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Tag: Centers for Medicare and Medicaid Services (CMS)

Preliminary Estimate of 2018 Medicare Rates

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

A Preliminary Estimate of 2018 Medicare Rates

In this blog, I will provide a preliminary estimate of the Ambulance Inflation Factor (AIF) for calendar year 2018.  The AIF is main factor that determines the increase (or decrease) in Medicare’s payment for ambulance services.

Calculating the 2018 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. For 2018, this means the 12-month period ending on June 30, 2017. Starting in calendar year 2011, the change in the CPI-U is 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 resulting AIF is then applied to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

The formula used to calculate the change in the CPI-U is limited to positive increases. Therefore, even if the change in the CPI-U was negative over a 12-month period (a rarity in the post-war era), the change in the CPI-U cannot be negative. However, when the MFP reduction is applied, the statute does permit a negative AIF for any calendar year. That is precisely what occurred in 2016, where the change in the CPI-U was 0.1% and the MFP was 0.5%. As a result, the industry saw an overall reduction in its Medicare rates of 0.4%.

Based on current data, it is highly unlikely that the AIF will be negative in 2018. For the 12-month period ending in June 30, 2017, the Bureau of Labor Statistics (BLS) currently calculates the change in the CPI-U to be approximately 1.6%.

CMS has yet to release its estimate for the MFP in calendar year 2018. However, assuming CMS’ projections for the MFP are similar to last year’s projections, the 2018 MFP is likely to be in the 0.3% to 0.5% range.

Therefore, at this time, my best guess is that the 2018 Ambulance Inflation Factor will be a positive 1.1% to 1.3%.

Please note that this estimate assumes the Bureau of Labor Statistics does not subsequently revise its inflation estimates. Please note further that this projection is based on the MFP being similar to last year.  To the extent either of these numbers changes in the coming months (up or down), my estimate of the 2018 AIF would need to be adjusted accordingly. Ultimately, the 2018 AIF will be finalized by CMS by Transmittal, which typically occurs in the early part of the 4th quarter.

Impact on the Medicare Ambulance Fee Schedule

Assuming all other factors remained the same, calculating your 2018 Medicare rates would be a relatively simple exercise, i.e., you would simply add 1.1 to 1.3% to your 2017 rates. However, as part of its 2018 Physician Fee Schedule Proposed Rule (issued July 21, 2017), CMS proposed minor changes to the GPCIs. These changes can be viewed by going to the Physician Fee Schedule page on the CMS website, and clicking the link for the “CY 2018 PFS Proposed Rule Addenda” (located in the Downloads section). You would then need to open the file for “Addendum E_Geographic Practice Cost Indicies (GPCIs).”

If the PE GPCI in your area is proposed to increase, you can expect your 2018 Medicare rates to increase by slightly more than 1.1 – 1.3%. If the PE GPCI in your area is proposed to decrease, you can expect your 2018 Medicare rates to increase by slightly less than 1.1 to 1.3%.

If you are looking for a more precise calculation of your rates, you will need to use the following formulas:

Ground Ambulance Services

Medicare Allowable = (UBR x .7 x GPCI) + (UBR x .3)

 Air Ambulance Services

Medicare Allowable = (UBR x .5 x GPCI) + (UBR x .5)

 In this formula, the “UBR” stands for the unadjusted base rate for each HCPCS code. These are calculated by multiplying the national conversation factor by the relative value unit assigned to each base rate. To save some time, estimates for the 2018 unadjusted base rates are reproduced below (using the low-end estimate for the AIF):

Base Rate (HCPCS Code) 2018 Unadjusted Base Rate
BLS non-Emergency (A0428) $224.74
BLS emergency (A0429) $359.58
ALS non-emergency (A0426) $269.68
ALS emergency (A0427) $427.00
ALS-2 (A0433) $618.02
Specialty Care Transport (A0434) $730.39
Paramedic Intercept (A0432) $393.29
Fixed Wing (A0430) $3,049.69
Rotary Wing (A0431) $3,545.72

Plugging these UBRs into the above formulas will result in adjusted base rates for each level of ground and air ambulance service. The final step is to apply whatever temporary adjustments are in effect under the Medicare Ambulance Fee Schedule. For example, in 2017, there were adjustments in place for urban (2%), rural (3%) and super-rural (22.6% over the corresponding rural rate) transports. Note: these temporary adjustments are currently set to expire on December 31, 2017. Therefore, absent further legislation, they should not be added to the adjusted base rates for 2018.

