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CMMI Releases Preview of ET3 RFA

Written by Brian Werfel on . Posted in ET3, Member Advisories, Member-Only, News, Reimbursement.

On May 22, 2019, the Center for Medicare and Medicaid Innovation (CMMI) released a preview of the Request for Applications (RFAs). This documentation will be used by ambulance providers and suppliers to apply for inclusion as “Participants” in the Emergency Triage, Treat, and Transport (ET3) pilot program.

Webinar: Learn More About the RFA

June 13, 2019 | 2:00 PM Eastern
Speakers: Brian Werfel, Kathy Lester, Rebecca Williamson, Asbel Montes
$99 for Members | $198 for Non-Members

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Relevant Background

On February 14, 2019, CMMI announced the creation of a new 5-year pilot program designed to give participating EMS agencies greater flexibility to address the needs of Medicare beneficiaries following a 911 call. The ET3 model would create a new payment model under which participating EMS agencies will be eligible for Medicare reimbursement for: (1) transportation to alternative treatment destinations and (2) treatment at the scene. At the time, CMMI indicated that it anticipated starting the ET3 model in early 2020. To that end, CMMI anticipated soliciting Requests for Participation in the Summer of 2019.

Participation in this pilot program is voluntary. Regardless of whether an ambulance provider or supplier participates in the pilot program, payment for ambulance transportation currently covered under the Medicare Ambulance Fee Schedule will not be affected.

The RFA provides a good deal of additional information regarding the proposed operation of the ET3 Model. These additional details are summarized below.

Eligibility Criteria/Application Process

To be eligible to participate, you must be a Medicare-enrolled ambulance provider or supplier.  In addition, CMMI is limiting eligibility to ambulance providers and suppliers that are located in a state or state in which at least 15,000 Medicare FFS emergency ambulances took place in calendar year 2017.  Note: based on this restriction, ambulance providers and suppliers in the State of Alaska would not be eligible for participation in the ET3 Model.

Medical Necessity Requirement

CMMI previously indicated that the existing medical necessity requirements would apply to ambulance transportation to alternative treatment destinations. In the RFA, CMMI reiterated this requirement. As a result, EMS agencies will only be eligible for reimbursement for transportation to alternative treatment destinations to the extent the beneficiary’s condition is such that safe transport by other means is contraindicated.

CMMI indicated that beneficiaries that do not meet the medical necessity requirements for ambulance transportation may still meet the medical necessity requirements for a Medicare-covered item or service furnished by a qualified health care practitioner, and, therefore, may allow an EMS agency to receive payment for treatment at the scene under the ET3 Model.

Payments under the ET3 Model

The ET3 Model provides for a number of new payment streams.  The two payment streams being made available to participating EMS agencies are: (1) payment for transportation of Medicare beneficiaries to alternative treatment destinations and (2) payment for treatment of the Medicare beneficiary at the scene, where such care was rendered by a qualified health care practitioner either at the scene or via telehealth.

Payment for Transportation to Alternative Treatment Destinations

When the ET3 Model was first announced, CMS indicated that the reimbursement to EMS agencies for providing transportation to alternative treatment destinations would be based on the corresponding BLS “base rate” in the area. However, in the RFA, CMMI indicates that the payment for transportation to an alternative treatment destination will now be made at either the applicable BLS emergency or ALS emergency base rate.  In order to qualify for payment at the applicable ALS emergency rate, the EMS agency must meet Medicare’s definition of “Advanced Life Support” (i.e., the provision of valid ALS intervention and/or the provision of a qualifying ALS assessment).  The payment for this base rate would include the current adjustments for transports provided in urban, rural, or super-rural areas.

The EMS agency would also be eligible for payment for all loaded mileage, at the applicable Medicare mileage rate. This payment would include all current adjustments, including the “bonus” paid for the first 17 rural miles.

Note: CMMI indicated that it would be creating an exception to general Medicare requirement that patients be transported to the nearest appropriate facility. Based on the language in the RFA, it appears clear that CMMI would cover all of the mileage to an alternative treatment destination, even where transportation to the nearest hospital ED would have been shorter.

Based on the language in the RFA, it appears that claims for transportation to alternative treatment destinations will be submitted using the normal ambulance HCPCS codes (i.e., A0427 for an ALS emergency and A0429 for a BLS emergency).

Payment for Treatment at the Scene

When the EMS agency facilitates in-person treatment by a qualified health care practitioner (QHP), the EMS agency will be paid an amount equivalent to the BLS emergency or ALS emergency base rate.  In order to qualify for payment at the applicable ALS emergency rate, the EMS agency must provide medically necessary supplies and services and either a qualifying ALS assessment or the provision of at least one ALS intervention. When the EMS agency facilitates treatment in pace via telehealth, the EMS agency will be paid a modified “telehealth originating site facility fee” equivalent to the applicable BLS emergency or ALS emergency base rate.

Claims submitted for treatment at the scene, whether by the QHP in person or via telehealth, will be submitted using a model-specific code (yet to be announced).

Performance-Based Payment Adjustment for EMS Agencies

EMS agencies that provide transportation to alternative treatment destinations and/or treatment at the scene may be eligible for performance-based payment adjustments of up to 5%, based upon meeting certain performance and reporting metrics. These adjustments will become available no earlier than Year 3 of the ET3 Model, and are not guaranteed.  Performance-based payment adjustments would be based on performance during the previous year (e.g., if the EMS agency meets the performance criteria in Year 3, it would see an increase in Year 4). These performance-based payment adjustments apply only to payments under the ET3 Model, i.e., they do not apply to Medicare payments made under the current Medicare Ambulance Fee Schedule.

Payment for Non-Participant Partners

When an EMS agency transports a patient to an alternative treatment destination, that facility will bill Medicare for the services it renders to the beneficiary using its normal claims submission procedures.

Payment for Qualified Health Care Practitioners

A QHP that partners with an EMS agency to provide treatment at the scene will bill Medicare using the applicable HCPCS code for the services it furnished under existing Medicare FFS rules.  When that service is furnished via telehealth, the QHP must submit a claim to Medicare for telehealth services furnished from the distant site.  QHPs that provide services to Medicare beneficiaries during non-business hours (defined as being from 8:00 p.m. to 8:00 a.m. local time) will be eligible for a 15% increase in the payment rates normally applicable to their in-person or telehealth services.

Notice of Funding Opportunity for 911 Dispatch Centers

Separate from the RFA process, CMMI expects to allocate funding to governmental entities and their designees that operate 911 dispatch centers.  The purpose of this funding is to support the successful implementation of medical triage lines integrated into the local 911 system.  These Notice of Funding Opportunity (NOFOs) will be released following the first round of Participant selection (i.e., likely in the Fall/Winter of 2019).

Application Timelines

The RFA is the first of up to three potential RFAs that will be used to select EMS agencies to participate in the ET3 Model as “Participants.” CMMI is indicating that it hopes to select enough EMS agencies to participate to capture up to 30% of the existing volume of Medicare FFS emergency ground ambulance transports. Additional RFAs will be considered based on available funding and evidence that the ET3 Model is working as intended.

