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Author: Brian Werfel

Brian S. Werfel, Esq. is a partner in Werfel & Werfel, PLLC, a New York based law firm specializing in Medicare issues related to the ambulance industry. Brian is a Medicare Consultant to the American Ambulance Association, and has authored numerous articles on Medicare reimbursement, most recently on issues such as the beneficiary signature requirement, repeat admissions and interrupted stays. He is a frequent lecturer on issues of ambulance coverage and reimbursement. Brian is co-author of the AAA’s Medicare Reference Manual for Ambulance, as well as the author of the AAA’s HIPAA Reference Manual. Brian is a graduate of the University of Pennsylvania and the Columbia School of Law. Prior to joining the firm in 2005, he specialized in mergers & acquisitions and commercial real estate at a prominent New York law firm. Werfel & Werfel, PLLC was founded by David M. Werfel, who has been the Medicare Consultant to the American Ambulance Association for over 20 years.

CMS Notifies Individuals Potentially Impacted by WPS Data Breach

Written by Brian Werfel on . Posted in Medicare, News.

On September 6, 2024, the Centers for Medicare and Medicaid Services (CMS) announced that CMS and its contractor, Wisconsin Physician Service Insurance Corporation (WPS), have begun the process of notifying nearly a million Medicare beneficiaries that were potentially impacted by a data breach involving WPS.

The data breach involved WPS’ use of the third-party application MOVEit.  MOVEit is a file transfer application developed by Progress Software.  In May 2023, a hacker group called CL0P discovered a security vulnerability that allowed the company to steal sensitive information from secure databases used by numerous governmental agencies and corporations.  This included the protected health information (PHI) of Medicare beneficiaries and non-Medicare beneficiaries stored within WPS’ databases.

The notices inform affected Medicare beneficiaries of the steps they can take to protect themselves.  As part of its remedial efforts, WPS is offering affected Medicare beneficiaries one year of free credit monitoring from Experian.

CMS indicated that it was not aware of any reported incidents of fraud or improper use of a Medicare Beneficiary Identifier (MBI).  However, CMS noted that, if the beneficiary’s MBI was potentially impacted, they would mail a new Medicare card with a new MBI to the patient.  Thus, the data breach has the potential to impact the patient demographic information you currently maintain within your billing systems.  This is especially true for AAA Members that operate in Medicare jurisdictions currently administered by WPS (Iowa, Indiana, Kansas, Michigan, Missouri, and Nebraska).  Specifically, the MBIs on file for existing patients may no longer be accurate.  This also has the potential to impact Medicare eligibility information that you receive from other parties like hospitals, skilled nursing facilities, etc.

AAA Members will have to make a business judgment on how to address these potential concerns.  One possible option would be to implement a process to confirm the MBI of existing patients prior to the submission of new claims.  Another possible option might be to implement internal procedures to flag claims that are denied for an incorrect MBI as potentially related to this issue, and to then verify the patient’s correct MBI prior to resubmitting any denied claims.

Department of Veterans Affairs Announces Extended Timely Filing Period for Claims Impacted by Change Healthcare Cyberattack

Written by Brian Werfel on . Posted in Regulatory.

On August 22, 2024, the Department of Veterans Affairs (VA) published a notice in the Federal Register announcing an extension of the timely filing limits for claims impacted by the Change Healthcare cyberattack.

In February, Change Healthcare announced that it was the victim of a massive cyberattack. In response, Change Healthcare proactively took down several of its online platforms, including its online claim submission platform. This platform is used by the VA to receive electronic claims. The VA indicated that this resulted in what it calls “limited or no ability” to receive electronic claims between February 21, 2024 and May 8, 2024 (referred to hereinafter as the “Limited Access Period”).

The current notice is intended to address problems with timely filing that resulted from that Limited Access Period. Specifically, the VA is announcing that claims that would have been considered timely had they been submitted during the Limited Access Period will continue to be treated as timely filed to the extent they are submitted on or before October 31, 2024.

