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Rural HCFA Reg,
MEMORANDUM
OF CALL
Previous editions usable
TO:
YOU VERE Julie CALLED BY-
YOU WERE VISITED BY-
OF
(Organization) Barb Wynn
PLEASE PHONE
FTS
AUTOVON
410-786-5674
WILL CALL AGAIN
IS WAITING TO SEE YOU
RETURNED YOUR CALL
WISHES AN APPOINTMENT
MESSAGE
Eliz. Cusicle orcall
410-786-0539
RECEIVED BY
DATE
THE
63-110 NSN 75 Dr A0-00-634-4018 STANDARD 9715 FORM 63 (Rev. 8.81)
9-
Prescribed by GSA
AVS GOVERNMENT PRONTING OFFICE 1091 261 781/40014 FPMR (4) CFR) 101-11.6
10/25/95 18:09 FAX 501 463 8591
PAFFORDAMBULANCE
001
Pafford Ambulance Service, Inc.
FAX Transmittal
P.O. Box 130
FAX Number (800)532-7571
214 Main Street
(501)463-8591
Hermitage, AR 71647
Office Number (800)451-8036
Home 501-463-2807
TO: Julie Demeo
463-2653
FAX Number: 202-456-2878
Date:
10-25-95
Number of Pages
(Including Header Page)
4
From: JAMie PAFFORD-GRESHAM
Comments: following is A Resolution PASSED (today) By NAt. ASSD.
of State EMS DiRectoRs At their ANNUAL Meeting today.
I Also have a copy of the Proposon House Bill
Reguarding Ambulances- - I AM Not SMART Enough to
Disipher (READ they All of this- is RURAL Protected +
LS this the Legislation I Need to Worry about-
Iwill Be out of theoffice tomorrow But James any PAODY
Will Be here- - Dr we should Becomeerend -Contret us
Thank you FOR All of your Help
JP6
002
10/25/95
FAX 501 463 8591
PAFFORDAMBULANCE
18:09
RADISSON INN-BIS
4
002/007
10/25/95
15:03
703 224 8212
THE NATIONAL ASSOCIATION OF
State Emergency Medical Services Directors
R
x
NATIONAL ASSOCIATION OF STATE EMS DIRECTORS
Wednesday October 25, 1995
Bismarck, North Dakota
RESOLUTION 95-08
URGING ADEQUATE REIMBURSEMENT FOR AMBULANCE SERVICES
WHEREAS, ambulance service is an essential component of all Emergency Medical Services (EMS)
systems, and
WHEREAS, EMS is a critical safety net that ensures all citizens timely amergency medical care and
access into the entire health care system, and
WHEREAS, financing of ambulance services through reasonable and appropriate reimbursement
policies is assential to sustain current levels of service, and
WHEREAS. EMS, representing less than 1% of overall national health expenditures, already
represents an extremely marginal cost to ensure such a critical, population-based service, and
WHEREAS, Congress is currently enacting reductions and changes to the Medicare program that
may cap ambulance fees at current levels well beyond the Year 2000 and limit the overall amount
available to reimburse ambulance services on an annual basis,
NOW, THEREFORE, BE IT RESOLVED, that the National Association of State EMS Directors urges
that Congress adopt a bill that contains specific language to reform ambulance reimbursement
through the development of a comprehensive, national fee schedule and reject fanguage which
would freeze ambulance service rates into the future, and
BE (T FURTHER RESOLVED that the National Association of State EMS Directors encourages the
President, Congress, the Health Care Financing Administration and other public and private
insurance officials to support adequate reimbursement for emergency medical care and
transportation. with particular attention to rural constraints, to ensure the vitality and full
geographic distribution of these critical health services.
Adopted in this form by unanimous vote of the membership, October 25, 1995:
President. Dan Manz
Louise Gozette 10-25-95
Secretary, Louise Govette
1947 Camina Vide Roble Suite 202 Carlsbad, CA 92008 619/431-7054 FAX 619/431-8135
10/25/95 16:06
TX/RX NO.3612
P.002
10/25/95
18:09
FAX 501 463 8591
PAFFORDAMBULANCE
0
003
10:04
TY/OI 224 8212
RADISSON JNN-BIS
004/007
OCT-24-95 TUE 16:41
EXECUTIVE MGMT SVCS
FAX NO. 19164825473
P.03
HOUSE MEDICARE PRESERVATION ACT
HR 2485
1
SEC. 15609A. ESTABLISIMENT OF FEE SCHEDULE FOR AMBULANCE
2 SERVICES.
3
(a) Payment in Accordance With Fee Schedule: Section (833(a)(1)
4
(42 U.S.C. 1395)(a)(1)) is amended--
S
(1) by striking and (P) and inserting '(P)': and
6
(2) by striking the semicolon as the and and inserting the
7
following: and (Q) with respect TO ambulance service, the
8
amounts paid shall be 80 percent of the lesser of the actual
9
charge for the services or the amount determined by a fee
10
schedule established by the Secretary for the purposes of this
11
subparagraph (in accordance with section 15608(b) of the
12
Medicare Preservation Act),'.
13
(b) Requirements for Establishment of Fee Schedule:
14
(1) In general: , and in accordance
15
with the requirements of this subsection
16
(2) Considerations In establishing the fee schedule for
17
ambulance services. the Secretary shall--
18
(A) establish mechanisms to control increases in
19
expenditures for ambulance services under part B of the
20
medicare program which fairly reflect the changing nature
21
of the ambulance service industry:
22
(B) establish definitions for ambulance services which
23
promote efficiency and link payments (including fees for
24
assessment and treatment services) to the type of service
25
provided:
26
(C) take into account regional differences which affect
27
Rural?
cost and productivity. including differences in the costs
28
of resources and the costs of uncompensated care:
29
(D) apply dynamic adjustments to payment rates to account
30
for inflation. demographic changes in the population of
31
medicare beneficiaries. and changes in the number of
32
providers of ambulance services participating in the
33
medicare program. and
34
(E) phase in the application of the payment rates under
35
the fee schedule in an efficient and fair manner.
36
(3) Savings: In establishing the fee schedule for ambulance
37
services, the Secretary shalf-
38
(A) ensure that the aggregate amount of payments made for
39
ambulance services under part B of the medicare program
40
during 1998 does not exceed the agyregate amount of
41
payments which would have been made for such services under
42
part B of the program during 1998 if the amendments made by
43
this section were not in effect: and
44
(B) set the payment amounts provided under the fee
45
schedule for services furnished in 1999 and each subsequent
154
10/25/95 16:06
TX/RX NO.3612
P.004
10/12/95 10:34 FAX 501 463 8591
PAFFORDAMBULANCE
001
Pafford Ambulance Service, Inc.
FAX Transmittal
P.O. Box 130
FAX Number (800)532-7571
214 Main Street
(501)463-8591
Hermitage, AR 71647
Office Number (800)451-8036
TO: Julie Demeo-
FAX Number: 202-456-2878
Date: 10-11-95
Number of Pages
(Including Header Page) 3
From: Jame- -
Comments: Thank you for all of your help
and input yeslerday - Here a copy of
what we fegured out See what your
Carol thenk
Xin the South)
P.S. Jue definition of RURAL: A Town on city with
one WAIMART OR Less!!!
10/12/95 10:34 FAX 501 463 8591
PAFFORDAMBULANCE
002
P
Pafford Ambulance Service, Inc.
P.O. Box 130
214 Main Proel
Hermitage, AR 71647
RURAL AMBULANCE SERVICES
(DEFINED)
Rural EMS Providers are those providers who provide the only EMS service
for a county or similar geographic region containing locales where transport
times to major trauma centers (level 1) may routinely exceed 20 minutes due
to terrain, distance or other contributing factors.
(Note: this definition was used in an EMS study prepared by the American
College of Emergency Physicians to compare rural and urban EMS settings.)
10/12/95
10:34 FAX 501 463 8591
PAFFORDAMBULANCE
003
A possibility would be to use the present definition of Rural as defined by the
Office of Management and Budget and add a third option to the criteria.
Rural-meets any of the following THREE criteria:
1)
located outside of a Metropolitan Statistical Area (MSA) as
defined by the Office of Management and Budget, OR
2)
located in a rural census tract of one of the MSA countiest listed
in Appendix I of the Federal Register notice, OR
3)
areas which are designated by OMB as an MSA county
which does not contain a level one trauma center
within its boundaries.
(There are counties on the OMB's list as MSA counties which do not even
have a hospital located in them but are considered due to proximity of a
metropolitan area Access to healthcare then becomes a problem in these
areas.)
HCEA
HHS
OMB
Internal HHS clearance (November)
+ OMB
[
60 day comment period
Exception for ambulances that are
Sole Supplice 40 mile aRea.
