House Passes American Health Care Act (AHCA)

The House this afternoon voted 217-213 to pass the American Health Care Act (H.R. 1628), as amended. The bill now heads to the Senate where it will be up for intense debate. The AAA will continue to monitor this legislation as it makes its way through the Senate.

The House also voted 429-0 to pass a bill (H.R. 2192) from Rep. Martha McSally (R-AZ) that would eliminate a congressional exemption from health care changes. The exemption was included in AHCA to comply with budget reconciliation rules.

Two key amendments were added to the healthcare bill in order to ensure Republican support, the Upton Amendment and the MacArthur Amendment. These amendments were two of the more substantial changes to the bill since it was originally introduced. The AAA is currently working on drafting a detailed overview of this legislation and will distribute to members once completed.

 

Support AAA’s Medicare Relief Legislation, S. 967

Dear Fellow Members,

As you know, the Medicare ambulance add-on payments are set to expire on December 31, 2017. I’m proud to share with you that today, due to AAA advocacy efforts, permanent ambulance relief legislation was introduced by Senators Stabenow, Roberts, Schumer, Collins, and Leahy.

This bill, S.967, “Medicare Ambulance Access, Fraud Prevention, and Reform Act” would make permanent the vital urban and rural Medicare add-ons and super-rural bonus payments. Although some changes are likely during the committee markup process, we are cautiously optimistic that it will also carry through proposals to reclassify ambulance organizations as providers of health care (not suppliers of transportation), as well as a cost data collection system that does not place undue burden on ambulance services.

On behalf of the AAA, I’d like to extend my deepest thanks to Senators Stabenow, Roberts, Schumer, Collins, and Leahy for sponsoring the legislation, as well as the AAA Board, Government Affairs Committee, advocacy consultants, and staff who worked so diligently to build support on Capitol Hill.

Over the coming months, AAA will continue to connect with policymakers to build support for sustainable ambulance Medicare reimbursement. However, we need your help to ensure that this critical revenue remains in place. We ask that you please contact your Senators to voice your support for S. 967. AAA makes it easy to connect with your legislators through our online advocacy tool—please use it today to quickly send messages expressing the importance of the legislation to your ambulance service and the communities you serve.

If possible, we ask that you also work with fellow ambulance providers in your area to schedule in-person meetings with your legislators’ offices. If you arrange a meeting in your home state, please contact AAA staff at info@ambulance.org for talking points to support your conversation.

Now, more than ever, we need the active participation of each member organization to ensure our collective future! Thank you in advance for your assistance with advocacy outreach, as well as for your continued membership to the American Ambulance Association.

Mark Postma
President, American Ambulance Association
“Representing EMS in America”

Status of the American Health Care Act

Today, citing “growing pains” of his Republican majority, Speaker Paul Ryan (R-WI), in consultation with President Donald Trump, determined not to proceed with a planned vote on the American Health Care Act (AHCA), which repealed and replaced important elements of the Affordable Care Act (ACA).  The Speaker indicated that the House Republican Caucus “came up short” in the number of votes needed for the bill.  House Republican Leadership had been moving AHCA through the Chamber at a rapid pace.  The bill was officially released on March 6, and had been changed several times to try to appease various conservative and moderate voting blocs within the Republican Caucus.  The Congressional Budget Office (CBO) originally estimated the bill would reduce federal deficits by $337 billion, and subsequently downgraded the deficit reduction to $150 billion based on additional substantive policy changes to the bill.  The CBO estimates the bill would have increased the country’s number of uninsured by about 24 million people.

In negotiating the provisions of AHCA, the House Republican Leadership had faced a constant seesaw, as efforts to appease one ideological bloc upset the other.  Ultimately, throughout the day in advance of the scheduled vote, an increasing number of moderate Republicans, including Appropriations Committee Chairman Rodney Frelinghuysen (R-NJ), announced they would vote against the bill.  As the moderates disappeared, not enough members of the conservative Freedom Caucus decided to support the bill.

