Medicare Relief and Reform Letter by President Postma

This is a critical year for the legislative efforts of the American Ambulance Association and our members.  First and foremost, our temporary Medicare ambulance increases expire at the end of the year.  It is vital that we ensure the new 115th Congress makes these increases permanent, or at the very least approves another long-term extension.  To be successful, we will need all of your help in reaching out to your members of Congress in support of the increases.

The AAA and our partners have been also working to further the reform of the Medicare ambulance fee schedule.  To accomplish the first steps in this process, ambulance services need to be treated as providers of health care services rather than only suppliers of medical transportation.  In addition, we will need the cost data necessary for Congress, Centers for Medicare and Medicaid Services and the AAA to make data-driven decisions regarding the reform.

To achieve these goals, we are working with our champions in Congress to reintroduce a version of the Medicare Ambulance Access, Fraud Prevention and Reform Act (HR 745, S. 332 – 114th Congress).  We hope to have a bill reintroduced in the House and Senate in the coming weeks.  Only with your help in sustained outreach to your legislators will we be able to get the provisions of this bill passed.

Our absolute top priority this year is preventing the expiration of the Medicare add-on payments.  Building the increases into the base rates is also vital to the future of reform, as is provider standing and cost data collection.  These changes will lead, we hope, to the demonstration of the need for additional reimbursement as well as recognition of the role ambulance services can play in the larger health care picture.  The subsequent goal is coverage for services such as mobile integrated health and alternate destinations.

The AAA will also be closely following the debate and implications for our industry around repeal and replacement of the Affordable Care Act, potential Medicare and Medicaid reform, and other health care and broader initiatives of interest to us.  We will keep you posted of new developments as the process unfolds.

Since this is such a vital year for us in Congress, I ask that each of you respond to our Calls to Action for help with your members of Congress on the Medicare increases and other legislative priorities.  We will only be successful if we all push as one.

EMS World: RAA’s Rob Lawrence on AAA President Postma

Rob Lawrence, Chief Operating Officer at the renowned Richmond Ambulance Authority, just shared his thoughts about AAA President Mark Postma over at EMS World. As always, we deeply appreciate the continued membership and support of RAAEMS.

[President Mark Postma] has a massive agenda and much business to do. This will require him to pursue current legislation to a successful conclusion, lead the development of AAA, foster the creation and maintenance of strategic partnerships and alliances for the betterment of the industry as a whole, and drive industry change, all while navigating Trump’s new world order.

Without a doubt a lot is about to change in 2017, but if ever there were a president up for the challenge—one who will knock down, not build, walls—Mark Postma seems that leader.

Read the full article►


GAO Report on Revised Provider Enrollment Screening Process

In March 2011, the Centers for Medicare and Medicaid Services (CMS) implemented a revised process for processing the enrollment of new Medicare providers and suppliers. This revised process also applied to existing Medicare providers and suppliers that were revalidating their enrollment information. This new process included assigning all providers and suppliers to one of three risk categories—limited, moderate, and high—based on the perceived risk of fraud and abuse. The risk category then determines the applicable screening process used for providers within that risk category.

Please note that ambulance providers and suppliers were placed in the moderate risk category. This risk category includes a verification of the information provided by the provider on its enrollment application, a check of the provider’s state licensure, a check of any adverse legal actions against the provider, and a site visit of the provider.

On December 15, 2016, the Government Accountability Office (GAO) released a report on the initial results of this revised provider enrollment screening process.

In its report, the GAO indicated that CMS applied its revised enrollment screening process to over 2.4 million newly enrolling and revalidating Medicare providers and suppliers from March 25, 2011 through December 31, 2015. Other relevant findings include:

  • The total number of enrolled Medicare providers and suppliers increased from 1.4 million in March 2011 to 1.9 million in December 2015, an increase of more than 30%.
  • CMS denied more than 6,000 applications for ineligible providers and suppliers. The most commonly cited reason for a denial was the failure of applicant to meet the provider/supplier type requirements. This included situations where the provider/supplier did not hold the required certification for that provider/supplier type.
  • CMS rejected 17,000 applications as incomplete. The GAO found that approximately 25% of the rejected applications were the result of the application being filed in error, either by the provider/supplier or the MAC. 21% of applications were rejected as being duplicates. Another 16% of rejections were the result of the provider/supplier failing to timely respond to the MAC’s request for additional information.
  • CMS screening of existing providers/suppliers resulted in more than 660,000 provider numbers being deactivated. This was typically (47%) the result of the provider failing to respond to the MAC’s request that they revalidate. Another 29% were the result of the provider/supplier voluntarily withdrawing from the Medicare program. Another 5% of deactivations were the result of the provider/supplier not submitting a claim to Medicare within the previous 12 months. The majority of these were likely individual practitioners (e.g., physicians) that either died, or who retired from professional practice, and who failed to inform the MAC at the time of retirement to request that their provider number be deactivated. This could also include organizational providers that were sold or otherwise no longer operational.
  • These were frequently the result of an individual practitioner (e.g., a physician) failing to deactivate his or her Medicare number upon their retirement, and their either not responding to a request to revalidate, or notifying the MAC of their retirement and agreeing to voluntarily withdraw
  • CMS revoked the billing privileges of 43,000 provider/suppliers. The most common reason cited (61%) was the failure of the provider/supplier to be professionally licensed. However, within the moderate risk category, which includes ambulance, 26% of all revocations were the result of a “CMS-approved revocation,” e.g., the result of some adverse legal action against the provider/supplier which was not properly disclosed to the MAC within 30 days.


CMS estimated that its revised screening procedures avoided $2.4 billion in Medicare payments to ineligible providers and suppliers over this period.

CMS also reported that it made several changes to its screening process over this period. This includes the implementation of a continuous license monitoring report in November 2013, and a continuous criminal monitoring report in July 2015. This also includes fingerprint-based criminal background checks for the owners and certain key employees of categorically high-risk providers and suppliers. In December 2015, CMS also began conducting site-visits for certain limited-risk providers and suppliers.