2018 Projected Rates for Mileage:

 At this time, I am estimating the following rates for Medicare mileage:

Base Rate (HCPCS Code) 2018 Unadjusted Base Rate
Ground Mileage – Urban $7.23
Ground Mileage – Rural Miles 1 – 17 $10.84
Ground Mileage – Rural Miles 18+ $7.23
Fixed Wing Mileage – Urban $86.5
Fixed Wing Mileage – Rural $12.98
Rotary Wing Mileage – Urban $23.09
Rotary Wing Mileage – Rural $34.64

Please keep in mind that a number of assumptions went into these projections. The Bureau of Labor Statistics can revise its inflation figures in the coming months. CMS may announce an MFP projection that differs from what we expect. CMS may also announce that it is electing not to finalize its proposed changes to the GPCI (highly unlikely). If any of these assumptions was to change, these projections would need to be revised. Therefore, I would suggest that you view these as rough estimates at best.  The AAA will update members as more information becomes available in the coming months.

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

 

 

 

Medicaid Replacement Plans

Written by Stacey Bickford on . Posted in Medicaid, Reimbursement.

Medicaid billing in emergency medical services is unavoidable. From trauma trips to non-emergency transports, ambulance providers face a multitude of hurdles when trying to identify, verify and bill the correct payor for Medicaid patients. Guesswork is often used instead of real-time insurance verification.

This can be especially true when commercial payors such as United Healthcare and Blue Cross Blue Shield manage the Medicaid plan, commonly termed Medicaid Replacement Plans. This article provides four valuable tips for successfully processing EMS claims when a Medicaid Replacement Plan is involved.

The Challenge for EMS Billing: Benefits Verification

Just as commercial payers see growth opportunities in managing Medicare Advantage (MA) plans, they are also overseeing hundreds of Medicaid programs. According to the annual CMS-64 Medicaid expenditure report, in federal fiscal year (FFY) 2016, Medicaid expenditures across all 50 states and 6 territories exceeded $548 billion, with nearly half of all spending now flowing through Medicaid managed care programs. On average 54.67% of Medicaid dollars are spent on managed care, whether to manage the transition or fund plans. This ranged from 97.9% in Puerto Rico, down to 12.1% in Colorado.

A single trip may have Medicaid benefits, but also managed by United Healthcare or another third-party commercial payer. The result? Blended coverage for Medicaid patients and confusion for providers.

Four Tips to Expedite Medicaid Verification

 When checking benefits for Medicaid patients, carefully review the standard eligibility response. Payors usually note benefit management by a commercial payer in the response, but there is no consistency in format or location. The Medicaid Replacement Plan notification may be placed at the top, middle or very bottom of the file. Furthermore, unnecessary additional information may be provided by the payor causing more confusion and time delays for EMS billers. For example, Cigna often includes dental, pharmaceutical and other specialty coverage details even though this information is never required for ambulance trips.

To avoid reimbursement delays with Medicaid Replacement Plans, implement the following four tactics:

Ask the eligibility vendor to place replacement plan information at the top of the file. If notification is placed in the same location and in the same format for every eligibility response, billers save time searching for coverage.

  1. Request that only pertinent coverage for the claim be included in the eligibility notification. If this is not possible, ask the payer to prioritize eligibility information by placing only the relevant coverage at the top.
  2. Take time to check and verify eligibility up front. Ensuring a clean and correct claim saves EMS providers back-end expense and expedites reimbursement due to fewer payor rejections and denials.
  3. Ask your EMS software vendor to integrate eligibility checking directly in your system’s workflow for real-time access during the pre-bill and billing processes. Technology integration saves billing time by eliminating the need to access and enter data into an outside payor portal or insurance discovery application.

