Coverage of Ambulance Services (Sec. 410.40(d)(3)(iv) & (v))
The following paragraphs also have information collection
requirements:
Paragraph (d)(3)(iv): If the ambulance provider or supplier is
unable to obtain the required certification within 21 calendar days
following the date of the service, the ambulance provider or supplier
must document its attempts to obtain the requested certification and
may then submit the claim. Acceptable documentation includes a signed
return receipt from the U.S. Postal Service or other similar service
that evidences that the ambulance provider or supplier attempted to
obtain the required signature from the beneficiary's attending
physician or other individual named in paragraph (d)(3)(iii) above.
Paragraph (d)(3)(v): In all cases, the provider or supplier must
keep appropriate documentation on file and, upon request, present it to
the contractor. The presence of the signed certification statement or
signed return receipt does not alone demonstrate that the ambulance
transport was medically necessary. All other program criteria must be
met in order for payment to be made.
The burden associated with these requirements is the time and
effort necessary for the ambulance provider or supplier to document its
attempts to obtain the requested certification statement and the time
and effort necessary for the hospital or physician's employee to
document the certification statement itself. We estimate that 5,000
providers or suppliers will be required to submit a receipt instead of
certification for an average of 12 instances each on an annual basis,
at an estimated 5 minutes per instance for a total annual national
burden of 5,000 hours. We also estimate that there will be 5,000
certifications to be documented by the hospital or physician's employee
at 5 minutes per instance for a total annual national burden of 417
hours.
Point of Pick-Up (Sec. 414.610(e))
This section states that the zip code of the point of pick-up must
be reported on each claim for ambulance services so that the correct
GAF and RAF may be applied, as appropriate.
In the proposed rule, we stated that the burden associated with
this requirement is the time and effort necessary for the ambulance
provider or supplier to note the required zip code for each claim of
service. We estimated that, of the 9,000 (potential) providers or
suppliers, 5,000 providers or suppliers will be required to provide the
documentation, for an estimated 550,000 (5% of total claims volume of
11 million) instances on an annual basis. Per provider or supplier
(5,000), we estimate 1 minute per instance to meet this requirement,
for a burden of 2 hours per provider or supplier on an annual basis.
Therefore, the annual national burden associated with this requirement
is 10,000 hours.
Comment: A few commenters stated that the burden of reporting the
zip code on the claim applies to 100 percent of total volume of claims
and more than 2 hours per supplier per year.
Response: We agree with the commenters. The burden of reporting the
zip code applies to all claims for ambulance services and to all
providers and suppliers. We estimate that there will be approximately
10 million claims for ambulance services, from approximately 10,000
ambulance providers and suppliers, each of which will require the zip
code to be entered. We estimate that entering the zip code requires
about 15 seconds, giving a total annual burden of approximately 40,000
hours or an average of 4 hours per provider or supplier per year. We
expect that this burden will diminish as providers and suppliers become
familiar with the zip codes in their service area.
If you comment on these information collection and recordkeeping
requirements, please mail copies directly to the following:
Centers for Medicare & Medicaid Services, Office of Information
Services, Information Technology Investment Management Group, Attn.:
Dawn Willinghan (Attn: CMS-1002-om N2-14-26, 7500 Security Boulevard,
Baltimore, MD 21244-1850;
and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attn: Allison Herron Eydt, CMS Desk Officer.
XI. Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 and the Regulatory Flexibility Act (RFA) (Public Law 96-
354). Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and
[[Page 9130]]
equity). A regulatory impact analysis (RIA) must be prepared for major
rules with economically significant effects ($100 million or more
annually). This final regulation will have no fiscal impact on the
Medicare program; therefore, we have determined that this is not a
major rule. However, we are providing a regulatory impact analysis
because some entities will experience a decrease in payments while
others will experience an increase in payments. This impact is less
than the $70 million savings estimate for FY 2002 shown in the proposed
rule because we are paying for BLS services furnished by ALS vehicles
at the ALS rate for the reasonable charge portion of the blended rate
during the transition period and because we have increased the amount
of spending upon which the CF is based by the amount paid for ALS
vehicles that furnished only a BLS level of service. In addition, our
data indicate that payments (80 percent of which will be program
expenditures and the remainder because of Medicare Part B coinsurance
and deductible requirements) will be redistributed among entities that
furnish ambulance services.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government agencies.