As disarray in the House Republican Caucus occurred, there appeared to be a similar lack of consensus amongst their Republican colleagues on the Senate side.  While Senate Leadership had planned to move the bill directly to the Senate floor as fast as within a week of receipt from the House, there were a number of Senators from a range of political perspectives with serious concerns about the bill.  On one side of the Republican spectrum, Senators Rand Paul (KY), Mike Lee (UT) and Ted Cruz (TX) had planned to push the limits of what can be included in a reconciliation bill to make it more conservative. Senator Paul had advocated for repealing the ACA in full and dealing with the replacement later on. On the other side, more moderate or “purple state” Members like Senators Susan Collins (ME), Lisa Murkowski (AK), Rob Portman (OH), Cory Gardner (CO) and Dean Heller (NV) raised concerns about insurance affordability and the expedited rollback of Medicaid expansion in the House version of the bill. Other Senators who will likely play a prominent role in any further health reform developments include physician Senator Bill Cassidy (LA), and Senator Tom Cotton (AR), who advocated all along to slow the process down. Republicans can only lose two Senators and still pass any health reform bill, with the vote of Vice President Mike Pence breaking the tie.

As a next step, House and Senate Republican Leadership plan to take more time to develop consensus in any future approach to health reform.  How much time is unclear – but it seems unlikely the bill will be the legislative focus in the short term.  Instead, there will likely be a cooling-off period on health reform legislative activity, since the fundamental disagreements within the caucus are not easily fixed.  There will continue to be significant messaging against ACA from conservatives, and there is the potential that the idea of “repeal and delay” may gain more traction.  Nonetheless, in the short term, the Speaker indicated he would move on to other items on his conference’s agenda – including tax reform.  Keep in mind, however, that since health-related tax provisions are a major component of the tax code, it would not be surprising to see some health issues resurface in tax reform.

The Speaker indicated that he expects the ACA marketplace to get worse – specifically citing rising premium costs.  In his own remarks on the failure to pass AHCA, the President suggested the Democrats will own any rising premiums, and provided a rare moment of optimism for the day when he indicated that a bipartisan health care reform bill may be achievable in the future when that happens.   As the Legislative Branch takes time to develop consensus, more focus will be placed on the Executive Branch.

We expect HHS Secretary Tom Price and White House Budget Director Mick Mulvaney to take an increasingly important role in driving the health agenda.  It is unclear at this point whether the Trump Administration will let ACA drift in the wind, take administrative actions to try to improve the marketplace, or even actively work to derail it further.  A likely bellwether as to the Administration’s intent is how it approaches the pending litigation over cost-sharing reduction (CSR) subsidies.  The House had sued the Obama Administration over the program, which funnels federal dollars to insurers to help keep out-of-pocket costs manageable for lower-income individuals, saying the funding had to be appropriated.  But after the inauguration, the House and Trump Administration sought a stay of the case until May 22 to allow time to resolve the issue.  If the Administration agrees to fold, the subsidies would be cut off, leading to further market instability.  If the House folds, the CSR payments would continue into the indefinite future.

From a health care legislative perspective, 2017 will still be far from a quiet year.  The President has proposed significant changes in the funding levels of important discretionary health programs.  Those budget battles will now move more front and center on the legislative agenda.  Furthermore, there continue to be “must pass” pieces of health care legislation, including CHIP reauthorization, FDA User Fee legislation, and certain Medicare extenders legislation.

ACA Repeal & Reform – What It Means for Ambulance Services

By: Tristan North and Kathy Lester, JD, MPH

This is the first of a two part Member Advisory by Tristan North and Kathy Lester on ACA Repeal & Reform. To continue reading, see Part Two: ACA Repeal & Reform – What It Means for Ambulance Services (Pt. 2).

Overview

A top priority of President Trump and congressional Republicans is to repeal and replace the Affordable Care Act (ACA). Since Republicans retook control of Congress in 2012 after passage of the ACA in 2010, they have sought to repeal the ACA. However, they had not developed a consensus on a replacement package, as they knew then-President Obama would veto the repeal bill. Now with President Trump in the White House and Republicans controlling the House and Senate, Republicans in the House have agreed upon a package and moved it through three Committees of jurisdiction: the Ways and Means Committee, the Energy and Commerce Committee, and the Budget Committee. Republicans in the Senate are less aligned and are said to be working on their own package, which is likely to differ in important ways from the House version.
For ambulance services, there are several key components to watch. These are:

  • Coverage for ambulance services. Expressed in terms of providing more flexibility, there is concern that some insurers are pushing and some Republicans agree that the concept of a minimum set of covered services (essential health benefits (EHB)) should be narrowed or even eliminated. Currently, only emergency services are included as an EHB, but through the designation of benchmark plans, non-emergency services have also been covered. If the benchmark plans requirements are modified, coverage for non-emergency services could become an issue.
  • Medicaid expansion. The Administration has sent a clear signal that it plans to roll back the expansion of Medicaid, which provide coverage to many Americans who had signed up under the ACA. For ambulance services in expansion States, the elimination of this program could result in more uncompensated care problems.
  • Coverage more generally. Republicans have clearly indicated a desire to eliminate the individual mandate. This could have two effects that may impact ambulance services. First, if people are not required to have coverage there are many who will not have it. It is not certain whether without coverage these individuals will be able to pay for the services they receive, which could lead to more uncompensated care. Second, individuals who do not purchase health insurance often are younger and healthier. Without such individuals in the risk pool, it is possible that premiums and other cost-sharing requirements will increase making it more likely for sicker individuals who cannot afford care becoming uninsured.
  • Employer costs and obligations. The House Republican legislation includes several provisions that relax the obligations and/or provide tax relief to employers providing health insurance. Such provisions could be beneficial to ambulance services in terms of providing health care coverage for their employees.

In addition, there are a few other provisions that the current bills being considered do not modify, but potential could be part of the discussions at some point or in subsequent Medicare legislation.  Of these, there are three that would directly impact ambulance services.

  • Productivity Adjustment. As part of the ACA, the annual inflation updates for the Medicare ambulance fee schedule rates are now subject to a productivity adjustment, which reduces the amount of the update. CMS subtracts a projection of the non-farm business multi-factor productivity adjustment (MFP) from the Consumer Price Index – Urban to determine the update amount.
  • Inflation Index Below Zero. Prior to the ACA, the Medicare inflation update for ambulance rates could not be a negative percentage. Under ACA policies, the update may be a negative percentage. For example, in 2011, the CPI-U was 1.1 percent and the productivity adjustment was 1.2 percent, which resulted in a cut to the rates of 0.1 percent. In 2016, the CPI-U was 0.1 percent and the productivity adjustment was 0.5 percent, which resulted in a cut of 0.4 percent. 
  • GPCI Increases. The ACA made a temporary change to the practice expense component of the physician geographical price cost index (GPCI), which is the entire GPCI for reimbursement under the Medicare ambulance fee schedule. The change established a minimum 1.0 GPCI for ambulance payments from January 1, 2010, to December 31, 2010. As a result of these changes, rates under the Medicare ambulance fee schedule for localities with a GPCI of less than 1.0 saw an additional temporary increase in reimbursement rates. Localities with a GPCI of 1.0 or higher were not be affected by the provision. The provision was retroactive to January 1, 2010 and the increases escalated for 2011 before expiring on December 31, 2011.

The ACA also established a permanent GPCI floor of 1.0 for “frontier” States which took effect in 2011. The designation of a “frontier” applies to those states in which 50 percent of the counties are frontier which have less than 6 people per square mile. The designation is updated with the original frontier states consisting of Montana, North Dakota, South Dakota, Utah and Wyoming. Utah is no longer deemed frontier and Nevada has been added to the list. While a complete repeal of the ACA would not impact the temporary GPCI increases as the provisions were temporary, it would eliminate frontier status.

Government Affairs Update: Protecting the Ambulance Add-ons

Medicare Ambulance Relief and Reform

The top legislative priority this year for the American Ambulance Association is to extend, or hopefully make permanent, the temporary Medicare ambulance add-on payments. The temporary increases of 2% urban, 3% rural and the super rural bonus expire at the end of this year. The 2% urban and 3% rural increases have been in place since 2008 and the super rural bonus payment since 2004. While the AAA and our members have been successful in getting the payments extended numerous times, 2017 is not a typical year and we need everyone to be prepared to help push to make the increases permanent or extended for the longest possible duration.

The other top priorities for the AAA are for the Centers for Medicare and Medicaid Services (CMS) to recognize ambulance services more like providers of medical services instead of merely suppliers of transportation. In addition, it is critical that Congress direct CMS to collect cost data from ambulance service providers using a method, which will result in usable and meaningful data from everyone, but also not be overly burdensome on extremely low volume providers. Finally, Congress needs to target fraud and abuse with the transport of dialysis patients through a prior authorization program instead an arbitrary payment cut that impacts all providers.

The AAA is pushing its agenda again through a version of the Medicare Ambulance Access, Fraud Prevention and Reform Act which we hope to have introduced in the next few weeks. We are working with our champions on Capitol Hill on a different approach to being treated more like providers to mitigate issues raised about the provision last Congress. Instead of being listed in the Social Security Act as having provider status, we are looking to a hybrid model similar to dialysis facilities. This will clarify that we are not seeking to be treated like providers to achieve Medicare coverage because we are already reimbursed under the Medicare program. It will however still set the foundation for future legislative and regulatory changes to the Medicare fee schedule such as reimbursement for transporting to an alternate destination or treat and referral.

