Department of Veterans Affairs Issues Final Rule on Reimbursement for Ambulance Services and Other Special Modes of Transportation
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.
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:
- The veteran must have a VA disability rating of 30% or higher;
- The veteran must be traveling for treatment of a service-related condition (if their VA disability rating is less than 30%);
- The veteran receives a VA pension;
- The veteran has an income below the maximum annual VA pension rate;
- The veteran cannot otherwise afford to pay for their travel; or
- 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:
- 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.
- 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
Veterans Administration Issues Interim Final Rule Expanding
Coverage of Ambulance Services under Millennium Bill
On January 9, 2018, the Department of Veterans Affairs issued an interim final rule that would amend its policy for payment of Millennium Bill claims. The Millennium Bill authorizes the Veterans Administration (VA) to pay for emergency care provided to veterans in non-VA facilities — including emergency ambulance transportation — provided the veteran has no other health insurance that would cover the costs of such emergency care. These changes were necessitated, in part, by a recent decision of the U.S. Court of Appeals for Veterans’ Appeals (Staab v. McDonald, 28 Vet. App. 50, 2016).
The two major changes being made by the interim final rule are: (1) the expansion of payment eligibility to include veterans who received partial payment or reimbursement from a health plan for their non-VA emergency care and (2) the expansion of payment eligibility for emergency transportation associated with a veteran’s receipt of emergency treatment in a non-VA facility.
These changes went into effect on January 9, 2018.
38 U.S.C. §1725 authorizes the VA to reimburse veterans for the costs of emergency treatment for non-service connected conditions furnished in a non-VA facility, provided certain criteria were met. One requirement was that the veteran be personally liable for the costs of that emergency treatment. As originally enacted in 1999, the statute indicated that the veteran would be personally liable if the veteran: (1) has no entitlement to care or services under a health-plan contract and/or (2) the veteran had no contractual or legal recourse against a third party that would, in part or in whole, extinguish such liability. The VA historically interpreted its payment obligations under the Millennium Bill to be limited to situations where the veteran had no entitlement to coverage under their health insurance or any other contractual or legal recourse against a third party.
The Expansion of Veteran Eligibility for Reimbursement Act of 2010 amended the requirements related to non-health insurance payments to remove the phrase “in part”. As a result, the VA revised its regulations to permit it to make a payment under the Millennium Bill in situations where automobile or other forms of non-health insurance made a partial payment, and where the veteran remained liable for the balance of the health care provider’s bill. However, there was no corresponding change made to the provisions related to health insurance contracts. As a result, the VA continued to view partial payment by a health plan as a bar to payment by the VA.
In Staab, the Court of Appeals adopted a more lenient interpretation of the statute, i.e., a more restrictive view of the VA’s statutory bar on reimbursement. Specifically, the Court held that the reimbursement bar would only apply when the payment from the health plan fully extinguished the veteran’s liability. The practical effect was to place health insurance plans on equal footing with other forms of insurance. The Court remanded the case back to the lower court for further proceedings.
The VA subsequently appealed the Court of Appeals decision. However, on June 14, 2017, Veterans Affairs Secretary David Shulkin announced that the Department would drop its appeal. Reversing course, Secretary Shulkin indicated that the VA had drafted regulations to implement the expanded Millennium Bill coverage. Those regulations form the basis of this interim final rule.
Provisions of Interim Final Rule
Partial Payment from Health Insurance Plan
The VA revised its regulations at 38 C.F.R. §17.1002(f) to indicate that the VA will make payment under the Millennium Bill to the extent the veteran otherwise qualifies for coverage to the extent that the veteran “does not have coverage under a health-plan contract that would fully extinguish the medical liability for the emergency treatment.” The VA retained the reimbursement bar for situations where the veteran would have been covered under a health plan had the veteran or the provider failed to comply with the requirements of that health plan, e.g., by failing to submit a timely claim. This change will apply to: (1) all claims pending with the VA as of April 8, 2016 or (2) submitted after that date.
Expansion of Payment Authority for Emergency Transportation
The VA historically viewed emergency ambulance transportation to the non-VA facility as part of the overall emergency treatment of the veteran. As a result, the VA believed that a health plan’s payment for the hospital care, in whole or in part, triggered its reimbursement bar. One common situation that impacts ambulance suppliers involves veterans that have Medicare Part A benefits (which cover the costs of their hospital care), but where the veteran has elected to forego paying for Medicare Part B. In these situations, Medicare would pay for the hospital care. The VA took the position that this triggered the reimbursement bar, and therefore prevented it from making payment for the emergency ambulance transportation.
Because the interim final rule expands Millennium Bill coverage to include situations where a health plan makes a partial payment, the VA found it necessary to amend its regulations governing the payment of ambulance claims. Specifically, the VA amended its regulations at 38 C.F.R. 17.1003 to provide that ambulance providers will now be eligible for payment provided the following conditions are met:
- Payment for emergency care provided at the non-VA facility is authorized or would have been authorized had:
- The veteran’s personal liability for the emergency treatment was not fully extinguished by payment by the health plan or other third-party; or
- Death not occurred before emergency treatment (at the hospital) could be provided);
- The veteran is financially liable to the ambulance provider;
- The veteran does not have coverage under a health insurance plan that would fully extinguish the medical liability for the emergency transport (and further provided that the veteran or the provider has timely filed a claim with the health plan);
- If the emergency transportation is the result of an accident or work-related injury, the veteran must have reasonably exhausted his remedies against a third-party payor (e.g., auto insurance policy or workers’ compensation policy); and
- The veteran remains liable for all copayments and deductibles.
