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HHS Office of Civil Rights Announces Phase 2 HIPAA Audit Review Program

On March 21, 2016, the Office for Civil Rights of the Department of Health and Human Services announced Phase 2 of its HIPAA Audit Program.  The Health Information Technology for Economic and Clinical Health Act (HITECH) required HHS to perform periodic audits of covered entities and business associates to assess their compliance with the HIPAA Privacy, Security and Breach Notification Rules.  These rules are enforced by the HHS Office for Civil Rights (OCR).

Background on Phase 1

In 2011, OCR implemented a pilot audit program to assess the controls and processes covered entities have adopted to meet their HIPAA obligations.  The pilot audit program was conducted in three phases.  OCR first developed a set of audit protocols that it would use to evaluate covered entities’ compliance.  This protocol was then tested using a limited number of audits.   The final step involved using the revised audit protocols on a larger number of covered entities.  Ultimately, 115 covered entities were selected for review, and all audits were concluded by December 31, 2012.

Phase 2

Phase 2 of the HIPAA Audit Program will focus on the policies and procedures adopted and employed by entities to meet the requirements of the Privacy, Security, and Breach Notification Rules.  OCR has indicated that these audits will be conducted primary through desk audits (i.e., document submissions), although by a limited number of on-site audits will also be conducted.

Unlike Phase 1, which focused exclusively on covered entities, OCR is indicating that Phase 2 will involve audits of both covered entities and their business associates.

As with the initial pilot audit program, Phase 2 will consist of several stages.  The first stage involves verification of a covered entity’s or business associate’s address and contact information.  A sample address verification letter can be viewed by clicking here.  OCR has indicated that emails will be sent to entities requesting accurate contact information for the entity.  OCR will then transmit a “pre-audit questionnaire” to the entity.  These questionnaires will be used to gather data about the size, type, and operations of potential auditees.  Based on this data, OCR will create potential audit subject pools.

Note: OCR has indicated that if an entity fails to respond to OCR’s request to validate its contact information and/or fails to return the pre-audit questionnaire, OCR will use publicly available information about the entity to create its audit subject pool.  As a result, an entity that fails to respond may still be selected for audit and/or compliance review.  OCR is specifically reminding entities to check their email “junk” or “spam” folders for any communications from OCR.

Once OCR has developed its audit subject pools, it will randomly select auditees from these pools.  Auditees will then be notified by OCR of their participation.  OCR has indicated that the first set of audits will focus on covered entities, with a subsequent round of audits focused on business associates.  These audits will focus on compliance with specific requirements of the Privacy, Security, or Breach Notification Rules.  Auditees will be notified of the scope of their audit in a document request letter.  Both of these rounds will be desk audits.  OCR indicated that all desk audits will be completed by the end of December 2016.

A third round of on-site audits will take place after the completion of the desk audits, and will examine a broader scope of requirements under HIPAA.  OCR further indicated that desk auditees may also be subject to on-site audits.

If an entity is selected for audit, OCR will notify them by email.  The email will introduce the OCR audit team, explain the audit process, and discuss OCR’s expectations in greater detail.  The email notification letter will also include initial requests for documentation.  OCR has indicated that it will expect entities to respond to these documentation requests within ten (10) business days.  Documents will be submitted through a new secure online portal.  Once received, OCR’s auditors will review the submitted information and inform the entity of its draft findings.  The entity will then have ten (10) business days to respond with written comments, if any.  OCR will then review the entity’s comments and issue a final audit report within thirty (30) business days.

OCR has indicated that the audits are primarily intended as a compliance improvement activity.  OCR will use aggregated data to better understand compliance with respect to particular aspects of the HIPAA rules.  The goal being to understand what types of technical assistance and/or corrective actions would be most helpful.  In other words, OCR is indicating that the goal of these audits is to improve its understanding of the state of compliance, and not to penalize specific companies for violations.  However, OCR indicated that should an audit reveal a serious compliance issue, OCR may initiate a further compliance review of the company.

OCR indicated that it will not post a list of the audited entities, nor will its findings be available in a format that would clearly identify the audited entity.  However, OCR noted that audit notification letters and other information regarding these audits may be discoverable under the Freedom of Information Act (FOIA).

Additional information from OCR regarding the Phase 2 HIPAA Audit Program can be obtained by clicking here.

CMS Implements Cycle 2 Revalidation Program

By Brian S. Werfel, Esq. AAA Medicare Consultant

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CMS recently announced the start of its Cycle 2 Revalidation Program. This program affects all enrolled Medicare providers and suppliers.

In Cycle 1, which was conducted from 2011 through 2015, the so-called “trigger” to revalidate was a formal request to do so by your Medicare Administrative Contractor (MAC). For Cycle 2, CMS is adopting a new approach. CMS will be assigning revalidation due dates, i.e., dates by which the provider or supplier must revalidate. These due dates will be the last day of a particular calendar month. These due dates are based on the provider’s or supplier’s last successful revalidation or the date of the provider’s or supplier’s initial enrollment with Medicare. In other words, providers or suppliers that last revalidated in 2011 are likely to have new revalidation due dates in 2016, providers or suppliers that revalidated in 2012 are likely to have 2017 due dates, etc. The first set of due dates is May 31, 2016.

CMS has indicated that it will notify providers or suppliers by email within 2-3 months of their due date. These emails will include the following subject line: Urgent: Medicare Provider Enrollment Revalidation Request. If the email is returned as undeliverable, the MAC is instructed to send a paper revalidation notice to at least two of your reported addresses: correspondence address, special payments address, or primary practice address.

Providers or suppliers will be permitted to submit revalidations up to 6 months prior to their scheduled due date. Revalidations can be submitted either on paper or by using the online Provider Enrollment, Chain, and Ownership System (PECOS).

If a provider or supplier fails to submit a timely revalidation packet, CMS has indicated that the entity’s Medicare billing privileges will be deactivated. The entity will be required to submit a complete enrollment application to “reactive” its billing privileges. However, CMS has indicated that no payments will be made for services provided during the interim period.

If you have not received an email from your MAC asking that you revalidate, it is likely that your revalidation due date is more than 3 months out, or has not even been assigned. However, it is possible that the requests to revalidate may have been sent to invalid email addresses, or may have been routed to your email “spam” folder. It is also possible that paper revalidation notices may have been sent to obsolete physical addresses.

For these reasons, the AAA is strongly encouraging members to check the CMS revalidation webpage. That webpage includes a lookup tool that you can use to determine whether your organization has been assigned a revalidation due date. Currently, CMS has assigned due dates through the end of October 2016. Providers and suppliers that have yet to be assigned due dates will display as “TBD”. You can also download the entire list of currently enrolled providers and suppliers into an Excel spreadsheet. This option may be particularly helpful for organizations that bill under multiple Medicare PTANs (which can have separate revalidation due dates) and for billing agents that intend to assist their clients with the revalidation process.

In sum, the new process appears to be a vast improvement over how revalidations were handled during Cycle 2. Assuming things work as intended, AAA members should have a minimum of 2 months prior notice of the need to revalidate, and potentially up to 6 months prior notice. This should be more than enough time to submit the revalidation and avoid any potential disruptions to your ability to bill Medicare.

FDA Issues First Responder Drug Dispenser Guidance

In accordance with the Drug Supply Chain Security Act of 2013, the FDA issued regulations last year to require drug dispensaries to build an electronic system to identify and track the distribution of drugs. Many small dispensaries do not have the ability currently to electronically trace small quantities of drugs. The AAA became concerned that hospital and other small dispensers would no longer provide first responders with critical drugs in fear of not being compliant with the new regulations. The AAA joined a coalition of dispensaries, pharmacists and others that also had concerns with the new regulations.

As a result of the efforts of the coalition and the AAA, we were able to delay enforcement of the requirements until today, March 1. The AAA then worked directly with the FDA to educate them about the unique nature that small dispensaries sometimes play in restocking certain ambulance service providers. Upon learning of these transactions, the FDA shared our concerns and worked quickly to release the guidance.

The guidance states that the FDA will not take action against drug dispensaries in providing drugs to first responders if the dispensary follows certain basic recording keeping policies. The agency will also not take any action against the first responder. The guidance is entitled “Requirements for Transactions with First Responders under Section 582 of the Federal Food, Drug, and Cosmetic Act — Compliance Policy Guidance for Industry“.