Despite the progress made by CMS, the GAO did find that certain program vulnerabilities still exist. For example, the GAO found that CMS had not established performance measures to monitor its ability to place providers and suppliers in the proper risk categories. The GAO recommended that CMS establish objectives and performance measures for assessing its progress in establishing better screening procedures for new enrollments and revalidations. CMS ultimately agreed with this recommendation.

Have a Medicare question? AAA members, send your inquiry to Brian Werfel, Esq. using our simple form!


EMS Today: Payment Reform Town Hall

EMS Today Conference & Exposition
Maximize your time at EMS TODAY by adding half-day or full day pre & post-conference workshops to your Gold (3-day) or Silver (2-day) full conference registration.
These unique, CE certified workshops are designed to provide in-depth clinical and hands-on instruction to students and will take place on Wednesday, February 22, 2017. These workshops are taught by recognized experts in the world of EMS.
ADD 1 or 2 today! Don’t forget that complimentary lunch is provided for all attendees registered for two onsite 4-hour workshops or one 8-hour workshop!
American Ambulance Association’s Town Hall Meeting on Payment Reform (#16200)
Wednesday, February 22, 2017: 1:00 PM – 5:00 PM
Workshop Description
The AAA has been leading efforts on Capitol Hill to take the initial steps necessary to reform the Medicare ambulance fee schedule. It began with the successful securement and multiple extensions of the 2% urban, 3% rural and super rural increases in Medicare payments for ambulance services. Through the Medicare Ambulance Access, Fraud Prevention and Reform Act (S. 377/H.R. 745), those increases would be made permanent and set the foundation for future reform by changing the status of ambulance service suppliers to that of providers, collecting data on the cost of providing ambulance services and addressing fraud and abuse with dialysis transports. EMS needs to be considered providers and have cost data if we are to make data driven changes to the fee schedule beyond ambulance services just being a transportation benefit. The AAA Payment Reform Committee is looking at what Medicare reimbursement policy would look like as providers of health care services with the data to support changes in ambulance policy. The Committee, comprised of representatives of the AAA, NAEMSP, NAEMT and NASEMSO, has developed a policy payment outlining the future of reimbursement for EMS including treat and refer, mobile integrated health and alternate destinations. Come to this special Town Hall Meeting on Payment Reform to hear about the activities of the Committee in detail and provide valuable input for the future of ambulance reimbursement policies.

Jimmy Johnson
Owner & President, LifeEMS, Past President, American Ambulance Association, United States

Kathleen Lester
Principal, Lester Health Law PLLC, United States

Asbel Montes
V.P. of Governmental Relations and Reimbursement, Acadian Ambulance Service, United States

Tristan North
S.V.P. of Govt. Affairs, American Ambulance Association, United States

Open to all registered EMS Today attendees. There is no charge to attend this workshop, but registration is required.

Register Today CLICK HERE to learn more about the
Pre & Post-Conference Workshops
EMS Today Conference & Exposition


December CMS Ambulance Open Door Forum & Follow Up Q&A

CMS LogoThe next CMS Ambulance Open Door Forum is scheduled for Thursday, December 1 at 2:00 PM Eastern. Please dial in at least 15 minutes before the call. View Agenda

CMS Ambulance Open Door Forum
December 1 | 2:00 PM ET
Conference ID: 44947739


Have questions after the CMS Open Door Forum? The AAA is here to help! Following the Open Door Forum, the AAA will host a Q&A conference call open to all members.

AAA Follow Up Q&A
December 1 | 3:00 PM ET
Pin: 73556603#

2015 Medicare Data Shows Evident of Crackdown on Non-Emergency Transport

2015 Medicare Payment Data Offers Evidence of Nationwide Crackdown on Non-Emergency Ground Ambulance Transportation; Impact Varies Dramatically by Medicare Administrative Contractor

Every year, CMS releases data on aggregate Medicare payments for the preceding year. This file is referred to as the Physician/Supplier Procedure Master File (PSP Master File). This past month, CMS released the 2016 PSP Master File, which contains information on all Part B and DME claims processed through the Medicare Common Working File with 2015 dates of service.

In September’s blog post, I discussed the results of the first year of the prior authorization demonstration project for repetitive, scheduled non-emergency ground ambulance transports. During this first year, the project was limited to three states: New Jersey, Pennsylvania, and South Carolina. The data confirms that these three states saw a dramatic reduction in Medicare’s approved payments for dialysis transports.

This month, I will be discussing the national payment trends for non-emergency ground ambulance transports, and, in particular, Basic Life Support non-emergencies.

In 2015, Medicare paid approximately $990 million for BLS non-emergency transports. This is 13% less than what it paid for BLS non-emergency transports in 2014 ($1.14 billion). Please note that these figures only reflect payments for the base rate; when the payments for the associated mileage are included, the reduction is even more dramatic.

In actual terms, this means Medicare Administrative Contractors (MACs) approved nearly 1 million fewer BLS non-emergency transports in 2015 (5.86 million) than they approved in 2014 (6.81 million). Roughly 75% of this reduction can be directly attributed to the prior authorization program in the three states listed above. Note: the reduction in approved dialysis transports in New Jersey accounts for nearly half of the national decline). However, that leaves nearly 250,000 fewer approved transports in the remaining 47 states. This reduction was not the result of fewer claims being submitted in 2015; the number of submitted claims was actually higher in 2015 than 2014. Rather, the data shows that this reduction is the result of the MACs actively denying many more claims than in year’s past.

I believe these reductions are the direct result of a step-up in the enforcement activities of the MACs, which I also believe has the tacit, if not outright, approval of CMS.

To test this thesis, I looked at the state-by-state data to see if any trends could be found. What I found was that 28 states saw increases in the total number of approved BLS non-emergency transports in 2015, with 19 states seeing decreases. However, on its face, that number is somewhat deceiving. The states that saw increases tended: (1) to see either relatively small increases or (2) had relatively low utilization rates to begin with. The states that saw decreases tended to be larger states with higher utilization rates, and those decreases tended to be larger in percentage terms. For instance, California saw a 21.5% decrease in the number of approved BLS non-emergency transports. Ohio saw an 11.7% decrease.