ALS BLS
Black Conservative for Village Voice
- Rep Controlled Congress as
Impalts on Dometic Policy
-
Next week
Thrmas
10mm
mon Tues
/
(718) 789-3315
3325
(home) (work) 718 give 7303
-
Oct 3
Hone in definition
of Rural
#OK ambulances
very developmental
To
Date
Time
WHILE YOU WERE OUT
M
Jamie Pafford
of
1800 451-8036
Phone
Area Code
Number
Extension
TELEPHONED
PLEASE CALL
CALLED TO SEE YOU
WILL CALL AGAIN
WANTS TO SEE YOU
URGENT
RETURNED YOUR CALL
Message
Operator
AMPAD
EFFICIENCY@
23-023 CARBONLESS
SEP-15-1995 15:57
P.01
FACSIMILE TRANSMISSION REQUEST
ADDRESSEE: (Name, Organization, Address)
FROM: (Name, Organization, Address)
Julie Demeo
Barb Wynn
HC7A
Phone:
Phone:
TOTAL PAGES:
ADDRESSEE'S FAX MACHINE PHONE NUMBER:
DATE:
(Without Cover)
(If Known)
1
202-456-2878
9/15/95
REMARKS: Attached is latest staffaversion working of the
exception for rural ambulances we are
meeting with State Eans Directors next
week & the exception may ecoange based
on their comments ( concerns
Please call if you have further questions
IF FAX MACHINE RETRANSMISSION IS NECESSARY PLEASE CALL:
AT:
(Name)
(Phone)
REQUESTOR'S INSTRUCTIONS TO RECEIVER:
Please call:
at
for pick-up
(Name)
(Phone)
Mail copies for
Location:
Retain copies in files.
"WARNING: Many fax machines produce copies on thermal paper. The image pro-
duced is highly unstable and will deteriorate significantly in a few years. If should be
copied on a plain paper copier prior to filing as a FEDERAL RECORD."
Tom Ault
- orbarbona winn
1800 451 8036
440-786
Jamie
5635
Popard
- Sept. 29th
AUG-16-1995 16:39 FROM
TO
91562878 P.01
SERVICES
/
F
DEPARTMENT OF HEALTH & HUMAN SERVICES
Chief of Staff
HEALTH
Washington D.C. 20201
&
DEPARTMENT
FACSIMILE
DATE AUGUST 16, 1995
TO:
(NAME, ORGANIZATION, CITY/STATE AND PHONE NUMBER)
:
Carol Rasco
Assistant to the President
for Domestic Policy
456-2249
ATTN: Julie DEMEO
FROM:
(NAME. ORGANIZATION, CITY/STATE AND PHONE NUMBER):
Kevin Thurm
Chief of Staff
690-6133
RECIPIENTS FAX NUMBER: ( ) 456-2878
NUMBER OF PAGES TO SEND (INCLUDING COVER SHEET) :
812
COMMENTS:
Please replace this one with the old one.
AUG-16-1995 16:39 FROM
TO
94562878
P.02
Briefing Material
Ambulance Regulation
August 2, 1995
I. WHY THIS REGULATION IS NEEDED
There have been dramatic changes in the ambulance industry since this service was
first authorized for Medicare beneficiaries in 1965. A huge array of equipment,
supplies and vehicles plus Increasingly well-trained staff have made ambulances more
efficient at saving lives. These developments have also resulted in a rapid increase in
Medicare expenditures. While total Medicare carrier payments grew by 50 percent
between 1987 and 1992, carrier ambulance payments grew by 150 percent during that
same period.
There are two types of ambulance services currently being delivered, Basic Life
Support (BLS) and Advanced Life Support (ALS), which IS a more sophisticated and
costly service. Much of the growth In Medicare ambulance payments is the result of the
increase in ALS services. For example, Medicare payments for ALS and BLS services
increased by $72 million from 1988 to 1989. Of this amount, 73 percent was
attributable to increased utilization of ALS ambulances. Also, the number of trips in
ALS ambulances increased by 131 percent during this time period, while the
comparable figure for BLS was 14 percent.
Medicare ALS payments have continued to increase in this decade, although at a
slower rate than previously. For the period 1992 to 1994, ALS payments increased 15
percent annually from $500 million to $660 million. Total ambulance payments have
experienced a similar pattern with annual increases of 15 percent and currently total
$1.7 billion.
The growth of ambulance payments has been documented by three OIG Reports
issued in 1992 to 1994. The OIG reports, along with the findings of the Project Hope
Study of Payments for Ambulance Services under Medicare, have been the impetus of
initiatives undertaken by HCFA to address the growth in ambulance spending while
protecting beneficiary access to essential services. This issue has also received
attention from Congress as evidenced by a December 1994 hearing by the Senate
Appropriations Committee. Subcommittee on Lapor, Health, and Human Resources.
Medicare's current policy bases payment for ambulance services on the type of vehicle
dispatched to a beneficiary, i.e. if an ALS vehicle is used payment is made at the ALS
rato. This proposed regulation would base payment on the level of ambulance service
that is modically necessary.
We have reviewed ambulance utilization patterns and tound that there is a small
AUG-16-1995 16:10 FROM
TO
91562878
P.03
number of regular users of this service. For some End Stage Renal Disease (ESRD)
beneficiaries other forms of transportation to dialysis facilities is contraindicated; they
need ambulance transportation to receive dialysis services on a regular basis, i.e. three
times a week. This extremely small group of beneficiaries (less than 2 percent)
account for 75 percent of all ESRD ambulance payments. Nevertheless, it is important
that HCFA not foreclose access to medically necessary ambulance services for ESRD
beneficiaries.
II. ISSUES
A. Basing Payment on Medical Necessity
Discussion
Medicare's current policy focuses on the type of vehicle used as determinative of
the level of payment. the BLS/ALS issue is further complicated by the fact that
there are an increasing number of local governments mandating, through
ordinances or regulations, ALS ambulance service as the minimum level of
ambulance transport.
Thus Medicare has paid at the ALS rate even when ALS services are not
necessary. This has resulted in increased expenditures for the Medicare
program and its beneficiaries who are subject to a 20 percent copayment on
these services. While we do not dispute the value of the ALS services when
they are needed, we also do not believe that Medicare should pay at the higher
rate in cases where AI.S services are not required. Under this proposal, an ALS
ambulance company must bill the BLS code if only BLS services are furnished.
Otherwise, the bill is incorrect and the Medicare carrier will downcode the claim
to the BLS code with the corresponding lower payment allowance.
Impact on the Beneficiary
Ambulance companies file Medicare claims in one of two ways; accepting
assignment or not accepting assignment. For assigned claims (which account
for over 90 percent of all ambulance claims) the beneficiary is protected from
any additional financial liability. Therefore, in the case where an ALS code is
billed, but only a BLS payment is allowed, the beneficiary is liable only for
coinsurance due on the lower BLS payment allowance. This protection is
afforded in either of two ways. the most common circumstance will be that an
ALS ambulance was used, but no ALS service was furnished. The new coding
structure requires the use of a code that describes this cituation. To bill for an
ALS service when no ALS service was furnished is a false claim, and the
beneficiary is not liable based on a false claim for services that were never
furnished.
The other case, which we expect will be much less frequent, is the case in which
AUG-16-1995 16:40 FROM
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94562878
P.04
the ambulance company furnishes an ALS service which the carrier determines
was not medically necessary. The carrier would then pay this claim at the BLS
rate. The beneficiary will be protected by the "limitation on liability" provision
(section 1879 of the law).
We are providing protection under section 1879 in the same manner as it applies
to all other services, with this exception: the ambulance suppliers will not be
required to give advanced written notices of the likelihood of non-coverage, nor
to obtain the beneficiary's signed agreement to pay. Giving advance notice is
not feasible with most ambulance patients, and their ability to make informed
consumer decisions at such time is questionable. Likewise, the effectiveness of
an agreement to pay signed by a patient in these circumstances also may well
be questioned. Absent advance notices. providers will be held liable when the
carrier finds they knew or should have known that Medicare would not pay; the
program will pay when the providers are held not to have had such knowledge; a
beneficiary will be liable only when there is clear and obvious evidence that the
beneficiary knew that Medicare would not pay.