CMS Publishes Medicare Fee-for-Service Provider & Supplier Lists

Earlier today, AAA representatives participated on an invitation-only stakeholder call in which CMS announced the availability of two new public data sets. The first data set shows through an interactive map the availability and use of services provided to Medicare beneficiaries by ground ambulance suppliers and home health agencies. The second data set is a list of Medicare fee-for-service (FFS) providers and suppliers currently approved to bill Medicare. CMS just released the two data sets to the public.

The first data set, the Moratoria Provider Services and Utilization Data Tool, includes interactive maps and a data-set that shows national, state, and county-level provider and supplier services and utilization data that can be used by CMS to determine which geographic and health service areas might be considered for a moratorium on new provider and supplier enrollments. The data provides the number of Medicare providers and suppliers servicing a geographic region, identifies moratoria regions at the state and county levels, and identifies the number of people with Medicare benefits who use a specific health service in that region. The data can also be used to reveal service levels related to the number of providers and suppliers in a geographic region. Utilization data and geographic regions for these services can be easily compared using interactive maps.

You can access the Moratoria Provider Services and Utilization Data Tool at: https://data.cms.gov/moratoria-data
The provider/supplier enrollment data set can be accessed at: https://data.cms.gov/public-provider-enrollment

CMS Issues Final Rule on the Reporting and Return of Medicare Overpayments

On February 12, 2016, the Centers for Medicare and Medicaid Services (CMS) issued a final rule titled “Medicare Program; Reporting and Returning Overpayments.”  This final rule would implement Section 6402(a) of the Affordable Care Act, which imposed a 60-day requirement on Medicare providers and suppliers to report and return overpayments.  The provisions of this final rule will go into effect on March 16, 2016.

The final rule implements changes that were first proposed as part of a February 16, 2012 proposed rule.  The final rule can be viewed in its entirety by clicking here.

Background

Section 6402(a) of the Affordable Care Act requires health care providers and suppliers to report and return a Medicare overpayment within 60 days of the date such overpayment is “identified”.  Any overpayment not returned within this timeframe would become an “obligation” under the False Claims Act.  As a result, any ambulance service that is found to have knowingly retained an overpayment beyond the 60 day period could be subject to False Claims Act liability.  In addition, violations may also subject an ambulance company to civil monetary penalties and possible exclusion from the Medicare program.

Provisions of Proposed Rule

Definition of an “Overpayment”

In the final rule, CMS defined an overpayment as “any funds that a person has received or retained under title XVIII of the Act to which the person, after applicable reconciliation, is not entitled under such title.”  CMS noted that this definition is mirrors the definition of an overpayment that appeared in Section 6402(a) of the Affordable Care Act.
CMS cited examples of certain common overpayments in the proposed rule, including:

  • Payments for non-covered services;
  • Payments in excess of the applicable Medicare allowable
  • Errors and nonreimbursable expenditures included on a cost report;
  • Duplicate payments; and
  • Payment from Medicare when another payor had primary responsibility.

For ambulance providers and suppliers, another common area of overpayments would be payment for excessive mileage.

Note: in the final rule, CMS clarified that, in instances where the paid amount exceeds the appropriate payment to which a provider or supplier is entitled, the “overpayment” would be limited to the difference between the amount that was paid and the amount that should have been paid.  For example, if the overpayment was the result of a claim incorrectly being billed as an ALS emergency, rather than a BLS emergency, the overpayment is not the entire amount of Medicare’s payment.  Rather, the overpayment is limited to the difference in Medicare’s payment for the two base rates.

When an Overpayment has been “Identified”

In its proposed rule, CMS indicated that an overpayment would be “identified” if the ambulance provider or supplier: (1) had actual knowledge of the existence of the overpayment or (2) acted in reckless disregard or deliberate ignorance of the existence of the overpayment.  CMS indicated that this definition was intended to prevent providers and suppliers from deliberately avoiding activities that might uncover the existence of potential overpayments, such as self-audits and outside compliance checks.

CMS further stated its belief that the Proposed Rule would, in some instances, place an affirmative burden on providers and suppliers to investigate whether a potential overpayment exists.  Specifically, CMS indicated that “in some cases, a provider or supplier may receive information concerning a potential overpayment that creates an obligation to make a reasonable inquiry to determine whether an overpayment exists.”  If the provider or supplier then fails to reasonably inquire, it could be found to have acted with reckless disregard or deliberate ignorance.

In the final rule, CMS indicated that an overpayment will be deemed to have been identified to the extent “a person has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.”

Thus, the final rule makes two important changes to the standard of when an overpayment is identified.  The first change is to clarify that an overpayment has not been identified unless and until the provider or supplier is able to quantify the amount of the overpayment.

The second change was to remove the language related to “reckless disregard” and “deliberate ignorance”.  CMS replaced these terms with a standard of “reasonable diligence”.  Under the new standard, an overpayment is identified on the date you can actually quantify the size of the overpayment, or the date on which you would have been able to quantify the overpayment had you proceeded with reasonable diligence to investigate the possibility of an overpayment.  For these purposes, CMS indicated that reasonable diligence would be established to the extent you can demonstrate a timely, good faith investigation of any credible report of a possible overpayment.  Note: CMS indicated that an investigation should take no more than 6 months from the date of receipt of credible information, except in extraordinary circumstances.

To see the impact of these changes, consider the following scenario:

You receive an anonymous report on your compliance hotline that a recent change to your billing software has resulted in the mileage for all Medicare claims being rounded up to the next whole number (as opposed to being submitted with fractions of a mile).  Based on this report, you begin an investigation, and quickly come to the conclusion that the anonymous report is correct.  However, it requires an addition 4 months to review every claim submitted to Medicare since that software change, and to calculate the actual amounts you were overpaid.

Under the standard first proposed by CMS, it was unclear whether the 60-day clock to return over payment started on the day you confirmed the software problem, or whether you have time to look at your entire claims universe to calculate the actual amounts you were overpaid.  By contrast, under the standard set forth in the final rule, it is clear that the overpayment would not be “identified” until you can quantify the actual amounts you had been overpaid.  In the above example, you completed your investigation within 6 months, meaning you would have satisfied the new “reasonable diligence” standard.  Therefore, assuming you make a timely report and refund of the amounts you were overpaid, you would have no liability under the False Claims Act.

Situations in Which a Provider or Supplier would have a Duty to Inquire

In the proposed rule, CMS provided some examples of situations where a provider or supplier would be deemed to have received a credible information regarding a potential overpayment, including the following situations:

  • Where a review of billing records indicates that you were incorrectly paid a higher rate for certain services;
  • Where you learn that the patient died prior to the date of service on a claim that has been submitted for payment;
  • Where you discover that the services were provided by an unlicensed or excluded individual;
  • Where an internal audit discovers the presence of an overpayment.
  • Where you are informed by a government agency of an audit that discovered a potential overpayment, and where you fail to make a reasonable inquiry;

In the final rule, CMS confirmed its belief that official findings from a government agency (or its contractors) would constitute credible evidence of a potential overpayment, and would therefore trigger a provider’s or supplier’s obligation to conduct an investigation with reasonable diligence.  If the provider or supplier ultimately agrees with the Medicare contractor’s findings, it would qualify as having “identified” an overpayment, which would trigger the 60-day period for reporting and refunding that overpayment.  CMS further indicated that when the provider confirms the audit’s findings, the provider or supplier may be deemed to have credible evidence of additional overpayments (i.e., claims presenting the same issues, but which fall outside the contractor’s audit period) that may require further investigation.   CMS did agree, however, that where the provider or supplier elects to appeal the contractor’s findings, it would be reasonable to hold off on conducting an investigation into similar claims until such time as the overpayment identified by the Medicare contractor has worked its way through the administrative appeals process.

Counting 60-Day Period

In the final rule, CMS indicated that the 60-day period for reporting and returning the overpayment would start on the date the overpayment is first identified (i.e., the date the overpayment is first quantified following a reasonably diligent inquiry.  However, in the event a person fails to conduct a reasonably diligent inquiry, the 60-day period will be deemed to run from the date the provider or supplier first received a credible report of a possible overpayment (assuming the provider or supplier was, in fact, overpaid).

Process for Reporting Overpayments

In its February 2012 proposed rule, CMS had indicated that it would require ambulance providers and suppliers to report and return overpayments using the existing process for voluntary refunds.  At that time, CMS also proposed that the overpayment report contain 13 required elements, including a brief statement of the reason for the overpayment, and a description of the steps the provider or supplier intended to take to ensure that the same error would not occur again.  At the time, CMS further indicated that it would develop a uniform reporting form that would replace the various forms currently in use by its Medicare contractors.