Digging deeper, it becomes clear that a state’s overall change in payments for BLS non-emergencies is almost perfectly correlated with its change in payments for dialysis transports. In other words, to the extent the state saw an overall reduction in payments for BLS non-emergencies, that reduction – – in nearly all cases – – was the result of the total payments for dialysis decreasing by more than any offsetting increase in the total payments for non-dialysis transports.

These relative changes in dialysis were also highly correlated with the MAC that administers Medicare claims in that state. To the extent your state saw a reduction in dialysis payments, it is highly likely that neighboring states administered by the same MAC saw similar reductions in payments. The following charts will help illustrate this point:

2016-11-29-werfel-non-emergency-crackdown-chart-1As you can see, all three states within Cahaba’s jurisdiction saw a net increase in the total payments for dialysis. While the increases themselves were quite minor in Alabama and Tennessee, Georgia saw an 11.8% increase in total payments for dialysis. Similarly, both Florida and Puerto Rico saw significant increases in the approved payments for dialysis.

By contrast, every state in National Government Services’ (NGS’) jurisdiction with more than 1,000 paid dialysis transports in 2015 saw a net reduction in the total payments for dialysis. These reductions ranged from a relatively minor reduction of 1.17% in New York to a nearly two-thirds (64.58%) reduction in Minnesota.

2016-11-29-werfel-non-emergency-crackdown-chart-2This trend was present in all remaining jurisdictions, although the results were more mixed. For example, with the exception of South Carolina, the three remaining states administered by Palmetto all saw increases. Likewise, the majority of states administered by WPS saw decreases. This included Indiana, which has a sizeable dialysis population. Among WPS states, only Missouri saw a small (3.90%) increase.

California saw a 31.76% decrease in its payments for dialysis. The only other Noridian states with more than 1,000 paid dialysis trips were Hawaii and Washington, which both saw increases.

Novitas presents a more complicated picture, with several large states, such as Texas, seeing double-digit increases in payments for dialysis, while other large states saw sizeable decreases.

All in all, the data suggests that CMS and its contractors continue to pay close attention to the non-emergency side of our business, particularly BLS non-emergency transports. These transports have been under scrutiny for many years, as reports from the Office of Inspector General, the Government Accountability Office and other federal agencies have flagged this portion of our industry as being particularly prone to overutilization (and, in some cases, outright fraud).  However, this heightened scrutiny is not being uniformly applied across-the-board. The data suggests that certain MACs have been far more aggressive in targeting these sorts of trips across their entire jurisdictions, while others seem content to target specific (typically large) states within their jurisdictions. This could serve as a template for how MACs will approach prior authorization in their jurisdictions.

‘Praemonitus, Praemunitus’     

Latin Proverb, loosely translated to “forewarned is forearmed.”



Payment Reform Chairs Pen Op-Ed in JEMS

Ambulance payment reform is critical to the future of emergency medical services across our country. Don’t miss the op-ed in JEMS by Asbel Montes and Jimmy Johnson, chair and vice chair of AAA’s Payment Reform Committee.

Before the industry as a whole can embrace mobile integrated health, community paramedicine, and value-based purchasing, the industry must contend with standardizing cost data and submitting it to the federal government. We must also fight to ensure that payment is linked to the health care services provided and less to the act of transporting patients.

Read the full op-ed►

Ready to add your voice to the conversation? Join fellow members at AAA’s Payment Reform Town Hall at EMS Today in Salt Lake City. Learn more►

CMS SMR Contractor Audit Error

Over the past week, we have learned that several ambulance suppliers have received letters from the CMS Supplemental Medical Review Contractor (SMRC), StrategicHealthSolutions, LLC.  These letters indicate that the SMRC is conducting a medical review of their claims.

The letter contains a section that explains why the supplier has been selected for review.  That section contains the following explanation:

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), signed into law on April 16, 2015, extended the therapy cap exception process through December 31, 2017, and modified the requirement for manual medical review for services over the $3,700 therapy thresholds.  MACRA eliminated the requirement for manual medical review of all claims exceeding the therapy thresholds and instead allows a targeted review process.  CMS has tasked the SMRC with performing post-payment medical review of Part B therapy claims for providers with a high percentage of patients receiving therapy beyond the threshold as compared to their peers for dates of service July 1, 2015 to the present. 

Our firm contacted the SMRC on behalf of a number of affected providers.  On November 14, 2016, StrategicHealthSolutions responded to our inquiry.  The SMRC indicated that its review was intended to be limited to suppliers of physical therapy services.  Accordingly, the SMRC confirmed that these audit letters were sent to ambulance suppliers in error. 

The SMRC further indicated that ambulance suppliers that received this audit letter in error will be notified by telephone that they were selected in error.  The SMRC will also be sending letters to affected ambulance suppliers notifying them of its error.  These letters are expected to be mailed tomorrow, Tuesday, November 15, 2016.

If your organization received a letter from StrategicHealthSolutions, LLC, please know that this letter was sent in error.  Your organization is not being audited by the Supplemental Medical Review Contractor.  You can expect to receive a phone call and/or a letter in the next few days formally notifying you of the contractor’s error.  That letter should formally withdraw the SMRC’s request for medical records. 

If you received a letter from the SMRC, and have any further questions, please feel free to contact Brian S. Werfel, Esq., the AAA’s Medicare Consultant.  He can be reached via email at

CMS List of Medically Unlikely Edits for Ambulance Services

On October 1, 2016, the Centers for Medicare and Medicaid Services (CMS) updated its list of Medically Unlikely Edits (MUEs). The MEU program is designed to reduce the paid claims error rate for Part B claims. The program operates by estimating the maximum number of units of service that a provider/supplier would report under most circumstances for a single beneficiary on a single date of service. A claim that submits units of service in excess of this threshold will typically be denied by the Medicare Administrative Contractor.

For additional information on the CMS Medically Unlikely Edit Program, click here.