Most hospitals and most other providers and suppliers are small
entities, either by nonprofit status or by having revenues of $5
million or less annually. For purposes of the RFA, most ambulance
providers and most ambulance suppliers are considered to be small
entities. Individuals and States are not included in the definition of
a small entity.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 604 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a metropolitan statistical area and has fewer
than 100 beds. In the aggregate, in 2002, rural entities, which include
both rural hospitals and rural ambulance suppliers, will receive an
increase in total revenue while urban entities will experience a
decrease in total revenue as summarized in the chart, below. It is also
true that some rural entities will be paid less than their current
rate. While we do not have specific data on the number of small rural
hospitals that furnish ambulance services, we recognize that the rural
adjustment factor incorporated in this proposal may not completely
offset the higher costs of low-volume suppliers. As stated earlier, we
recognize that this rural adjustment is a temporary proxy to
acknowledge the higher costs of certain low-volume isolated and
essential suppliers. We will consider alternative methodologies that
would more appropriately address payment to isolated, low-volume rural
ambulance suppliers. In addition, critical access hospitals that do not
have an ambulance supplier within a 35-mile drive will be paid for
ambulance services based on cost.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in an expenditure in any one year by
State, local, or tribal governments, in the aggregate, or by the
private sector, of $110 million. The final rule will not have any
unfunded mandates.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct compliance costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. The final rule will not impose compliance costs on the
governments mentioned.
Although we view the anticipated results of this final regulation
as beneficial to the Medicare program and to Medicare beneficiaries, we
recognize that not all of the potential effects of this final rule can
be anticipated.
The foregoing analysis concludes that this regulation may have a
financial impact on a number of small entities. This analysis, in
combination with the rest of the preamble, is consistent with the
standards for analysis set forth by the RFA.
Comment: Many commenters noted that this is a major rule and that
we should conduct a regulatory impact analysis under Executive Order
12866. They argue that the impact is more than $84.5 million because it
should include: (1) The effects of our treatment in calculating the
conversion factor of suppliers with low charges and those that do not
bill for mileage; (2) redistribution effects; and (3) the effect of
mandatory assignment of benefits. In addition, the rule does not
discuss the impact on public safety of the ambulance suppliers who will
experience a reduction in payments. The commenters noted that we should
conduct a State-by-State impact assessment of the proposed rule to
determine if there are regulatory alternatives that would have a less
drastic effect on ambulance providers, many of whom are small
businesses.
Response: As stated above, we have determined that this is not a
major rule and that this final rule has no fiscal impact on the
program. With respect to the mandatory assignment requirement,
historically, ninety-five percent of ambulance services have been
submitted to Medicare under assignment, and, while the fee schedule
redistributes payments, we do not anticipate that the assignment
requirement will be a major issue nationally. There may be areas of the
country where balanced billing occurs more often than in other parts;
however, the effect on total payments is unclear because payment in any
of the areas may increase under the fee schedule. Also, as stated
above, mandatory assignment of benefits is a requirement of the law and
not subject to the discretion of the Secretary through this regulatory
action. Also, we have included an amount in this final rule for
suppliers of ambulance services who may choose not to bill the program
at the full fee schedule amount.
B. Anticipated Effects
Implementation of the ambulance fee schedule will have several
general effects. Section 1834(l)(3)(A) of the Act requires that the
aggregate amount paid under the ambulance fee schedule not exceed the
aggregate amount that would have been paid absent the fee schedule. One
of the characteristics of the present payment system is that widely
varying amounts are paid for the same type of service depending upon
the location of the service. In effect, the ambulance fee schedule will
lower payments in areas of high current levels of payment and raise
payments in areas of low current levels of payment. Thus, a given area
could have a large reduction in payment only because such an area had
historically been paid at a rate higher than average for the type of
service. Even with a reduction, such an area may continue to have
payment rates under the fee schedule that are higher than the national
average.
1. Effect on Ambulance Providers and Suppliers
One effect of the fee schedule will be that revenue will be
redistributed from providers to ambulance suppliers because providers
have been paid, on average, more for the same service furnished by a
supplier.
[[Page 9131]]
2. Effects on Urban, Rural, and Air Ambulance Services
Payment could be redistributed from urban ambulance services to
rural ambulance services for two reasons:
(1) Services furnished in urban areas have been paid more, on
average, than the same services furnished in rural areas.
(2) The ambulance fee schedule will pay more for the same services
furnished in a rural area than in an urban area because of the rural
adjustment factor (RAF). Payment will also be redistributed from urban
air ambulance services to rural air ambulance services because of the
RAF for air services.