CMMI is not currently accepting applications. Round 1 applications will be accepted via an application portal that will be opened at a later date. Information on the applicable process, including the date the application portal will be opened will be posted on the ET3 Model website: https://innovation.cms.gov/initiatives/et3

Application Submission Process

If you elect to apply for participation in the ET3 Model, you will be required to identify a “region” in which you propose to implement the model. CMMI indicates that this region should be a county or equivalent entity, or multiple counties or equivalent entities.

In selecting Participants, CMMI indicated that it will give preference to applicants who propose a region that includes at least one county (or county-equivalent) where at least 7,500 Medicare FFS emergency ground ambulance transports occurred in 2017. CMMI provided a list of the number of Medicare FFS emergency ground ambulance transports that occurred in each county (organized by state)  That list can be obtained by clicking here.

Applicants will be required to participate in the transportation to alternative treatment destination (ATD) portion of the program. Applicants will have the option – – but not be required – – to propose the creation of a program to provide treatment at the scene in conjunction with QHPs.  Note: CMMI indicated that applicants that elect to implement the treatment at the scene intervention will earn additional points towards their overall application score.

In order to implement the ATD portion, you will be required to partner with alternative destination sites (e.g., Urgent Care Centers), which must be enrolled in Medicare or employ or contract with Medicare-enrolled practitioners, and which must be able to accept and treat Medicare FFS beneficiaries.  If you elect to implement the treatment at the scene portion, you must also partner with QHPs to provide treatment at the scene. These contractual partners are referred to in the RFA as “Non-Participant Partners” (NPPs). To qualify, you must contract with NPPs that can ensure the availability of services for ET3 Model beneficiaries on a 24 hours per day, 7 days a week basis. CMMI will have the right to accept or reject a proposed Non-Participant Partner.

Applicants will also be required to describe their strategy for engaging other payers in their proposed service area, or explain how they can successfully implement the model for Medicare FFS beneficiaries only.

Accountability and Performance Metrics/Ongoing Educational Commitments

Participants in the ET3 will be required to report certain metrics to CMMI and its contractors. You will also be required to participate in what CMMI is calling a “Learning System.”  This is a structured approach to sharing, integrating, and actively applying quality improvement concepts, tactics, and lessons designed to improve the likelihood of success of the model. At a minimum, this will include consistent participation in monthly ET3 Model learning activities, and participation in at least one in-person event, with the location to be determined by CMMI at a later date.

The above is a brief summary of the new information available regarding the ET3 Model. It is not intended to be a complete discussion of all of the requirements for participation. AAA Members are strongly encouraged to read the RFA for themselves to determine whether they want to participate in the ET3 Model.

New SNF PPS Edits Highlight the Importance of Facility Agreements

Written by Brian Werfel on . Posted in Medicare, Member-Only, Reimbursement, Talking Medicare.

On April 1, 2019, CMS implemented a new series of Common Working File (CWF) edits that are intended to better identify ground ambulance transports that are furnished in connection with an outpatient hospital service that is properly bundled to the skilled nursing facility (SNF) under the SNF Consolidated Billing regime.

These edits work by comparing the ambulance claim to the associated outpatient hospital claim.  Hospital claims were already subject to CWF edits designed to identify outpatient hospital services that should be bundled to the SNF.  These hospital edits operate by referencing a list of Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) codes that correspond to outpatient hospital services that are expressly excluded from SNF Consolidated Billing.  Hospital claims for outpatient services that are submitted with one of these excluded codes bypass the existing CWF edits, and are then sent to the appropriate Medicare Administrative Contractor for further editing and payment.  Hospital claims submitted without one of these codes are denied for SNF Consolidated Billing.

The new ambulance edits will extend these process one step further.  The ambulance claim will be associated with the outpatient hospital claim on the same date.  To the extent that hospital claim is bundled under SNF Consolidated Billing, the associated ambulance claim will also be bundled.  To the extent the hospital claim is unbundled, the associated ambulance claim will be unbundled.

In order for these new edits to work properly, there must be an outpatient hospital in Medicare’s claim history. If the ambulance claim beats the hospital claim into the system, the ambulance claim will be rejected. If and when an outpatient hospital claim with the same date of service enters Medicare’s system, the initial rejection of the ambulance claim will be overturned, and the ambulance claim will be reprocessed using the same edits.

It is important to note that the new edits were designed to reject the ambulance claim as a bundled service unless the hospital claim indicates that it should not be bundled.  In other words, these edits are designed to be “over inclusive.”  This over-inclusiveness creates the potential for ambulance denials in situations that, on their face, would not appear to be bundled.

A few examples will help illustrate this point. Imagine a situation where the patient elects, for whatever reason, to pay out-of-pocket for their hospital care (in a situation where that care would not be bundled to the SNF), and, as a result, the hospital does not submit a bill to Medicare for its services.  Based on how the new edits are designed, your ambulance claim for the transport to that excluded service will be rejected based on the lack of a hospital claim. Or maybe the patient has both Medicare and the V.A., and has elected to have the V.A. be the primary payer for their required hospital care.  Again, there would likely be no outpatient hospital claim submitted to Medicare on that date of service, resulting in the rejection of your ambulance claim.

I can see your point, but those examples are pretty far-fetched.  How big an issue is this really?

I agree those examples are pretty far-fetched.  However, there are other situations that create the same problem.  For example, what about an emergent response to transport an SNF patient to the hospital for necessary emergency services?  Imagine if you are called to respond late at night (e.g., 11:30 p.m.) tonight.  Now imagine that, by the time you get to the patient, load them into the vehicle, and transport them to the ED, it has crossed over midnight into the next day.

What date of service is going to be on the hospital’s claim?  Almost certainly, the hospital will use tomorrow’s date.  As a result, when your claim hits Medicare’s system, there will not be an associated hospital claim, which will result in your claim being rejected as the responsibility of the SNF.  In this situation, Medicare’s edit has worked as intended, but the result is the denial of a claim that should be separately payable by Medicare Part B.

Okay, I can see how this might be annoying,
but I can appeal the claim and likely win on appeal, right? 

Yes and no.  The problem is that you are not likely to win on either of the first two levels of appeal, as they are likely going to rely upon the information in the CWF.  I can see you possibly winning your appeal at the ALJ level…5 to 7 years from now.

In other words, the appeals process is unlikely to provide an acceptable resolution.  Instead, I think the majority of ambulance providers are going to look to the SNFs to make good in these situations.  Of course, the SNFs are likely going to disclaim liability, arguing (correctly) that ambulance transportation to an ED is an excluded service.

This is where the agreement with the SNF comes into play.  One key purpose of contracts is to allocate known risks between the parties.  In this instance, the “risk” that needs to be addressed is the possibility that Medicare might incorrectly reject your claim thinking it is bundled to the SNF.  I would argue that this risk should be absorbed by the SNF.  The transport to the ED should have suspended the patient’s SNF stay, which would have allowed you to receive a separate payment from Medicare.  However, the fact that your claim was rejected is proof positive that the CWF does not reflect the suspension of the patient’s SNF stay.  Indirectly, it also serves as proof that the SNF received a per diem payment for the patient on that date.  To me, the fact that they accepted the per diem payment means they accepted the risk of a bundled ambulance service on that date.  I would also argue that it was their failure to properly suspend the patient’s SNF stay that set in motion your denial.  Either way, I would be looking to the SNF for payment.