Effective October 1, 2016, claims for ambulance services will be subject to the following MUE edits:

HCPCS Code MUE Threshold
A0425 (Ground Ambulance Mileage) 250
A0426 (Ground Ambulance, ALS Non-Emergency) 2
A0427 (Ground Ambulance, ALS Emergency) 2
A0428 (Ground Ambulance, BLS Non-Emergency) 4
A0429 (Ground Ambulance, BLS Emergency) 2
A0430 (Air Ambulance, Fixed Wing) 1
A0431 (Air Ambulance, Helicopter) 1
A0432 (Ground Ambulance, Paramedic Intercept) 1
A0433 (Ground Ambulance, ALS-2) 1
A0434 (Ground Ambulance, Specialty Care Transport) 2
A0435 (Air Ambulance, Fixed Wing Mileage) 999
A0436 (Air Ambulance, Helicopter Mileage) 300


Findings Patterns Where None Exist

On August 16, 2016, the HHS Departmental Appeals Board (DAB) issued a decision related to CMS’ authority to revoke a Medicare supplier’s billing privileges.  The DAB is the fourth and final level of administrative appeal within the Department of Health and Human Services.

Factual Background

The case involved John P. McDonough III, Ph.D., a clinical psychologist residing in Florida, and two of his affiliated medical practices, Geriatric Psychological Specialists and Geriatric Psychological Specialists II.  In October 2014, First Coast Service Options, Inc., the Medicare Administrative Contractor for Florida, notified McDonough and both medical practices that their Medicare billing numbers were being revoked for alleged abuses of their billing privileges.  Specifically, First Coast indicated that data analysis had revealed that the three suppliers had submitted a total of 420 claims for deceased beneficiaries over an approximately two-year period.

McDonough and his two medical practices appealed for a reconsideration of the revocation of their billing privileges, which was denied in February 2015.   The suppliers then appealed for an ALJ hearing.  The suppliers conceded that they submitted more than 200 claims for beneficiaries that were deceased on the date of service.  However, they attributed these claims to data-entry errors and other clerical mistakes.  The suppliers argued that these were simple billing errors, representing a small percentage of the tens of thousands of claims they submitted during this period of time.   In December 2015, the ALJ issued his decision.  While the ALJ seemingly accepted the suppliers’ explanation that these were billing errors, and that there was no intent on the part of the suppliers’ to submit false claims, the ALJ nevertheless upheld the revocation of their billing privileges.  Citing previous DAB decisions, the ALJ held that the admitted submission of repeated claims for services to deceased beneficiaries due to “incorrect billing entries due to similar beneficiary names or Medicare numbers, and inadvertent typing errors” was not inconsistent with a finding that the suppliers’ had abused their billing privileges.

The suppliers’ then appealed to the DAB. In its decision, the DAB first noted that it has consistently rejected contentions that revocation required a finding that the supplier acted intentionally:

“The Board has long held that the regulation’s plain language does not require CMS to establish fraudulent or dishonest intent to revoke a supplier’s billing privileges under this section and that the regulatory language also does not provide any exception for inadvertent or accidental billing errors.”

The DAB then countered the suppliers’ argument that CMS never intended to revoke a supplier’s billing privileges for simple mistakes.  They cited language from the June 27, 2008 final rule, where CMS stated revocation “is not intended to be used for isolated occurrences or accidental billing errors.”  The DAB noted that CMS, in that same final rule, indicated that it would not consider the submission of three or more improper claims to be accidental.  The DAB also noted that the relatively small percentage of erroneous claims was irrelevant, as the regulation does not require CMS to establish any particular error rate or percentage of improper claims.

The DAB held that since the record established that the suppliers’ had submitted more than 3 claims for deceased beneficiaries, CMS had met the requisite legal standard for revocation.  Accordingly, the DAB upheld the revocation of the suppliers’ billing privileges.

Potential Impact on Ambulance Providers

The DAB’s decision effectively establishes a strict liability standard for revocations based on the submission of claims for deceased beneficiaries.  The submission of three or more such claims over any designated period of time could constitute legal grounds for CMS to revoke a supplier’s Medicare billing privileges. 

The implications of this decision should give every Medicare provider pause.  However, given the nature of our operations, our industry needs to pay particular attention.  The psychologist and therapists that were the subject of the above-referenced case saw patients on a scheduled basis, and spent many hours with each of their patients.  This gave them ample time to obtain insurance information from each of their patients, and to confirm the accuracy of that information.  Yet the suppliers’ still had more than 200 claims billed incorrectly.

EMS providers do not have that luxury.  We frequently encounter patients on the street or at their home.  Many of these patients do not have their insurance information on them at the time of transport.  Even when the patient had this information on their person, under the stress of an emergency medical situation, the paramedic or EMT may not record this information accurately.

As a result, our billing offices spend a good portion of their time trying to verify a patient’s insurance.  Unfortunately, some of the administrative “shortcuts” we have developed to address these problems create the potential to inadvertently submit claims for deceased patients.  While there is nothing at present that suggests that CMS intends to expand the use of its revocation authority, we probably want to rethink these shortcuts.

An example you say?

Consider a transport of an elderly woman to the hospital in an emergency.  The crew does not obtain the patient’s insurance information at the time of transport.  However, they do obtain the hospital face sheet, which lists the patient’s social security number.  To convert this social security number to a Medicare HIC#, we need to include a Medicare suffix.  How would you go about doing that?

One option would be to ping the patient’s name, date of birth and SSN against an eligibility database.  While effective, provider’s typically pay for these lookups.

Another option would be to simply guess what the applicable suffix might be, affix that to the SSN, and submit the claim.  If it goes through, the provider guessed correctly.  If it rejects as an invalid name and HIC# combination, the provider would know to try another suffix.  So let’s assume the provider elects to use this option.  Playing the percentages, the provider would likely add the “B” suffix, on the theory that, given her age, the woman likely qualified for Social Security Benefits (and therefore Medicare benefits) based on the work history of her spouse.  But what if the provider was wrong, and the woman was the primary wage earner in her family?  If that were the case, her suffix would likely be the “A.”  Now imagine that her husband shared the same Social Security numerics, and that his suffix was the “B.”  Further imagine that he has since passed, and the provider has now inadvertently submitted a claim for the dead husband.