Regional Impact
In order to determine which geographical areas would be most impacted by
basing Medicare ambulance payments on medical necessity rather than the level
of ambulance used, we examined Medicare data, especially for those carrier
areas that have a disproportionally high percentage of ALS care compared to
national levels. If we assume that the regulation affected only the areas with a
percentage of ALS charges greater than the national average percentage of ALS
to total ambulance charges, the following five carriers out of 55 total carriers
would account for 50 percent of the regulation's impact:
Northern California
Texas
Florida
Ohio
Mississippi
Also, eleven carriers (the additional 6 are Arkansas, Louisiana, Alabama,
Georgia, Oregon, and Oklahoma) account for 76 percent of the regulation's
impact. This effect is more pronounced when the data are viewed by locality Of
235 localities, only 13 account for 50 percent of the impact, 36 localities account
for 75 percent and 57 localities account for 90 percent of the total impact on ALS
services. These regional patterns reflect a heavy use of ALS services and, while
there are no national data identifying communities that mandate all ALS
services, we believe the concentration of our data in specific areas reflects the
communities with ALS mandates.
Savings
Savings associated with this regulation are $30 million for the first year; the five
year savings total is $260 million.
AUG-16-1995 16:11 FROM
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94562878
P.05
Rural Area
A primary concern in basing payment on medical necessity is the issue of
ambulance services in rural areas. We do realize that there are rural areas
(where multiple ambulances, a mix of ALS and BLS. are not economical) that
may be affected by our proposed change to base payment on medical necessity.
To date, however, we have not come to closure on exactly how a rural exception
should be effected.
Therefore, we are working with Department staff, including the Office of Rural
Health, in an effort to establish a "rural exception" that will attempt to mitigate the
possible negative impact on rural areas. A proposed exception under
consideration is to continue to reimburse a rural ambulance supplier under the
current policy if the State Emergency Medical Services Director certifies that the
ambulance service meets one of the following criteria:
The ambulance supplier only offers an ALS level of service and is the sole
provider of ambulance services in the county or comparable New England
district.
When there is more than one ambulance supplier in the county, a supplier
can be excepted if it offers an ALS lovel of service only and is located
more than 40 miles from the nearest alternative provider.
Recommendation
If 8 locality decides to provide or require a level of service in excess of what is
medically necessary, we recommend that Modicare should not be required to
subsidize that decision. It should be the responsibility of the citizens of that
locality to pay for the decision to support an ALS-only system.
Pros:
Potential cost savings for Medicare and the beneficiary.
Limitations on liability would provide beneficiary protection.
Identifying a rural exception would help to maintain access to services for
beneficiaries in a rural area.
Cons:
Ambulance suppliers believe that the proposed policy change will lead to
the collapse of many EMS systems in the U.S, including the probable
elimination of ALS in rural communities and the layoff of EMS personnel.
AUG-16-1995 16:11 FROM
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91562878
P.06
Payments to some ambulance suppliers will be reduced.
B. Medical Condition Codes
Discussion
For several years the American Ambulance Association (AAA) has expressed an
interest in the subject of the national medical condition indicator codes for
ambulance services. Current Medicare guidelines indicate that, in order to be
covered, ambulance services must be reasonable and necessary. This is
usually established in part by the diagnosis of the patient's condition at the time
of the transport. Physicians are required to use ICD-9-CM codes on Part B
claims submitted for payment. However, no such national requirement exists for
ambulance suppliers.
While suppliers have boon encouraged to employ the use of the existing
ICD-9-CM codes, many aro reluctant to do so, because ICD-9-CM codes are
diagnosis codes and, by law, ambulance suppliers not authorized to diagnose
the patient's medical problem.
Currently, different carriors use local modifiers and ICD-9-CM crossovers to
process claims. What is needed is a uniform method of coding that would
simplify claims processing and provide ambulance personnel with the ability to
accurately describe the condition of the patient.
I he proposed condition indicator codes will describe the medical condition of the
patient at the time ambulance services are provided and justify the medical
necessity for BLS and ALS transportation, i.e., demonstrate that other methods
of transportation are contraindicated.
Recommendation
Therefore, we are also proposing the promulgation of national medical condition
indicator codes for ambulance services.
Pros:
Claims are easier to evaluate.
Comprehensive coding system would be consistent among carriers and
conforms to the Medicare Transaction System.
The American Ambulance Association and American College of
Emergency Physicians have reviewed the current list and submitted
recommendations for consideration.
AUG-16-1995 16:42 FROM
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94562878 P.07
Cons:
The listing may need revision periodically.
AAA and ACEP believe the current listing should be expanded because
the current list is too narrow and restrictive.
Monitoring the list by the carrier would require additional funding in
addition to increasing the workload.
AUG-16-1995 16:55 FROM
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91562878 P.02
C. Ambulance Definition
Discussion
We also propose to publish rules clarifying the requirements for determining
whether a vehicle qualifies as an ambulance for Medicare purposes.
In some States, an ambulance is defined, by State or local laws, as a vehicle
that is intended for modical emergency transportation. There are, however,
some suppliers that bill Medicare for providing transportation in vehicles that are
not equipped to respond to medical emergencies 83 required by State or local
law.
Transportation in such vehicles may be furnished to persons who need
assistance in getting to caro givers, for example, because of difficulty in
ambulating, but who do not require medical emergency transportation. More
specifically, their condition is such that transportation by means other than in a
vehicle designed and equipped to respond to a medical emergency is not
contraindicated. Typically, this level of transportation is less than ambulance
services and is furnished to e person who has a scheduled medical appointment,
using a vehicle such as an ambulette, ambu-van, medi-transport, or invalid
coach. These services are not covered under Medicare law.
Some suppliers have been paid by Medicare for this type of transportation
service. Suppliers have argued that their vehicles, despite not meeting State or
local standards, still meet the definition of an ambulance contained in the
regulations at 42 CFR 410.40, which does not explicitly require that an
ambulance be designed and equipped to handle medical emergencies.
The AAA and ACEP have maintained that a separate definition of emergency
should be included in the proposed regulation. While we initially agreed with
this position, it was decided that the definitions contained in the statute
adequately defined the term "emergency" and that we would include the concept
of emergency in the context of definition of an ambulance. ACEP has submitted
Its "prudent layperson" definition of emergency services This definition,
according to ACEP, "accommodates an individual patient's judgement about
their emergency symptoms and whether to seek emergency care." ACEP views
HCFA's statutory definitions as inappropriate because ambulance personnel are
not authorized to diagnose a patient's medical condition in addition to
discouraging an individual from pursuing the care they deem appropriate; the
prudent layperson definition would allow patients to determine whether they are
in need of medical care
Recommendation
We believe that the basic purpose of the ambulance benefit set forth in
section 1861(s)(7) of the Act, which states that ambulance service may be
covered by Medicare if the use of other methods of transportation is
AUG-16-1995 16:56 FROM
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91562878 P.03
distances than nearby freestanding facilities. Ambulance services must be
reasonable and medically necessary. Generally, coverage of ambulance
services is only available to a beneficiary whose condition is such that the use of
other methods of transportation is contraindicated.
The first step in our effort to address this problem of inappropriate ambulance
transport of ESRD beneficiaries involved the implementation of new origin and
destination codes to be used when an ambulance supplier is billing for an
ambulance trip to dialysis for ambulance services furnished to ESRD patients.
Suppliers also have been instructed to use base billing codes that identify
non-emergency (scheduled) transportation. These new codes will allow
Medicare to distinguish between trips to hospitel-based dialysis facilities and
trips lo non-hospital-based facilities as well 63 emergency and emergency
transportation. These codes have been in full effect since April, 1995.
In addition to the implementation of the coding changes, HCFA worked closely
with the ESRD Networks and facilities to clarify HCFA's coverage policy
regarding ambulance transportation of ESRD boneficiaries. As a result we were
able to assure that ESRD beneficiaries continued to receive dialysis treatment
without disruption. The Networks were able to assure continued treatment by
arranging for alternative transportation or, in the case of those needing
ambulance transportation, making sure the patients were transferred to a
hospital-based facility.
Recommendation
We propose to revise the current regulations to authorize coverage of medically
necessary ambulance transportation of ESRD beneficiaries to the nearest
freestanding outpatient dialysis facility capable of providing the necessary
dialysis services. The purpose of the proposed revision is to make the existing
regulation more consistent with our policy of transporting boneficiaries to the
nearest appropriate facility.
In addition, we propose to revise the regulations to deal with the issue of
whether the transport was scheduled or not. We would propose, in this instance,
to base payment for ambulance services on a medical necessity criterion. We
would require, in situations involving repetitive, scheduled ambulance runs (such
as to a dialysis facility) where non emergency BLS service is required, that the
ambulance suppliers obtain advance written physician certification from the
attending physician as documentation of the medical reason that transportation
by other means is contraindicated. We also propose to specify that the
certifications, while renewable, would be valid for a period not to exceed 60
days.