(3) Finally, there will be a redistribution of payment from ground
ambulance services to air ambulance services. This effect is explained
in greater detail in the discussion of the CF.
Currently, providers (for example, hospital-based ambulance
services) are paid on average 66 percent more than independent
suppliers for the same type of ambulance service. This is because
providers are currently paid based on reasonable cost and suppliers are
paid based on reasonable charges capped by the inflation indexed charge
(IIC). The IIC has limited the growth of suppliers' payments over the
years, whereas, until enactment of the BBA in 1997, there had not been
a limit on the growth of providers' reimbursable cost for ambulance
services. As a result, providers of ambulance services will experience
a reduction in total revenue while independent ambulance suppliers will
experience an increase in total revenue.
There are offsetting factors that affect payment in urban versus
rural areas. While payment rates in rural areas will generally be
lowered by the GPCI (because the GPCI is generally lower in rural areas
than it is in urban areas), rural payment rates will increase because
of the rural mileage add-on. The net result is that payments will be
redistributed from providers and suppliers in urban areas to providers
and suppliers in rural areas.
Furthermore, payments will be redistributed from providers and
suppliers of ground ambulance services to providers and suppliers of
air ambulance services.
The following chart summarizes these findings for 2002:
------------------------------------------------------------------------
Revenue
From To (million)
------------------------------------------------------------------------
Providers........................... Suppliers.............. $14
Urban............................... Rural.................. 17
Ground.............................. Air.................... 5
------------------------------------------------------------------------
These amounts represent total revenue, that is, the 80 percent Medicare
portion plus the 20 percent beneficiary coinsurance liability. The
redistributive effects of this final rule represent a negligible
fraction of the total revenue (both Medicare at $2.7 billion plus all
other non-Medicare sources of revenue) for ambulance providers and
suppliers. Therefore, we conclude and the Secretary certifies that this
final rule does not have a significant impact on a substantial number
of small entities.
3. Effect on the Medicare Program
We estimate that this final rule will have no fiscal impact on the
Medicare program.
C. Alternatives Considered
While there were many alternatives considered during the course of
the negotiated rulemaking process, the statute requires that total
program expenditures not exceed what the payments would have been
without the fee schedule. None of the alternatives considered changed
total program expenditures. The alternatives varied in the manner in
which the total amount of program expenditures might be distributed
among the entities that furnish ambulance services to Medicare
beneficiaries. For example, the Committee considered other geographical
adjustment factors, other relative values for the levels of ambulance
service, other definitions for the levels of ambulance service and
other definitions for ``rural entities,'' but it did not adopt them for
various reasons. (A full description of these alternatives may be found
at the Web site: www.hcfa.gov/medicare/ambmain.htm.)
D. Effect on Beneficiaries
The ambulance fee schedule will have a leveling effect on
coinsurance liability. About 10 percent of the 37 million beneficiaries
enrolled in Medicare Part B receive a Medicare benefit for ambulance
services. While beneficiaries in those areas of historically higher
than average payment rates will benefit from lower coinsurance
liability, beneficiaries in areas of historically lower than average
payment rates will experience an upward trend of coinsurance liability.
While, on average, for all Medicare beneficiaries receiving a Medicare
benefit for ambulance services there is no change in coinsurance
liability, the average beneficiary coinsurance liability will increase
by one percent for beneficiaries located in rural areas with the same
decrease in coinsurance liability for beneficiaries in urban areas.
Beneficiaries will also benefit in those cases in which suppliers
previously did not accept assignment and billed the beneficiary the
difference between the Medicare program allowed amount and their actual
charge, because under the fee schedule all suppliers must accept
assignment.
E. Conclusion
We anticipate that the ambulance fee schedule amounts for entities
that have historically received lower than average payment rates will
be relatively higher and the fee schedule amounts for entities that
have historically received higher than average payment rates will be
relatively lower. Generally, this will mean higher rates in the future
for rural transports, lower rates in the future for urban transports,
and higher rates in the future for air ambulance services. We believe
that the statutory requirement to establish mechanisms to control
increases in expenditures for ambulance services under Part B of the
Medicare program is met by continuance of the application of the
inflation factors prescribed in the statute.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects Affected in 42 CFR Part 410
Ambulances, Health facilities, Health professions, Kidney diseases,
Laboratories, Medicare, Rural areas, X-rays.