We are also making potential modifications to the House bill on our proposed data collection system. These changes would help with possible Committee consideration of the provision but still hopefully achieve or goal of obtaining useable data that is not overly burdensome to 73% of our industry which is composed of providers that do less than 1,000 Medicare transports a year of less. It is vital that we have meaningful data to make data-driven decisions as to changes to the Medicare ambulance fee schedule.

Ambulance Advocacy Webinar

We will let you know as soon as the revised legislation is introduced for the new Congress. In the meantime, we encourage you to register for the upcoming AAA webinar on the Ambulance Advocacy Action Plan with AAA Senior Vice President of Government Affairs Tristan North and AAA Government Affairs Coordinator Aidan Camas. Tristan and Aidan will provide you the latest information on our advocacy efforts and let you know how you can help. To register for the webinar which is free to AAA members, please go to: https://ambulance.org/product/ambulance-advocacy-action-plan/.

Also read Tristan and Kathy Lester’s recent Member Advisory on ACA Repeal & Reform:

ACA Repeal & Reform – What It Means for Ambulance Services (Pt. 1)
ACA Repeal & Reform – What It Means for Ambulance Services (Pt. 2)

HHS Letter to Governors on Medicaid Changes

On Monday evening, the Senate confirmed Seema Verma, MPH, as the new Administrator of the Centers for Medicare and Medicaid Services (CMS). She has a strong background in Medicaid, and prior to her appointment worked as a consultant to several States seeking Medicaid waivers.

One of her first acts was to issue a letter to governors with Secretary Tom Price, MD, regarding the Medicaid program. The letter highlights several initiatives on which they are focusing with regard to Medicaid. Perhaps of most importance to the ambulance community is the section on “Aligning Medicaid and Private Insurance Policies for Non-Disabled Adults.” In this section, the Secretary and Administrator suggest that States:

may consider creating greater alignment between Medicaid’s design and benefit structure with common features of commercial health insurance, to help working age, non-pregnant, non-disabled adults prepare for private coverage. These state-led reforms could include, as allowed by law: …waivers of non-emergency transportation benefit requirements.

While it may be meaningful that the reference does not include “medical,” before transport, it is critically important that the AAA work to protect Medicaid beneficiary access to medically necessary non-emergency medical transports. Thus, the Medicare Regulatory Committee is developing a letter and considering additional engagement with CMS to clarify that the reference is to programs related to providing beneficiaries with the cost of taxis, buses, or other transportation options, but not to medically necessary non-emergency ambulance transports.

It is important that AAA members speak out on this issue with their governors and State Medicaid officials. The AAA has developed draft talking points to assist with these contacts as well.

Thank you for your attention to this critical issue.

Mark Postma
President, American Ambulance Association
Representing EMS in America

Thank you to AAA Consultant Kathy Lester, JD, of Lester Health Law for the analysis of this issue.

Administration’s Proposed Rule on Marketplace Stabilization

The Centers for Medicare & Medicaid Services (CMS) has released the “Marketplace Stabilization Proposed Rule” (Proposed Rule). Overall, the rule proposes a series of modifications to the Marketplaces that align with requests made by issuers in an attempt to keep them in the Marketplaces. The background section of the Proposed Rule emphasizes the concerns of issuers and the Agency’s interest in making sure that consumers have more plan options for 2018. Comments are due March 7.

While ambulance services are not directly mentioned, the Proposed Rule could affect the ability of individuals in the marketplace to enroll and remain enrolled in plans. Another provision that could impact the ambulance industry is the proposal to rely more upon the States to enforce the network adequacy requirements of the ACA.  

Changes to Open Enrollment/Special Enrollment Periods

CMS proposes to tighten the enrollment rules in several ways. First, the Proposed Rule would change the open enrollment period to November 1 – December 15 to “increase the incentives for individuals to maintain enrollment in health coverage and decrease the incentives for individuals to enroll only after they discover they require services.”[1]  Individuals may still be eligible for a special enrollment period that would allow them to enroll outside of these dates.

