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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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