42 CFR Part 414
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medicare, Reporting and recordkeeping
requirements, Rural areas, X-rays.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as follows:
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
A. Part 410 is amended as set forth below:
1. The authority citation for part 410 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
[[Page 9132]]
Subpart B--Medical and Other Health Services
2. Section 410.40 is amended by:
A. Revising paragraph (b).
B. Revising paragraph (d)(1).
C. Revising paragraph (d)(2).
D. Revising the paragraph (d)(3) heading and introductory text.
E. Revising paragraph (d)(3)(i).
F. Adding new paragraphs (d)(3)(iii), (d)(3)(iv), and (d)(3)(v).
The revisions and additions read as follows:
Sec. 410.40 Coverage of ambulance services.
* * * * *
(b) Levels of service. Medicare covers the following levels of
ambulance service, which are defined in Sec. 414.605 of this chapter:
(1) Basic life support (BLS) (emergency and nonemergency).
(2) Advanced life support, level 1 (ALS1) (emergency and
nonemergency).
(3) Advanced life support, level 2 (ALS2).
(4) Paramedic ALS intercept (PI).
(5) Specialty care transport (SCT).
(6) Fixed wing transport (FW).
(7) Rotary wing transport (RW).
* * * * *
(d) Medical necessity requirements--(1) General rule. Medicare
covers ambulance services, including fixed wing and rotary wing
ambulance services, only if they are furnished to a beneficiary whose
medical condition is such that other means of transportation are
contraindicated. The beneficiary's condition must require both the
ambulance transportation itself and the level of service provided in
order for the billed service to be considered medically necessary.
Nonemergency transportation by ambulance is appropriate if either: the
beneficiary is bed-confined, and it is documented that the
beneficiary's condition is such that other methods of transportation
are contraindicated; or, if his or her medical condition, regardless of
bed confinement, is such that transportation by ambulance is medically
required. Thus, bed confinement is not the sole criterion in
determining the medical necessity of ambulance transportation. It is
one factor that is considered in medical necessity determinations. For
a beneficiary to be considered bed-confined, the following criteria
must be met:
(i) The beneficiary is unable to get up from bed without
assistance.
(ii) The beneficiary is unable to ambulate.
(iii) The beneficiary is unable to sit in a chair or wheelchair.
(2) Special rule for nonemergency, scheduled, repetitive ambulance
services. Medicare covers medically necessary nonemergency, scheduled,
repetitive ambulance services if the ambulance provider or supplier,
before furnishing the service to the beneficiary, obtains a written
order from the beneficiary's attending physician certifying that the
medical necessity requirements of paragraph (d)(1) of this section are
met. The physician's order must be dated no earlier than 60 days before
the date the service is furnished.
(3) Special rule for nonemergency ambulance services that are
either unscheduled or that are scheduled on a nonrepetitive basis.
Medicare covers medically necessary nonemergency ambulance services
that are either unscheduled or that are scheduled on a nonrepetitive
basis under one of the following circumstances:
(i) For a resident of a facility who is under the care of a
physician if the ambulance provider or supplier obtains a written order
from the beneficiary's attending physician, within 48 hours after the
transport, certifying that the medical necessity requirements of
paragraph (d)(1) of this section are met.
* * * * *
(iii) If the ambulance provider or supplier is unable to obtain a
signed physician certification statement from the beneficiary's
attending physician, a signed certification statement must be obtained
from either the physician assistant (PA), nurse practitioner (NP),
clinical nurse specialist (CNS), registered nurse (RN), or discharge
planner, who has personal knowledge of the beneficiary's condition at
the time the ambulance transport is ordered or the service is
furnished. This individual must be employed by the beneficiary's
attending physician or by the hospital or facility where the
beneficiary is being treated and from which the beneficiary is
transported. Medicare regulations for PAs, NPs, and CNSs apply and all
applicable State licensure laws apply; or,
(iv) If the ambulance provider or supplier is unable to obtain the
required certification within 21 calendar days following the date of
the service, the ambulance supplier must document its attempts to
obtain the requested certification and may then submit the claim.
Acceptable documentation includes a signed return receipt from the U.S.
Postal Service or other similar service that evidences that the
ambulance supplier attempted to obtain the required signature from the
beneficiary's attending physician or other individual named in
paragraph (d)(3)(iii) of this section. ]
(v) In all cases, the provider or supplier must keep appropriate
documentation on file and, upon request, present it to the contractor.