In the final rule, CMS abandoned this formulaic approach to the reporting of overpayments.  Instead, CMS elected to permit providers or suppliers to use any of the following to report an overpayment:

  • An applicable claims adjustment;
  • Credit balance;
  • Self-Reported Refund; or
  • Any other reporting process set forth by the applicable Medicare contractor.

In addition to the processes currently used by Medicare contractors, providers or suppliers can also satisfy the reporting obligations of the final rule by making a disclosure under the OIG’s Self-Disclosure Protocol or the CMS Voluntary Self-Referral Disclosure Protocol.  Note: these processes are generally reserved for situations that involve something more than an isolated billing error.

When reporting an overpayment that was calculated using a statistical sampling methodology, CMS indicated that the provider or supplier must describe the actual process used to obtain a statistically valid sample, and the extrapolation methodology used.

Statute of Limitations

In the final rule, CMS adopted a 6-year “lookback period”.  CMS further clarified that this lookback period is measured from the date the provider or supplier identifies the overpayment.  As a result, an overpayment must be reported and returned only to the extent the overpayment is identified within 6 years of the date the overpayment was received.  Overpayments identified beyond the 6-year lookback period would not be subject to the new regulations.

The 6-year lookback period represents a substantial reduction from the 10-year lookback period originally proposed by CMS.  That 10-year period was intended to coincide with the outer limit of the statute of limitations for False Claims Act violations.  However, after considering comments from healthcare providers and suppliers, CMS agreed that a 6-year lookback period was more appropriate.  CMS noted that the change would significantly reduce the burden these new regulations imposed on providers and suppliers.

Change to Regulations Governing Reopenings

To facilitate the reporting and refunding of overpayments under these new regulations, CMS elected to revise its rules regarding reopenings.  CMS will now permit its Medicare Administrative Contractors (MACs) to reopen an initial determination (i.e., a paid claim) for the purpose of reporting and returning an overpayment.

While seemingly minor, this change is needed to ensure that Medicare’s payment files properly reflect that an overpayment has been refunded.  Otherwise, it would be possible for a claim that had previously been refunded to be selected by a Medicare auditor for postpayment review.  This could lead to the auditor attempting to recoup amounts that had previously been voluntarily refunded.

CMS Releases Ambulance Cost Data Collection Report

The Centers for Medicare and Medicaid Services (CMS) has released its report on the feasibility of collecting cost data from ambulance service providers.  Under the American Taxpayer Relief Act of 2012, Congress directed CMS to conduct the report entitled “Evaluation of Hospitals’ Ambulance Data on Medicare Cost Reports and Feasibility of Obtaining Cost Data from All Ambulance Providers and Suppliers”. The report can be accessed here.

The report states that due to the diverse nature of our industry with a majority of providers being small entities, traditional mandatory ambulance cost reporting is not feasible.  While it does not make a recommendation on a data collection system, the report highlights the work of the AAA with The Moran Company and will be helpful in our push for a survey approach to collecting ambulance cost data.  Here is AAA’ summary of the report, AAA Summary of CMS Acumen Cost Analysis.

The survey approach to collecting ambulance cost data is a major component of the Medicare Ambulance Access, Fraud Prevention and Reform Act (S. 377, H.R. 745) which would make the current Medicare ambulance increases permanent.  The data collected through the survey would help the AAA make data-driven recommendations to the Congress and CMS on future changes to the Medicare ambulance fee schedule.

The contractor, Acumen, who developed the report, was also asked to look to see if cost data submitted by hospital-based ambulance service providers would be helpful.  Acumen determined that the data submitted varied significantly and thus was not useful.

For questions about the AAA efforts on cost data collection, please contact AAA Senior Vice President of Government Affairs Tristan North at tnorth@ambulance.org.

CMS Announces 2016 Inflation Factor

The Centers for Medicare and Medicare Services (CMS) has officially announced that the inflation factor for payments under the Medicare ambulance fee schedule for 2016 will be negative .4% (-0.4%). As part of the Affordable Care Act, a productivity adjustment has been part of the calculation for the last several years which for 2016 has resulted in a negative update.

The calculation for determining the Medicare ambulance inflation factor is as follows: Consumer Price Index – Urban (which is the change in the CPI-U from June to June) minus the non-farm business multi-factor productivity adjustment (MFP) as projected by the Secretary of HHS (10-year average). The CPI-Urban for 2016 is 0.1% with a MFP of 0.5% which equals negative .4%.

The AAA had projected an inflation factor of negative .5%.

The Importance of Ambulance Cost Survey Data

By Kathy Lester, JD, MPH | Updated November 9, 2015

Tomorrow is in your hands today. This statement is especially true when we think about the evolution of ambulance services. Today, care once reserved for the hospital setting is now delivered at the scene, resulting in better patient outcomes. Yet, despite these advances, the Medicare payment system lags behind. Current rates are based upon a negotiated rulemaking process that did not take the cost of providing services into accounts. While many in the industry strive to further expand the delivery of high-quality care, the inflexibility of the current payment system makes it difficult to compensate the next generation of ambulance service providers appropriately.

To prepare for tomorrow, ambulances services must act today. The AAA has taken a leadership role by setting the groundwork needed to reform the payment system so that it recognizes the continued evolution of ambulance services. The two game changers are (1) designating ambulance suppliers as “providers” of care; and (2) implementing a federal data collection system.

“Emergency care has made important advances in recent decades: emergency 9-1-1 service now links virtually all ill and injured Americans to immediate medical response; organized trauma systems transport patients to advanced, lifesaving care within minutes; and advances in resuscitation and lifesaving procedures yield outcomes unheard of just two decades ago.”
Institute of Medicine: Emergency Medical Services at a Crossroads (2007)

Provider Status

Being deemed a “provider” rather than a “supplier” is the first step toward recognizing the clinical component of ambulance services and appropriately incorporating ambulance services into the broader health care coordination and reform discussions.

Under current law, the term provider refers to hospitals, skilled nursing facilities (SNFs), outpatient rehabilitation facilities, home health agencies, ambulatory surgical centers, end-stage renal disease facilities, organ procurement organizations, and clinical labs. Durable medical equipment entities and ambulance services are designated as suppliers.

When ambulance services were first added to the Medicare benefit, the primary services provided were transportation. As noted already, transportation is only one component of the services provided. The deliver of health care services today make ambulances more like other Medicare providers than suppliers.

Achieving this designation is the first step toward having the federal government recognizing the value of the health care services provided by ambulances.

Cost Collection

The second game changer involves collecting cost data from all types and sizes of ambulances services in all areas of the country. Current Medicare rates are not based on cost. As the Government Accountability Office has recognized in two separate reports, these rates do not cover the cost of providing services to beneficiaries. While the Congress has extended the ambulance add-ons year after year, the lack of a permanent fix makes it difficult to plan. There is also the risk of the add-ons not being extended at some point. In addition, the rates take into account only at the most general level the health care being provided.

In the American Taxpayer Relief Act (ATRA), the Congress required the Centers for Medicare and Medicaid Services (CMS) to issue a report evaluating the ability to use current hospital cost reports to determine rates and also to assess the feasibility of obtaining cost data on a periodic basis from all types of ambulance services. Knowing of the strong Congressional interest in obtaining additional cost information, the AAA began working with The Moran Company (a consultant organization with expertise in Medicare cost reporting) to develop recommendations as to how cost data could be most efficiently and effectively collected. The AAA shared these recommendations with CMS and the contractor developing the report. The final report, released in October, supports the AAA’s work and states:

Any cost reporting tool must take into account the wide variety of characteristics of ambulance providers and suppliers. Efforts to obtain cost data from providers and suppliers must also standardize cost measures and ensure that smaller, rural, and super-rural providers and suppliers are represented.

The next step in the process is to provide CMS with direction and authority to implement the AAA’s cost survey methodology. In brief, the methodology would:

  • Require all ambulance services to report to CMS demographic information, such as organizational type (governmental agency, public safety, private, all volunteer, etc), average duration of transports, number of emergency and nonemergency transports. CMS would use this data to establish organization categories so that the data collected aligns with the type of organization providing it.
  • Require all ambulance services to report cost data, such as labor costs, administrative costs, local jurisdiction costs, through a survey process. During any survey period, CMS would identify a statistically valid sample of ambulance services in each category to be surveyed. These services would have to provide the data or be subject to a five percent penalty. Those ambulance services that provide data will not be asked to do so again until every service in its organization category has submitted the data.