Now imagine this happens three times in a year…

Another way we can inadvertently submit claims for dead patients is not using front-end verification.  Many providers submit claims based off the insurance information they received at the time of transport (or from the hospital, nursing home, etc.), without any attempt to confirm its accuracy.  These providers recognize that the insurance information will be correct more often than not.  They are making the calculated decision that it is easier to deal with any issues after they have been identified by the payer.  However, one reason an insurance can come back as invalid is because the crewmember recorded the HIC# incorrectly.  For example, they may transpose a few digits (i.e., they wrote “1243” rather than “1234”).  If the transposed HIC# relates to a deceased beneficiary, that would be captured by the data analytics used by the Medicare contractors.

The DAB’s decision is certainly troubling.  However, I do not believe that our industry needs to overreact.  Rather, I would encourage everyone to view the DAB’s decision as a starting point, and to re-examine their own billing and verification processes to see if there is anything they can do to reduce the likelihood of their organization every confronting this issue.


Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at

Ambulance services face huge losses under ACA

From the San Fernando Valley Business Journal

Two consequences of health care reform – lower reimbursement rates and more patients – have put some local ambulance companies on life support as they struggle to balance higher volumes of trips with less money in return. As a result, ambulance companies have left certain regions of the state amid consolidations and closures.

Read the Full Article (PDF Download)

Acadian’s Asbel Montes on Ambulance Payment Reform

“EMS is instrumental to the healthcare fabric of our country. As the healthcare industry continues to innovate, it is imperative to recognize the value that EMS brings to the pre- and post-hospital environment. EMS providers are the only gatekeepers to the healthcare system in many communities.

73% of all ambulance suppliers credentialed with Medicare bill the program less than 1,000 transports per year. It is imperative that any cost data collection system reporting requirements consider this to ensure the reliability of the data and the administrative burden to ambulance providers and suppliers.”

Asbel Montes
Vice President of Governmental Relations & Reimbursement, Acadian Ambulance
Co-Chair, American Ambulance Association Payment Reform Committee

CMS Moratoria Update

The Centers for Medicare & Medicaid Services Lifts Moratoria on Enrollment of Part B Emergency Ground Ambulance Suppliers in All Geographic Locations; Moratoria for Part B Non-Emergency Ground Ambulance Suppliers Extended

Effective July 29, the Centers for Medicare & Medicaid Services (CMS) has lifted the temporary moratoria in all geographic locations for Part B emergency ground ambulance suppliers.  Beginning in 2013, CMS placed moratoria on Medicare Part B ground ambulance suppliers in Harris County, Texas, and surrounding counties (Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller).  In February 2014, CMS announced it would add six more months to these moratoria and add Philadelphia, Pennsylvania, and surrounding counties (Bucks, Delaware, and Montgomery), as well as the New Jersey counties of Burlington, Camden, and Gloucester.  Since that date, CMS extended the moratoria four additional times, most recently in February of this year.

CMS considers qualitative and quantitative factors when determining if there is a high risk of fraud, waste, and abuse in a particular area and whether or not it should establish a moratorium.  If CMS identifies an area as posing an increased risk to the Medicaid program, the State Medicaid agency must impose a similar temporary moratorium as well.  CMS also consults with the Office of the Inspector General (OIG) within the Department of Health and Human Services (HHS) and the Department of Justice (DOJ) when identifying potential areas and providers/suppliers that should be subject to a temporary moratorium.  Finally, CMS also considers whether imposing a moratorium would have a negative impact on beneficiary access to care.  In areas where there is a temporary moratorium, the policy does not apply to changes in practice location, changes to provider/supplier information (e.g., phone number, address), or change in ownership.  Temporary moratoria remain in place for six months, unless CMS extends the policy through notice in the Federal Register.

CMS may lift a moratorium at any time if the President declares an area a disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, if circumstances warranting the imposition of a moratorium have abated, if the Secretary of HHS has declared a public health emergency, or if, in the judgment of the Secretary of HHS, the moratorium is no longer needed.  After a moratorium is lifted, providers/suppliers previously subject to it will be designated to CMS’s “high screening level” for six months from the date on which the moratorium was lifted.

CMS has announced it will lift the moratoria on new Part B emergency ambulance suppliers in all geographic locations because the Agency’s evaluation has shown the primary risk of fraud, waste, and abuse comes from the non-emergency ambulance supplier category and that there are potential access to care issues for emergency ambulance services in the areas with moratoria.  New emergency ambulance suppliers seeking to enroll as Medicare suppliers will be subject to “high risk” screening.  If enrolled, these suppliers will be permitted to bill only for emergency transportation services.  They will not be permitted to bill for non-emergency services.

The moratoria remain in place for Medicare Part B non-emergency ground ambulance suppliers for all counties in which moratoria already are in place in New Jersey, Pennsylvania, and Texas.


2016 Medicaid Crossover Study

The AAA is pleased to announce the release of its Medicaid Crossover Survey 2016. A companion to its recently released 2016 Medicaid Rate Survey, the 2016 Medicaid Crossover Survey focuses on each state’s treatment of Medicare crossover amounts (i.e., copayment’s and deductibles).

The survey notes whether a state will pay the full crossover amount, will make a payment only to the extent Medicare’s payment was less than the amount Medicaid would have paid as a primary, or will not make a payment under any circumstances.

We hope members will find this tool useful in comparing their state’s Medicaid reimbursement to neighboring states, and hope it will assist in their efforts to ensure fair and equitable compensation for their services.

The AAA also wants to thank all members that participated in the survey. Without your help, these sort of projects would be impossible.

AAA 2016 State Medicaid Ambulance Rate Survey Results Released

Normally this blog focuses on an area of Medicare reimbursement or compliance.  However, this month I want to talk about Medicare’s companion program, Medicaid.

When you talk to ambulance providers around the country about their State’s Medicaid Program, a universal truth emerges: no one believes their Medicaid Program fairly reimburses them for their services.  This statement is not particularly controversial.  The Government Accountability Office has on several occasions looked at the relationship between our industry’s costs and Medicare’s payment, and has consistently determined that Medicare fails to adequately reimburse us for our costs.  Given that Medicaid payments are usually some fraction of what Medicare pays, there is really no debate that our industry loses money transporting Medicaid patients.