Pros:
Proposal makes the benefit more equitable to ESRD beneficiaries by
AUG-16-1995 16:13 FROM
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91562878
P.08
contraindicated by the individual's condition, but only to the extent provided in
regulations, is to provide coverage for necessary transportation in emergency
situations. The current definitions of "ambulance" contained in the regulation
and manuals do not state specifically that ambulance services must be furnished
in vehicles that are "equipped to respond to medical emergencies."
As a means of distinguishing an ambulance from other modes of medically
related transportation, we are proposing to revise the regulation to define an
ambulance in terms of the medical equipment, staffing requirements and the
ability to respond to a medical emergency. We also propose to revise the
regulation to establish definitions of BLS and ALS levels of ambulance service.
We propose to use, with minor changes, the definitions contained in current
manual instructions. While some may argue that we are overriding State or local
law that may not be as strict as our proposal, these requirements would only
apply to Medicare beneficiaries who, we believe, would benefit from receiving
ambulance services from those suppliers meeting these vehicle, medical
equipment, and staffing standards.
Pros:
Allows HCFA to distinguish between ambulances and lesser forms of
medically related transportation.
Promotes consistency in interpretation of policy and adjudication of
disputes.
Ensures a quality standard of care for Medicare beneficiaries.
Cons:
ACEP and AAA strongly believe that a separate definition of emergency
that is appropriate for prehospital services is needed. The decision not to
include separate definition of emergency, but to rely on the definitions
contained in the statute are in conflict with ACEP's prudent layperson
definition.
ACEP views the current definitions and proposed changes as establishing
barriers to emergency medical caro.
D. End Stage Renal Disease Beneficiaries
Discussion
Currently, the Medicare program may pay to have ESRD beneficiaries
transported to hospital-based ESRD facilities that may be located at greater
TO
91562878 P.09
AUG-16-1995 16:11 FROM
eliminating unnecessarily long ambulance trips to hospital-based dialysis
facilities when a freestanding facility is closer.
Potential cost savings to the beneficiary and Medicare.
Proposal is the direct result of working with the ambulance Industry.
Cons:
Additional paperwork requirement for the attending physicians and
ambulance suppliers.
Carrier costs for claims processing will increase because of physician
certification requirement.
III. OTHER CONSIDERATIONS
Legislative Proposal in lieu of Regulatory Change
While we are proposing to change the regulations to effect the changes
described above, another alternative is to seek a legislative proposal to change
these policies. Since ambulance services are a politically sensitive issue, we
may want a Congressional directive. On the other hand, problems in this area
are well documented and the Medicare ambulance requirements that were
originally set when the program began in 1965 need to be updated to reflect
current conditions.
We have a legislative proposal to pay for ambulance services on 8 fee schedule.
We would limit the payment allowance for ambulance services to the average
allowed charge of each locality. An average allowed charge would be calculated
for each locality (there are approximately 235 localities around the country).
Payment would be made at the lower of the ambulance supplier's actual charge
or the average allowed charge for that locality. This proposal Is essentially
budget neutral because by limiting the payment to the average allowed charge
by locality, payment denied to a higher charger is added to the allowable charge
of a lower charger. This proposal redistributes money within a locality rather
than denying it
We would also pursue legislation to protect the beneficiary's financial liability by
requiring ambulance companies to accept assignment. Under the terms of
Medicare assignment. Medicare pays its benefits only to the ambulance
company (i.o., the beneficiary is not paid), the ambulance company accepts
Medicare's allowable charge as its total charge, and ambulance companies may
Dill beneficiaries only for the Part B coinsurance (20 percent) and any unmet
Part B deductible applied to Medicare's allowed charge for any Medicare
AUG-16-1995 16:15 FROM
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covered service. Historically, over 90 percent of ambulance claims are paid
under assignment.
AUG-11-1995 15:17 FROM
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Himes ......
DEPARTMENT OF HEALTH & HUMAN SERVICES
Chief of Staff
MIALTH
Washington D.C. 20201
:
DEPARTMENT
FACSIMILE
AUG 11 1995
DATE
TO:
(NAME, ORGANIZATION CITY/STATE AND PHONE NUMBER)
:
Carol Rasco
Assistant to the President
Attn: Julie Demio
for Domestic Policy
456-2249
FROM:
(NAME, ORGANIZATION, CITY/STATE AND PHONE NUMBER):
Kevin Thurm
Chief of Staff
690-6133
RECIPIENTS FAX NUMBER: ( ) 456-2878
NUMBER OF PAGES TO SEND (INCLUDING COVER SHEET) :
12
COMMENTS:
Julie Demic:
Attached is the information you requested.
Mary Beth Donahue
AUG-11-1995 15:47 FROM
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Briefing Material
Ambulance Regulation
August 2, 1995
1. WHY THIS REGULATION IS NEEDED
There have been dramatic changes in the ambulance industry since this service was first
authorized for Medicare beneficiaries in 1965. A huge array of equipment, supplies and
vehicles plus increasingly well-trained staff have made ambulances more efficient at saving
lives. These developments have also resulted in a rapid increase in Medicare
expenditures. While total Medicare carrier payments grew by 50 percent between 1987
and 1992, carrier ambulance payments grew by 150 percent during that same period.
There are two types of ambulance services currently being delivered, Basic Life Support
(BLS) and Advanced Life Support (ALS), which is a more sophisticated and costly service.
Much of the growth in Medicare ambulance payments is the result of the increase in ALS
services. For example, Medicare payments for ALS and BLS services increased by $72
million from 1988 to 1989. Of this amount, 73 percent was attributable to increased
utilization of ALS ambulances. Also, the number of trips in ALS ambulances increased
by 131 percent during this time period, while the comparable figure for BLS was 14
percent.
Medicare ALS payments have continued to increase in this decade, although at a slower
rate than previously. For the period 1992 to 1994, ALS payments increased 15 percent
annually from $500 million to $660 million. Total ambulance payments have experienced
a similar pattern with annual increases of 15 percent and currently total $1.7 billion.
The growth of ambulance payments has been documented by three OIG Reports issued
in 1992 to 1994. The OIG reports, along with the findings of the Project Hope Study of
Payments for Ambulance Services under Medicare, have been the impetus of Initiatives
undertaken by HCFA to address the growth in ambulance spending while protecting
beneficiary access to essential services. This issue has also received attention from
Congress as evidenced by a December 1994 hearing by the Senate Appropriations
Committee, Subcommittee on Labor, Health, and Human Resources.
Medicare's current policy bases payment for ambulance services on the type of vehicle
dispatched to a beneficiary, i.e. if an ALS vehicle is used payment is made at the ALS
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rate. This proposed regulation would base payment on the level of ambulance service
that is medically necessary.
We have reviewed ambulance utilization patterns and found that there is a small number
of regular users of this service. For some End Stage Renal Disease (ESRD) beneficiaries
other forms of transportation to dialysis facilities is contraindicated; they need ambulance
transportation to receive dialysis services on a regular basis, i.e. three times a week. This
extremely small group of bcneficiaries (less than 2 percent) account for 75 percent of all
ESRD ambulance payments. Nevertheless, it is important that HCFA not foreclose access
to medically necessary ambulance services for ESRD beneficiaries.
11. ISSUES
A. Basing Payment on Medical Necessity
Discussion
Medicare's current policy focuses on the type of vehicle used as determinativo of
the level of payment. The BLS/ALS issue is further complicated by the fact that
there are an increasing number of local governments mandating, through
ordinances or regulations, ALS ambulance service as the minimum level of
ambulance transport.
Thus Medicare has paid at the ALS rate even when ALS services are not
necessary. This has resulted in increased expendituros for the Medicare program
and its beneficiaries who are subject to a 20 percent copayment on these services.
While we do not dispute the value of the ALS services when they are needed, we
also do not believe that Medicare should pay at the higher rate in cases where ALS
services are not required. Under this proposal, an Al S ambulance company must
bill the BLS code if only BLS services are furnished. Otherwise, the bill is incorrect
and the Modicare carrier will downcode the claim to the BLS code with the
corresponding lower payment allowance.
Impact on the Beneficiary
Ambulance companies file Medicare claims in one of two ways; accepting
assignment or not accepting assignment. For assigned claims (which account for
over 90 percent of all ambulance claims) the beneficiary is protected from any
additional financial liability. Therefore, in the case where an ALS code is billed, but
only a BLS payment is allowed, the beneficiary is liable only for coinsuranoo duo
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on the lower BLS payment allowance. This protection is afforded in either of two
ways. The most common circumstance will be that an ALS ambulance was used,
but no ALS service was furnished. The new coding structure requires the use of
a code that describes this situation. To bill for an ALS service when no ALS
service was furnished is a false claim, and the beneficiary is not liable based on a
false claim for services that were never furnished.