As part of this process, the AAA has begun developing a common language for reporting these data. This work will ensure that the information is collected in a standardized manner. The AAA will also provide assistance to services that may need extra help in completing the surveys.

This information can then be aggregated and used to evaluate the adequacy of Medicare payments and support additional coverage policies. Most importantly, it will allow policy-makers, the AAA, and other stakeholders to reform the current Medicare ambulance payment system so that it incorporates the health care services currently being provided and those that will be in the future.

Conclusion

In order to be prepared for the reimbursement structures of tomorrow, ambulance services need to be designated a providers and recognized for the health care they provide. They also need to participate in a standardized cost collection program that will provide accurate data in the least burdensome way possible. The AAA is leading the effort to help ambulance services prepare for tomorrow.

Summary of CMS Ambulance Open Door Forum of November 5, 2015

By David M. Werfel, Esq. | Updated November 6, 2015

On November 5, 2015, the Centers for Medicare and Medicaid Services (CMS) conducted its latest Ambulance Open Door Forum.  As usual, CMS started with announcements, which were as follows:

As required under the Medicare Access and CHIP Reauthorization Act (HR 2), the pilot program for prior authorization for non-emergency repetitive patients will be expanded to Delaware, the District of Columbia, Maryland, North Carolina, Virginia and West Virginia, effective January 1, 2016.  A Special Open Door Forum on the topic will be held by CMS on November 10, 2015 from 12:30 to 1:30 pm. (Link to PDF).

Payment Policies

On October 30, CMS released the final rule on changes in CY 2016 to the Medicare ambulance fee schedule.  The final rule will be published in the Federal Register on November 16, 2015.  The rule finalizes the following:

  • The 2% urban, 3% rural and 22.6% super rural adjustments have been extended through December 31, 2017.
  • Urban/Rural Designations – CMS will continue in 2016 and thereafter with the current geographic designations of urban and rural that were implemented on January 1, 2015. CMS also stated the Agency is further reviewing those zip codes which are a RUCA 2 or 3 and have a portion that include a rural census tract.  The Agency will issue possible changes in a proposed rule.  This review was requested by the AAA and should result in more urban zip codes being designated as rural.
  • Vehicle/Staff – For Medicare purposes, a BLS vehicle must include at least a driver and an EMT-Basic.  However, the vehicle/staff must also meet all state and local rules.

ICD-10 – CMS published an ambulance crosswalk from ICD-9 codes to ICD-10 codes.  Also, the condition codes list is only a guide and using one of the codes does not guarantee coverage.

Meeting at the AAA

  • Rogers spoke at the AAA Workshop on Prior Authorization held at the AAA headquarters on October 2.  He thanked the AAA for inviting him as a speaker.
  • Rogers mentioned one of the issues he discussed at the AAA headquarters was the transportation of psychiatric patients. Dr. Rogers indicated that his opinion is that when patients are in a “psychiatric hold”, that the psychiatric hold, by itself, does not constitute Medicare coverage for an ambulance.  He indicated that coverage would exist if there was IV, EKG, medications administered, etc., but that possible elopement was not enough for coverage.  Dr. Rogers’s statement was his individual opinion.  The AAA does not agree with that opinion and we will be following up with Dr. Rogers and CMS on the matter.
  • Rogers stated another issue discussed at the AAA headquarters was on the proper level of service being determined at the time of dispatch. He stated that it was his opinion that Medicare should reimburse for the level of service dispatched.

Healthcare Marketplace – individuals can apply for health coverage through the marketplace from November 1, 2015 to January 31, 2016 through healthcare.gov.

Medicare Open Enrollment – CMS announced the Open Enrollment period has begun for Medicare beneficiaries to select their plan.

The question and answer period followed the announcements.  As usual, several resulted in the caller being asked to e-mail their question to CMS.  Questions concerning the prior authorization program were asked but the callers were told the questions would be answered on the Special Open Door Forum for prior authorization that will be held on November 10.  Answers to questions asked were as follows:

  • Medicare does not cover an ambulance transport of a psych patient, as the patient can be transported safely by other means, such as by law enforcement.
  • When physicians and facilities do not provide records needed for prior authorization, the ambulance provider may have to choose discontinuing transportation of that patient.
  • The denial rate for ICD-10 codes is the same as it was for ICD-9 codes.
  • No solution was offered for situations where the SNF uses 911 to call for an ambulance that they know is not needed.
  • When Medicaid pays and takes back its payment more than a year after the date of service, due to the patient receiving retroactive Medicare eligibility, Medicare can be billed.

No date was given for the next Ambulance Open Door Forum, other than the November 10 date for the Special Open Door Forum on the expansion of prior authorization.

Member Advisory: CMS Releases the ICD-10 Crosswalk

By Kathy Lester, JD, MPH | AAA Healthcare Regulatory Consultant | October 9, 2015

At the end of last week, CMS posted the ICD-10 crosswalks for medical conditions for ambulance services. The documents can be found here, under the Other Guidance section at the bottom of the webpage.

In creating the crosswalk files, CMS relied upon a program developed by 3M, ICD-10 CTT. The files provide comprehensive crosswalks for both primary and alternative specific codes and are intended to supplement the existing Medical Conditions List.

The AAA has been working with CMS for the past year to create an official document that addresses the medical condition codes upon which some of the Medicare contractors rely for billing and auditing purposes.

While we are pleased that CMS has recognized the need for a crosswalk, we are concerned that the documents posted are a literal crosswalk of the previous ICD-9 list. This document can also be found on the Ambulance Service Center webpage. This approach, which incorporates all potential ICD-10 codes, has resulted in a large number of codes being included in the crosswalk. Some of these codes are inappropriate to use because they require diagnostic skills that extend beyond the scope of ambulance personnel.

The AAA has developed a more streamlined list of condition codes that eliminates those codes that are inappropriate for ambulance services to use.

We continue to work with CMS to refine its crosswalk to ensure that it is useful to ambulance services throughout the country.

Member Advisory: Follow Up Regarding Recent OIG Report on Questionable Billing Practices for Ambulance Suppliers

HHS OIG Analysis Part 2 of 2 – Read Part One of the Analysis


October 1, 2015

Yesterday, the American Ambulance Association summarized a report from the Department of Health and Human Services Office of the Inspector General (OIG) on certain questionable billing practices by ambulance suppliers.

In this report, the OIG indicated that 1 in 5 ambulance providers had engaged in one or more of the following “questionable billing” practices”:

  • Billing for a transport without a Medicare service being provided at either the origin
  • Billing for excessive mileage for urban transports
  • Billing for a high number of transports per beneficiary
  • Billing using compromised beneficiary ID numbers
  • Billing for an inappropriate or unlikely transport level
  • Billing for a beneficiary that is being shared among multiple ambulance suppliers
  • Billing for transports to/from a partial hospitalization program

In this member advisory, I want to devote additional attention to the questionable billing practice the OIG referred to as “inappropriate or unlikely transport levels”.

The OIG identified 268 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of claims submitted with inappropriate or unlikely combinations of transport levels and destinations.  The OIG summarized its findings as follows:

“We identified two types of transports billed with inappropriate combinations of destinations and transport levels. First, we identified emergency transports that suppliers indicated were to a destination other than a hospital or the site of a transfer between ground and air transports. We also identified specialty care transports that suppliers indicated were to or from destinations other than hospitals, SNFs, or transfer sites.”

The OIG went on to state that a high percentage of an ambulance supplier’s transports with inappropriate or unlikely transport levels (given the destination) could be indicative of “upcoding”.  The OIG identified 268 ambulance suppliers that had particularly high numbers of claims submitted with unlikely or inappropriate transport levels/destinations combinations.  These ambulance suppliers submitted 3% or more of their claims with these suspect combinations, compared to less than 1% for most ambulance suppliers.  The OIG identified 19 companies that used a suspect combination on more than 25% of their claims.

