On February 16, 2023, the Department of Veterans published in the Federal Register the final rule to revise the payment methodology for beneficiary travel by ambulance and other so-called “special modes of transportation. The changes contained within the final rule were first included in a November 5, 2020 proposed rule.

The final rule will become effective on February 16, 2024.

Relevant Background

The VA currently pays for beneficiary travel under certain circumstances.  To be eligible for reimbursement, the veteran must meet certain eligibility criteria.  Specifically, the veteran must be traveling either: (i) for care at a VA health facility or (ii) for care at a non-VA facility that has been previously approved by the VA.  The veteran must also meet one of the following additional criteria:

1. The veteran must have a VA disability rating of 30% or higher;
2. The veteran must be traveling for treatment of a service-related condition (if their VA disability rating is less than 30%);
3. The veteran receives a VA pension;
4. The veteran has an income below the maximum annual VA pension rate;
5. The veteran cannot otherwise afford to pay for their travel; or
6. The veteran is traveling for one of the following reasons: (i) to obtain a VA compensation and pension exam, (ii) to obtain a VA service dog, or (iii) to obtain VA-approved transplant care.

Beneficiary travel covers all modes of transportation, including transportation by private vehicle, common carriers (e.g., taxi, livery, and public transportation), mass transit, etc.  Beneficiary travel also covers so-called “special modes of transportation,” which includes air and ground ambulance services, wheelchair vans services, and stretcher vans services.

The rules governing the payment for beneficiary travel services at set forth in 38 C.F.R. § 70.30.

Subpart (a)(4) sets forth the payment methodology for the reimbursement of special modes of transport, and simply provides that payment is based on “[t]he actual cost of a special mode of transportation.  In the context of ambulance services, this has historically been interpreted to mean the ambulance provider’s full billed charges.

Provisions of Final Rule 

Under the final rule, the VA would revise its existing payment methodology for beneficiary travel by ambulance and other special modes of transportation to no longer reimburse providers for their actual costs, and to instead base reimbursement on:

1. For ground and air ambulance services, the lesser of: (i) the actual charge for ambulance transportation (i.e., the provider’s billed charges) or (ii) the amount determined under the Medicare Ambulance Fee Schedule.
2. For other special modes of transportation (i.e., ambulette, wheelchair van, or stretcher van), the lesserof: (i) the provider’s actual charge, (ii) the applicable Medicaid rate in the state where the provider is domiciled (using the lowest Medicaid rate where the provider is domiciled in multiple states), or (iii) the applicable Medicaid rate in the state where the transport occurred (or the lowest Medicaid rate if the transport occurred in more than one state). Note: the revised regulations provide that if none of the states involved has a “posted rate,” the VA would continue to pay the provider’s full billed charges

The revised payment methodology for non-ambulance special modes of transport is intended to be temporary.  In its proposed rule, the VA indicated that it would use this payment methodology for a minimum of 90 calendar days after a final rule was posted in the Federal Register.  This period of time was intended to allow the VA to gather payment data.  If the VA believes that it gathered sufficient payment data during this initial 90-day period, it indicated that it would develop a new payment methodology “using the lowest possible rate.”  If the VA determined that it did not have sufficient payment data after the initial 90-day period, it would extend the proposed payment methodology for additional 90-day periods as needed until it believed it had sufficient data.  The VA indicated that it did not anticipate needing more than 18 months from the effective date of the final rule to gather sufficient payment data to implement a new payment method