The other case, which we expect will be much less frequent, is the case in which
the ambulance company furnishes an ALS service which the carrier determines
was not medically necessary. The carrier would then pay this claim at the BLS
rate. The beneficiary will be protected by the "limitation on liability" provision
(section 1679 of the law).
We are providing protoction under section 1879 in the same manner as It applies
to all other services, with this exception: the ambulance suppliers will not be
required to give advanced written notices of the likelihood of non-coverage, nor to
obtain the beneficiary's signed agreement to pay. Giving advance notice is not
feasible with most ambulance patients, and their ability to make informed consumer
decisions at such time is questionable. Ukawise, the effectiveness of an
agreement to pay signed by a patient in these circumstances also may well be
questioned. Absent advance notices, providers will be held liable when the carrier
finds they knew or should have known that Medicare would not pay; the program
will pay when the providers are held not to have had such knowledge; a
beneficiary will be liable only when there is clear and obvious evidence that the
beneficiary knew that Medicare would not pay.
Regional Impact
In order to determine which geographical areas would be most impacted by basing
Medicare ambulance payments on medical necessity rather than the level of
ambulance used, we examined Medicare data, especially for those carrier areas
that have a disproportionally high percentage of ALS care compared to national
levels. If we assume that the regulation affected only the areas with a percentage
of ALS charges greater than the national average percentage of ALS to total
ambulance charges, the following five carriers out of 55 total carriers would
account for 50 percent of the regulation's impact:
Northern California
Toxas
Florida
Ohio
Mississippi
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Also, eleven carriers (the additional 6 are Arkansas, Louisiana, Alabama, Georgia,
Oregon, and Oklahoma) account for 76 percent of the regulation's impact. This
effect is more pronounced when the data are viewed by locality. Of 235 localities,
only 13 account for 50 percent of the impact, 36 localities account for 75 percent
and 57 localities account for 90 percent of the total impact on ALS services. These
regional patterns reflect a heavy use of ALS services and, while there are no
national data identifying communities that mandate all ALS services, we believe the
concentration of our data in specific areas reflects the communities with ALS
mandates.
Savings
Savings associated with this regulation are $30 million for the first year: the five
year savings total is $260 million.
Hural Area
A primary concern In basing payment on medical necessity is the issue of
ambulance services in rural areas. We do realize that there are rural areas (where
multiple ambulances, a mix of ALS and BLS, are not economical) that may be
3
affected by our proposed change to base payment on medical necessity. To date,
however, we have not come to closure on exactly how a rural exception should be
effected.
Therefore, we are working with Department staff, including the Office of Rural
Health, in an effort to establish a "rural exception" that will attempt to mitigate the
possible negative impact on rural areas. A proposed exception under
consideration is to continue to reimburse a rural ambulance supplier under the
current policy if the State Emergency Medical Services Director certifies that the
ambulance service meets one of the following criteria:
The ambulance supplier only offers an ALS level of service and is the sole
provider of ambulance services in the county or comparable New England
district.
When there is more than one ambulance supplier in the county, a supplier
can be excepted if it offers an ALS level of service only and is located more
1
than 40 miles from the nearest alternative provider.
Recommendation
If a locality decides to provide or require a level of service in excess of what is
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medically necessary, we recommend that Medicare should not be required to
subsidize that decision. It should be the responsibility of the citizens of that locality
to pay for the decision to support an ALS-only system.
Pros:
Potential cost savings for Medicare and the beneficiary.
Limitations on liability would provide beneficiary protection.
Identifying a rural exception would help to maintain access to services for
beneficiarios in a rural area.
Cons:
{
Ambulance suppliers believe that the proposed policy change will lead to
the collapse of many EMS systems in the U.S, including the probable
elimination of ALS in rural communities and the layoff of EMS personnel.
Payments to some ambulance suppliers will be reduced.
B. Medical Condition Codes
Discussion
For several years the American Ambulance Association (AAA) has expressed an
interest in the subject of the national medical condition indicator codes for
ambulance services. Current Medicare guidelines indicate that, in order to be
covered, ambulance services must be reasonable and necessary. This is usually
established in part by the diagnosis of the patient's condition at the time of the
transport. Physicians are required to use ICD-9-CM codes on Part B claims
submitted for payment. However, no such national requirement exists for
ambulance suppliers.
While suppliers have been encouraged to employ the use of the existing ICD-9-CM
oodes, many are reluctant to do so, because ICD-9-CM codes are diagnosis codes
and, by law, ambulance suppliers not authorized to diagnose the patient's medical
problem.
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AUG-11-1995 15:52 FROM
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Currently, different carriers use local modifiers and ICD-9-CM crossovers to
process claims. What is needed is a uniform method of coding that would simplify
claims processing and provide ambulance personnel with the ability to accurately
describe the condition of the patient.
The proposed condition indicator codes will describe the medical condition of the
patient at the time ambulance services are provided and justify the medical
necessity for BLS and ALS transportation, i.e., demonstrate that other methods of
transportation are contraindicated.
Recommendation
Therefore, we are also proposing the promulgation of national medical condition
indicator codes for ambulance services.
Pros:
Claims are easier to evaluate.
Comprehensive coding system would be consistent among carriers and
conforms to the Medicare Transaction System.
The American Ambulance Association and American College of Emergency
Physicians have reviewed the current list and submitted recommendations
for consideration.
Cons:
The listing may need revision periodically.
AAA and ACEP believe the current listing should be expanded because the
current list is too narrow and restrictive.
Monitoring the list by the carrier would require additional funding in addition
to increasing the workload.
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AUG-11-1995 15:52 FROM
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C. Ambulance Definition
Discussion
We also propose to publish rules clarifying the requirements for determining
whether a vehicle qualifies as an ambulance for Medicare purposes.
In some States, an ambulance is defined, by State or local laws, as a vehicle that
is intended for medical emergency transportation. There are, however, some
suppliers that bill Medicare for providing transportation in vehicles that are not
equipped to respond to medical emergencies as required by State or local law.
Transportation in such vehicles may be furnished to persons who need assistance
in getting to care givers, for example, because of difficulty in ambulating, but who
do not require medical emergency transportation. More specifically, their condition
is such that transportation by means other than in a vehicle designed and
equipped to respond to a medical emergency is not contraindicated. Typically, this
level of transportation is less than ambulance services and is furnished to a person
who has a scheduled medical appointment, using a vehicle such as an ambulette,
ambu-van, medi-transport, or invalid coach. These services are not covered under
Medicare law.
Some suppliers have been paid by Medicare for this type of transportation service.
Suppliers have argued that their vehicles, despite not meeting State or local
standards, still meet the definition of an ambulance contained in the regulations at
42 CFR 410.40, which does not explicitly require that an ambulance be designed
and equipped to handle medical emergencies.
The AAA and ACEP have maintained that a separate definition of emergency
should be included in the proposed regulation. While we initially agreed with this
position, it was decided that the definitions contained in the statute adequately
defined the term "emergency" and that we would include the concept of
emergency in the context of definition of an ambulance. ACEP has submitted its
"prudent layperson" definition of emergency services. This definition, according to
ACEP, "accommodates an individual patient's judgement about their emergency
symptoms and whether to seek emergency care." ACEP views HCFA's statutory
definitions as Inappropriate because ambulance personnel are not authorized to
diagnose a patient's medical condition in addition to discouraging an individual
from pursuing the care they deem appropriate; the prudent layperson definition
would allow patients to determine whether they are in need of medical care.
7
AUG-11-1995 15:53 FROM
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Recommendation
We believe that the basic purpose of the ambulance benefit set forth in
section 1861(s)(7) of the Act, which states that ambulance service may be
covered by Medicare if the use of other methods of transportation is
contraindicated by the individual's condition, but only to the extent provided in
regulations, is to provide coverage for necessary transportation in emergency
situations. The current definitions of "ambulance" contained in the regulation and
manuals do not state specifically that ambulance services must be furnished in
vehicles that are "equipped to respond to medical emergencies."
As a means of distinguishing an ambulance from other modes of medically related
transportation, we are proposing to revise the regulation to defino an embulance
in terms of the medical equipment, staffing requirements and the ability to respond
to a medical emergency. We also propose to revise the regulation to establish
definitions of BLS and ALS levels of ambulance service. We propose to use, with
minor changes, the definitions contained in current manual instructions. While
some may argue that we are overriding State or local law that may not be as strict
as our proposal, these requirements would only apply to Medicare beneficiaries
who, we believe, would benefit from receiving ambulance services from those
suppliers meeting these vehicle, medical equipment, and staffing standards.
Pros:
Allows HCFA to distinguish between ambulances and lesser forms of
medically related transportation.
Promotes consistency in interpretation of policy and adjudication of
disputes.
Ensures a quality standard of care for Medicare beneficiaries.