Numerous EMS providers struggle with insufficient billing staff to manage claims. Take every step possible to streamline efforts and reduce duplicate work due to denied or rejected claims. When checking eligibility, proper identification and billing of Medicaid Replacement Plans is an essential step.

About the Author:
Stacey Bickford is the Operations and Client Coordinator at Payor Logic. She has been involved with medical billing since a teenager with prior experience in data entry, billing and office management for physicians’ practices, hospitals and especially EMS agencies. Prior to joining Payor Logic in 2016, Stacey started with ZOLL in 2008 as a support technician moving to Product Manager of RescueNet Billing through 2016.

In her free time, Stacey enjoys travelling with her family, Michael and their dogs Benjamin and Poncho. They’ve visited 21 states in the last 15 months! She loves hiking, gardening and being outdoors as much as possible.

 

CMS Extends Moratorium on Non-Emergency Ground Ambulance

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

CMS Extends Temporary Moratorium on Non-Emergency Ground Ambulance Services in New Jersey, Pennsylvania, and Texas

On July 28, 2017, the Centers for Medicare & Medicaid Services (CMS) issued a notice in the Federal Register extending the temporary moratoria on the enrollment of new Medicare Part B non-emergency ground ambulance providers and suppliers in the states of New Jersey, Pennsylvania, and Texas. The extended moratoria will run through January 29, 2018.

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

On August 3, 2016, CMS announced changes to the moratoria on the enrollment of new ground ambulance suppliers. Specifically, CMS announced that: (1) the enrollment moratoria would be lifted for the enrollment of new emergency ambulance providers and supplier and (2) the enrollment moratoria on non-emergency ambulance services would be expanded to cover the entire states of New Jersey, Pennsylvania, and Texas. At the same time, CMS announced the creation of a new “waiver” program that would permit the enrollment of new non-emergency ambulance providers in these states under certain circumstances. The moratoria have been extended on these terms every six months thereafter.

On or before January 29, 2018, CMS will need to make a determination on whether to extend or lift the enrollment moratorium.

Talking Medicare: CMS Transmittal 236

Written by Brian Werfel on . Posted in Government Affairs, Member Advisories, Regulatory, Talking Medicare.

On June 16, 2017, the Centers for Medicare & Medicaid Services (CMS) released Transmittal 236. This Transmittal makes some minor changes to Chapter 10 of the Medicare Benefit Policy Manual. Specifically, CMS is clarifying its definitions related to the “ALS assessment” and “locality.” The change to the locality definition has prompted some discussion within the industry as to the impact on Medicare’s reimbursement for mileage beyond the nearest appropriate facility. In this month’s blog, I will explain the recent change, and hopefully convince you that this isn’t something that should cause you undue concern.

Medicare’s Definition of “Locality”

The definition of “locality” appears in Section 10.3.5 of Chapter 10 of the Medicare Benefit Policy Manual. That definition reads as follows:

The term “locality” with respect to ambulance service means the service area surrounding the institution to which individuals normally travel or are expected to travel to receive hospital or skilled nursing services.

CMS then includes the following example to explain how that definition should be applied to real world situations:

EXAMPLE: Mr. A becomes ill at home and requires ambulance service to the hospital. The small community in which he lives has a 35-bed hospital. Two large metropolitan hospitals are located some distance from Mr. A’s community and both regularly provide hospital services to the community’s residents. The community is within the “locality” of both metropolitan hospitals and direct ambulance service to either of these (as well as to the local community hospital) is covered.