The presence of the signed certification statement or signed return
receipt does not alone demonstrate that the ambulance transport was
medically necessary. All other program criteria must be met in order
for payment to be made.
* * * * *
PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES
B. Part 414 is amended as set forth below:
1. The authority citation for part 414 continues to read as
follows:
Authority: Secs. 1102, 1871, and 1881(b)(1) of the Social
Security Act (42 U.S.C. 1302, 1395hh, 1395rr(b)(1)).
2. Section 414.1 is revised to read as follows:
Sec. 414.1 Basis and scope.
This part implements the following provisions of the Act:
1802--Rules for private contracts by Medicare beneficiaries.
1833--Rules for payment for most Part B services.
1834(a) and (h)--Amounts and frequency of payments for durable
medical equipment and for prosthetic devices and orthotics and
prosthetics.
1834(l)--Establishment of a fee schedule for ambulance services.
1834(m)--Rules for Medicare reimbursement for telehealth services.
1848--Fee schedule for physician services.
1881(b)--Rules for payment for services to ESRD beneficiaries.
1887--Payment of charges for physician services to patients in
providers.
3. A new subpart H, consisting of Secs. 414.601 through 414.625, is
added to read as follows:
Subpart H--Fee Schedule for Ambulance Services
Sec.
414.601 Purpose.
414.605 Definitions.
414.610 Basis of payment.
414.615 Transition to the ambulance fee schedule.
414.620 Publication of the ambulance fee schedule.
414.625 Limitation on review.
Subpart H--Fee Schedule for Ambulance Services
Sec. 414.601 Purpose.
This subpart implements section 1834(l) of the Act by establishing
a fee schedule for the payment of ambulance services. Section 1834(l)
of the Act
[[Page 9133]]
requires that, except for services furnished by certain critical access
hospitals (see Sec. 413.70(b)(5) of this chapter), payment for all
ambulance services, otherwise previously payable on a reasonable charge
basis or retrospective reasonable cost basis, be made under a fee
schedule.
Sec. 414.605 Definitions.
As used in this subpart, the following definitions apply to both
land and water (hereafter collectively referred to as ``ground'')
ambulance services and to air ambulance services unless otherwise
specified:
Advanced life support (ALS) assessment is an assessment performed
by an ALS crew as part of an emergency response that was necessary
because the patient's reported condition at the time of dispatch was
such that only an ALS crew was qualified to perform the assessment. An
ALS assessment does not necessarily result in a determination that the
patient requires an ALS level of service.
Advanced life support (ALS) intervention means a procedure that is,
in accordance with State and local laws, beyond the scope of authority
of an emergency medical technician-basic (EMT-Basic).
Advanced life support, level 1 (ALS1) means transportation by
ground ambulance vehicle, medically necessary supplies and services and
either an ALS assessment by ALS personnel or the provision of at least
one ALS intervention.
Advanced life support, level 2 (ALS2) means either transportation
by ground ambulance vehicle, medically necessary supplies and services,
and the administration of at least three medications by intravenous
push/bolus or by continuous infusion excluding crystalloid, hypotonic,
isotonic, and hypertonic solutions (Dextrose, Normal Saline, Ringer's
Lactate); or transportation, medically necessary supplies and services,
and the provision of at least one of the following ALS procedures:
(1) Manual defibrillation/cardioversion.
(2) Endotracheal intubation.
(3) Central venous line.
(4) Cardiac pacing.
(5) Chest decompression.
(6) Surgical airway.
(7) Intraosseous line.
Advanced life support (ALS) personnel means an individual trained
to the level of the emergency medical technician-intermediate (EMT-
Intermediate) or paramedic. The EMT-Intermediate is defined as an
individual who is qualified, in accordance with State and local laws,
as an EMT-Basic and who is also qualified in accordance with State and
local laws to perform essential advanced techniques and to administer a
limited number of medications. The EMT-Paramedic is defined as
possessing the qualifications of the EMT-Intermediate and also, in
accordance with State and local laws, as having enhanced skills that
include being able to administer additional interventions and
medications.
Basic life support (BLS) means transportation by ground ambulance
vehicle and medically necessary supplies and services, plus the
provision of BLS ambulance services. The ambulance must be staffed by
an individual who is qualified in accordance with State and local laws
as an emergency medical technician-basic (EMT-Basic). These laws may
vary from State to State. For example, only in some States is an EMT-
Basic permitted to operate limited equipment on board the vehicle,
assist more qualified personnel in performing assessments and
interventions, and establish a peripheral intravenous (IV) line.