Since the publication of the OIG’s report, the AAA has received numerous inquiries from members asking for guidance on how they can identify whether their company is at risk for submitting claims with these suspect combinations.  Unfortunately, there is no easy answer to that question.  However, based on my experience, I can offer the following general guidelines:

  1. Define the types of claims that would potentially be problematic. The OIG identified two distinct categories of suspect combinations.  The first involves emergency transports.  The OIG indicated that a claim would presumably not qualify for payment of an emergency base rate to the extent the patient was being transported to somewhere other than a hospital or an intercept site (i.e., the “I” modifier).  In other words, the OIG is looking at claims billed for an emergency base rate (HCPCS Codes A0427 or A0429) with a destination modifier that is either an “R” (Residence), “N” (Skilled Nursing Facility), “E” (Other Custodial Facility), “J” (Free-Standing Dialysis Facility).  The second category involved specialty care transports (SCT).  To qualify as SCT, a transport must be “interfacility”, which CMS has defined to be transports between hospitals (including hospital-based dialysis facilities), skilled nursing facilities, or any combination thereof.  Therefore, the OIG would consider a claim to be suspect if the origin or destination modifier was an “R”, “N”, “E”, or “J”.
  2. Investigate the claim submission edits within your billing system. Having defined the types of claims that the OIG would consider suspect, I suggest that you investigate the claims submission edits within your billing system.  Specifically, you want to see whether there is anything currently in place that would make it impossible for you to submit a claim with any of these suspect combinations.  For example, would your billing system prevent you from submitting the following claim:  A0427 HR?  This may require you to attempt to submit test claims with each possible combination to see whether your billing software would reject any or all of these combinations.
  3. To the extent these claim submission edits are not already in place, you should investigate whether your billing software permits you to create them. Assuming your billing system does not currently have edits in place to prevent the submission of claims with these suspect combinations, you want to investigate whether these types of edits can be added.  Many billing software products have optional submission edits that you can enable for certain payers.  Other products may permit you to create specialized edits for these purposes.  You may want to contact your billing vendor to ask whether there is any way to put these edits in place for your Medicare claims.  Assuming your software has the capability of putting these edits in place, it almost certainly makes sense to do so, in order to eliminate the possibility of submitting claims with these suspect combinations going forward.

The suggestions listed in paragraphs #1 and #2 above address the issue of whether it was possible for your company to have inadvertently submitted claims with any of these suspect combinations.  Even if you determine that it was theoretically possible for you to have submitted claims with any of these suspect combinations, it does not necessarily follow that any such claims were actually submitted.  Most ambulance companies have numerous controls in place to guard against inadvertent mistakes in the coding/billing of claims.  For example, while many billing software products permit an ambulance coder to duplicate an earlier transport for the patient, many companies elect not to use this functionality, preferring instead to code each claim from scratch.  This removes one possible mechanism by which these types of inadvertent errors can occur.  Moreover, even if it a claim was submitted with a suspect combination, it does not necessarily follow that the claim was paid by Medicare.  Your Medicare contractor may have its own edits in place to deny claims submitted with these suspect combinations.  Finally, even if a claim was accidentally submitted with a suspect combination and paid by the Medicare contractor, it is possible that you may have caught the error at the time you posted Medicare’s payment.  Assuming that you properly refunded the incorrect payment at that time, there is no need for further concern.

Conclusion

Ambulance supplier should attempt to determine whether their billing software was designed in such a way as to prevent these suspect combinations from being submitted to Medicare.  To the extent you are confident that it is impossible for these claims to be submitted to Medicare, there is nothing further that needs to be done.

To the extent an ambulance supplier determines that their current billing software edits do not make it impossible for such claims to be submitted to Medicare, they should determine whether the necessary edits could be implemented on a go forward basis.  The ambulance supplier will also need to make an organizational determination on whether to investigate its past claims universe.  This determination should be made in consultation with the company’s legal advisers.  Your legal advisers will also guide you on the steps that should be taken if you discover that you remain paid for any claims with any of these suspect combinations.

Member Advisory: OIG Issues Report on Questionable Billing Practices for Ambulance Suppliers

HHS OIG Analysis Part 1 of 2 – Read Part Two of the Analysis


On September 29, 2015, the Department of Health and Human Services Office of the Inspector General (OIG) issued a report titled “Inappropriate Payments and Questionable Billing for Medicare Part B Ambulance Transports” (OEI-09-12-00351).  The report, conducted by the Office of Evaluation and Inspections (OEI), looked at claims data for 7.3 million ambulance transports furnished during the first half of 2012.  The OIG reviewed this claims data to determine whether claims were billed appropriately to the Medicare program.

Summary of the OIG’s Findings

The OIG determined that Medicare paid $24.2 million in the first half of 2012 for ambulance transports that did not meet certain program requirements for payment.  The OIG identified an additional $30.2 million paid for transports for which the beneficiary did not receive Medicare services at either the pick-up or drop-location, or anywhere else.  Finally, the OIG determined that 1 in 5 ambulance suppliers met certain criteria that indicated they may have engaged in questionable billing practices.  According to the OIG, more than half of all questionable transports were provided to beneficiaries residing in 4 metropolitan areas.

Detailed OIG Findings

Medicare paid $24.2 million for ambulance transports that did not meet certain Medicare requirements justifying payment.  This included transports to a non-covered destination, as well as transports to a covered destination but where the level of service was inappropriate. 

The OIG determined that Medicare paid $17.4 million for ambulance transports to non-covered destinations.  This amount also include return trips following treatment at the non-covered destination.  These transports represented 0.6% of all Medicare payments during the first half of 2012.

The OIG indicated that transports to a physician’s office were the most common type of non-covered destination.  Payments for transports to and from a physician’s office accounted for $8.7 million in improper payments.  Medicare also paid $5.8 million for transports of beneficiaries to and from community mental health centers or psychiatric facilities (other than duly-licensed psychiatric hospitals).  Other transports to non-covered destinations included independent laboratories, diagnostic or therapeutic sites (i.e., “D” modifiers), non-SNF nursing facilities, long-term care and hospice facilities.

The OIG determined that Medicare paid $7 million for transports with inappropriate combinations of the level of service billed and the type of destination.  This included $4.3 million in payments for specialty care transports (SCT) where either the origin or destination was something other than a hospital, SNF, or intercept site.  The majority of these inappropriate SCT transports involved transports between the patient’s SNF or residence and a free-standing dialysis facility.  The OIG also determined that Medicare paid $2.7 million for emergency transports where the destination was not a hospital.

Medicare paid $30.2 million for ambulance transports for which the beneficiary did not receive Medicare services at any origin or destination. 

The OIG identified $30.2 million in payments for ambulance transports where the beneficiary did not appear to receive any Medicare services at either the origin or destination within 1 day of the date of transport.  To account for the possibility that the ambulance supplier may have submitted a claim with the wrong origin or destination, the OIG only flagged a claim as questionable if its records determined that the beneficiary did not receive Medicare services at any other facility type within 1 day of the transport.  The OIG stated its belief that, since there was no record of the beneficiary receiving Medicare services at or close to the date of transport, the OIG believed that it was likely that Medicare inappropriately paid for the ambulance transports.  The OIG did note the possibility that these transports occurred during an inpatient hospital or SNF stay, and therefore may have been the responsibility of the inpatient facility.  These transports represented 1.1% of all Medicare payments during the first half of 2012.

The OIG determined that 1 in 5 ambulance suppliers had questionable billing

As part of the methodology used for this report, the OIG developed a set of 7 measure that it believed could be evidence of questionable billing practices.  These seven measures were:

  1. No Medicare service provided at either the origin or destination – The OIG believes that a high percentage of an ambulance supplier’s for which the beneficiary did not receive Medicare services at either the origin or destination could be indicative of either: (a) billing for transports to non-covered destinations or (b) billing for transports that were not provided.
  2. Excessive mileage for urban transports – The OIG believes that high average mileage for transports within an urban area could be indicative of either: (a) billing for more miles than the ambulance supplier actually drove or (b) billing for mileage beyond the nearest appropriate facility.
  3. High number of transports per beneficiary – The OIG believes that a high average of per-beneficiary transports could be indicative of billing for transports that were not medically necessary.
  4. Compromised Beneficiary Number – The OIG believes that a high percentage of an ambulance supplier’s transports provided to beneficiary with compromised beneficiary ID numbers could be indicative of billing for transports that were not medically necessary, or which were not provided.
  5. Inappropriate or unlikely transport level – The OIG believes that a high percentage of an ambulance supplier’s transports with inappropriate or unlikely transport levels (given the destination) could be indicative of “upcoding”.
  6. Beneficiary sharing – The OIG believes that when multiple ambulance suppliers all provide dialysis transports to the same beneficiary that it could be evidence of the misuse of a beneficiary’s ID number, or it could be evidence that the beneficiary is shopping his or her ID number for kickbacks.
  7. Transports to or from partial hospitalization programs – The OIG believes that transports to and from a partial hospitalization program (PHP) is unlikely to be medically necessary because beneficiary’s that meet Medicare’s coverage requirements for PHP services generally do not qualify for ambulance transportation.