Claims submitted after that date will not be considered timely filed, and will be denied.

Thus, the VA is effectively extending the timely filing period for VA claims through October 31, 2024. The VA expressly noted that this would include claims for transportation furnished to veterans with dates of service between February 21, 2022 and March 23, 2024. Note: the specific program under which ambulance transportation claims are being paid will determine the actual timely filing limits. The VA was simply noting the earliest and latest possible qualifying dates.

Therefore, if you have claims for ambulance services that were recently denied by the VA for lack of timely filing, the AAA encourages you to resubmit those claims to the VA under this extending timely filing period.

Preliminary Calculation of 2025 Ambulance Inflation Update

Written by Brian Werfel on . Posted in Regulatory.

The AAA is projecting that the 2025 Medicare Ambulance Inflation Factor will likely be 2.6%, plus or minus 0.1%.

Section 1834(l)(3)(B) of the Social Security Act mandates that the Medicare Ambulance Fee Schedule be updated each year to reflect inflation. This update is referred to as the “Ambulance Inflation Factor” or “AIF”.

The AIF is calculated by measuring the increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year. Starting in calendar year 2011, the change in the CPI-U is now reduced by a so-called “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private nonfarm business multi factor productivity index (MFP). The MFP reduction may result in a negative AIF for any calendar year. The resulting AIF is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

For the 12-month period ending in June 2024, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased by 3.0%.

CMS has yet to release its estimate for the MFP for calendar year 2024. Since its inception, this number has fluctuated between 0.3% and 1.2%. For calendar year 2024, the MFP was 0.4%.

Under normal circumstances, it would be reasonable to expect the 2025 MFP to be within a tenth of a percentage point or two of the 2024 MFP.

Accordingly, the AAA is projecting that the 2025 Ambulance Inflation Factor will likely be 2.6%, plus or minus 0.1%.

The AAA will notify members once CMS issues a transmittal setting forth the official 2025 Ambulance Inflation Factor.

CMS Announced Medicare Accelerated and Advance Payments in Response to Change Healthcare Cyberattack

Written by Brian Werfel on . Posted in News, Private Insurance.

On March 9, 2024, the Centers for Medicare and Medicaid Services (CMS) announced the creation of the Change Healthcare/Optum Payment Disruption (CHOPD) Program.  Under the CHOPD Program, CMS will make accelerated payments to Part A providers and advance payments to Part B suppliers that have experienced claims disruptions as a result of the Change Healthcare cyberattack.

Under the CHOPD Program, qualifying providers and suppliers will be eligible to apply for and receive Medicare advances of up to 30 days of their average Medicare payments.  Applications for payment advances must be made to the provider’s or supplier’s Medicare Administrative Contractor (MAC).  The 30-day payment advance will be based on the average Medicare payments to the provider or supplier between August 1, 2023 and October 31, 2023.  Specifically, CMS will compute the total amounts paid to the provider during this period, and then divide by 3 to arrive at the 30-day average amount.

Advance payments received through the CHOPD Program are considered a loan.  Therefore, these amounts must be repaid through offsets against future Medicare payments.  Recoupments will commence on the date the advance payments are received by the provider or supplier.  These recoupments will be equal to 100% of future payments, and will continue until the earlier to occur of: (1) the full repayment of the advance payment or (2) 90 days.  In the event a balance remains after 90 days, the MAC will generate a demand notice for the outstanding balance, which must be repaid within 30 days.  If the provider does not repay the outstanding balance within that period, interest will start to accrue on the outstanding balance.

Providers and suppliers with multiple National Provider Identifiers (NPIs) may be eligible for multiple advance payments.