Conversion factor (CF) is the dollar amount established by CMS that
is multiplied by relative value units to produce ground ambulance
service base rates.
Emergency response means responding immediately at the BLS or ALS1
level of service to a 911 call or the equivalent in areas without a 911
call system. An immediate response is one in which the ambulance
supplier begins as quickly as possible to take the steps necessary to
respond to the call.
Fixed wing air ambulance (FW) means transportation by a fixed wing
aircraft that is certified as a fixed wing air ambulance and such
services and supplies as may be medically necessary.
Geographic adjustment factor (GAF) means the practice expense (PE)
portion of the geographic practice cost index (GPCI) from the physician
fee schedule as applied to a percentage of the base rate. For ground
ambulance services, the PE portion of the GPCI is applied to 70 percent
of the base rate for each level of service. For air ambulance services,
the PE portion of the GPCI is applied to 50 percent of the applicable
base rate.
Goldsmith modification means the recognition of rural areas within
certain Standard Metropolitan Statistical Areas wherein a census tract
is deemed to be rural when located within a large metropolitan county
of at least 1,225 square miles, but is so isolated from the
metropolitan core of that county by distance or physical features as to
be more rural than urban in character.
Loaded mileage means the number of miles the Medicare beneficiary
is transported in the ambulance vehicle.
Paramedic ALS intercept (PI) means EMT-Paramedic services furnished
by an entity that does not furnish the ground ambulance transport,
provided the services meet the requirements specified in Sec. 410.40(c)
of this chapter.
Point of pick-up means the location of the beneficiary at the time
he or she is placed on board the ambulance.
Relative value units (RVUs) means a value assigned to a ground
ambulance service.
Rotary wing air ambulance (RW) means transportation by a helicopter
that is certified as an ambulance and such services and supplies as may
be medically necessary.
Rural adjustment factor (RAF) means an adjustment applied to the
base payment rate when the point of pick-up is located in a rural area.
Rural area means an area located outside a Metropolitan Statistical
Area (MSA), or a New England County Metropolitan Area (NECMA), or an
area within an MSA that is identified as rural by the Goldsmith
modification.
Specialty care transport (SCT) means interfacility transportation
of a critically injured or ill beneficiary by a ground ambulance
vehicle, including medically necessary supplies and services, at a
level of service beyond the scope of the EMT-Paramedic. SCT is
necessary when a beneficiary's condition requires ongoing care that
must be furnished by one or more health professionals in an appropriate
specialty area, for example, nursing, emergency medicine, respiratory
care, cardiovascular care, or a paramedic with additional training.
Sec. 414.610 Basis of payment.
(a) Method of payment. Medicare payment for ambulance services is
based on the lesser of the actual charge or the applicable fee schedule
amount. The fee schedule payment for ambulance services equals a base
rate for the level of service plus payment for mileage and applicable
adjustment factors. Except for services furnished by certain critical
access hospitals or entities owned and operated by them, as described
in Sec. 413.70(b) of this chapter, all ambulance services are paid
under the fee schedule specified in this subpart (regardless of the
vehicle furnishing the service).
(b) Mandatory assignment. Effective with implementation of the
ambulance fee schedule described in Sec. 414.601 (that is, for services
furnished on or after April 1, 2002), all payments made for ambulance
services are made only on an assignment-related basis. Ambulance
[[Page 9134]]
suppliers must accept the Medicare allowed charge as payment in full
and may not bill or collect from the beneficiary any amount other than
the unmet Part B deductible and Part B coinsurance amounts. Violations
of this requirement may subject the provider or supplier to sanctions,
as provided by law (part 402 of this chapter).
(c) Formula for computation of payment amounts. The fee schedule
payment amount for ambulance services is computed according to the
following provisions:
(1) Ground ambulance service levels. The CF is multiplied by the
applicable RVUs for each level of service to produce a service-level
base rate. The service-level base rate is then adjusted by the GAF.