What I find more interesting is the sheer number of people that are convinced – – and I mean absolutely convinced – – that their state has the lowest Medicaid rates in the country.  Call it a reverse Lake Wobegon effect.  Of course, not everyone can be right.  Only one state can have the lowest ambulance rates (answer below).  Conversely, only one state can hold the honor of having the highest rates.  But how to settle these questions?

Well, the AAA has the answer.  On behalf of the AAA, I am pleased to announce the release of the American Ambulance Association’s 2016 State Medicaid Rate Survey.  This survey sets forth the fee-for-service Medicaid rates for all 50 states.  For each state, the Survey lists the rate paid for each of the following procedure codes:

  • A0428 – BLS Non-Emergency
  • A0429 – BLS Emergency
  • A0426 – ALS Non-Emergency
  • A0427 – ALS Emergency
  • A0433 – ALS-2
  • A0434 – SCT
  • A0225 – Neonate Transport
  • A0998 – Treatment, No Transport
  • A0425 – Mileage
  • A0422 – Oxygen
  • A0382/A0398 – BLS/ALS Routine Disposable Supplies
  • A0420 – Wait Time
  • A0424 – Extra Attendant

While I can promise that we have taken steps to verify the information on this Survey, neither the AAA nor myself can guarantee its accuracy.  The rates set out in this survey are based on publicly available information provided by the various State Medicaid agencies, and may not reflect changes to a state’s reimbursement policy that have not been made publicly available.  They will also reflect any emergency budgetary measures or other temporary reductions imposed by a state.  That said, our goal is to make this as accurate as possible.  Therefore, if you believe the rates for your state are inaccurate, I would ask you to please email me at, and to provide me with updated information.

I can feel some of you thinking at this point: “This is all fine and good, but how does this actually help me?”  Fair question.  At a minimum, it will probably make some of you feel better that your state is not actually the lowest.  Others may be fairly surprised to find that their state, which they believed to be at or near the bottom, is actually closer to the middle of the road.  Many of your states are expanding their managed Medicaid programs, and you find yourself trying to determine whether it makes sense to contract with the MCO (or its transportation broker).  Many of these transportation brokers service multiple states, and may be offering rates based on their rates offered by the State Medicaid agency in the state in which they are headquartered (I know it will come as a shock that many of the new MCOs seem unaware that coverage rules differ in each state).  We are also aware of instances in which a state association has used past rate surveys as part of a comprehensive strategy to lobby their state legislature for a rate increase, e.g., by demonstrating that the current rates paid by the state are far lower than the rates paid in neighboring states.

Regardless of whether (or how) you intend to use this Survey, I encourage all AAA members to check it out.

Answer: New Jersey has the lowest payment for both emergency and non-emergency transport, at a listed rate of $58.00, plus $1.50 per mile (for the first 15 miles, $2.00 for each mile thereafter).  For sake of comparison, a taxi from Newark Airport to midtown Manhattan (a distance of 17 miles) will typically run around $70.00 (plus tip).


Have an issue you would like to see discussed in a future Talking Medicare blog? Submit a question today!



The Case of the Disappearing ALS Assessment

by Brian S. Werfel, AAA Medicare Consultant | Updated May 2, 2016

Question: What do the Easter Bunny, the Loch Ness Monster, and a valid ALS assessment have in common?
Answer: Chances are, your Medicare contractor has never met any of them.

While it is clear that I don’t have a future in comedy, this joke illustrates an unfortunate reality: the contractors responsible for processing the ambulance industry’s claims routinely ignore an important aspect of the Medicare reimbursement regime.

The logical starting point for this discussion is to define what we mean by an ALS Assessment. In the Medicare world, the term “ALS assessment” has a very specific meaning. The regulations (42 C.F.R. §414.605) defines an ALS assessment as follows:

Advanced life support (ALS) assessment is an assessment performed by an ALS crew as part of an emergency response that was necessary because the patient’s reported condition at the time of dispatch was such that only an ALS crew was qualified to perform the assessment. An ALS assessment does not necessarily result in a determination that the patient requires an ALS level of service.

Over time, many in our industry has come to use the terms “paramedic assessment” and “ALS assessment” to be interchangeable. In certain contexts, the two are synonymous. However, for Medicare reimbursement purposes, they are not. In order to qualify as an “ALS assessment,” the regulation requires that the paramedic’s assessment be warranted based on the patient’s condition as reported to the dispatcher.

In other words, if the patient’s reported condition was such that an EMT-Basic would have been capable of properly assessing the patient, the situation would not qualify as an ALS assessment. That is true even if the ambulance service elects (or is required by local ordinance) to respond with a paramedic. It is only when the reported condition of the patient was of sufficient severity that an EMT-Basic would have been unqualified to conduct the assessment that the paramedic’s assessment rises to the level of an ALS assessment. That determination, in turn, must be based on established EMS dispatch protocols. (Multiple blog posts could be devoted to the issue of local dispatch protocols and their impact on Medicare reimbursement; however, for this blog, I want to keep the focus on the Medicare contractors.)

At this point, I imagine that many of you are asking yourself: why would the federal government create such a complicated (and inherently subjective) concept? Good question.

The best answer I can offer is to point to the reimbursement regime that existed prior to the implementation of the Medicare Ambulance Fee Schedule in 2002. If you recall, the previous reimbursement structure was based on the vehicle that responded to the patient. Provided the medical necessity requirement was met, the ambulance service would be entitled to bill for an ALS emergency regardless of the interventions (if any) that were provided by the crew. The Negotiated Rulemaking Committee (NRC) tasked with creating the Ambulance Fee Schedule agreed to move away from this vehicle-centric reimbursement regime to one based on the treatments furnished to the patient during the ambulance encounter. Under the new payment rules, the ambulance service would typically be entitled to bill for an ALS base rate to the extent they provided one or more valid ALS interventions.