Cons:
ACEP and AAA strongly believe that a separate definition of emergency that
is appropriate for prehospital services is needed. The decision not to
include separate definition of emergency, but to rely on the definitions
contained in the statute are in conflict with ACEP's prudont layperson
definition.
8
AUG-11-1995 15:53 FROM
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ACEP views the current definitions and proposed changes as establishing
barriers to emergency medical care.
D. End Stage Renal Disease Beneficiaries
Discussion
Currently, the Medicare program may pay to have ESRD beneficiaries transported
to hospital-based ESRD facilities that may be located at greater distances than
nearby freestanding facilities. Ambulance services must be reasonable and
medically necessary. Generally, coverage of ambulance services is only available
to a beneficiary whose condition is such that the use of other methods of
transportation is contraindicated.
The first step In our effort to address this problem of inappropriate ambulance
transport of ESRD beneficiaries involved the implementation of new origin and
destination codes to be used when an ambulance supplier is billing for an
ambulance trip to dialysis for ambulance services furnished to ESRD patients.
Suppliers also have been instructed to use base billing codes that identify non-
emergency (scheduled) transportation. These new codes will allow Medicare to
distinguish between trips to hospital-based dialysis facilities and trips to non-
hospital-based facilities as well as emergency and non-emergency transportation.
These codes have been in full effect since April, 1995.
In addition to the implementation of the coding changes, HCFA worked closely with
the ESRD Networks and facilities to clarify HCFA's coverage policy regarding
ambulance transportation of ESRD beneficiaries. As a result we were able to
assure that ESRD beneficiaries continued to receive dialysis treatment without
disruption. The Networks were able to assure continued treatment by arranging
for alternative transportation or, in the case of those needing ambulance
transportation, making sure the patients were transferred to a hospital-based
facility.
Recommendation
We propose to revise the current regulations to authorize coverage of medically
necessary ambulance transportation of ESRD beneficiaries to the nearest
freestanding outpatient dialysis facility capable of providing the necessary dialysis
services. The purpose of the proposed revision is to make the existing regulation
more consistent with our policy of transporting beneficiaries to the nearest
9
AUG-11-1995
15:51
FROM
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P.07
appropriate facility.
In addition, we propose to revise the regulations to deal with the issue of whether
the transport was scheduled or not. We would propose, In this instance, to base
payment for ambulance services on a medical necessity criterion. We would
require, in situations involving repetitive, scheduled ambulance runs (such as to a
dialysis facility) where non-emergency BLS service is required, that the ambulance
suppliers obtain advance written physician certification from the attending physician
as documentation of the medical reason that transportation by other means is
contraindicated. We also propose to specify that the certifications, while
renewable, would be valid for a period not to exceed 60 days.
Pros:
Proposal makes the benefit more equitable to ESRD beneficiaries by
eliminating unnecessanly long ambulance trips to hospital-based dialysis
facilities when a freestanding facility is closer.
Potential cost savings to the beneficiary and Medicare.
Proposal is the direct result of working with the ambulance industry.
Cons:
Additional paperwork requirement for the attending physicians and
ambulance suppliers.
Carrier costs for claims processing will increase because of physician
certification requirement.
III. OTHER CONSIDERATIONS
Legislative Proposal in lieu of Regulatory Change
While we are proposing to change the regulations to effect the changes described
above, another alternative is to seek a legislative proposal to change these
policies. Since ambulance services are a politically sensitive issue, we may want
a Congressional directive. On the other hand, problems in this area are well
documented and the Medicare ambulance requirements that were originally set
when the program began in 1965 need to be updated to reflect current conditions.
10
AUG-11-1995 15:54 FROM
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We have a legislative proposal to pay for ambulance services on a fee schedule.
We would limit the payment allowance for ambulance services to the average
allowed charge of each locality. An average allowed charge would be calculated
for each locality (there are approximately 235 localities around the country).
Payment would be made at the lower of the ambulance supplier's actual charge
or the average allowed charge for that locality. This proposal is essentially budget
neutral because by limiting the payment to the average allowed charge by locality,
payment denied to a higher charger is added to the allowable charge of a lower
charger. This proposal redistributes money within a locality rather than denying
it.
We would also pursue legislation to protect the beneficiary's financial liability by
requiring ambulance companies to accept assignment. Under the terms of
Medicare assignment, Medicare pays its benefits only to the ambulance company
(i.e., the beneficiary is not paid), the ambulance company accepts Medicare's
allowable charge as its total charge, and ambulance companies may bill
beneficiaries only for the Part B coinsurance (20 percent) and any unmet Part B
deductible applied to Medicare's allowed charge for any Medicare covered service.
Historically, over 90 percent of ambulance claims are paid under assignment.
11
08/11/95 15:21 FAX 501 463 8591
PAFFORDAMBULANCE
001
Pafford Ambulance Service, Inc.
FAX Transmittal
P.O. Box 130
FAX Number (800)532-7571
214 Main Street
(501)463-8591
Hermitage, AR 71647
Office Number (800)451-8036
TO: Julie Demeo
FAX Number: 2024562878
Date: 8-11-95
Number of Pages
(Including Header Page) 17
From: Damie + James Papport
Comments:
I know its lengthy -
Please or Nee Junther letine know if you hear
Jamie
08/11/95 15:21 FAX 501 463 8591
PAFFORDAMBULANCE
002
P
Pafford Ambulance Service, Inc.
P.O. Box 130
214 Main Greet
Hermitage, AR 71647
August 11, 1995
Julie Demeo
The White House
Domestic Policy
Washington, D.C.
RE: HCFA proposed regulation changes for ambulance service (ALS VS BLS)
Attached please find letters we have received regarding the proposed changes in HCFA
regulations pertaining to emergency ambulance services.
Here is a letter written to the President from our State Director of EMS. We do not know
if he has received this letter. Although it is lengthy, it makes several important points.
Daddy and I both separately received a letter from Thomas Ault with HCFA. They were
exactly the same. While we recognize the goal of the program is to reduce short term
expenditures, there must be consideration given to the long term implications. We are
especially concerned about the effect of these changes on rural ambulance providers.
The change proposed by HCFA would provide reimbursement based on patient need,
rather that the level of service provided This is feasible in urban areas where ambulance
providers have sufficient transport volume to operate both ALS and BLS ambulances.
However, in rural America, ambulance providers cannot afford to operate a "tiered"
system. It will financially force these providers to operate only basic ambulance services,
if any at all,
We would like to propose the question to Mr. Ault of HCFA as to what type of service he
feels will be "readily available to Medicare bencficiaries" as he states in his letter, if this
change is made.
Most small communities in America have limited hospital emergency room resources.
Patients must travel great distances to reach major trauma centers. Providing less than
ALS ambulance services to these patients at the onset of the emergency will result in
much greater costs to the overall health care system. Many rural communities have
M
recognized the need for this level of service and have adopted ordinances and local laws
mandating ALS ambulance services in their respective communities.
08/11/95 13:21 FAX 501 163 8591
PAFFORDAMBULANCE
4
003
page 2
The Office of the Inspector General's study emphasized this point in the report made part
of HCFA's "Project Ilopc" dated October 21, 1991 (Section 7.3.1) In this study, il is
noted there must bc 30mc consideration given to the reimbursement methodology for
rural providers. Failure to recognize this fact will have a devastating impact on rural
providers. Rural, in terms of this issue, would imply arcas of approximately 30,000
population have sufficient volume to permit operating a tiered system.
It IS our request that the current changes proposed by HCFA be amended to protect small
rural ALS ambulance services. This could be accomplished by making the current
changes applicable to services operating in urban areas. Rural areas should be permitted
to continue providing ALS services in accordance will all current requirements (i.e.
ordinances, mandates) of ALS reimbursement.
It should be further noted payment to rural ambulance providers constituted only twenty
percent of the overall ambulance expenditures made by the Medicare program. It is
estimated the savings from early ALS inter vention in rural emergency medical situations
will far exceed the cost to the program.
Failure to intervene in the proposed changes before IICFA will result in services leaving
the rural areas. Rural residents will be left with little or no ALS cmergency care. This
will obviously have a catastrophic impact on the health and welfare of millions of
Americans.
Your personal assistance in this matter is critical to the future of emergency medical
care in rural America. Please contact me if we can be of further assistance to you and
your staff on this matter.