Eligibility Requirements

To qualify for advance payments, a provider or supplier must meet the following requirements:

  1. Advance payments may be requested for individual providers or suppliers, i.e., a unique NPIs and Medicare ID (PTAN) combination.
  2. The provider or supplier must not currently be receiving Periodic Interim Payments.
  3. The provider or supplier must make the following certifications:
  4. The provider/supplier must certify that they have experienced a disruption in claims payment or submission due to a business relationship the provider/supplier has with Change Healthcare or another entity that uses Change Healthcare, or the provider’s/supplier’s third-party payers have with Change Healthcare or another entity that uses Change Healthcare.
  5. The provider/supplier must not be able to submit claims to receive claims payments from Medicare.
  6. The provider/supplier has been unable to obtain sufficient funding from other available sources to cover the disruption in claims payment, processing, or submission attributable to the cyberattack
  7. The provider/supplier does not intend to cease business operations and is presently not insolvent.
  8. The provider/supplier, if currently in bankruptcy, will alert CMS about this status and include case information.
  9. Based on its information, knowledge and belief, the provider/supplier is not aware that the provider/supplier or a parent, subsidiary, or related entity of the provider/supplier is under an active healthcare-related program integrity investigation in which the provider/supplier or a parent, subsidiary, or related entity of the provider/supplier: (1) is under investigation for potential False Claims Act violations related to a federal healthcare program; (2) is a defendant in state or federal civil or criminal action (including a qui tam False Claims Act action either filed by the Department of Justice or in which the Department of Justice has intervened; or (3) has been notified by a state or federal agency that it is a subject of a civil or criminal investigation or Medicare program integrity administrative action; or (3) has been notified that it is the subject of a program integrity investigation by a licensed health insurance issuer’s special investigative unit.
  10. The provider/supplier is enrolled in the Medicare program had has not been revoked, deactivated, precluded, or excluded by CMS or the HHS Office of the Inspector General.
  11. The provider/supplier does not have any delinquent Medicare debts.
  12. The provider/supplier is not on a Medicare payment hold or payment suspension.
  13. The provider/supplier will use the funds for the operations of the specific provider/supplier for which they were requested.

To the extent a provider or supplier is approved for an advance payment, they must then execute a Terms and Conditions document acknowledging the following:

  1. That the funds were advanced from the Medicare Trust Fund, and represent an advance on claims payments.
  2. The accelerated and advance payment is not a loan, and cannot be forgiven, indebtedness cannot be reduced, and there are no flexibilities regarding repayment timelines. CMSI will use its standard recoupment procedures to recover these amounts.
  3. Repayment will commence immediately via 100% recoupment of Medicare claims payment owed to the provider/supplier, as the provider/supplier submits claims and claims are processed, after the date on which the payment is granted. Recoupment will continue for a period of 90 days.
  4. A demand will be issued for any remaining balance on Day 91 following the issuance of the advance payment.
  5. Interest will start to accrue 30 days after a demand is issued consistent with the interest rate established under applicable interest authorities.
  6. CMS will proceed directly to demand the advance payments if any certifications or acknowledgements are found to be falsified.
  7. Grant of an advance payment is not guaranteed and payments will not be issued once the disruption to claims servicing is remediated, regardless of when a request is received. CMS may terminate the program at any time.
  8. CMS maintains the right to conduct post payment audits related to any advance payments issued under this program.

Summary of Change Healthcare Cyberattack and HHS Statement

Written by Brian Werfel on . Posted in News, Operations.

On February 21, 2024, UnitedHealth Group (UHG) disclosed that one of its subsidiaries was the victim of a ransomware attack.  According to UHG, the cyberattack was perpetrated against Change Healthcare, an operating unit within UHG’s Optum subsidiary.  Change Healthcare is a health care technology company that provides support and technical services to UHG and numerous other health care insurers.  In response to the cyberattack, UHG proactively isolated the affected systems while it works to assess the damage.  

Change Healthcare offers a range of services to the healthcare industry, including payment and billing, prescription processing, and data analytics.  According to its website, it processes more than 15 billing healthcare transactions annually.  According to the American Hospital Association, Change Healthcare touches 1 out of every 3 patient records.  