Based on my experience, the typical agreement with an SNF does not address this situation.  Frequently, these agreements do not even address the specifics of SNF Consolidated Billing.  Instead, I tend to see general language indicating that the ambulance provider will bill the SNF when payment responsibility lies with the SNF under an applicable federal or state health care program.  I doubt that language is going to convince an SNF to take financial responsibility for the situation discussed above.

The good news is that your existing agreements can easily be revised to address this situation.  The language I would recommend is something along the lines of:

“The parties acknowledge and agree that a denial from Medicare for SNF consolidated billing shall constitute conclusive evidence that a transportation service is the financial responsibility of the facility.” 

In sum, the new SNF Consolidated Billing edits are going to increase the frequency with which we are forced to look to the SNFs for payment.  In most instances, it will be a situation where the SNF is legally responsible under SNF Consolidated Billing.  However, there will also be situations where the over-inclusive nature of the edits results in the claim being incorrectly denied as the SNF’s responsibility.  The question becomes how you want to handle these incorrect denials.  Do you want to appeal and hope CMS reverses its decision?  Or do you want to hold the SNF responsible?  If you want to hold the SNF responsible, you will likely need to revise your agreements with the SNFs.

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

Member Update on Balance Billing

Written by Aidan Camas on . Posted in Advocacy Priorities, Balance Billing, Government Affairs, Legislative, Member Advisories, News.

This morning Ruth Hazdovac and Aidan Camas of AAA staff and Kathy Lester, Esq, Healthcare Consultant to the AAA attended a briefing held by the House Energy & Commerce Committee on the issue of surprise/balance billing. At the briefing, staff for Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR) announced that they would be releasing a bipartisan discussion draft, the No Surprises Act, which would “protect consumers from surprise medical bills and increase transparency in our health care system.”

As of now, ground and air ambulances are NOT included in the discussion draft. However, the committee is asking for comments on ground and air ambulance and recommendations on how to provide relief to the consumer in this area. The AAA has a Balance Billing Work Group that is hard at work developing a policy recommendation that will work for our members.

The House Ways and Means Health Subcommittee Chairman Lloyd Doggett also announced today that the Health Subcommittee will hold a hearing next week entitled “Hearing on Protecting Patients from Surprise Medical Bills.” AAA Staff will be at the briefing and provide a timely update to membership on any developments.

The AAA team will be submitting comments and policy recommendations based off the work of the Balance Billing Work Group to both the Energy & Commerce and Ways & Means Committee to ensure that the views of our members are well represented. We will also be reaching out to AAA members in the states of key policymakers on the Committees to submit comments, as well. The AAA will also provide members with key talking points in the event they are contact by their Members of Congress or their staff.

Questions? Contact Us

If you have questions about the discussion draft or balance billing initiatives being undertaken by the AAA, please do not hesitate to contact a member of the AAA Government Affairs Team.

Tristan North – Senior Vice President of Government Affairs
tnorth@ambulance.org | (202) 802-9025

Ruth Hazdovac – AAA Senior Manager of Federal Government Affairs
rhazdovac@ambulance.org | (202) 802-9027

Aidan Camas – Manager of State & Federal Government Affairs
acamas@ambulance.org | (202) 802-9026

Thank you for your continued membership and support.

Summary of March 28, 2019 Ambulance ODF

Written by Brian Werfel on . Posted in Finance, Medicare, Member-Only, News, Reimbursement.

The Centers for Medicare and Medicaid Services (CMS) held its latest Open Door Forum on Wednesday, March 28, 2019.  As with past Open Door Forums, CMS started the call with the following announcements:

  1. Ambulance Cost Data Collection – CMS reminded the industry that the Bipartisan Budget Act of 2018, enacted on February 9, 2018, requires CMS to create a new cost data collection system by December 31, 2019.
  2. Emergency Triage, Treat, and Transport Model – A representative from the Innovation Center within CMS provided an overview of the “Emergency Triage, Treat, and Transport Model” or “ET3.” This is a 5-year pilot program intended to provide ambulance providers with greater flexibility to handle low-acuity 911 calls, by providing Medicare payment for: (a) ambulance transportation to alternative treatment destinations and (b) treatment at the scene. The CMS representative indicated that CMS is in possession of data that suggests that 16% of emergency ambulance transports to a hospital emergency department could have been resolved by transporting the patient to an alternative treatment site, e.g., an urgent care center. CMS estimates that had all of these patients elected to receive care in the lower-acuity setting, it would have saved the Medicare Program approximately $560 million each year. With respect to the operation of the model itself, CMS essentially repeated the information that had been previously provided on its webinars. You can view the AAA Member Advisory on the ET3 Model by clicking here.
  3. Ambulance Inflation Factor – CMS reiterated that the 2019 Ambulance Inflation Factor is 2.3%.

Following the announcements, CMS moved into a Question & Answer period. The majority of the questions related to the ET3 pilot program. As is typical, many questions were not answered on the call; instead, CMS asked the individual to submit their question in writing. However, the following questions were answered on the call:

  1. Payment Rates under ET3 – CMS was asked whether the BLS base rate payment would be the BLS emergency base rate. It was not clear that the CMS representative fully understood the question, although she indicated that it would.
  2. Eligibility for Government Agencies – CMS was asked whether governmental agencies that operate 911 centers would submit applications to participate as part of the RFA process in the Summer of 2019. CMS responded that governmental agencies that operate 911 centers would not submit RFAs, but would rather wait for the Notice of Funding Opportunity (NOFO), which will be issued after the ambulance providers and suppliers are selected for participation (expected to be the late Fall/Winter of 2019). CMS further confirmed that if the governmental agency also operated its own ambulance service that it would be eligible to apply for both aspects of the ET3 Model.
  3. Limit on Ambulance Providers – CMS was asked whether it would cap the number of ambulance providers and suppliers selected to participate in the program. CMS responded that, at the present time, it has no intent to cap the number of participating ambulance providers and suppliers at any specific number.
  4. Return Transports from Alternative Treatment Destinations – CMS was asked whether the model would provide for ambulance payment for the return transport after a patient was transported to an alternative treatment site. CMS indicated that the model does not provide for payment for the return transport.
  5. Definition of “Telehealth” – CMS confirmed that the model will use the same definition of “telehealth” used in other areas of the Medicare Program. CMS further confirmed that telehealth encounters require both audio and video connections.
  6. Approval of Alternative Treatment Sites – CMS confirmed that state and local regulatory agencies would have final approval over acceptable alternative treatment sites.
  7. Qualified Health Care Practitioner – CMS confirmed that a “qualified health care practitioner” would be an individually enrolled Medicare practitioner, which includes physicians and nurse practitioners. In some instances, it can also include physician’s assistants. CMS confirmed that the definition would not include registered nurses or advance scope paramedics.
  8. NOFO Funding – CMS indicated that, at the present time, it is not prepared to release additional details on the nature or size of the funding opportunities available to governmental agencies and their designees that operate or have authority over 911 centers.
  9. Medicare Advantage and Other Payers – CMS confirmed that the ET3 Model applies only to Medicare beneficiaries enrolled in FFS Medicare. It does not apply to Medicare Advantage enrollees, Medicaid recipients, etc.