To its credit, the NRC recognized that ambulance services frequently receive incorrect or incomplete information on the patient’s condition at the time of dispatch. For example, you may be told that the patient is experiencing chest pain, but the person that called 911 may be unable to provide information on whether the patient has an underlying cardiac condition, had suffered a traumatic injury, or may simply be experiencing indigestion. The NRC further recognized that a reimbursement regime that focused solely on the treatments provided to the patient might result in ambulance services electing to respond initially with a BLS vehicle, and only call for ALS backup once the EMT determined, on scene, that the patient was experiencing a serious medical emergency. To address this concern, the NRC created the ALS assessment to ensure that EMS organizations would be fairly reimbursed for the additional costs associated with responding with an ALS vehicle when the situation dictated.

So now that you have the background, let’s turn to how the ALS assessment is currently being interpreted by Medicare contractors. Put bluntly, to the extent they even acknowledge its existence in the regulations, they discount its significance. A recent guidance document by one of the Medicare Administrative Contractors illustrates the prevailing view among contractors:

“The ALS Assessment alone does not allow you to bill an ALS1 level of service…If the ALS Assessment has proven that an ALS transport is not medically necessary, it would only be appropriate to bill a BLS level of service.”

There are numerous problems with this statement. However, the MAC’s thinking on the subject is also illustrative of the larger problem with how they review emergency claims: specifically, the contractors frequently conflate the issues of: (1) medical necessity for the ambulance and (2) the appropriate level of service that can be billed.

The two must be separate determinations, if for no other reason than they focus on different points on the timeline of the patient encounter. The issue of medical necessity is determined by the patient’s on-scene condition. If that condition is such that other means of transport are contraindicated, the ambulance transport is medically necessary. Assuming the other requirements set forth in the Medicare regulations are met (origin/destination, patient signature, etc.), you would have a covered ambulance transport. By contrast, the ALS assessment focuses on the patient’s condition as reported to dispatch. As noted above, it focuses on whether that reported condition was such that an EMT-Basic was unqualified to conduct that assessment.

So, in the above-referenced statement, the MAC is incorrect in stating that you should bill for a BLS level of service when the ALS transport is not medically necessary. If the transport was truly not medically necessary (i.e., the patient could go safely by other means), it would not be covered by Medicare (at any level of service). In the same vein, when the MAC states that the ALS assessment does not allow you to bill ALS, it seems that they are confusing the term “ALS assessment” with the term “paramedic assessment.” By definition, a valid ALS assessment qualifies a medically necessary ambulance transport to be billed as an ALS emergency.

So how did Medicare’s contractors’ thinking get so convoluted? Based on numerous conversations with the policy folks at the MACs, I think the answer is they are simply misreading the regulation. Recall that the last sentence of the ALS assessment definition reads as follows: “An ALS assessment does not necessarily result in a determination that the patient requires an ALS level of service.”

I think the MACs are interpreting the phrase “level of service” to mean “base rate.” On its face, this would appear to be a reasonable interpretation. However, a cursory review of the final rule that adopted the Ambulance Fee Schedule definitions makes clear that the phrase “level of service” refers to the interventions and/or treatments provided to the patient. For example, in that final rule, CMS stated that:

“An emergency ambulance trip may be paid as an ALS1-Emergency even when the only ALS service furnished is an ALS assessment.”

Words mean things. You have probably heard this phrase used numerous times. This is especially true when those words are being used by the federal government to control the distribution of millions of Medicare dollars. Many of the difficulties our industry is currently experiencing with Medicare could be avoided if CMS exercised a bit more care in its choice of language.

Have an issue you would like to see discussed in a future Talking Medicare blog post? Please write to me at

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

Want to learn more?

Join Brian Werfel and Angie Lehman for a 60 minute webinar on Revalidation for All Services.
June 29, 2016 at 2:00 PM EASTERN

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.

MAC Novitas March 2016 Updates to Ambulance Services

On March 4, Novitas Solutions, Medicare Administrative Contract managers for several jurisdictions, asked AAA to share the following information with ambulance services.

March 4, 2016 – Letter to Ambulance Providers | March 4, 2016 – Letter to Beneficiaries

Jurisdictions Covered By Novitas

  • The Medicare Administrative Contract (MAC) Jurisdiction L (JL), which spans Pennsylvania, New Jersey, Maryland, Delaware and Washington D.C.;
  • The Medicare Administrative Contract (MAC) Jurisdiction H (JH), which spans Colorado, Oklahoma, New Mexico, Texas, Arkansas, Louisiana, Mississippi, Indian Health Service (IHS) and Veterans Affairs (VA); and
  • The payment processing for the Federal Reimbursement of Emergency Health Services Furnished to Undocumented Aliens contract, as authorized under Section 1011 of the 2003 Medicare Modernization Act.

Calculating Excess Mileage

The American Ambulance Association receives many questions from members for our expert consultants. Starting in February 2016, we will share responses to common questions on our blog. Have a more complex question? Contact an AAA expert directly.
Medicare | Human Resources & Operations | Labor Relations

Ask An AAA Expert: Ambulance Service Needs Some Direction on Mileage

[dropcap1]Q:[/dropcap1] Our service operates in a large metropolitan area. Within the city limits is a major university medical center. This hospital operates the only Level 1 Trauma Center within 100 miles. It is also the only hospital to offer interventional cardiology services and certain other advanced services within a 50-mile radius. As a result, patients from outlying areas are frequently transferred to this hospital. As the medical center’s contracted ambulance provider, we are often asked to transport patients long distances back to their towns of origin, either to their residences or to a skilled nursing centers (SNF). There are approximately a half a dozen SNFs located within a short distance (approximately five miles) of the hospital. Can you help us determine whether all of the mileage for these long distance transports will be covered by Medicare? If all of the mileage is not covered, can you help us determine the portion of the mileage that would be covered?

[dropcap1]A:[/dropcap1] In this inaugural edition of Ask the Medicare Consultant, we tackle one of the more difficult aspects of Medicare billing: how to determine the number of covered miles for long-distance hospital discharges.

The starting point for answering this question is to recognize that Medicare’s coverage rules will differ depending upon whether the patient is: (1) being returned to his or her residence, (2) is being returned to an SNF where he or she previously resided, or (3) is being transported to an SNF for an initial admission.