Conceptually, the locality definition is intended to address situations where there are several local options that residents of a community could choose for the receipt of necessary medical care. CMS recognizes that a strict adherence to its general policy of only covering mileage to the nearest appropriate facility would undermine a patient’s right to choose from these various institutional health care providers. The locality definition ensures that, when the two or more facilities are reasonably close to one another, the patient can safely choose the further facility without fear that they may end up being responsible for some incremental portion of the mileage.

The Proposed Clarification

Effective September 18, 2017, Transmittal 236 adds the following sentence to the end of the current definition of locality:

The MACs have the discretion to define locality in their service areas.

Analysis of the Proposed Clarification

The first question that should be asked is whether this clarification is actually a change in CMS policy? I would argue that it not, as Medicare Administrative Contractors have always had the discretion to define what constitutes the “locality” for an ambulance transport. For that reason, I view the purpose of this Transmittal as simply clarifying “who” (i.e., CMS vs. the MACs) has the primary responsibility for making these determinations.

Nor do I believe that this clarification is being made in response to potential abuse of the locality issue, either by providers billing for excess mileage under an expansive reading of “locality” or by the MACs in processing claims. Rather, I think this clarification is being made in response to repeated questions from the provider community, both on Open Door Forums and at state association meetings with their MACs. In other words, I think CMS is simply making clear that concerns regarding locality should be raised with the MACs, rather than CMS itself.

The Transmittal does leave open the possibility that MACs could impose their own definitions of locality. However, as I noted above, they already have this authority. I am not aware of any MAC ever electing to define the issue. Typically, the MAC will simply restate the CMS Manual definition of locality in its LCD.

So why have MACs been reluctant, up to this point, to define localities? I think it has to do with the administrative burden that would be involved. First and foremost, the MAC would need to have a sense of the larger demographic trends that dictate patient referral patterns in any given area. While that information is available, in theory, it is not available in any way that is readily useable by the MAC. Moreover, as the test focuses on what is “normal” or “expected” for patients, this would be a moving target, as patient preferences change over time, new facilities open, other facilities close or change the services they offer, etc. Thus, to the extent a MAC defined a locality, it would be constantly forced to revisit that definition every so often.  Finally, the MAC would have to make allowances for transports that are outside the locality, but where the patient is seeking specialized care that may not be available within the locality.

In sum, defining the locality for even a single community would be a significant administrative burden on the MAC. When you consider that there are hundreds, if not thousands of distinct communities within each state, you can understand the MACs reluctance to offer specific guidance on this approach.

Instead, I believe that the MACs will continue to address the mileage issue in the same way they have done up to this point. Most MACs have imposed an upper limit on the mileage they will pay without question. This upper mileage limit may be for its entire MAC Jurisdiction, it could be statewide, or it could have two or more mileage limits for a particular state.  For example, some MACs use a smaller mileage edit for transports that originate in and around a major metropolitan center, and a larger mileage edit for transports in the more rural areas of a state.

This approach offers a number of administrative benefits to the MAC.  First, it limits the number of claims that run afoul of the edit, and therefore that potentially may need to be reviewed by the MAC on appeal.  It also offers clarity to the provider community.

So, if your MAC has previously indicated that it has a mileage edit, I think you can safely assume that this will continue to be the guiding principle used by the MAC after the effective date. If the MAC doesn’t have a published mileage edit, I don’t think that is likely to change come September.

I would suggest that ambulance providers continue to monitor their remittances. If you are seeing mileage over a certain amount consistently denied by the MAC, that is their mileage edit. Please note that the MAC is not indicating this mileage is never covered, just that it has determined that it will not necessarily pay this higher number of miles without seeing the underlying documentation. In other words, the MAC is putting the burden on you to prove that the entire mileage was covered. If you are not seeing mileage being denied, I wouldn’t expect that to change either. I hope this helps to put everyone’s mind at ease.

Have a wonderful Fourth of July.

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

CMS – MLN Ambulance Transports Booklet

Written by David Werfel on . Posted in Medicaid, Medicare, News, Reimbursement.

CMS has issued an MLN Ambulance Transports Booklet. The booklet (36 pages) can be downloaded here.