Effect of Coinsurance and Deductibles
The A.A.A. has confirmed that the VA does not consider the coinsurance or deductible obligations imposed by a veteran’s health plan for the purposes of determining whether the veteran’s liability has been fully extinguished by the health plan’s payment.
Therefore, in situations where the veteran has health care coverage, payment by the VA is likely to be limited to situations where the ambulance provider is permitted under state and local laws to bill patients for the difference between their billed charges and the amounts allowed by the health insurer, i.e., those areas that currently permit balance billing. This would also mean that the VA would be unlikely to have any payment responsibility in situations where Medicare has made payment on the ambulance claim (although it leaves open the possibility that the VA may be responsible for non-covered Medicare services such as excess mileage).
Amount of Payment
When the VA pays under this expanded Millennium Bill authority, its payment will be based on the following methodology:
- When the veteran has no coverage under a health plan or other third-party payor, the VA will pay the lesser of: (a) the amount for which the veteran is personally liable or (b) 70% of the applicable Medicare allowable;
- When partial payment is made by a health plan or other third party payer, the VA will pay the difference between: (a) the amount the VA would have paid under the preceding bullet point (typically 70% of the Medicare allowable) or (b) the amount paid (or payable) by the health plan or other third-party payor; provided that amount is greater than zero;
- If the calculation in the preceding bullet point would not result in the VA making a payment (i.e., because the resulting amount would be less than zero), the VA will pay the lesser of: (a) the veteran’s personal liability after the third-party payment (excluding deductibles and copayments) and (b) 70% of the applicable Medicare allowable;
- In the absence of a corresponding allowable, the VA will be the lesser of: (a) the amount for which the veteran is personally liable or (b) the amount calculated by the VA Fee Schedule in 38 C.F.R. 17.56(a)(2)(i)(B).
Payment from the VA is generally considered to be payment-in-full, and extinguishes the veteran’s remaining liability to the provider for unpaid amounts. Note: the veteran would remain liable for unpaid co-payments and deductibles. If the provider does not wish to accept the VA’s payment, it has 30 days from its receipt of such payment to reject and refund the payment.
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The House VA Committee hearing started at 7:30 p.m., but it was well-attended and lasted until 10 p.m. The witnesses included Senator John McCain (R-AZ), VA Secretary David Shulkin, and representatives of the VA Office of Inspector General and the Government Accountability Office. Senator McCain and Secretary Shulkin were both warmly welcomed by Members of the Committee on a bipartisan basis.
Chairman Roe (R-TN) emphasized the need to act quickly to extend the authorization for the Veterans Choice Program, which expires on August 7. To that end, the House VA Committee is voting today on a bill to eliminate the sunset of the program’s authorization. In addition, the Committee will consider broader legislation later this year to make comprehensive reforms to the Choice Program. He noted that the VA has additional funds available but will not be able to spend them once the authorization expires. A copy of Chairman Roe’s opening statement is available here.
Secretary Shulkin testified in support of extending the Choice Program, and he clarified that the VA was not seeking additional funding – just the authority to spend funds already obligated. He noted that the VA already is being forced to deny Choice Program coverage to veterans whose episodes of care would extend beyond the August 7 expiration date (e.g., pregnancy).
Secretary Shulkin also urged Congress to support the VA’s efforts to bring appointment scheduling in-house for care coordination purposes. However, the VA OIG witness noted challenges in records going out to community-based providers and coming back to the VA. The GAO witness also underscored the need for the VA to have better systems in place in order to effectively coordinate care, which will take time to procure and implement. Rep. Brownley (D-CA) echoed that point, calling the VA’s information technology systems a “Model T in a Tesla world.” Rep. Esty (D-CT) also urged improvements in the VA’s information systems and expressed concern that veterans are being improperly billed.
Other Members, including Rep. Wenstrup (R-OH) and Rep. Poliquin (R-ME), raised concerns about continuing delays in the processing of claims and payments to providers. Secretary Shulkin agreed that providers deserve to be paid for their services, noting his own experience as a physician in the private sector. He acknowledged that the VA is not processing enough claims electronically today, and he advised that he plans to pursue options outside the VA for systems procurement going forward.
Many Members also raised serious concerns about treatment of PTSD and mental health conditions for veterans, including Rep. Wenstrup (R-OH), Rep. O’Rourke (D-TX), Rep. Sablan (D-MP), Rep. Banks (R-IN), Rep. Rutherford (R-FL) and Rep. Takano (D-CA). Rep. O’Rourke emphasized that suicide among veterans is the most serious crisis, and Secretary Shulkin agreed that it is his number one priority. The Secretary announced that the VA will begin providing urgent mental health care that also will include individuals other than those service members who were honorably discharged. He added that the VA needs 1,000 more mental health providers, as well as telemental health services, and is looking to expand community partnerships to address suicide.
Rep. Banks noted interest among Indiana veterans in greater access to alternative treatments for PTSD and traumatic brain injury. Secretary Shulkin underscored that he is “most concerned about areas like PTSD, where we do not have effective treatments.” He also advised that the VA has established an “Office of Compassionate Innovation” (separate from the VA’s Center for Innovation), which will focus on finding new approaches to health and physical wellness and explore alternative treatment options for veterans when traditional methods fall short.
Rep. Wenstrup inquired about the VA’s GME and residency programs, as well as its associations with academic institutions. Secretary Shulkin responded that the VA is “doubling down” on partnerships with academic medical institutions.
Chairman Roe concluded his remarks by emphasizing the need to extend the Choice Program authorization soon and to consolidate the VA’s community-based care programs. He also expressed support for the VA’s decision to stop developing its own information technology internally.