CMS would increase the States’ pre-enrollment verification from 50 percent to 100 percent beginning June 1, 2017, and require consumers’ enrollment requests to be “pended” until verification is complete. CMS encourages State-based Exchanges to adopt a similar policy. The Proposed Rule would also limit the ability of existing Exchange enrollees to change plan metal levels during the coverage year.  It would allow Exchanges to require enrollees that qualify for a special enrollment period because of a dependent to be add only to the current Qualified Health Plan (QHP) or allow the enrollee and the new dependent to enroll in another QHP within the same level of coverage.[2]

The Proposed Rule would also require that if an enrollee or the dependent is not enrolled in a silver level QHP and becomes newly eligible for cost-sharing reductions and qualifies for the special enrollment periods, the Exchange may allow the enrollee and dependent to enroll in only a QHP at the silver level.[3] CMS also proposes a new restriction that would allow the Exchange only to allow an enrollee and dependents who qualify for remaining special enrollment periods to make changes to their enrollment in the same QHP or to change to another QHP within the same level of coverage, if other QHPs at that metal level are available.[4]

CMS would allow consumers to start their coverage one month later than their effective date would ordinarily have been, if the special enrollment period verification process results in a delay in their enrollment such that they would be required to pay two or more months of retroactive premium to effectuate coverage or avoid termination for non- payment. [5]

Additionally, CMS would permit the issuer to reject an enrollment for which the issuer has a record of termination due to non-payment of premiums unless the individual fulfills obligations for premiums due for previous coverage.

The Proposed Rule also expresses concern that some consumers not seeking coverage until they are married. CMS proposes that if consumers are newly enrolling in QHP coverage through the Exchange through the special enrollment period for marriage, at least one spouse must demonstrate having had minimum essential coverage for 1 or more days during the 60 days preceding the date of marriage. There is a special rule for individuals who may not have been living in the United States prior to their marriage.[6]

The Proposed Rule would also significantly limit the use of the exceptional circumstances special enrollment period. In previous years, this special enrollment period has been used to address eligibility or enrollment issues that affect large cohorts of individuals where they had made reasonable efforts to enroll, but were hindered by outside events. If the proposal were adopted, CMS would apply a more rigorous test for future uses of the exceptional circumstances special enrollment period, including requiring supporting documentation where practicable. It would grant this special enrollment period only if provided with sufficient evidence to conclude that the consumer’s situation was truly exceptional and in instances where it is verifiable that consumers were directly impacted by the circumstance, as practicable.[7]

CMS is also exploring ways to incentivize consumers to maintain continuous coverage.

These proposed special enrollment changes would not apply to special enrollment periods under the Small Business Health Options Program (SHOP).[8]

Network Adequacy

CMS proposes changes to the oversight of network adequacy requirements to “affirm the traditional role of States in overseeing their health insurance markets while reducing the regulatory burden of participating in Exchanges for issuers.”[9]

CMS proposes to rely on State reviews for network adequacy in States in which an FFE is operating, provided the State has a sufficient network adequacy review process, rather than performing a time and distance evaluation. Beginning in plan year 2018, it would defer to the States’ reviews in States with the authority that is at least equal to the “reasonable access standard” and means to assess issuer network adequacy, regardless of whether the Exchange is a State-based Exchange or federally facilitated, and regardless of whether the State performs plan management functions.

In States without the authority or means to conduct sufficient network adequacy reviews, CMS would rely on an issuer’s accreditation (commercial or Medicaid) from an HHS-recognized accrediting entity. HHS has previously recognized 3 accrediting entities for the accreditation of QHPs: the National Committee for Quality Assurance, URAC, and Accreditation Association for Ambulatory Health Care. An unaccredited issuer would have to submit an access plan.

Interpretation of the Guaranteed Availability Requirement

CMS proposes revising the interpretation of the guaranteed availability requirement to allow issuers to apply a premium payment to an individual’s past debt owed for coverage from the same issuer enrolled in within the prior 12 month. CMS argues this change is necessary to “remov[e] economic incentives individuals may have had to pay premiums only when they were in need of health care services and to encourag[e] individuals to maintain continuous coverage throughout the year and prevent gaming.”[10]

De Minimis Variation in the Actuarial Values

CMS proposes increasing the de minimis variation in the actuarial values (AVs) used to determine metal levels of coverage for the 2018 plan year to “allow issuers greater flexibility in designing new plans and to provide additional options for issuers to keep cost sharing the same from year to year.”[11]

Essential Community Providers

CMS proposes allowing issuers to use a write-in process to identify essential community providers (ECPs) who are not on the HHS list of available ECPs for the 2018 plan year; and lower the ECP standard to 20 percent (rather than 30 percent).[12] 

[1] CMS Patient Protection and Affordable Care Act; Market Stabilization Proposed Rule.