Questions? Email Brian at bwerfel@aol.com

Update on New SNF Edits

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

CMS Set to Implement New Common Working File Edits to Identify Ambulance Services Provided in Connection with Outpatient Hospital Services that should be bundled to the SNF under Consolidated Billing.

In a Member Advisory issued last week, the AAA provided an update on a series of new Common Working File (CWF) edits intended to identify ambulance transports furnished in connection with outpatient hospital services that are properly bundled to the skilled nursing facility under the SNF Consolidated Billing regime. These new edits are set to go into effect on April 1, 2019. 

In our discussion of the implementation specifics, we attempted to answer the question of what would happen when an ambulance claim is submitted prior to the receipt of the associated hospital outpatient claim, and where the associated hospital claim eventually hit Medicare’s system. Specifically, we indicated as follows:

“The Transmittal contains further instructions that the CWF be updated to identify previously rejected ambulance claims upon receipt of an associated hospital claim for the same date of service that contains an Exempted Code.  Once identified, the Shared System Maintainer (SSM) is supposed to adjust the previously rejected or denied ambulance claim.  At this point, the nature of that “adjustment” is unclear, i.e., it is unknown whether the SSM will automatically reprocess the ambulance claim for payment.  The AAA is seeking additional clarification from CMS on this important point.”

On March 15, 2019, CMS responded to our request for clarification. Specifically, CMS indicated that it has instructed the SSM and/or its Medicare Administrative Contractor (MAC) to automatically reprocess claims that were rejected for lack of an associated hospital outpatient claim.

Upon reprocessing, the claims will pass the edits to the extent the associated hospital claim contains a HCPCS or CPT code that indicates that the hospital outpatient service was excluded from SNF Consolidated Billing. Such claims would then be forwarded to the MAC for further editing, and either paid or denied. By contrast, when the associated hospital outpatient claim contains HCPCS or CPT codes that suggest the hospital services should be bundled to the SNF, the claim will be reprocessed and denied by the MAC with a remittance advice code indicating that the SNF is financially responsible.

AAA Webinar on New SNF Consolidated Billing Edits

March 27, 2019 | 2:00 PM Eastern
Speakers: Brian Werfel, Esq.
$99 for Members | $198 for Non-Members

Join AAA Medicare Consultant Brian Werfel, Esq., to go over the new SNF Consolidated Billing edits that go into effect April 1, 2019. These edits are being implemented by CMS in response to 2017 investigation by the HHS Office of the Inspector General that determined that CMS lacked the appropriate claims processing edits to properly identify ambulance transports provided in connection with hospital outpatient services that are not expressly excluded from SNF PPS. The implementation of these new edits will force ambulance providers and suppliers to rethink their current claims submission processes for SNF residents. Ambulance providers and suppliers will need to make a decision on what to do with these claims moving forward. Sign up today to make sure your service is ready!

Register for the Webinar

CMS SNF Edits Go Into Effect – April 1, 2019

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

CMS Set to Implement New Common Working File Edits to Identify Ambulance Services Provided in Connection with Outpatient Hospital Services that should be bundled to the SNF under Consolidated Billing

On November 2, 2018, the Centers for Medicare and Medicaid Services (CMS) issued Transmittal 2176 (Change Request 10955), which would establish a new series of Common Working File (CWF) edits intended to identify ambulance transports furnished in connection with outpatient hospital services that are properly bundled to the skilled nursing facility under the SNF Consolidated Billing regime. These new edits are set to go into effect on April 1, 2019. 

Why these edits are necessary?

In 2017, the HHS Office of the Inspector General conducted an investigation of ground ambulance claims that were furnished to Medicare beneficiaries during the first 100 days of a skilled nursing home (SNF) stay. Under the SNF Consolidated Billing regime, SNFs are paid a per diem, case-mix-adjusted amount that is intended to cover all costs incurred on behalf of their residents.  Federal regulations further provide that, with limited exceptions, the SNF’s per diem payment includes medically necessary ambulance transportation provided during the beneficiary’s Part A stay. The OIG’s report was issued in February 2019.

The OIG conducted a review of all SNF beneficiary days from July 1, 2014 through June 30, 2016 to determine whether the beneficiary day contained a ground ambulance claim line. The OIG excluded beneficiary days where the only ambulance claim line related to: (1) certain emergency or intensive outpatient hospital services or (2) dialysis services, as such ambulance transportation would be excluded from SNF Consolidated Billing. The OIG determined that there were 58,006 qualifying beneficiary days during this period, corresponding to $25.3 million in Medicare payments to ambulance suppliers.

The OIG then selected a random sample of 100 beneficiary days for review. The OIG determined that 78 of these 100 beneficiary days contained an overpayment for the associated ambulance claims, as the services the beneficiary received did not suspend or end their SNF resident status, nor was the transport for dialysis. The OIG determined that ambulance providers were overpaid a total of $41,456 for these ambulance transports. The OIG further determined that beneficiaries (or their secondary insurances) incurred an additional $10,723 in incorrect coinsurance and deductibles.

Based on the results of its review, the OIG estimates that Medicare made a total of $19.9 million in Part B overpayments to ambulance suppliers for transports that should have been bundled to the SNFs under SNF Consolidated Billing regime. The OIG estimated that beneficiaries (and their secondary insurances) incurred an additional $5.2 million in coinsurance and deductibles related to these incorrect payments.

The OIG concluded that the existing edits were inadequate to identify ambulance claims for services associated with hospital outpatient services that did not suspend or end the beneficiary’s SNF resident status, and which were not related to dialysis. The OIG recommended that CMS implement additional edits to identify such ambulance claims.

Overview of new claims processing edits

In response to the OIG’s report, CMS issued Transmittal 2176, which implements a new series of claims processing edits to identify ambulance claims associated with outpatient hospital services that should be bundled to the SNF. As noted above, these edits will go into effect on April 1, 2019.

These new claims processing edits are somewhat complicated. In order to properly understand how these claims edits will work, it is helpful to understand that CMS already has claims processing edits in place to identify hospital outpatient claims that should be bundled to the SNF. These CWF edits operate by referencing a list of Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) codes that correspond to outpatient hospital services that are expressly excluded from SNF Consolidated Billing. Hospital claims for outpatient services that are submitted with one of these excluded codes bypass the existing CWF edits, and are then sent to the appropriate Medicare Administrative Contractor for further editing and payment. Hospital claims submitted without one of these codes are denied for SNF Consolidated Billing. For convenience, the list of HCPCS and CPT codes excluded from SNF Consolidated Billing is hereinafter referred to as the “Exempted Codes.”

