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Principles of Healthcare Reimbursement

Third Edition

Chapter 7Medicare-Medicaid Prospective Payment Systems for Nonhospitalized Patients: Ambulance Fee Schedule

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Covered Services

• Medicare Part B provides beneficiary coverage for ambulance services– Will provide transport service, only if other means are

inadvisable based on the beneficiary’s medical condition

– Provided to the nearest facility that is able to provide services for that patient’s condition

– Transported• From one hospital to another• To home• To an extended care facility

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History

Two types of ambulance service entities1. Providers: Associated with a medical facility

such as a hospital, CAH, SNF, or HHA– Retrospective reasonable cost payment

– Previous year’s cost-to-charge ratio (CCR)

2. Suppliers: Not associated with a medical facility

– Reasonable charge payment mechanism– Fours ways to report ambulance services

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History (cont.)

• Both types used HCPCS Code Set– Providers

• A0030–A0999, excluding A0888 (ambulance codes)• And codes to report type of mileage

– Suppliers• A0030-A0999, excluding A0888• Level I codes 93005 and 93041• Various other Level II codes

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Legislation

• BBA of 1997– Added section 1834(1) to the SSA– Required the creation of a fee schedule to establish

prospective payment rates for ambulance services– Devised through negotiated rulemaking (Negotiated

Rulemaking Act of 1990)• Negotiated Rulemaking Committee on Medicare

Ambulance Services Fee Schedule

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Legislation (cont.)

• The committee was instructed to:– Control Medicare expenditures through PPS– Establish service definitions to link payment to the type

of service– Consider regional and operational differences– Consider inflation– Construct a phase-in period for implementation– Require providers and supplier to accept Medicare

assignment– Reimburse providers and suppliers at the lower of FS or

billed charges

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Legislation (cont.)

• BBA (cont.)– Established the paramedic intercept service

type (discussed under levels of service)• BBRA of 1999

– Modified the definition of rural for the paramedic intercept service type

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Legislation (cont.)

• BIPA of 2000– Excluded CAH from the fee schedule payment

methodology when the CAH is the only supplier or provider of ambulance services within a 35 mile drive.

• Reasonable cost basis– Increased payment rates for rural ambulance

mileage– Modified inflation factor for 7/1/01 to 12/31/01

• Increased 2%– Eliminated blended payment rate for mileage

phase-in provision for suppliers

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Ambulance FS

• Implemented April 1, 2002• Five year phase-in plan• Reimbursement is based on the level of

service provided to the beneficiary– Seven levels of service

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Levels of Service Chart:

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Service Acronym Description

Basic Life Support BLS Service level of an Emergency Medical Technician (EMT)-Basic, including the establishment of a peripheral intravenous line.

Advanced Life Support, Level 1

ALS1 In emergency cases, an assessment provided by an EMT-Intermediate or Paramedic (ALS crew) to determine patient needs and the furnishing of one or more ALS interventions. An ALS intervention is a procedure beyond the scope of an EMT-Basic.

Advanced Life Support, Level 2

ALS2 The administration of at least three different medications or the provision of one or more ALS procedures.

Specialty Care Transport SCT For critically injured or ill patient, the level of interhospital service furnished is beyond the scope of a paramedic. Ongoing care must be furnished by one or more health professionals in an appropriate specialty area.

Paramedic ALS Intercept PI ALS services furnished by an entity that does not provide the ambulance transport.

Fixed Wing Air Ambulance

FW Destination is inaccessible by land vehicle or great distances or other obstacles (heavy traffic) and the patient’s condition is not appropriate for BLS or ALS ground transportation.

Rotary Wing Air Ambulance

RW Helicopter transport. Destination is inaccessible by land vehicle or great distances or other obstacles (heavy traffic) and the patient’s condition is not appropriate for BLS or ALS ground transportation.

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Provisions

• Immediate response payment– Emergency response involves responding

immediately at the basic life support or advanced life support level 1 of service to a 911 or 911-type call

– Immediate response is one in which the ambulance begins as quickly as possible to take the steps necessary to respond to a call

• Additional payment is provided for the extra overhead expenses incurred to stay prepared at all times for emergency service

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Provisions (cont.)

• Multiple-patient transport – Example: traffic accident– 2 passengers

• Each beneficiary is reimbursed at 75% of the base rate for the level of service provided

– 3 or more passengers• Each beneficiary is reimbursed at 60% of the base rate for the level

of service provided

– Single payment is made for the mileage– Modifier GM is reported with level of service HCPCS code

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Provisions (cont.)

• Transport of deceased patients– Specific rules

• Patient is pronounced dead prior to the ambulance being called, no payment is made to the ambulance provider/supplier

• Patient is pronounced dead after the ambulance has been called but prior to its arrival, BLS base rate for group transport or air ambulance base rate payment will be made. Mileage will not be reimbursed.

• Patient is pronounced dead during transport, payment rules are followed as if the patient were alive. Modifier QL should be reported with the level of service code.

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Adjustments

• Regional variations– Based on point of beneficiary pick-up (zip code)– Geographic adjustment factor is applied

• Equal to the practice expense portion of the geographic practice cost index used in the Medicare physician fee schedule

– Ground transport• 70% of payment rate is adjusted

– Air transport• 50% of payment rate is adjusted

– Mileage is not adjusted

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Modifiers

• HCPCS Level II modifiers– Origin and destination modifier must be

reported for each trip– Additional modifiers are used

• Provided under arrangement of a provider of services (QM)

• Furnished directly by a provider of services (QN)

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Payment Steps

• Six step process– Takes into consideration

• Patient service level• Modifiers• Zip codes• Miles• Add-on payments

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Payment Steps (cont.)

1. Identify the level of service code for the transportation provided

• Does the case meet emergency response criteria?

2. Determine the number of patients transported

• If yes, append modifier and reduce payment

3. Determine if the Medicare beneficiary was pronounced dead

• If yes, append modifier and adjust payment

4. Apply the regional variation adjustment• Identify zip code

5. Identify the mileage code and number of miles

6. Add together the level of service payment and mileage payment to determine total reimbursement

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Compliance

• “Medicare Payments for Ambulance Transports” report– 25% of the ambulance transport claims did not meet

CMS program requirements – deficient claims resulted in $402 million of improper

payments

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Compliance

• OIG recommendations:– Prepayment edits– Post-payment review guidelines– Education, education, education

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Condition Lists

• Numerous requests for medical condition lists to aid in determining level of service– Do not use ICD-9-CM– Broad categories of issues– Do not use a HIPAA approved code set

• CMS implemented a Medical Conditions List February 2007– Condition list– Transportation indicators

• Assist with determining the appropriate level of service