As of today, Change Healthcare’s systems remain down, and there is no definitive timetable for when the company anticipates restoring services.  

HHS Statement on Impact to Federal Health Care Programs

On March 5, 2024, the U.S. Department of Health and Human Services issued a statement detailing the steps HHS would be taking to avoid further disruptions to the health care system.  Specifically, HHS/CMS indicated that it would:

 

  • Work to expedite new electronic data interchange (EDI) enrollments for any provider that needs to change the clearinghouse through which it submits Medicare claims.  HHS is also encouraging other federal health care programs, including State Medicaid and CHIP agencies, to waive or expedite new EDI enrollments.
  • Issue guidance to Medicare Advantage organizations and Medicare Part D sponsors to encourage them to relax or remove prior authorization, utilization management, and timely filing requirements for the duration of the Change Healthcare system outage.  
  • Encourage MA plans to offer advance funding to providers most affected by the cyberattack.
  • Encourage State Medicaid and CHIP agencies to remove or relax their own prior authorization and utilization management requirements, and to consider offering advance funding to providers to the extent permitted by state law. 
  • Ensure that Medicare Administrative Contractors are prepared to accept paper claims from providers who need to file them.  

HHS also indicated that it would permit hospitals to submit requests for Medicare Accelerated Payments, similar to those issued during the early stages of the COVID-19 pandemic; however other providers/suppliers do not seem to have access to this workaround HHS indicated that its MACs would be issuing specific guidance on how to request accelerated payments later this week.

The Potential Impact on EMS Providers

According to various reports, there are approximately 800 payers whose claims routing processes utilize Change Healthcare’s network.  The day-to-day processing of electronic claims for these payers may be impacted in varying degrees.  This impact may be felt directly, in the case of claims submitted directly by the provider to the payer, or indirectly, in the case of claims submitted through a clearinghouse.  

The AAA encourages members to contact their clearinghouses to see which payers, if any, are being affected by the system interruption.  Payers that are not capable of processing electronic claims will likely have opened channels for claims to submitted on paper.  The clearinghouses should be able to provide additional information on the steps a provider needs to take to ensure the proper processing of these claims.

Optum has also established temporary alternative funding options.  Essentially, these are advances based on historical claims submissions, which will be repaid (likely through claim offsets) once Optum’s systems are fully back online.  At this point it is unclear whether ambulance providers will be eligible for this alternative funding.  Members are encouraged to check the Optum website for further updates.  



CMS Posts 2023 Public Use File

Written by Brian Werfel on . Posted in Medicare, Member Advisories, News.

On November 23, 2022, CMS posted the 2023 Ambulance Fee Schedule Public Use Files. These files contain the amounts that will be allowed by Medicare in the calendar year 2023 for the various levels of ambulance service and mileage. These allowable reflect an 8.7% inflation adjustment over the calendar 2022 rates. The 2023 Ambulance Fee Schedule Public Use File can be downloaded from the CMS website by clicking here.

Please note that these files reflect the Medicare allowable based on current federal law.  Accordingly, the 2023 Public Use Files do not include the current add-ons (i.e., 2% for urban, 3% for rural, and the super-rural bonus), as these add-ons are currently scheduled to expire on December 31, 2022.

The AAA is actively working with congressional offices to not only extend but hopefully increase, the Medicare ambulance add-ons by the end of the year. If you have not already written to your members of Congress about extending the add-ons at increased levels, please do so today by using the AAA online advocacy tool by clicking here.

Unfortunately, in recent years, CMS has elected to release its Public Use Files without state and payment locality headings. As a result, in order to look up the rates in your service area, you would need to know the CMS contract number assigned to your state. This is not something the typical ambulance service would necessarily have on hand. For this reason, the AAA will be publishing a reformatted version of the CMS Medicare Ambulance Fee Schedule that includes the state and payment locality headings. The reformatted fee schedule will be available on the AAA website in the coming days.