The new edits for ambulance claims will compare Part B ambulance claims to the associated outpatient hospital claim to see whether or not that hospital claim is excluded from SNF Consolidated Billing.

Specifics related to new claims processing edits

Under these new edits, the CWF will reject an incoming ambulance claim whenever the beneficiary is determined to be in an SNF Part A stay if either:

  1. There is no associated outpatient hospital claims for the same date of service on file; or
  2. There is an associated outpatient hospital claim for the same date of service on file (paid or denied), but where that outpatient hospital claim does not contain at least one Exempted Code.

When an incoming ambulance claim is rejected by the CWF, it will be sent to the applicable Medicare Administrative Contractor and rejected (Part A Ambulance Providers) or denied (Part B Ambulance Suppliers) using the applicable Claim Adjustment Reason Code/Remittance Advice Remark Code for SNF Consolidated Billing.  In other words, the ambulance claim will be denied with an indication that youshould bill the SNF.

The Transmittal contains further instructions that the CWF be updated to identify previously rejected ambulance claims upon receipt of an associated hospital claim for the same date of service that contains an Exempted Code. Once identified, the Shared System Maintainer (SSM) is supposed to adjust the previously rejected or denied ambulance claim. At this point, the nature of that “adjustment” is unclear, i.e., it is unknown whether the SSM will automatically reprocess the ambulance claim for payment. The AAA is seeking additional clarification from CMS on this important point.

Potential concerns for ambulance providers and suppliers

Based on the current experience of hospital providers, the AAA is cautiously optimistic that the new edits can be implemented in a way that proper identifies ambulance transports associated with hospital outpatient claims that should be bundled to the SNF vs. those that correctly remain separately payable by Medicare Part B.

However, the AAA has some concerns with the manner in which CMS intends to apply these edits.  Ambulance providers and suppliers are typically in a position to submit their claims earlier than the corresponding hospital, many of which submit claims on a biweekly or monthly cycle.  This creates a potential timing issue. This timing issue arises because the edits will reject any ambulance claim that is submitted without an associated hospital claim on file.  In other words, even if the hospital outpatient service is properly excluded from SNF Consolidated Billing, the ambulance claim will still be rejected if it beats the hospital claim into the system. The hope is that CMS will subsequently reprocess the ambulance claim once the hospital claim hits the system. However, at this point in time, it is unclear whether these claims will be automatically reprocessed, or whether ambulance providers and suppliers will be forced to appeal these claims for payment.

One option available to ambulance providers and suppliers would be to hold these claims for a period of time, in order to allow the hospitals to submit their claims. By waiting for the hospital to submit its claim, you can ensure that your claims will not be denied solely due to the timing issue. This should eliminate the disruption associated with separately payable claims being rejected and then subsequently reprocessed and/or appealed. It would also give you a degree of certainty when billing the SNF for claims that are denied for SNF Consolidated Billing. However, holding claims carries an obvious downside, i.e., it will disrupt your normal cash flow.

To summarize, the implementation of these new edits will force ambulance providers and suppliers to rethink their current claims submission processes for SNF residents. Ambulance providers and suppliers will need to make a decision on whether to hold claims to minimize the potential for problems, or to continue their existing submission practices and deal with any issues as they arise.

AAA webinar on new SNF Consolidated Billing edits

March 27, 2019 | 2:00 PM Eastern
Speakers: Brian Werfel, Esq.
$99 for Members | $198 for Non-Members

Join AAA Medicare Consultant Brian Werfel, Esq., to go over the new SNF Consolidated Billing edits that go into effect April 1, 2019. These edits are being implemented by CMS in response to 2017 investigation by the HHS Office of the Inspector General that determined that CMS lacked the appropriate claims processing edits to properly identify ambulance transports provided in connection with hospital outpatient services that are not expressly excluded from SNF PPS. The implementation of these new edits will force ambulance providers and suppliers to rethink their current claims submission processes for SNF residents. Ambulance providers and suppliers will need to make a decision on what to do with these claims moving forward. Sign up today to make sure your service is ready!

Register for the Webinar

AAA Releases 2019 State Medicaid Ambulance Rate Survey

Written by Brian Werfel on . Posted in Medicaid, Reimbursement, Talking Medicare.

The AAA is pleased to release its 2019 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

Download the Survey

Download the Survey as Spreadsheet

The rates set out in this survey are based on publicly available information provided by the various State Medicaid agencies. While the AAA has taken steps to verify the accuracy of the information on this Survey, it is possible that the rates provided in the Survey may not reflect changes to a state’s reimbursement policies that have not been made publicly available. These rates may not also not reflect any emergency budgetary measures or other temporary reductions imposed by a state.

The AAA’s goal is to make this Survey as accurate as possible. Therefore, if you believe the rates for your state are inaccurate, please contact the AAA at info@ambulance.org or me at bwerfel@aol.com.

CMS Declines to Extend Temporary Moratorium

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

On January 30, 2019, the Centers for Medicare & Medicaid Services (CMS) announced that it had elected not to extend its temporary moratoria on the enrollment of new Medicare Part B non-emergency ground ambulance providers and suppliers in the states of New Jersey and Pennsylvania. These enrollment moratoria expired on January 29, 2019.

Update on Government Shutdown and Sequestration

Written by Aidan Camas on . Posted in Medicare, Member Advisories, Member-Only, News, Reimbursement, Uncategorized.

As the government shutdown drags on the negative impacts continue to grow. If the shutdown continues through January 24, 2019, which is looking likely at this point, current law will require the Trump Administration to cut about $839 million from non-exempt federal benefit programs to avoid increasing the deficit. This is a result of the “PAYGO” (pay as you go) law which requires spending increases or tax cuts to be offset with cuts to programs or additional revenue to avoid increasing the deficit. As the largest nonexempt benefit program, it is likely that Medicare would experience the worst of these cuts through sequestration.

While the Trump Administration has not yet issued a sequestration order, there is a distinct possibility that one could be issued if the shutdown continues much longer. A sequestration order would mean an additional across the board cut to all Medicare providers, including ambulance services. Ambulance service providers are still feeling the impact of the 2% sequestration cut that has been in effect the past few years. Any new cuts would likely start out being targeted at administrative tasks which could slow payments to providers. Temporary cuts would be expensive for the administration to facilitate and is made more challenging by the fact that many important staff members are currently furloughed. There are also some at the Office of Budget and Management (OMB) who believe that these cuts could not actually be administered until the government is reopen.

The AAA will keep members informed of any new developments.

Update on HHS OIG Reports on Ambulance Services

Written by Kathy Lester on . Posted in Member Advisories, Member-Only, News, Reimbursement.

Update on HHS Office of the Inspector General Reports on Ambulance Services

The HHS Office of the Inspector General (OIG) released an update to the Work Plan as the year comes to a close.  There are no new projects specific to ambulance services, but the update does provide a summary of three projects that have been completed or are in progress.