Where the patient is being returned to a residence (or a SNF at which they were previously admitted as a resident), Medicare’s coverage rules are relatively straightforward. Section 10.3.1 of Chapter 10 of the Medicare Benefit Policy Manual provides that:

“Ambulance service from an institution to the beneficiary’s home is covered when the home is within the locality of such institution, or where the beneficiary’s home is outside the locality of such institution, but the institution, in relation to the home, is the nearest one with appropriate facilities.”

For these purposes “locality” means the area surrounding the hospital from which patients would normally travel to that hospital for medical care. See Section 10.3.5 of Chapter 10 of the Medicare Benefit Policy Manual. Therefore, to the extent the patient’s residence falls within the “catchment area” of the hospital, the Manual makes clear that all of the mileage back to the patient’s residence will be covered.

To the extent the patient’s residence falls outside the hospital’s catchment area, the test is whether that hospital was the nearest appropriate facility (in relation to the patient’s residence) for the treatment of the patient’s medical condition.

Consider a patient that went to his local hospital with a complaint of chest pain, and who was ultimately diagnosed with a major cardiac blockage requiring bypass surgery. The patient was then transferred to the university medical center for that surgery (the only facility offering interventional cardiology within a 50-mile radius). The patient is now ready to be discharged back to his residence, a distance of 45 miles.

In this instance, the patient’s residence falls outside the catchment area of the medical center. However, the medical center was the nearest appropriate facility for the treatment of the patient’s medical condition. Accordingly, all of the mileage to this patient’s residence would be covered.

Unfortunately, it can sometimes be difficult to apply this test in practice, because the patient’s medical condition does not always manifest itself while at home. For example, what if this cardiac patient did not reside in the area, but rather was in the area visiting a son or daughter? Let’s further assume that the patient actually resided a few hundred miles away, in another major urban center (e.g., Chicago).

The university medical center would clearly not be the nearest appropriate facility when measured in relation to the patient’s home. Therefore, at the onset, it is clear that there is some non-covered mileage. The question then becomes, “how many miles?”

The test indicates that the covered mileage is the mileage from the patient’s residence to the nearest appropriate facility for that treatment. For these purposes, let’s also assume that there is a hospital that offers interventional cardiology located 10 miles from the patient’s residence. Therefore, in this example, the first 10 miles would be covered, and the remaining mileage would be non-covered.

A good rule of thumb: if all of mileage from the patient’s residence to the university medical center would have been covered (whether or not the patient actually traveled to that facility by ambulance), then all of the mileage back to that residence will also be covered.

The test for discharges to a SNF for an initial admission is a bit more complicated. The starting point is Section 10.3 of Chapter 10 of the Medicare Benefit Policy Manual, which provides that “only mileage to the nearest appropriate facility equipped to treat the patient is covered.”

In the original question, it was indicated that there were a number of SNFs located within a short distance of the university medical center. For the purposes of convenience, let’s assume that the nearest SNF is located across the street from the hospital, the next closest is located one mile away, the next closest is located two miles away, etc.

Thus, if the patient is transported to the SNF across the street, the entire mileage would be covered.

If the patient was transported to the next closest SNF, we cannot determine whether all of the mileage is covered without first determining whether the closer SNF had a bed available on that date. Note: a facility is not considered an “appropriate facility” if it does not have an available bed at the time of the transport. In other words, if the closer SNF had a bed on that date, then only the mileage to that SNF would be covered. The extra mileage, approximately 9/10ths of a mile, would not be covered. If, however, that closer facility did not have a bed available at the time, then the SNF to which the patient was transported would be the “nearest appropriate facility,” and all of the mileage would be covered.

Now imagine that the patient was taken the SNF two miles from the hospital. To properly calculate the covered mileage, we would need to know whether: (1) the SNF across the street had a bed available and (2) whether the SNF 1 mile from the hospital had a bed available).

[quote_left]“Does CMS really expect me to call one or more SNFs on every hospital discharge?”[/quote_left]And so on and so on…

At this point, you are probably asking yourself, “How can I possibly know if each of these closer SNFs had a bed available on that date? Does CMS really expect me to call one or more SNFs on every hospital discharge?”

The short answer: Yes, a literal interpretation of the Medicare coverage rules would require you to make those phone calls.

It goes without saying that this sort of process would be burdensome. Depending on the actual miles traveled, it may not even be possible to identify each and every closer SNF. For example, the original question alludes to transports of 50 or more miles. There could be dozens of SNFs located within a shorter distance. Calling each and every one of them is simply impractical.

In a perfect world, the hospital staff would notify you at the time they schedule the call that the patient is being transported beyond the nearest appropriate facility. However, in order to notify you, the hospital would have to know whether the nearby SNFs had a bed available on that date. The only way they could know that information would be to have called themselves. But why would the hospital call? The hospital likely gave the patient a choice, i.e., you can do your rehab in a nearby SNF or you can elect to go to an SNF in your hometown where you can be closer to your friends and family. As you would expect, the patient then elected to go closer to home.

So what to do?

One solution used by a number of ambulance providers is to draw a circle around the hospital that incorporates a sufficient number of SNFs so that they can be reasonably confident that there would be an available bed on any given day. In the original example, let’s assume that is the six SNFs located within five miles of the hospital. These ambulance providers have elected not to question any mileage below this threshold. Instead, they will bill up to five miles for coverage without any questions. These providers then assume that anything over that five-mile threshold is going to be excess mileage, which will need to be billed to the patient.

Please note that I am not suggesting that the first five miles would always be covered. Rather, these providers are engaged in a cost/benefit analysis. They are balancing the chances of having some portion of those five miles disallowed during a Medicare audit against the time and effort involved in calling each of these SNFs.

Please also keep in mind that this mileage circle would vary based on the local geography. In some areas, you may need to go out to 10, 20, or even 30 miles before you can incorporate a sufficient number of SNFs so that you can be assured that at least one would have an available bed on any given date. Of course, the larger the circle, the greater the potential that you may end up billing for substantial amounts of non-covered mileage. Thus, the decision to adopt a mileage parameter is one that should be made in consultation with your legal advisors.


Have a Medicare billing question? Do you suspect other AAA members are struggling with the same issues? If so, please let us know.


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