08/11/95 15:21 FAX 501 463 8591
PAFFORDAMBULANCE
0
004
MED-TECH EMS Morrilton TEL:5013541420
Aug 11 95 10:20 No. 001 P.01
Lloyd D. (Doug) Darr
12201 Jacksonville-Cato Road
North little Rock, AR 72120
(501) 835-0741
June 25, 1995
President Bill Clinton
1600 Pennsylvania Avenue
Washington, DC
Dear President Clinton,
I am writing to request your help in preventing the Health Care Financing Administration
(HCFA) from destroying our nations rural emergency medical services (EMS) through a well
intended, but poorly researched, regulatory rule change. Specifically, they are attempting to
reduce the nation's Medicare cost by quickly pushing through a package of changes which effect
the reimbursement of pre-hospital emergency medical care by ambulance services. Overall this
is a very good, well thought out package of changes. However, one change will only allow for
reimbursement of transfers at the Advanced Life Support (ALS or paramedic level) rate when the
patient actually needs the advanced level of care. At first look this appears to be a logical
change, but it's effect will be to reduce the Emergency Medical Services available in our nation's
rural and frontier areas back to the Basic Life Support (BLS or basic emergency medical
technician) levels of the late 70s and early 80s.
The package of changes is already drafted and will be published in the Federal Register within
the next month My specific request for your help is for you to temporarily stop the
promulgation process of these changes and direct HCFA to conduct an in-depth study to
determine the impact of this change on the ability of the rural and frontier ambulance services to
>
provide Advanced Life Support (ALS) for both emergencies and transfers after the changes are
implemented
To my knowledge the only input HCFA has had on these changes is primarily from large, urban
ambulance services with high call volumes and numerous ambulances serving one urban region
These services can, and probably should. only be reimbursed for what they provide based on
patient needs. The people HCFA has not heard from is the small, rural service with two or three
ambulances who do not have the luxury of multiple ALS and BLS units on duty and do not have
the large call volume required to effectively assign units to a request for service based on the
patient's need. If these services are providing ALS level care, then ALS units are all they will
have on duty, and their cost of transferring a patient will be the ALS cost, regardless of the
patient's needs.
08/11/95 10:13
TX/RX NO. 2509
P.001
08/11/95 15:21 FAX 501 463 8591
PAFFORDAMBULANCE
4
005
MED-TECH EMS Morrilton TEL :5013541420
Rug 11 95 10:21 No. 001 P.02
I realize that publishing in the Federal Register is the legal way of obtaining public comment
Having been Governor of our rural state, I am sure you realize that the typical rural ambulance
service manager will never see or is even aware of the Federal Register. These people need to
be heard from now, and HCFA needs to go to them, since they do not have the ability or method
to be able to go to HCFA.
If your staff researches this issue, you will be told that the American Ambulance Association
(AAA) has agreed to the transfer reimbursement change. What you need to keep in mind is that
the AAA primarily represents the large, urban services who will not be effected by the change.
If HCFA were to survey the rural state's ambulance associations and services, I believe they will
find they oppose this change because of it's impact on rural services. The Arkansas Ambulance
Association is opposed to this change.
If this change goes through then rural services will loss the benefit of ALS level reimbursement
on 70% of their transfers. With transfers (not emergencies) being the majority of a service's
funding source, the services will be forced to reduce costs by only providing the less expensive
>
BLS level of care on all emergencies and transfers. This will reduce the overall pre-hospital and
between hospital patient care available. The overall result will be a drastic increase in morbidity
and mortality in rural areas which presently have ALS care, with an associated increase in the
downstream costs of patient care.
Until recently the highest level of pre-hospital care, ALS (paramedic), was only available in the
urban area where the profit motive is groater due to increased call volume. However, in the
urban areas transport times to major, well equipped hospitals is short, and the impact of
advanced procedures before arrival at the hospital is less.
The rural areas is where the ALS (paramedic) level is needed most. and where it is the most
effective in preventing morbidity and mortality. Frequently the rural patient's life is in the hands
of the EMT or paramedic for over an hour before arrival at a rural emergency room After
arrival at a rural hospital the critical traume or medical patient may only be stabilized before
having to be transferred to a more well equipped and staffed urban tertiary care center for
treatment. The patients care then reverts back to the paramedic, who must monitor and maintain
the advanced procedure initiated during the one to three hour trip to the large urban hospital.
The basic life support (BLS) and advanced life support (ALS) levels are frequently
misunderstood by the general public and many public officials. The BLS level of care is
performed by an emergency medical technician-basic, commonly referred to as EMTs, who have
completed at least 110 hours of training in accordance with curriculum established by the US
Department of Transportation (DOT) and are certified/licensed by their state. They perform
basic, non-invasive skills such as splinting. bleeding control and bandaging, administering
oxygen, assisting a patient with the patient's own medications, extrication from vehicles, etc.
The EMT has been the backbone of pre-hospital care since the late 1970s.
The ALS level is performed by an emergency medical technician-paramedic, commonly referred
to as paramedics. After becoming EMT-Basics, these individuals continue their training by
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completing & minimum of 700 hours of additional training established by the DOT paramedic
curriculum. The average paramedic course in Arkansas is 900 hours long. Paramedics are
frequently the difference between life and death for a critical patient. In addition to the EMT
-Basic's skills, paramedics perform advanced procedures such as EKG monitoring, endotracheal
intubation, chest decompression. treating shock with TV fluids. and administration of drugs for
medical problems such as heart attack, insulin shock, acute high blood pressure, severe
anaphylactic (allergic) reactions, severe asthma attacks, congestive heart failure, etc. The
paramedics procedures are so effective that a recent study showed that if a paramedic cannot
restore a heartbeat to a patient in cardiec arrest, that the statistical probability of the emergency
room saving the patient is zero. Based on this study, some states are considering allowing
paramedics (not EMT-Basics) to pronounce patients dead when resuscitative efforts in the field
are unsuccessful.
The long term financial impact of proper paramedic level pre-hospital care is tremendous.
Twelve lead EKGs performed in the field are reducing the time to diagnosis of heart attack and
treatment with thrombolytic therapy. Rapid thrombolytic therapy can significantly reduce the
damage caused by a heart attack, thereby reducing length of hospital stays, and allow the patient
to return to productive life. The paramedic's advanced cardiac life support (ACLS) skills can
prevent cardiac arrest, or even restart a stopped heart Treating patients with acute high blood
pressure can prevent them from having a stroke enroute to the hospital. Rapid treatment of
unconscious patients in insulin shock prevents brain damage. IV fluids for victims of traumatic
injury can keep them alive until they receive surgical care. Treating trauma victims with steroids
can prevent the brain from swelling curoute to the hospital, preventing permanent brain damage
or death. These are only a few examples of the numerous emergencies which require a
paramedics skills.
A paramedic is also frequently required to maintain the standard of care when transferring
trauma, heart attack, and other acute patients from the smaller rural hospital to an urban tertiary
*
care facility. If a paramedic level ambulance is not available, then the hospital has to send a
nurse or physician, drastically increasing the overall cost of the transfer.
One of the justifications given for the new regulations is that a study of Arkansas and a few other
states showed that the amount of ALS claims by ambulance services has increased significantly
between 1988 and now. The false conclusion derived from the study was that the increase was
due to fraud In 1988, Arkansas had only 20 paramedic level ambulance services. Since then 67
services have upgraded to the paramedic level so that they can provide better care. In fact, since
]ver
your election to President. Cherokee Village, Walnut Ridge, Clinton, Maumelle, Cabot, Lonoke
County, Grant County, Sherwood, and Newton County have advanced to the paramedic level.
Columbia County, Hempstead County, and Yell County will reach the paramodic level in the
next few months. If these new Medicare changes take effect, every one of these areas will
probably have to revert back to the basic life support (BLS) level because they will not be able to
support the increased cost of providing paramedic (ALS) care.
I hope that you can intervence to provent the promulgation of these Medicare reimbursement
changes before a study of their impact on rural America is conducted.
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I am willing to volunteer my time to help your staff or HCFA in studying this issue. I was the
Director of the Arkansas Department of Health's Emergency Medical Services and Trauma
Systems Division until last week, when I voluntarily resigned to work in the private sector. I
have served on the Executive Committee of the National Association of State EMS Directors
where I represented the south central states. I am currently working as a paramedic and shift
supervisor in Sherwood, Arkensas.
I appreciate your attention to this critical issue.
Sincerely,
Dorg Pen
Lloyd D. (Doug) Darr. MS, NREMT-P
Captain, USAF Retired
cc:
Governor Jim Guy Tucker
Senator David Pryor
Senator Dale Bumpers
Representative Ray Thornton
Dr. Sandra B. Nichols, Director, Arkansas Department of Health
Dr. Marvun Leibovich, Chairman, Arkansas EMS Advisory Council
Dr. John Cone, Chairman, Arkansas Trauma Advisory Council
Mr. David Jones, Member. Arkansas Trauma Advisory Council
Mr. Francis Carson, President, Arkansas Ambulance Association
Mr. Bob Williams, President, Arkansas EMT Association
Mr. Dan Manz, President, National Association of State EMS Directors
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REPORT TO CONGRESS
A STUDY OF PAYMENTS FOR
AMBULANCE SERVICES UNDER MEDICARE
:
Donna E Shalala
Secretary of Health and Human Services
1994
:
,
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provide total cost data. In the absence of an on-site audit, the accuracy of the
reported cost data is less than ideal for research purposes.