  • Medicare Part B Payments for Ambulance Services Subject to Part A Skilled Nursing Facility Consolidated Billing Requirements (expected release 2019). In this work, the OIG  seeking to determine whether ambulance services paid by Medicare Part B were subject to Part A SNF consolidated billing requirements. The OIG will also assess the effectiveness of edits in CMS’s Common Working File to prevent and detect Part B overpayments for ambulance transportation subject to consolidated billing. Prior OIG reports have identified high error rates and significant overpayments for services subject to SNF consolidated billing.
  • Ambulance Services – Supplier Compliance with Payment Requirements (partially completed; remainder expected release 2019). Prior OIG work has found that Medicare made inappropriate payments for advanced life support emergency transports. The OIG seeks to determine whether Medicare payments for ambulance services were made in accordance with Medicare requirements. 

The first report of this project found that Medicare made improper payments of $8.7 million to providers for nonemergency ambulance transports to destinations not covered by Medicare, including the identified ground mileage associated with the transports.  The report identified that the majority of the improperly billed claim lines (59 percent) were for transports to diagnostic or therapeutic sites, other than a physician’s office or a hospital, that did not originate from SNFs.

In this report, the OIG recommended that the CMS: (1) direct the Medicare contractors to recover the portion of the $8.7 million in improper payments made to providers for claim lines that are within the claim-reopening period; (2) for the remaining portion of the $8.7 million, which is outside of the Medicare reopening and recovery periods, instruct the Medicare contractors to notify providers of potential improper payments so that those providers can exercise reasonable diligence to investigate and return any identified similar improper payments, and identify and track any returned improper payments; (3) direct the Medicare contractors to review claim lines for nonemergency ambulance transports to destinations not covered by Medicare after the audit period and recover any improper payments identified; and (4) require the Medicare contractors to implement nation-wide prepayment edits to ensure that payments to providers for nonemergency ambulance transports comply with Federal requirements.

  • The third report is linked to a case study of the closure of the Rosebud Hospital Emergency Department. Rosebud is an Indian Health Service (IHS) hospital that discontinued emergency services. The closure of the Rosebud emergency department (ED) followed a notice of intent by the CMS to terminate Rosebud Hospital from the Medicare program. Representatives of the Rosebud Sioux Tribe raised concerns to OIG about the Rosebud ED closure and linked that closure to several patient deaths that occurred during ambulance transports to other facilities when emergency care was unavailable locally. In response to these concerns, the OIG seeks to examine factors considered and procedures involved in IHS’s decisions to close and later reopen the Rosebud ED. The OIG will also assess IHS’s management, coordination, and communication related to the closure and will identify lessons learned that IHS could apply to similar situations in the future.  The report was expected to be published in 2018, but has not as of this date. 

The AAA continues to monitor the OIG work plan and engage as appropriate with key officials.  Our goal is to provide educational background to address any misunderstandings or incorrect assumptions that may exist. 

Federal District Court Judge Strikes Down the ACA

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

On December 14, 2018, a federal district court judge for the Northern District of Texas issued a ruling striking down the Affordable Care Act (ACA) on the grounds that the Individual Mandate was unconstitutional, and that the rest of the law cannot withstand constitutional scrutiny without the Individual Mandate.

District Court Judge Reed O’Connor’s decision relates to a lawsuit filed earlier this year by 20 states and two individuals. The plaintiffs argued that the Tax Cuts and Jobs Act of 2017 — which amended the Individual Mandate to eliminate the penalty on individuals that failed to purchase qualifying insurance effect January 1, 2019 — rendered the Individual Mandate unconstitutional. The plaintiffs further argued that the Individual Mandate was inseverable from the rest of the ACA, and, therefore, that the entire ACA should be struck down.

The defendants in this case were the United States of America, the U.S. Department of Health and Human Services (HHS), Alex Azar, in his capacity as the Secretary of HHS, and David J. Kautter, in his capacity as the Acting Commissioner of the Internal Revenue Service (IRS). 16 states and the District of Columbia intervened as additional defendants.

In order to properly understand the district court’s ruling, it is necessary to revisit the Supreme Court’s 2012 decision on the constitutionality of the ACA, National Federal of Independent Business v. Sebelius (NFIB). In that case, 26 states, along with several individuals and a business organization challenged the ACA’s Individual Mandate and Medicaid expansion provisions as exceeding Congress’ enumerated powers. In a complicated decision, the majority of Justices ruled that the Individual Mandate was unconstitutional under Congress’ authority to regulate interstate commerce, but that the provision could be salvaged under Congress’ authority to lay and collect taxes. In reaching this conclusion, the majority of Justices focused on the “shared responsibility payment” aspect of the Individual Mandate, which imposed a tax on those individuals that failed to purchase or otherwise obtain qualifying health insurance. The majority of Justices concluded that the shared responsibility payment was a “tax.” It was therefore constitutional under the Congress’ general taxing authority.

In sum, the Supreme Court ruled that Congress lacked the power to compel individuals to buy qualifying health insurance, but that it could constitutionally impose a tax on those that failed to purchase or otherwise obtain qualifying health insurance.

In the current case, the court was asked to reconsider the Individual Mandate in light of the TCJA, which “zeroed” out of the shared responsibility payment, effective January 1, 2019. The plaintiffs argued that the Individual Mandate could no longer be justified as a valid exercise of Congress’ taxing authority. The federal government and its agents did not necessarily contest the plaintiffs’ argument with respect to the Individual Mandate. By contrast, the intervening states and the District of Columbia argued that the Individual Mandate could continue to be construed as a tax because it continues to satisfy the factors set forth by the Supreme Court in NFIB.

Judge O’Connor sided with the plaintiffs, holding that, because the Individual Mandate would no longer trigger a tax beginning in 2019, the Supreme Court’s ruling on this point in NFIB was no longer applicable. He therefore concluded that the Individual Mandate could no longer be upheld under Congress’ taxing authority. Judge O’Connor then fell back on the Supreme Court’s previous holding that the Individual Mandate, as a stand-alone command, remained unconstitutional under the Interstate Commerce Clause. Judge O’Connor then ruled that the Individual Mandate could not be severed from the rest of the ACA. On this point, the judge cited the express provisions of the ACA, as well as the Supreme Court’s decisions in NFIB and King v. Burwell.

What this decision means

On its face, the decision strikes down the Affordable Care Act in its entirety. However, the ruling is likely to be appealed to the Fifth Circuit Court of Appeals. Most legal experts expect that, regardless of the decision at the Circuit Court, the case is likely to make its way up to the Supreme Court.

Pending the resolution of these appeals, the Administration has adopted a “business as usual” approach. The White House has already indicated that it will not attempt to enforce the ruling during the appeals process. CMS Administrator Seema Verma recently tweeted that the decision will have “no impact to current coverage or coverage in a 2019 plan.”

The American Ambulance Association will continue to monitor this case as it makes its way through the appeals process, and we will notify our members of any new developments.

CMS Posts 2019 Public Use File

Written by Brian Werfel on . Posted in Medicare, Member-Only, News, Reimbursement.

On November 28, 2018, CMS posted the 2019 Ambulance Fee Schedule Public Use Files. These files contain the amounts that will be allowed by Medicare in calendar year 2019 for the various levels of ambulance service and mileage. These allowables reflect a 2.3% inflation adjustment over the 2018 rates.