Compare this amount to the actual charge. The lesser of the charge or
the GAF adjusted base rate amount is added to the payment rate per
mile, multiplied by the number of miles that the beneficiary was
transported. When applicable, the appropriate RAF is applied to the
ground mileage rate to determine the appropriate payment rates. The RVU
scale for the ambulance fee schedule is as follows:
------------------------------------------------------------------------
Relative
value
Service level units
(RVUs)
------------------------------------------------------------------------
BLS......................................................... 1.00
BLS-Emergency............................................... 1.60
ALS1........................................................ 1.20
ALS1-Emergency.............................................. 1.90
ALS2........................................................ 2.75
SCT......................................................... 3.25
PI.......................................................... 1.75
------------------------------------------------------------------------
(2) Air ambulance service levels. The base payment rate for the
applicable type of air ambulance service is adjusted by the GAF and,
when applicable, by the appropriate RAF to determine the amount of
payment. Air ambulance services have no CF or RVUs. This amount is
compared to the actual charge. The lesser of the charge or the adjusted
GAF rate amount is added to the payment rate per mile, multiplied by
the number of miles that the beneficiary was transported. When
applicable, the appropriate RAF is also applied to the air mileage
rate.
(3) Loaded mileage. Payment is made for each loaded mile. Air
mileage is based on loaded miles flown as expressed in statute miles.
There are three mileage payment rates: a rate for FW services, a rate
for RW services, and a rate for all levels of ground transportation.
(4) Geographic adjustment factor (GAF). For ground ambulance
services, the PE portion of the GPCI from the physician fee schedule is
applied to 70 percent of the base rate for ground ambulance services.
For air ambulance services, the PE portion of the physician fee
schedule GPCI is applied to 50 percent of the base rate for air
ambulance services.
(5) Rural adjustment factor (RAF). For ground ambulance services
where the point of pickup is in a rural area, the mileage rate is
increased by 50 percent for each of the first 17 miles and by 25
percent for miles 18 through 50. The standard mileage rate applies to
every mile over 50 miles. For air ambulance services where the point of
pickup is in a rural area, the total payment is increased by 50
percent; that is, the rural adjustment factor applies to the sum of the
base rate and the mileage rate.
(6) Multiple patients. The allowable amount per beneficiary for a
single ambulance transport when more than one patient is transported
simultaneously is based on the total number of patients (both Medicare
and non-Medicare) on board. If two patients are transported
simultaneously, then the payment allowance for the beneficiary (or for
each of them if both patients are beneficiaries) is equal to 75 percent
of the service payment allowance applicable for the level of care
furnished to the beneficiary, plus 50 percent of the applicable mileage
payment allowance. If three or more patients are transported
simultaneously, the payment allowance for the beneficiary (or each of
them) is equal to 60 percent of the service payment allowance
applicable for the level of care furnished to the beneficiary, plus the
applicable mileage payment allowance divided by the number of patients
on board.
(d) Payment. Payment, in accordance with this subpart, represents
payment in full (subject to applicable Medicare Part B deductible and
coinsurance requirements as described in subpart G of part 409 of this
chapter or in subpart I of part 410 of this chapter) for all services,
supplies, and other costs for an ambulance service furnished to a
Medicare beneficiary. No direct payment will be made under this subpart
if billing for the ambulance service is required to be consolidated
with billing for another benefit for which payment may be made under
this chapter.
(e) Point of pick-up. The zip code of the point of pick-up must be
reported on each claim for ambulance services so that the correct GAF
and RAF may be applied, as appropriate.
(f) Updates. The CF, the air ambulance base rates, and the mileage
rates are updated annually by an inflation factor established by law.
The inflation factor is based on the consumer price index for all urban
consumers (CPI-U) (U.S. city average) for the 12-month period ending
with June of the previous year.
(g) Adjustments. The Secretary will annually review rates and will
adjust the CF and air ambulance rates if actual experience under the
fee schedule is significantly different from the assumptions used to
determine the initial CF and air ambulance rates. The CF and air
ambulance rates will not be adjusted solely because of changes in the
total number of ambulance transports.
Sec. 414.615 Transition to the ambulance fee schedule.
The fee schedule for ambulance services will be phased in over 5
years beginning April 1, 2002. Subject to the first sentence in
Sec. 414.610(a), payment for services furnished during the transition
period is made based on a combination of the fee schedule payment for
ambulance services and the amount the program would have paid absent
the fee schedule for ambulance services, as follows:
(a) 2002 Payment. For services furnished in 2002, the payment for
the service component, the mileage component and, if applicable, the
supply component is based on 80 percent of the reasonable charge for
independent suppliers or on 80 percent of reasonable cost for
providers, plus 20 percent of the ambulance fee schedule amount for the
service and mileage components. The reasonable charge or reasonable
cost portion of payment in CY 2002 is equal to the supplier's
reasonable charge allowance or provider's reasonable cost allowance for
CY 2001, multiplied by the statutory inflation factor for ambulance
services.