These data problems point to the need for caution, also, in making
recommendations based on inferences drawn from the data. Despite the coding
differences, the overall quality of the 1987 Medicare claims data was adequate to
provide insights into the use and spending patterns for ambulance services.
FINDINGS
Patterns of Ambulance Service Use and Costs
Analysis of Medicare claims data showed that of the almost $602 million in
allowed charges incurred for ambulance services in 1987, about 20 percent were
incurred by beneficiaries living in rural areas, though rural beneficiaries comprise
about 27 percent of Medicare enrollees. The rate of use was higher among
beneficiaries in urban areas (65 users per 1,000 beneficiaries) than among
beneficiaries living in rural areas (57 users per 1,000 beneficiaries).
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Urban residents also make more frequent use of ambulance services (about
110 runs per 1,000 beneficiaries) than rural residents (about 89 runs per
1,000 beneficiaries). Since the average allowed charge per run was higher for
urban residents ($134 per run) than for rural residents ($110 per run), the rate of
program allowed charges for urban beneficiaries ($14,818 per 1,000 beneficiaries)
was 50 percent higher than for rural residents ($9,854 per 1,000 beneficiaries).
While it is clear that charges are higher for ambulance services in urban areas, it
is unclear whether the difference in the rate of use between urban and rural areas
reflects differential access or different preferences as to the mode of
transportation.
The charges allowed by Medicare in the 4 States surveyed covered the average
costs of providing rural ambulance services, for both BLS and ALS services. In
urban areas, the allowed charges were sufficient to cover BLS services, but were
below the average costs of ALS services though exceeding marginal costs. The
attached study by Project HOPE presents detailed data at Table 5-1.
Nevertheless, a smaller proportion of rural providers than urban providers
accepted assignment for Medicare claims. In the analysis of cost outliers, it was
clear that in some sparsely-populated communities served by small firms, costs are
significantly higher than the average of Medicare's allowed charges. In addition,
mileage was shown to be a major contributor to higher average costs for these
rural firms.
THis is WHAT we are
9
we can't AFFORD to not
TAIKING ABOUT-
ANOTHER WAY-
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The study of the claims file showed that services reimbursed in addition to an
ambulance base rate (i.e., "add-ons") increased the average allowed charges for
BLS and ALS runs by 42 and 74 percent, respectively. Mileage charges
contributed the most to the price of a run, with oxygen second. The relative
importance of these additionally-reimbursable services to the overall price of an
ambulance run varied among the carriers. While most carriers reimbursed an allen
inclusive rate for ALS services, some carriers predominantly used the non-
inclusive rate.
X Results from the Survey of Ambulance Providers suggest that mileage add-ons)
were considered essential for ambulance providers in rural areas. The analysis of
payment adequacy suggested that, when including the add-on services, Medicare's
allowed charges were roughly comparable to costs. However, the higher total
charges allowed for bills in which the services are separately itemized may be
providing an incentive to unbundle the services for billing purposes. This
incentive is likely to be strong among providers who perceive that their COSTS
would not be covered by billing an all-inclusive charge.
The analysis of national Medicare claims data underscored the geographic
diversity of the ambulance industry. Average allowed charges for an ambulance
trip varied widely both within and across Medicare carriers. Service mix also
varied.
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Basing reimbursement on the actual procedures performed and services
rendered. rather than the type of vehicle used.
RECOMMENDATIONS
The findings in this report indicate that, overall, ambulance providers are receiving
adequate payments for services to Medicare beneficiaries. However, HCFA has
undertaken and plans further administrative, regulatory, and legislative initiatives
for improving the consistency of carrier coverage determinations and payments for
ambulance services. No new legislation is proposed at this time; however, we are
considering proposing such legislation as part of the Fiscal Year (FY) 1996
budget.
CAST page 8 Report
HCFA is mindful of Congressional concerns about assuring access to transport
services in rural areas and equity in the payment for the services. The agency will
be especially sensitive to these objectives in the proposed initiatives.
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Basing reimbursement on the actual procedures performed and services
rendered, rather than the type of vehicle used.
RECOMMENDATIONS
The findings in this report indicate that, overall, ambulance providers are receiving
adequate payments for services to Medicare beneficiaries. However, HCFA has
undertaken and plans further administrative, regulatory, and legislative initiatives
for improving the consistency of carrier coverage determinations and payments for
ambulance services. No new legislation is proposed at this time; however, we are
considering proposing such legislation as part of the Fiscal Year (FY) 1996
budget
0
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RECEIVED NUV 23
A STUDY OF PAYMENTS FOR
AMBULANCE SERVICES UNDER MEDICARE
Final Report
October 21, 1991
Peany E. Mohr
Doug M. Brown
Mary Beth Fiske
Beth A. Owen
Tulin Domo
Project HOPE
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Medic.
The Office of the Inspector General (OIG) recommended that Medicare
carriers apply inherent reasonableness criteria more stringently. These criteria allow
carriers to adjust rates downward if charges do not appear to be economically justified.
The use of these criteria would be particularly applicable in areas with unregulated
rates served by one or a few providers.
These criteria could also be used to adjust rates upwards for areas that
have legitimately higher costs. These adjustments could be made for sole community
providers serving sparsely-populated areas, similar to payment adjustments made for
sole community rural hospitals. (Recall there are economies of scale in the provision of
ambulance services, and, ceteris paribus. the small providers will have higher costs per
run.) Rates also could be adjusted if a strong case could be made that the decline in
the use of volunteer staff. or changes in community standards has dramatically increased
costs.
7.3.2 Scheduled Runs
A major finding of this study was that scheduled runs are provided at
substantially lower cost than emergency runs. (Approximately 20 to 60 percent below
the costs of providing an emergency BLS run and substantially below the cost of
providing an emergency ALS run in the surveyed States.) Despite this fact, most
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August 10, 1995
MEMORANDUM FOR CAROL RASCO
FROM:
JULIE DEMEO
Subject:
HCFA Regulation's Negative Effect on Rural
Ambulance Service
The President requested that you follow-up on his conversation
with Jamie Pafford-Gresham, regarding a Thew HCFA proposed-
regulation and it's negative effect on rural ambulance services.
which may be proposed in the commy months
In response to this request, I spoke with Jamie and her father
who own the Pafford Ambulance Service. Their company owns 25
ambulances which service eleven rural counties in Mississippi and
Arkansas.
such
potential
They are very concerned about a preposed HCFA regulation
(currently in comment period) which would alter the amulance
reimbursement structure.
since it
According to the Pafford's:
Most ambulances (especially in rural areas) are mandated by
the county to be "Advanced Life Support" (ALS) equipped,
versus "Basic Life Support" (BLS) equipped.
Equipping an ambulance at the ALS level costs approximately
$70,000, versus $50,000 for a basic ambulance.
In counties with this ALS mandate, HCFA currently reimburses
all ambulance (Medicare) calls at the ALS rate, which is
approximately $100 more that the BLS rate.
The new regulation would reimburse only calls where ALS is
used at the ALS rate and all other calls at the BLS rate.
The proposed HCFA change would disproportionately impact rural
emergency service for the worse, at a time when rural hospitals
are closing and rural health systems are struggling. For rural
counties that only can only afford to be serviced by one
ambulance - - that ambulance has to be ALS equipped! Yet, the
lower volume of calls in rural areas means that to support an ALS
ambulance they need to get paid at an ALS rate.
to pesponder/
throwike urban areas which have more ambalances to &
more call to Respond to which often Sive them
greater flexibility of what typed ambulance to sends
UNSCIENTIFIC CASE STUDY OF THE JEFFORD'S AMBULANCE SERVICE:
*
25 (ALS) ambulances
Approx start-up cost of $70,000 per ALS ambulance
*
11 counties (all with an ALS-mandate law)
*
Approximately 45 total calls per day
Over 50% are emergency calls (911 or equivalent used)
But only approx. 35% turn out to use the ALS equipment (and
thus be ALS rate reimbursed under proposed HCFA regulation)
If then are reimbursed for 45 calls a day, but now only 35% or
taffords
the 45 calls are at the ALS rate - this means a daily decrease of
$750
21
V Reim decrease of
45
,35
45
$ $310/day
14
25
31
135
13.75
Fmi from monest
Lee County 14,000
Hospital
2 fara medic units
6.5 calls /day
1.5 ALS
=> decrease of $500/day