The 2019 Ambulance Fee Schedule Public Use File can be downloaded from the CMS website by clicking here.

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

View Reformatted Fee Schedule

CMS Announces 2019 Ambulance Inflation Factor

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

On November 30, 2018, CMS issued Transmittal 4172 (Change Request 11031), which announced the Medicare Ambulance Inflation Factor (AIF) for calendar year 2019.

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

For the 12-month period ending in June 2018, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased 2.9%. CMS further indicated that the CY 2019 MFP will be 0.6%. Accordingly, CMS indicated that the Ambulance Inflation Factor for calendar year 2019 will be 2.3%.

CMS Announces Extension of Prior Authorization Program

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

On November 30, 2018, CMS issued a notice on its website that it would be extending the prior authorization demonstration project for another year. The extension is limited to those states where prior authorization was in effect for calendar year 2018. The affected states are Delaware, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia and West Virginia, as well as the District of Columbia. The extension will run through December 1, 2019. 

CMS indicated that the extension will provide it with an additional year to evaluate the prior authorization program, and to determine whether the program meets the statutory requirements for nationwide expansion under the Medicare Access and CHIP Reauthorization Act of 2015.

CMS has also updated its Ambulance Prior Authorization FAQs and its Physician/Practitioner Letter to reflect the expansion of the program. The updated FAQ and Physician Letter can be downloaded from the CMS Ambulance Prior Authorization webpage by clicking here.

Rural Health Day Advocacy Update

Written by Kathy Lester on . Posted in Advocacy Priorities, Government Affairs, Legislative, Member Advisories, Member-Only, News, Regulatory, Reimbursement.

Happy National Rural Health Day! Thank you to all of the ambulance service providers who work hard providing life-saving treatment in rural areas every day.

In part of our ongoing advocacy efforts, the AAA sent a letter today to the Rural Caucuses in the United States Senate and House of Representatives. Addressed to leadership of the caucuses, Sen. Pat Roberts (R-KS), Sen. Heidi Heitkamp (D-ND), Rep. Adrian Smith (R-NE), and Rep. Tim Walz (D-MN), this in-depth letter highlights the critical work that our members do every day around the country and raises important issues affecting the industry. Issues covered in the letter include:

Stabilizing the Ambulance Fee Schedule
  • Make the add-ons permanent and build them into the base rate
  • Use new data from the ambulance cost collection program to ensure reimbursement is adequate going forward
  • New data should be used to assess the problems with the current ZIP-code methodology for determining rural and super-rural services
Ambulance Fee Schedule Reform
  • Proposed alternative models for rural ambulance services
  • Encouraging Congress to look at alternative destination options for ambulance service providers
Recognizing Ambulance Services as Providers of Health Care
  • Moving non-fire-based ambulance services from suppliers to providers under Medicare

The letter also highlights some of the burdensome regulations facing ambulance service providers that the AAA has recommended Congress address through its Red Tape initiative. These include:

Removing Unnecessary Regulatory Burdens:
  • Reduce the burdens created by the Physician Certificate Statement
  • Simplify the 855B Ambulance Enrollment Form
  • Address burdensome requirements of the patient signature on claims and the strict application of the revocation of billing authority

This letter from the AAA to Congressional leaders is just one part of the AAA’s ongoing effort to educate Congress on the crucial role ambulance service providers play in America’s healthcare system. The AAA wants Congress to know that in many rural areas of the country, ambulances are the medical safety net, yet face extreme challenges to staying in business thanks to below cost reimbursement and burdensome regulations. The AAA will continue to pursue this list of priorities with our members next year and going forward.

Read the Full Letter

Again, Happy Rural Health Day to our members – thanks for all that you do!

If you have any questions about our letter or rural advocacy, please contact us:

Questions?: Contact Us

If you have questions about the legislation or regulatory initiatives being undertaken by the AAA, please do not hesitate to contact a member of the AAA Government Affairs Team.

Tristan North – Senior Vice President of Government Affairs
tnorth@ambulance.org | (202) 802-9025

Ruth Hazdovac – AAA Senior Manager of Federal Government Affairs
rhazdovac@ambulance.org | (202) 802-9027

Aidan Camas – Manager of State & Federal Government Affairs
acamas@ambulance.org | (202) 802-9026

Thank you for your continued membership and support.

2017 National and State-Specific Medicare Data

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

The American Ambulance Association is pleased to announce the publication of its 2017 Medicare Payment Data 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 2017, 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 2016.

2017 National & State-Specific Medicare Data

Questions? Contact Brian Werfel at bwerfel@aol.com.

 

MedPAC Examines Beneficiary Use of Emergency Departments

Written by Kathy Lester on . Posted in Medicare, Member Advisories, Member-Only, Regulatory, Reimbursement.

During its October meeting, the Medicare Payment Advisory Commission (MedPAC), reviewed Medicare’s current policies related to non-urgent and emergency care, as these topics relate to the use of hospital emergency departments (EDs) and urgent care centers (UCCs). The Commission is examining this topic because the use of ED services in recent years has grown faster than that of physician offices.  At the same time, the share of ED visits that are coded as high acuity has increased.

The Commission is exploring Medicare beneficiaries’ use of EDs and UCCs for non-urgent services. In addition, the Commission is analyzing ED coding to determine if the increase in coding high-acuity visits reflects real change in the patients treated in EDs. This slide deck shows the potential savings Medicare could realize if beneficiaries shift certain care to the UCC setting.

During the meeting, the staff sought feedback from Commissioners for developing next steps. This topic will likely continue to be addressed in future meetings.

From the perspective of ambulance payment reform, the observations made by the Commissioners and staff would also seem to support incorporating scope-appropriate ambulance services in the context of community paramedicine or treatment at the scene with referral. While additional work needs to be done by the ambulance community before these services can be incorporated into the Medicare reimbursement program, discussions like the one at MedPAC last week, show the importance of getting the details right so that ambulance services can be part of new payment models likely to be considered.

The American Ambulance Association is leading the effort with the Medicare program to develop appropriate models that account for the cost of providing services through sustainable reimbursement rates, rather than the use of temporary grants. We are also focused on ensuring services align with the scope of practice laws. Led by the Payment Reform and the Medicare Regulatory Committees, our efforts include regular meetings and discussions with leaders at the Centers for Medicare & Medicaid Services, as well as key Members of Congress. Follow us on Facebook and Twitter to learn more about our ongoing efforts.

Talking Medicare: CMS Implements Further Dialysis Cuts

Written by Brian Werfel on . Posted in Advocacy Priorities, Member-Only, News, Reimbursement, Talking Medicare.

Talking Medicare: CMS Implements Further Cuts in Reimbursement for Dialysis Services; Medicare Payment Data Shows Continued Reduction in Overall Spending on Dialysis Transports, but Net Increase in Dialysis Payments in Prior Authorization States

On October 1, 2018, CMS implemented an additional thirteen (13%) cut in reimbursement for non-emergency BLS transports to and from dialysis. This cut in reimbursement was mandated by Section 53108 of the Bipartisan Budget Act of 2018. This on top of a ten (10%) cut in reimbursement for dialysis transports that went into effect on October 1, 2013. As a result, BLS non-emergency ambulance transports to and from dialysis that occur on or after October 1, 2018 will be reimbursed at 77% of the applicable Medicare allowable.