The OIG indicated that 21% of ambulance suppliers met one of the seven measures it developed for identifying questionable billing practices.  17% of ambulance suppliers met only 1 of the 7 measures, while 4% met 2-4 of these measures.  No ambulance suppliers met more than 4 of these measures.

The OIG identified 2,038 out of the 15,614 ambulance suppliers reviewed (13%) that had questionable billing based on the percentage of their transports where the beneficiary did not receive Medicare services at either the origin or destination.  The OIG flagged an ambulance supplier’s billing as questionable if 3% or more of its transports involved situations where no Medicare service was billed at the destination.  46 ambulance suppliers had 95% or more of their transports involve situations where the beneficiary did not receive Medicare services at either the origin or destination.  By contrast, the median for all ambulance suppliers was zero transports where the beneficiary did not receive services at either the origin or destination.

The OIG identified 642 out of the 15,614 ambulance suppliers reviewed (4%) that had questionable billing based on the average mileage they billed for beneficiaries residing in urban areas.  The OIG indicated that the typical ambulance supplier average 10 miles for an urban transport.  By contrast, the average mileage for the 642 suppliers identified by the OIG was 34 miles.  The OIG identified 48 suppliers with an average urban mileage of more than 100 miles.

The OIG identified 533 out of the 15,614 ambulance suppliers reviewed (3%) that had questionable billing based on the average number of transports per beneficiary.  Beneficiaries transported by the typical ambulance supplier that provided dialysis transports received an average of 4 ambulance transports during the first 6 months of 2012.  Beneficiaries transported by the 533 suppliers identified by the OIG received an average of 21 transports during the first half of 2012.

The OIG identified 358 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of their transports that were associated with compromised beneficiary ID numbers.  In studying this measure, the OIG excluded ambulance suppliers that did not bill for any transports involving the use of compromised beneficiary ID numbers.  Among those suppliers that billed any transports that involved the use of a compromised ID number, only 1% of the typical supplier’s involved the compromised ID numbers.  The 358 suppliers identified by the OIG used a compromised ID number for at least 7% of their claims.  31 suppliers used a compromised ID number for more than 95% of their submitted claims.

The OIG identified 268 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of claims submitted with unlikely or inappropriate transport levels and destinations.  For the typical supplier that billed any claims with an inappropriate combination of transport level and destination, these claims accounted for less than 1% of all claims submitted in the first half of 2012.  For the 268 suppliers identified by the OIG, these claims accounted for more than 3% of all claims submitted in the first half of 2012.  The OIG identified 19 suppliers that used an inappropriate or unlikely combination on at least 25% of the claims they submitted during the first half of 2012.

Finally, the OIG noted that the ambulance suppliers that tested “positive” for any of the questionable billing practices it identified were disproportionately likely to provide BLS non-emergency transports (including dialysis).  The OIG noted that BLS non-emergency transports accounted for only 36% of transports billed by providers that did not meet any of its questionable billing measures, while BLS non-emergency transports accounted for 65% of all claims submitted by those suppliers it identified as having at least one questionable billing practice.

More than half of questionable ambulance transports were provided to beneficiaries residing in 4 metropolitan areas

The OIG determined that questionable billing was concentrated in the metropolitan areas of Houston, Los Angeles, New York, and Philadelphia.  These 4 areas accounted for 18% of all ambulance transports during the first half of 2012, but 52% of all questionable transports.  Collectively, these areas accounted for $104 million of the $207 million in Medicare payments for “questionable” ambulance transports during the first half of 2012.

The OIG also determined that, on average, ambulance suppliers that provided transports to beneficiaries in these 4 metropolitan areas transported more Medicare beneficiaries and received more in Medicare payments than suppliers in other metropolitan areas.  For example, the average ambulance supplier in Los Angeles received a total of $105,696 in Medicare payments, compared with an average of $16,137 in Medicare payments per supplier in other metropolitan areas.  The numbers in NY ($85,606), Philadelphia ($56,667), and Houston ($34,951) were also far in excess of the national average.

OIG’s Recommendations

In this report, the OIG makes a number of recommendations to CMS to reduce the number of inappropriate payments and questionable billing practices.  These recommendations include:

  1. Expanding the temporary moratoria on new enrollments to additional metropolitan area. The OIG is recommending that CMS consider whether the existing moratoria (in place in Houston and Philadelphia) should be expanded to NY and Los Angeles.CMS concurred with this recommendation, and stated that it will continue to monitor these geographic areas, and will impose additional temporary moratoria if warranted.
  2. Require ambulance suppliers to include the National Provider Identifier (NPI) of the certifying physician on non-emergency claims that require a certification. The OIG is recommending that when a physician certification is required (e.g., for dialysis transports), that the physician’s NPI be listed on the claim.  The OIG notes that the NPI of the ordering physician is already required for laboratory and DME claims.  The OIG also recommended that the physician’s NPI be listed on PCS forms.CMS concurred with the recommendation, and indicated that it will explore the best way to implement this recommendation.
  3. Implement new claims processing edits, or improve existing edits, to prevent inappropriate payments for ambulance transports. The OIG is recommending that CMS update its edits to prevent payment: (a) for transports to non-covered destinations and (b) for transports with inappropriate combinations of the destination and the level of service billed (e.g., emergency transports to a patient’s residence).CMS partially concurred with the recommendation, but indicated that it wanted to review the data on the claims identified by the OIG in the report before taking any actions.
  4. Increase CMS’ monitoring of ambulance billing. The OIG is recommending that CMS continue to monitor the billing of ambulance claims using the measures of questionable billing that the OIG developed.CMS appeared to concur with the recommendation, indicating that it would continue its current monitoring.  However, the OIG indicated that its recommendation was not to continue monitoring at the current levels, but rather to increase the monitoring of ambulance claims.
  5. Determine the appropriateness of the claims billed by the ambulance suppliers identified in this report and take appropriate action. The OIG indicated that it would be providing CMS with a separate memorandum that lists the claims it identified that did not meet Medicare billing requirements.  The OIG was suggesting that CMS or its contractors should take a closer look at these providers, for example by reviewing medical records or performing unannounced site visits to determine whether additional actions are appropriate.CMS partially concurred with the recommendation, but indicated that it wanted to review the data on the claims identified by the OIG in the report before taking any actions.

Member Advisory: OIG Issues Report on Questionable Billing Practices for Ambulance Suppliers

HHS OIG Analysis Part 1 of 2 – Read Part Two of the Analysis


On September 29, 2015, the Department of Health and Human Services Office of the Inspector General (OIG) issued a report titled “Inappropriate Payments and Questionable Billing for Medicare Part B Ambulance Transports” (OEI-09-12-00351).  The report, conducted by the Office of Evaluation and Inspections (OEI), looked at claims data for 7.3 million ambulance transports furnished during the first half of 2012.  The OIG reviewed this claims data to determine whether claims were billed appropriately to the Medicare program.

Summary of the OIG’s Findings

The OIG determined that Medicare paid $24.2 million in the first half of 2012 for ambulance transports that did not meet certain program requirements for payment.  The OIG identified an additional $30.2 million paid for transports for which the beneficiary did not receive Medicare services at either the pick-up or drop-location, or anywhere else.  Finally, the OIG determined that 1 in 5 ambulance suppliers met certain criteria that indicated they may have engaged in questionable billing practices.  According to the OIG, more than half of all questionable transports were provided to beneficiaries residing in 4 metropolitan areas.

Detailed OIG Findings

Medicare paid $24.2 million for ambulance transports that did not meet certain Medicare requirements justifying payment.  This included transports to a non-covered destination, as well as transports to a covered destination but where the level of service was inappropriate. 

The OIG determined that Medicare paid $17.4 million for ambulance transports to non-covered destinations.  This amount also include return trips following treatment at the non-covered destination.  These transports represented 0.6% of all Medicare payments during the first half of 2012.