(b) 2003 Payment. For services furnished in CY 2003, payment is
based on 60 percent of the reasonable charge or reasonable cost, as
applicable, plus 40 percent of the ambulance fee schedule amount. The
reasonable charge and reasonable cost portion in CY 2003 is equal to
the supplier's reasonable charge or provider's reasonable cost for CY
2002, multiplied by the statutory inflation factor for ambulance
services.
(c) 2004 Payment. For services furnished in CY 2004, payment is
based on 40 percent of the reasonable charge or reasonable cost, as
applicable, plus 60 percent of the ambulance fee schedule amount. The
reasonable charge and reasonable cost portion in CY 2004 is equal to
the supplier's reasonable charge or provider's reasonable cost for CY
2003, multiplied by the statutory inflation factor for ambulance
services.
[[Page 9135]]
(d) 2005 Payment. For services furnished in CY 2005, payment is
based on 20 percent of the reasonable charge or reasonable cost, as
applicable, plus 80 percent of the ambulance fee schedule amount. The
reasonable charge and reasonable cost portion in CY 2005 is equal to
the supplier's reasonable charge or provider's reasonable cost for CY
2004, multiplied by the statutory inflation factor for ambulance
services.
(e) 2006 and Beyond Payment. For services furnished in CY 2006 and
thereafter, the payment is based solely on the ambulance fee schedule
amount.
(f) Updates. The portion of the transition payment that is based on
the existing payment methodology (that is, the non-fee-schedule
portion) is updated annually for inflation by a factor equal to the
percentage increase in the CPI-U (U.S. city average) for the 12-month
period ending with June of the previous year. The CY 2002 inflation
update factor used to update the 2001 payment amounts is applied to the
annualized (average) payment amounts for CY 2001. For the period
January 1, 2001 through June 30, 2001, the inflation update factor is
2.7 percent. For the period July 1, 2001 through December 31, 2001, the
inflation update factor is 4.7 percent. The average for the year is 3.7
percent. Thus, the annualized (average) CY 2001 payment amounts used to
derive the CY 2002 payment amounts are equivalent to the CY 2001
payment amounts that would have been determined had the inflation
update factor for the entire CY 2001 been 3.7 percent. Both portions of
the transition payment (that is, the portion that is based on
reasonable charge or reasonable cost and the portion that is based on
the ambulance fee schedule) are updated annually for inflation by the
inflation factor described in Sec. 414.610(f).
(g) Exception. There will be no blended payment allowance as
described in paragraphs (a), (b), (c), and (d) of this section for
ground mileage in those States where the Medicare carrier paid
separately for all out-of-county ground ambulance mileage, but did not,
before the implementation of the Medicare ambulance fee schedule, make
a separate payment for any ground ambulance mileage within the county
in which the beneficiary was transported. Payment for ground ambulance
mileage in that State will be made based on the full ambulance fee
schedule amount for ground mileage. This exception applies only to
carrier-processed claims and only in those States in which the carrier
paid separately for out-of-county ambulance mileage, but did not make
separate payment for any in-county mileage throughout the entire State.
Sec. 414.620 Publication of the ambulance fee schedule.
Changes in payment rates resulting from incorporation of the annual
inflation factor described in Sec. 414.610(f) will be announced by
notice in the Federal Register without opportunity for prior comment.
CMS will follow applicable rulemaking procedures in publishing
revisions to the fee schedule for ambulance services that result from
any factors other than the inflation factor.
Sec. 414.625 Limitation on review.
There will be no administrative or judicial review under section
1869 of the Act or otherwise of the amounts established under the fee
schedule for ambulance services, including the following:
(a) Establishing mechanisms to control increases in expenditures
for ambulance services.
(b) Establishing definitions for ambulance services that link
payments to the type of services provided.
(c) Considering appropriate regional and operational differences.
(d) Considering adjustments to payment rates to account for
inflation and other relevant factors.
(e) Phasing in the application of the payment rates under the fee
schedule in an efficient and fair manner.
(Catalog of Federal Domestic Assistance Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
Dated: December 7, 2001.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
Dated: December 19, 2001.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-4548 Filed 2-22-02; 12:00 pm]
BILLING CODE 4120-01-P