The AAA will also be publishing an updated version of its Medicare Rate Calculator, which we expect to have available on our website once we have a better sense of the timing of the extension of the add-ons.

CMS Announces 2023 Ambulance Inflation Factor

Written by Brian Werfel on . Posted in Government Affairs, Medicare, Member Advisories, News.

On October 14, 2022, CMS issued Transmittal 11642 (Change Request 12948), which announced the Medicare Ambulance Inflation Factor (AIF) for the calendar year 2023.

The AIF is calculated by measuring the increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year.  Starting in the calendar year 2011, the change in the CPI-U is now reduced by a so-called “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private nonfarm business multi-factor productivity index (MFP).  The MFP reduction may result in a negative AIF for any calendar year.  The resulting AIF is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

For the 12-month period ending in June 2022, the Federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U increased by 9.1%.  CMS further indicated that the CY 2023 MFP would be 0.4%.  Accordingly, CMS indicated that the Ambulance Inflation Factor for the calendar year 2023 will be 8.7%. 

This is the largest inflation update since the implementation of the current Medicare Ambulance Fee Schedule in April 2002.  The increase from last year’s 5.1% increase is also the single largest year-over-year increase on record.

CMS Ambulance Open Door Forum Summary

Written by Brian Werfel on . Posted in Cost Data Collection, Medicaid, Medicare, Member Advisories.

On August 18, 2022, the Centers for Medicare and Medicaid Services (CMS) held its most recent Ambulance Open Door Forum (ODF). As is typically the case, CMS started the ODF with a series of announcements, before opening the call to questions from the ambulance industry.

 

The first announcement related to proposed changes to the regulations governing the medical necessity requirements for non-emergency, scheduled, repetitive ground ambulance services. Specifically, CMS is proposing to modify the so-called “special rule” for repetitive, scheduled non-emergency services (set forth in the regulations at 42 C.F.R. §410.40(e)(2)(ii)). CMS indicated that these proposed changes would provide necessary and ensure the consistent application of the documentation requirements by its contractors. The proposed change would add language indicating that both the Physician Certification Statement and “additional documentation from the beneficiary’s medical record” could be used to support medical necessity for the ambulance transport. The new language would further indicate that these documents must provide detailed explanations that are consistent with the beneficiary’s current medical condition. On the ODF, CMS encouraged the industry to submit comments on these proposed changes. However, CMS indicated that, because these changes were the subject of ongoing rulemaking, it would not be able to answer any questions on the ODF.

 

The second announcement related to the proposed changes to the Medicare Ground Ambulance Data Collection System (GADCS) included in the July 2022 Proposed Rule. CMS and its contractor, the Rand Corporation, went through a detailed PowerPoint presentation that summarized these proposed changes. That PowerPoint presentation can be accessed by clicking here.

 

As part of its discussion of the GADCS, CMS also announced the implementation of an automated process for requesting hardship exemptions and informal review of determinations that an ambulance provider is subject to a financial penalty for failing to properly submit its cost data.

 

The final announcement related to ambulance services furnished by Rural Emergency Hospitals (REHS). In the FY 2023 Outpatient Hospital Proposed Rule, CMS is proposing to codify in its regulations the statutory requirement that ambulance services furnished by entities that are owned and operated by REHS will be paid under the Medicare Ambulance Fee Schedule. CMS is also proposing to revise the origin and destination requirements to include REHS as both a covered origin and covered destination for ambulance services.

 

The ODF concluded with a brief Q&A period. All of the questions posed to CMS related to the GADCS.  One of the questions placed to CMS was whether it would permit ambulance suppliers to prospectively seek a hardship exemption, i.e., to permit an ambulance supplier to ask now that it be relieved of the financial penalties for failing to report its cost data. The person posing the question specifically referenced ambulance suppliers impacted by the severe flooding in the State of Kentucky. CMS confirmed that an ambulance supplier had to be notified that it was subject to a financial penalty before it was eligible to seek a hardship exemption.

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