The OIG indicated that transports to a physician’s office were the most common type of non-covered destination.  Payments for transports to and from a physician’s office accounted for $8.7 million in improper payments.  Medicare also paid $5.8 million for transports of beneficiaries to and from community mental health centers or psychiatric facilities (other than duly-licensed psychiatric hospitals).  Other transports to non-covered destinations included independent laboratories, diagnostic or therapeutic sites (i.e., “D” modifiers), non-SNF nursing facilities, long-term care and hospice facilities.

The OIG determined that Medicare paid $7 million for transports with inappropriate combinations of the level of service billed and the type of destination.  This included $4.3 million in payments for specialty care transports (SCT) where either the origin or destination was something other than a hospital, SNF, or intercept site.  The majority of these inappropriate SCT transports involved transports between the patient’s SNF or residence and a free-standing dialysis facility.  The OIG also determined that Medicare paid $2.7 million for emergency transports where the destination was not a hospital.

Medicare paid $30.2 million for ambulance transports for which the beneficiary did not receive Medicare services at any origin or destination. 

The OIG identified $30.2 million in payments for ambulance transports where the beneficiary did not appear to receive any Medicare services at either the origin or destination within 1 day of the date of transport.  To account for the possibility that the ambulance supplier may have submitted a claim with the wrong origin or destination, the OIG only flagged a claim as questionable if its records determined that the beneficiary did not receive Medicare services at any other facility type within 1 day of the transport.  The OIG stated its belief that, since there was no record of the beneficiary receiving Medicare services at or close to the date of transport, the OIG believed that it was likely that Medicare inappropriately paid for the ambulance transports.  The OIG did note the possibility that these transports occurred during an inpatient hospital or SNF stay, and therefore may have been the responsibility of the inpatient facility.  These transports represented 1.1% of all Medicare payments during the first half of 2012.

The OIG determined that 1 in 5 ambulance suppliers had questionable billing

As part of the methodology used for this report, the OIG developed a set of 7 measure that it believed could be evidence of questionable billing practices.  These seven measures were:

  1. No Medicare service provided at either the origin or destination – The OIG believes that a high percentage of an ambulance supplier’s for which the beneficiary did not receive Medicare services at either the origin or destination could be indicative of either: (a) billing for transports to non-covered destinations or (b) billing for transports that were not provided.
  2. Excessive mileage for urban transports – The OIG believes that high average mileage for transports within an urban area could be indicative of either: (a) billing for more miles than the ambulance supplier actually drove or (b) billing for mileage beyond the nearest appropriate facility.
  3. High number of transports per beneficiary – The OIG believes that a high average of per-beneficiary transports could be indicative of billing for transports that were not medically necessary.
  4. Compromised Beneficiary Number – The OIG believes that a high percentage of an ambulance supplier’s transports provided to beneficiary with compromised beneficiary ID numbers could be indicative of billing for transports that were not medically necessary, or which were not provided.
  5. Inappropriate or unlikely transport level – The OIG believes that a high percentage of an ambulance supplier’s transports with inappropriate or unlikely transport levels (given the destination) could be indicative of “upcoding”.
  6. Beneficiary sharing – The OIG believes that when multiple ambulance suppliers all provide dialysis transports to the same beneficiary that it could be evidence of the misuse of a beneficiary’s ID number, or it could be evidence that the beneficiary is shopping his or her ID number for kickbacks.
  7. Transports to or from partial hospitalization programs – The OIG believes that transports to and from a partial hospitalization program (PHP) is unlikely to be medically necessary because beneficiary’s that meet Medicare’s coverage requirements for PHP services generally do not qualify for ambulance transportation.

The OIG indicated that 21% of ambulance suppliers met one of the seven measures it developed for identifying questionable billing practices.  17% of ambulance suppliers met only 1 of the 7 measures, while 4% met 2-4 of these measures.  No ambulance suppliers met more than 4 of these measures.

The OIG identified 2,038 out of the 15,614 ambulance suppliers reviewed (13%) that had questionable billing based on the percentage of their transports where the beneficiary did not receive Medicare services at either the origin or destination.  The OIG flagged an ambulance supplier’s billing as questionable if 3% or more of its transports involved situations where no Medicare service was billed at the destination.  46 ambulance suppliers had 95% or more of their transports involve situations where the beneficiary did not receive Medicare services at either the origin or destination.  By contrast, the median for all ambulance suppliers was zero transports where the beneficiary did not receive services at either the origin or destination.

The OIG identified 642 out of the 15,614 ambulance suppliers reviewed (4%) that had questionable billing based on the average mileage they billed for beneficiaries residing in urban areas.  The OIG indicated that the typical ambulance supplier average 10 miles for an urban transport.  By contrast, the average mileage for the 642 suppliers identified by the OIG was 34 miles.  The OIG identified 48 suppliers with an average urban mileage of more than 100 miles.

The OIG identified 533 out of the 15,614 ambulance suppliers reviewed (3%) that had questionable billing based on the average number of transports per beneficiary.  Beneficiaries transported by the typical ambulance supplier that provided dialysis transports received an average of 4 ambulance transports during the first 6 months of 2012.  Beneficiaries transported by the 533 suppliers identified by the OIG received an average of 21 transports during the first half of 2012.

The OIG identified 358 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of their transports that were associated with compromised beneficiary ID numbers.  In studying this measure, the OIG excluded ambulance suppliers that did not bill for any transports involving the use of compromised beneficiary ID numbers.  Among those suppliers that billed any transports that involved the use of a compromised ID number, only 1% of the typical supplier’s involved the compromised ID numbers.  The 358 suppliers identified by the OIG used a compromised ID number for at least 7% of their claims.  31 suppliers used a compromised ID number for more than 95% of their submitted claims.

The OIG identified 268 out of the 15,614 ambulance suppliers reviewed (2%) that had questionable billing based on the percentage of claims submitted with unlikely or inappropriate transport levels and destinations.  For the typical supplier that billed any claims with an inappropriate combination of transport level and destination, these claims accounted for less than 1% of all claims submitted in the first half of 2012.  For the 268 suppliers identified by the OIG, these claims accounted for more than 3% of all claims submitted in the first half of 2012.  The OIG identified 19 suppliers that used an inappropriate or unlikely combination on at least 25% of the claims they submitted during the first half of 2012.

Finally, the OIG noted that the ambulance suppliers that tested “positive” for any of the questionable billing practices it identified were disproportionately likely to provide BLS non-emergency transports (including dialysis).  The OIG noted that BLS non-emergency transports accounted for only 36% of transports billed by providers that did not meet any of its questionable billing measures, while BLS non-emergency transports accounted for 65% of all claims submitted by those suppliers it identified as having at least one questionable billing practice.

More than half of questionable ambulance transports were provided to beneficiaries residing in 4 metropolitan areas

The OIG determined that questionable billing was concentrated in the metropolitan areas of Houston, Los Angeles, New York, and Philadelphia.  These 4 areas accounted for 18% of all ambulance transports during the first half of 2012, but 52% of all questionable transports.  Collectively, these areas accounted for $104 million of the $207 million in Medicare payments for “questionable” ambulance transports during the first half of 2012.

The OIG also determined that, on average, ambulance suppliers that provided transports to beneficiaries in these 4 metropolitan areas transported more Medicare beneficiaries and received more in Medicare payments than suppliers in other metropolitan areas.  For example, the average ambulance supplier in Los Angeles received a total of $105,696 in Medicare payments, compared with an average of $16,137 in Medicare payments per supplier in other metropolitan areas.  The numbers in NY ($85,606), Philadelphia ($56,667), and Houston ($34,951) were also far in excess of the national average.