[2]Id.

[3]Id.

[4]Id.

[5]Id.

[6]Id.

[7]Id.

[8]Id.

[9]Id.

[10]Id.

[11]Id.

[12]Id.

Tom Price Confirmed as HHS Secretary

The Senate voted 52-47 Friday to confirm Rep. Tom Price (R-GA) as Health and Human Services secretary. Democrats held the Senate floor for the full 30 hours permitted to them, raising concerns about Price’s trades in health stocks and his opposition to the Affordable Care Act.

New HHS Secretary, Tom Price

A retired orthopedic surgeon, Price will oversee the administration’s efforts to repeal and replace or repair the Affordable Care Act. Rep. Price was previously the Chairman of the House Budget Committee.

Tom Price: Everything You Need to Know About the New Health Secretary
Tom Price Is Sworn In as Health Secretary Amid Senate Disunity

In related news, the Senate Finance Committee has scheduled a hearing on February 16 to consider the nomination of Seema Verma as Administrator of the Centers for Medicare and Medicaid Services (CMS).

The Future of Prior Authorization

In May 2014, CMS announced the creation of a three-year demonstration project that calls for the prior authorization of repetitive scheduled non-emergency ambulance transports. The demonstration project was first implemented in the states of New Jersey, Pennsylvania, and South Carolina. These states were selected based on their higher-than-average utilization rates for repetitive ground ambulance transportation. For example, in a June 2013 report to Congress, the Medicare Payment Advisory Commission (MedPAC) cited these states as having particular high utilization rates for dialysis transports. Prior authorization went live in these states on December 15, 2014.

Congress Acts to Expand the Prior Authorization Regime

On April 16, 2015, President Barack Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015. Section 515 of that law required CMS to expand the demonstration program into five additional states (Delaware, Maryland, North Carolina, Virginia, and West Virginia) and the District of Columbia on or before January 1, 2016. The law further instructed CMS to expand the prior authorization regime to the rest of the country beginning no earlier than January 1, 2017. However, the national expansion was conditioned on CMS determining that the demonstration project has been effective in reducing Medicare expenditures without jeopardizing patient’s access to necessary medical care.

Short Term Prospects for Expansion

As of the end of January 2017, CMS has yet to issue its report on the effectiveness of the prior authorization program in the original 8 states and the District of Columbia. Therefore, there it is highly unlikely that CMS will be expanding the program nationally in the foreseeable future. However, CMS has not officially ruled out the possibility of expanding the program at some point during 2017.

While CMS has not officially ruled out a national expansion in 2017, I rate the prospect as unlikely. I base this statement simply on the calendar. Even if CMS were to issue the required certifications tomorrow, it would still need to give its contractors instructions on how to implement the program. It would also need to give some advance notice to the provider community. If you assume it would want to give everyone involved at least a month to prepare, it would be April at the earliest before it could expand the program. Personally, I have a hard time believing that CMS would go through all that trouble—not to mention allocating the necessary funding—for 8 months.

Long Term Prospects for Prior Authorization

While I rate the short term prospects for prior authorization to be unlikely, I think that our industry should expect prior authorization for repetitive patients to be part of our long term future.

The data thus far suggests that prior authorization is highly effective at reducing Medicare expenditures. In 2014, the last year before prior authorization went into effect, Medicare paid more than $106 million for dialysis transports in New Jersey alone. In 2015, total spending on dialysis decreased to slightly more than $15 million, a decrease of more than 85%. While there has been anecdotal reports of patients in the state being unable to obtain transportation to their dialysis appointments, there is little empirical evidence to suggest that these are anything other than isolated occurrences, or that prior authorization is contributing to a systematic lack of access. The data from Pennsylvania and South Carolina shows similar dramatic decreases in spending on dialysis.

Collectively, total spending on dialysis in these three states was approximately $140 million less in 2015 than 2014. This corresponds to nearly 20% of total dialysis spending in 2014. To put these reductions in their proper perspective, it may be helpful to remember that the Congressional Budget Office scores the cost of our existing temporary adjustments (i.e., the 2% urban, 3% rural and super rural adjustments) at approximately $100 million a year.

Some will argue that the 2015 reductions in these states were magnified by what can be charitably described as “friction” in the implementation of the program. (We recognize that affected providers in these states are likely to use far less charitable descriptions.) These people would argue that the reductions in subsequent years is likely to be less dramatic. CMS will be releasing 2016 payment data in a few months; at which point we will know whether this prediction proves true. Regardless of whether the data shows an uptick in payments in these states, that same data is almost guaranteed to show a dramatic decrease in total spending on dialysis in these states over the 2014 base year.