In related news, CMS has released its national payment data for calendar year 2017. This data shows a continued reduction in total Medicare payments for dialysis transports. Medicare paid $477.7 million on dialysis transports in 2017, down from $488.9 million in 2016. This continues a downward trend that has seen total payments decline from a high of more than $750 million in 2013 (see accompanying chart to the right). Not coincidentally, it was in 2013 that our industry saw its first reduction in Medicare’s payments for dialysis transports.

The payment reduction is partially the result of the reduction in the amounts paid for dialysis services. However, it is also reflective of an overall decline in the number of approved dialysis transports. For this, we can look primarily to the impact of a four-year demonstration project that requires prior authorization of dialysis transports in 8 states and the District of Columbia.

As a reminder, the original prior authorization states were selected based on higher-than-average utilization rates and high rates of improper payment for these services. In particular, the Medicare Payment Advisory Commission (MedPAC) had singled out these states as having higher-than-average utilization of dialysis transports in a June 2013 report to Congress. The chart below shows total spending on dialysis in those states in the years immediately preceding the implementation of the prior authorization project up through 2017, the third year of the demonstration project. While the three states had very different trajectories prior to 2015, each showed a significant decrease in total payments for dialysis under the demonstration project.

However, it is the trajectory of these changes that I want to discuss in this month’s blog. In previous blogs, I discussed the impact of the particular Medicare Administrative Contractor on the outcomes under prior authorization. Specifically, I noted that, while dialysis payments dropped in each state, the decline was far more dramatic in the states administered by Novitas Solutions (NJ, PA) than in the South Carolina, which was administered by Palmetto GBA. This trend continued in the second year of the program, which saw prior authorization expanded into five additional states and the District of Columbia. Those states administered by Novitas (DE, MD) saw far greater declines than the states administered by Palmetto (NC, VA, WV).

Given these declines, the data from the third year is somewhat surprising. The states administered by Palmetto continued to see declines in total dialysis payments, with the only exception being West Virginia. However, in the states administered by Novitas, we saw total dialysis payments increase, particularly in New Jersey, which saw nearly a 33% increase in total dialysis payments.

Three years into the prior authorization program, it is starting to become clear that the two MACs have approached the problem of overutilization of dialysis transports using two different approaches. Palmetto appears to have adopted a slow-and-steady approach, with total payments declining in a consistent manner year after year. By contrast, Novitas adopted more of a “shock the system” approach, where it rejected nearly all dialysis transports in the first year, and has adopted a somewhat more lenient approach in subsequent years.

Key Takeaways

 Last year, I wrote that two years of data under the prior authorization program permitted two conclusions: (1) the implementation of a prior authorization process in a state will undoubtedly result in an overall decrease in the total payments for dialysis within that state and (2) the size of that reduction appears to be highly dependent on the Medicare contractor.

With an additional year of data, I think both conclusions remain valid, although I would revise the second to suggest that the initial reduction has more to do with the Medicare contractor. The evidence from the third year of the program suggests that the trends tend to equalize after the first few years. It is also possible that Novitas felt a more aggressive approach was needed in the first few years to address evidence of widespread dialysis overutilization in the Philadelphia metropolitan area.

This has potential implications beyond the demonstration project, as CMS looks towards a possible national expansion of the program. Among other issues, it suggests that the AAA must continue its efforts to work with CMS and its contractors on developing more uniform standards for coverage of this patient population.

What the AAA is Doing

The AAA continues to work on legislation that would restructure this cut to dialysis transport reimbursement. The AAA strongly supports the NEATSA Act (H.R.6269) introduced by Congressman LaHood (R-IL) and Congresswoman Sewell (D-AL) that would restructure the offset so that a majority of the additional reduction would be focused on those ambulance service agencies in which 50% or more of their volume are repetitive BLS nonemergency transports. AAA members and the AAA are working to get a Senate companion bill introduced shortly. The goal of this legislation would be to have the restructured offset go into effect as soon as possible. Thank you to the dozens of AAA members who have already contacted their members of Congress voicing their support for this critical legislation.

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

CMS Launches Outreach Effort to Ambulance Providers & Suppliers

Written by Kathy Lester on . Posted in Cost Data Collection, Member Advisories, News.

As part of the Bipartisan Budget Act of 2018 (BBA 2018), the Congress instructed CMS to develop a cost collection system to collect cost and revenue data related to the provision of ambulance services. Ambulance services are defined by federal law to include all levels of emergency and non-emergency services. 

CMS is in the first phase of this process. The Congress instructed the Agency to engage with stakeholders before specifying through notice and comment rulemaking the data collection system. By law, CMS is required to specify the final system by December 31, 2019. CMS must also identify the first group of providers and suppliers selected for the first representative sample by that date as well. It appears that the goal is to have the contractor develop a proposal before the 2019 rulemaking cycle which will begin next summer.

To engage with the stakeholders, CMS, through its contractor the RAND Corporation, is reaching out providers and suppliers to learn more about the costs and revenues associated with providing ambulance services.

During the American Ambulance Association’s annual meeting earlier this month, CMS through the RAND Corporation, convened a focus group where they selected several AAA members who were able to talk directly with the contractor. The discussion centered around characteristics of ambulance services that matter for determining costs. The group also talked about how data is currently captured at the state and local levels, as well as how data is tracked within ambulance services. There was also a lot of discussion about the importance of standardizing data elements and not relying upon different state or local definitions, which could confound the data and make it impossible to compare costs across states.

As we have reported previously, it is critically important that the data collected through this process is standardized and reflects the actual cost of providing ambulance services. It is important to make sure that the data is useable not only for supporting the ambulance add-ons after they next expire in 2023, but also to help implement broader reforms and innovative payment models.

CMS is now reaching out to others in the industry. If you receive an email or a phone call from RAND Corporation, please respond. 

If you have questions about, or would like assistance with regard to, this project, please contact Tristan North at tnorth@ambulance.org.

Preliminary Calculation of 2019 Ambulance Inflation Update

Written by Brian Werfel on . Posted in Member Advisories, Member-Only, News, Reimbursement.

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

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

For the 12-month period ending in June 2018, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased by 2.87%.

CMS has yet to release its estimate for the MFP in calendar year 2019. However, assuming CMS’ projections for the MFP are similar to last year’s projections, the number is likely to be in the 0.5% range.

Accordingly, the AAA is currently projecting that the 2019 Ambulance Inflation Factor will be approximately 2.4%. 

Cautionary Note Regarding these Estimates

Members should be advised that the BLS’ calculations of the CPI-U are preliminary, and may be subject to later adjustment. The AAA further cautions members that CMS has not officially announced the MFP for CY 2019. Therefore, it is possible that these numbers may change. The AAA will notify members once CMS issues a transmittal setting forth the official 2019 Ambulance Inflation Factor.

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