OIG’s Recommendations

In this report, the OIG makes a number of recommendations to CMS to reduce the number of inappropriate payments and questionable billing practices.  These recommendations include:

  1. Expanding the temporary moratoria on new enrollments to additional metropolitan area. The OIG is recommending that CMS consider whether the existing moratoria (in place in Houston and Philadelphia) should be expanded to NY and Los Angeles.CMS concurred with this recommendation, and stated that it will continue to monitor these geographic areas, and will impose additional temporary moratoria if warranted.
  2. Require ambulance suppliers to include the National Provider Identifier (NPI) of the certifying physician on non-emergency claims that require a certification. The OIG is recommending that when a physician certification is required (e.g., for dialysis transports), that the physician’s NPI be listed on the claim.  The OIG notes that the NPI of the ordering physician is already required for laboratory and DME claims.  The OIG also recommended that the physician’s NPI be listed on PCS forms.CMS concurred with the recommendation, and indicated that it will explore the best way to implement this recommendation.
  3. Implement new claims processing edits, or improve existing edits, to prevent inappropriate payments for ambulance transports. The OIG is recommending that CMS update its edits to prevent payment: (a) for transports to non-covered destinations and (b) for transports with inappropriate combinations of the destination and the level of service billed (e.g., emergency transports to a patient’s residence).CMS partially concurred with the recommendation, but indicated that it wanted to review the data on the claims identified by the OIG in the report before taking any actions.
  4. Increase CMS’ monitoring of ambulance billing. The OIG is recommending that CMS continue to monitor the billing of ambulance claims using the measures of questionable billing that the OIG developed.CMS appeared to concur with the recommendation, indicating that it would continue its current monitoring.  However, the OIG indicated that its recommendation was not to continue monitoring at the current levels, but rather to increase the monitoring of ambulance claims.
  5. Determine the appropriateness of the claims billed by the ambulance suppliers identified in this report and take appropriate action. The OIG indicated that it would be providing CMS with a separate memorandum that lists the claims it identified that did not meet Medicare billing requirements.  The OIG was suggesting that CMS or its contractors should take a closer look at these providers, for example by reviewing medical records or performing unannounced site visits to determine whether additional actions are appropriate.CMS partially concurred with the recommendation, but indicated that it wanted to review the data on the claims identified by the OIG in the report before taking any actions.

Update: House & Senate Approve Veterans Health Care Choice Act

Yesterday, the House of Representatives voted overwhelmingly to approve H.R. 3236, the Surface Transportation and Veterans Health Care Choice Improvement Act. Update 2:16 p.m. on July 30: The Senate approved the legislation today, and it is now headed to the President’s desk for signature.

Among its provisions, the bill would allow the Department of Veterans Affairs (VA) to use $3.3 billion from the Veterans Choice Fund to pay for care provided to veterans by non-VA providers between May 1 and October 1, 2015 under the VA’s community care programs.

H.R. 3236 also would require the VA to develop a plan to consolidate all non-VA programs into a single “Veterans Choice Program” and to submit a report on the plan to Congress by November 1, 2015. Among its provisions, the plan must include the structuring of the billing and reimbursement process; a description of the reimbursement rate to be paid; and an explanation of the processes to be used to ensure that the Secretary will fully comply with the federal Prompt Payment Act.

Further, H.R. 3236 would make a number of changes to the current Veterans Choice Program, including: eliminating the requirement that a veteran be enrolled in the VA health care system by Aug. 1, 2014 in order to participate; allowing the VA to expand the number of non-VA providers that may offer medical services; waiving the program’s wait-time eligibility threshold if clinically necessary for the veteran; and allowing veterans residing within 40 driving miles of a VA medical facility to use non-VA services if the VA facility does not have a full-time physician on staff.

M. Todd Tuten is a Senior Policy Advisor at Akin Gump Strauss Hauer & Feld, LLP.

CMS Issues Proposed Rule for Calendar Year 2016

On July 8, 2015, the Centers for Medicare and Medicaid Services (CMS) published a display copy of a proposed rule titled “Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2016”.  The proposed rule makes a number of changes to the Medicare Physician Fee Schedule.  It also makes certain changes to the Medicare Ambulance Fee Schedule.  These proposed changes are summarized below.

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AAA’s 2015 Ambulance Ride-Along Toolkit

It is that time of year. With the summer heat, fireworks, baseball and barbecues comes your greatest opportunity to meet with and influence your federal legislators, the August Recess. This year, Congress is scheduled to begin recess early in August and return to normal business after the Labor Day Holiday. The recess means that many members of Congress will be in their districts and states. This will be a great opportunity for you to educate your members of Congress about current issues affecting our industry. In particular, it will give you the chance to talk about permanent Medicare ambulance relief.

The easiest and most effective way to discuss key issues with your members of Congress is to invite them and their staffs to participate in a tour of your operation and on an ambulance ride-along. This gives you the opportunity to show all of the valuable services that you provide to the community and how Congress can continue to help. The AAA has made the process of scheduling and arranging a ride-along easy for you with the release of our 2015 Congressional Ride-Along Toolkit.

In April of this year, Congress extended the temporary 2% urban, 3% rural and super rural bonus payment through December, 2017. While this was a great victory for the AAA and ambulance services nationwide, a permanent solution is still needed. With temporary extensions of Medicare ambulance relief, ambulance services are incapable of adequately preparing for their financial future and providing quality care to their patients. The AAA has worked hard to have legislation introduced in the both the U.S. House of Representatives and the Senate that would make the temporary relief become permanent. We are still seeking cosponsors for the bill (H.R. 745, S. 377) and hope that you will assist in our search.

We invite you to use the Ambulance Ride-Along toolkit as you prepare to meet with your members of Congress over the coming months.

Ask Your Members of Congress to Cosponsor Permanent Medicare Relief Legislation

Yesterday morning, Congressmen Walden, Welch, Nunes and Neal sent a Dear Colleague to their fellow members of the House of Representatives asking them to cosponsor the Medicare Ambulance Access, Fraud Prevention and Reform Act of 2015 (S. 377, H.R. 745). This bill will make the current temporary ambulance add-on payments permanent for all ambulance services.

Even with our recent victory of a temporary 33-month extension of crucial Medicare ambulance relief, our Champions on Capitol Hill realize the importance of receiving permanent Medicare relief. They, like every ambulance service across the country, understand that a permanent solution is necessary to provide quality health care to individuals and our communities both today and tomorrow.

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Ask Your Members of Congress to Cosponsor Permanent Medicare Relief Legislation

Yesterday morning, Congressmen Walden, Welch, Nunes and Neal sent a Dear Colleague to their fellow members of the House of Representatives asking them to cosponsor the Medicare Ambulance Access, Fraud Prevention and Reform Act of 2015 (S. 377, H.R. 745). This bill will make the current temporary ambulance add-on payments permanent for all ambulance services.

Even with our recent victory of a temporary 33-month extension of crucial Medicare ambulance relief, our Champions on Capitol Hill realize the importance of receiving permanent Medicare relief. They, like every ambulance service across the country, understand that a permanent solution is necessary to provide quality health care to individuals and our communities both today and tomorrow.

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Ambulance Open Door Forum, April 22, H.R. 2

CMS held its latest Ambulance Open Door Forum on April 22. It started with the following two announcements:

– H.R. 2 was signed into law extending the temporary ambulance adjustments through December 31, 2017. The adjustments are 2% (urban pick-ups), 3% (rural) and 22.6% (super rural).

– For free standing facilities, use the “P” modifier if the facility is not part of the hospital and use “H” if it is hospital-based.
Following these announcements, there was a Question and Answer period. Most of the questions were not answered on the call and the caller was asked to submit their questions to CMS, or was told to ask their Medicare Administrative Contractor or was told to appeal the denied claim referenced in their question. A few were answered, as follows:

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Senate Delays Vote on SGR Repeal Package

Early this morning after completing action on a FY 2016 Senate Budget Resolution, Senate Majority Leader Mitch McConnell (R-KY) announced that the Senate would not act on legislation (H.R. 2) to permanently repeal the sustainable growth rate (SGR) formula for physicians until after the Easter recess. H.R. 2 includes the 33-month extension of the temporary Medicare ambulance increases. Senate Majority Leader McConnell had sought consideration today of H.R. 2 under unanimous consent which requires the support of all 100 Senators. There were objections to the expedited vote and thus the Senate is now expected to consider the bill when it returns on April 14.

The temporary Medicare ambulance increases expire on March 31. However, contractors have a standard requirement to hold all Medicare claims for 14 days before making payment. The Centers of Medicare and Medicaid Services (CMS) has issued a notice to contractors formally directing them to utilize this hold. So if the Senate does complete action on H.R. 2 on April 14 there will be no need for reprocessing any claims for the retroactive increases. Should action on H.R. 2 be delayed further, Congress could do a short-term extension or simply allow the provisions to expire for a short period of time. Senate Majority Leader Mitch McConnell and Senate Minority Leader Harry Reid (D-NV) have both stated they would like quick consideration of H.R. 2 when the Senate returns.

We will continue to keep you posted of new developments.

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