In sum, the data makes clear that prior authorization offers substantial cost savings to the federal government. Moreover, the overwhelming majority of these cost savings come from dialysis transports, an area that CMS has long-identified with fraud, abuse, and overutilization. This represents a tempting target for both CMS and Congress when looking for future cost-savings.


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

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.

CMS Extends Temporary Moratorium (NJ, PA, TX)

On January 9, 2017, the Centers for Medicare & Medicaid Services (CMS) issued a notice in the Federal Register extending the temporary moratoria on the enrollment of new Medicare Part B non-emergency ground ambulance providers and suppliers in the states of New Jersey, Pennsylvania, and Texas. The extended moratoria will run through July 29, 2017.

Section 6401(a) of the Affordable Care Act granted CMS the authority to impose temporary moratoria on the enrollment of new Medicare providers and suppliers to the extent doing so was necessary to combat fraud or abuse. On July 31, 2013, CMS used this new authority to impose a moratorium on the enrollment of new ambulance providers in Houston, Texas and the surrounding counties. On February 4, 2014, CMS imposed a second moratorium on newly enrolling ambulance providers in the Philadelphia metropolitan areas. These moratoria have been extended every six months thereafter.

However, on August 3, 2016, CMS announced changes to its existing moratoria on the enrollment of new ground ambulance suppliers. Specifically, CMS announced that the moratoria would be lifted for the enrollment of new emergency ambulance providers and supplier, but that it would expand the enrollment moratorium on non-emergency ambulance services to cover the entire states of New Jersey, Pennsylvania, and Texas. At the same time, CMS announced the creation of a new “waiver” program that would permit the enrollment of new non-emergency ambulance providers in these states under certain circumstances.

On or before July 29, 2017, CMS will need to make a determination on whether to extend or lift the enrollment moratorium.

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

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!

 

Ambulance Payment Reform Whiteboard Video

The American Ambulance Association needs your help to build the future of EMS—an innovative industry compensated fairly and recognized appropriately for the critical healthcare it provides. Learn more in the video below, then visit our Payment Reform page to get involved!

Ambulance services across the country are struggling to survive in the face of falling reimbursement, short-sighted regulations, and rising costs. EMS providers of all sizes must share critical cost data, meet with legislators, and speak with one voice as we work to surmount these obstacles and position ambulance services for success today and for many years to come.

OIG Releases Final Rule Revising Safe Harbor

Office of the Inspector General – Final Rule – Revisions to the Safe Harbors for Waiving Coinsurance, et.al

On December 7, 2016, the Office of the Inspector General published a Final Rule (81 Federal Register 88368) and will be effective January 6, 2017.

The Final Rule includes technical corrections to the existing Safe Harbor for referral services, a new Safe Harbor for waiver of patient cost-sharing for emergency ambulance services, a new Safe Harbor for free or discounted local transportation services, and an amendment to the definition of “remuneration” for purposes of the Civil Monetary penalties for beneficiary inducements.  Since the Final Rule covers many issues that pertain to other providers and suppliers, such as pharmacies, outpatient hospital, Federally Qualified Health Centers, Medicare Advantage Plans, etc., this Member Advisory will focus on the two issues that impact ambulance services and transportation.

Safe Harbor – Cost Sharing Reductions for Emergency Ambulance Services

In recent years, we have seen a number of OIG Advisory Opinions that permitted public EMS entities to waive the cost-sharing obligations of Medicare beneficiaries in specified circumstances. The OIG is now adding these as a “Safe Harbor”. The regulation, at 42 C.F.R 1001.952, will protect certain reductions or waivers of beneficiary cost-sharing for emergency ambulance services provided by public entities, which are paid by Federal health care programs under a fee-for-service basis. However, to qualify, all of the following must be met:

  • The provider or supplier must be owned and operated by a State, political division of a state or a tribal health program. NOTE: While this protects government entities that own and operate their ambulance service, it does not protect a supplier who contracts with that government entity even when that government entity pays the supplier for patient cost-sharing obligations through tax funded revenues.  It also does not protect hospitals providing the emergency ambulance services.
  • The emergency ambulance services must be provided by a Part B provider or supplier. The definition of “Emergency” is the same one listed in 42 C.F.R. 414.605, which you use to determine whether to bill for an emergency base rate or a non-emergency base rate.
  • The reduction or waiver is not considered furnishing free services paid directly or indirectly by a government entity. It is not considered a free service if the government entity bills to the extent of insurance.
  • The reduction or waiver of cost-sharing is offered uniformly without considering patient- specific factors. NOTE:  The OIG allows residency to be considered. Thus, a city may choose to waive or reduce cost-sharing for residents but not for non-residents.
  • The provider does not later claim the amount waived as a bad debt, or shift the burden to a government program.

