© 2011 Principles of Healthcare Reimbursement Third Edition Chapter 7 Medicare-Medicaid Prospective Payment Systems for Nonhospitalized Patients: Ambulance Fee Schedule

© 2011 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

© 2011 History Two types of ambulance service entities 1.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

© 2011 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 and Various other Level II codes

© 2011 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

© 2011 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

© 2011 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

© 2011 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

© 2011 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

© 2011 Levels of Service Chart:

© 2011 ServiceAcronymDescription Basic Life SupportBLSService level of an Emergency Medical Technician (EMT)-Basic, including the establishment of a peripheral intravenous line. Advanced Life Support, Level 1 ALS1In 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 ALS2The administration of at least three different medications or the provision of one or more ALS procedures. Specialty Care TransportSCTFor 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 InterceptPIALS services furnished by an entity that does not provide the ambulance transport. Fixed Wing Air Ambulance FWDestination 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 RWHelicopter 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.

© 2011 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

© 2011 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

© 2011 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.

© 2011 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

© 2011 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)

© 2011 Payment Steps Six step process –Takes into consideration Patient service level Modifiers Zip codes Miles Add-on payments

© 2011 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

© 2011 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

© 2011 Compliance OIG recommendations: –Prepayment edits –Post-payment review guidelines –Education, education, education

© 2011 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