If all of the above items are met, the government entity providing the emergency ambulance service can reduce or waive the patient’s cost-sharing obligation.

Please note, there is no change here with respect to membership programs by a public or private ambulance service, nor is there any change in policy or the law concerning a government entity paying a private ambulance company for copayments of its residents.

Safe Harbor for Free or Discounted Local Transportation

A new Safe Harbor has been created at 42 C.F.R. 1001.952(bb) to protect free or discounted local transportation made available by an “eligible entity” for beneficiaries of Federal health care programs.  The key elements to this Safe Harbor are:

  • The transportation must be local. That is defined as up to 25 miles if urban and up to 50 miles if rural.
  • It can be provided to or from a provider of service.
  • It can be provided to the patient as well as to a person that assists the patient.
  • The transportation does not have to be scheduled ahead of time.
  • The entity can use a voucher program, if they want.
  • The transport cannot be provided by an air, luxury or ambulance level service.
  • An eligible entity cannot require an ambulance company to provide free or discounted transportation to its patients.
  • An eligible entity is defined as an individual or entity.
  • An “established” patient means a person who has selected and initiated contact with a provider or supplier to schedule an appointment or who has given consent to someone to do it for them.
  • The transportation cannot be advertised.
  • The transportation cannot be used to recruit patients.
  • The transportation must be for medically necessary services.
  • Eligible entities must have an established policy regarding the availability of transportation assistance and must apply it uniformly.
  • The eligible entity is not required to maintain documentation for each patient transported, but it would be a “best practice” to have such documentation.
  • Drivers cannot be paid on a per patient basis.
  • The eligible entity cannot have a sign saying “Donated by ___”, as that is marketing.
  • The eligible entity cannot shift the cost of the transportation to any government health care program.
  • Shuttles are permitted but the rules are slightly less stringent. The vehicle must be used for a set route or schedule, does not have to be for established patients, must be for local use (25 miles urban; 50 miles rural), it can make multiple stops and, while the entity cannot advertise, they can post a schedule.

Read the entire Final Rule is 42 (Federal Register).

AAA Releases 2017 Medicare Rate Calculator

AAA 2017 Medicare Rate Calculator Now Available!

The American Ambulance Association is pleased to announce the release of its 2017 Medicare Rate Calculator tool. The AAA believes this is a valuable tool that can assist members in budgeting for the coming year. This calculator has been updated to account for recent changes in Medicare policies, including the 2017 Ambulance Inflation Factor (0.7%) and continuation of the current temporary add-ons.

To access the Rate Calculator, please CLICK HERE.

To access the Fee Schedule, please CLICK HERE.

CMS has not yet published the Public Use File for 2017.  Once the file is released, the AAA will verify that the rates are correct and notify you of any discrepancies.

Download the 2017 Rate Calculator

2017 Fee Schedule

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 bwerfel@aol.com.

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

 

AAA Posts 2015 National and State-Specific Medicare Data

The American Ambulance Association is pleased to announce the publication of its 2015 Medicare Data Payment Report.  This report is based on the Physician/Supplier Procedure Summary Master File.  This report contains information on all Part B and DME claims processed through the Medicare Common Working File and stored in the National Claims History Repository.

The report contains an overview of total Medicare spending nationwide in CY 2015, and then a separate breakdown of Medicare spending in each of the 50 states, the District of Columbia, and the various other U.S. Territories.

For each jurisdiction, the report contains two charts: the first reflects data for all ambulance services, while the second is limited solely to dialysis transports.  Each chart lists total spending by procedure code (i.e., base rates and mileage).  For comparison purposes, information is also provided on Medicare spending in CY 2014.

CMS Announces 2017 Inflation Factor

The Centers for Medicare and Medicare Services (CMS) issued Transmittal 3625 officially announcing that the inflation factor for payments under the Medicare ambulance fee schedule for 2017 will be 0.7%.

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 2017 is 1.0% with a MFP of 0.3% which equals the 0.7% inflation factor. As part of the Affordable Care Act, a productivity adjustment is subtracted from the CPI-Urban for the final inflation update.