Download MLN Ambulance Transports Booklet

One section of the Booklet that you might want to keep handy involves Free-Standing Emergency Departments. Specifically, on page 15, CMS states the following:

Freestanding Emergency Department (ED)
If a freestanding ED is provider based (a department of the hospital), the ambulance transport from the freestanding ED to the hospital is not a separately payable service under Part B if the beneficiary is admitted as an inpatient prior to ambulance transport. For more information about criteria for coverage of ambulance transports separately payable under Part B or as a packaged hospital inpatient service under Part A, refer to Chapter 10, Section 10.3.3, of the Medicare Benefit Policy Manual.

This may be useful, along with the Manual section cited, when you have a free-standing ED that is part of a hospital and they call for transports to the main building for the patient to be admitted, but the hospital lists the time of admission as being prior to the time of your transport. When the hospital admits the patient prior to your transport, the hospital becomes responsible for the ambulance charges. It may be useful to show the hospital and ED the booklet and Manual section to prove to them that the hospital is responsible if the patient is admitted to the hospital prior to your transport.

CMS Letter Regarding Merit-Based Incentive Payment System

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

Over the past week, multiple members have contacted the American Ambulance Association to report that they have received a letter from the Centers for Medicare and Medicaid Services (CMS) related to their participation in the Merit-Based Incentive Payment System (MIPS). The letter appears to have been sent to any entity with a taxpayer identification number (TIN) that is enrolled in the Medicare Part B Program. The stated purpose of the letter is to inform the provider whether it is exempt from participation in the MIPS program.

This member advisory is being issued to advise ambulance suppliers that:

(1) they are not eligible to participate in the MIPS program
(2) no positive or negative adjustments will be made to the ambulance suppliers Medicare payments
(3) no further action is required on their part

Therefore, AAA members that received this letter can safely disregard it. 

 

Understanding CERT

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

Talking Medicare: Understanding CERT

Every year around this time, our firm receives a steady stream of questions from AAA members about the CERT Program. Typically, the provider has received a notice from what appears to be the Centers for Medicare and Medicaid Services (CMS), which asks for medical records for one or two patient transports. These providers naturally wonder whether they are being audited, and how they should respond. The intent of this post is to clear up any confusion.

What is the CERT program?

The Comprehensive Error Rate Testing (CERT) program is an attempt by CMS to measure the rate of improper payments in the Medicare Fee-for-Service Program. It does so by evaluating a statistically valid random sample of claims to determine whether these claims were properly paid under the applicable Medicare coverage, coding, and billing rules.

In August 2016, CMS awarded responsibility for conducting CERT reviews to AdvanceMed. Therefore, if you receive a letter from AdvanceMed, and that review is asking for only a single claim, it is likely that you are being asked to participate in the FY 2017 CERT review.

What is the National Error Rate for ambulance services?

In its report for Fiscal Year 2016, CMS indicated that the overall improper payment rate was 11.00% across all provider types. CMS estimated that this represented approximately $41.08 billion in improper payments. This is down slightly from the FY 2015 review, which estimated the improper payment rate at 12.09%, representing $43.33 billion in improper payments. The FY 2016 reporting period ran from July 1, 2014 through June 30, 2015.

The overall error rate for Part A Providers, i.e., hospitals, nursing homes, etc., was 13.98%. The overall error rate for Part B providers was 11.71%.  In contrast, the error rate for durable medical equipment, prosthetics, orthotics, and supplies (DME) was 46.26%.

The overall error rate for ambulance was 11.7%, or basically the same as the overall Part B error rate. The ambulance error rate was further broken down based on the basis for a payment error. The most common error, comprising more than three-fourths of all errors, was either no documentation or insufficient documentation. The lack of medical necessity for the ambulance comprised only 15.6% of all improperly paid ambulance claims.

Should I freak out if my service is selected for review?

In a word, “No.” The odds of your service being selected under the CERT program are quite low. If you are selected, it is helpful to keep in mind that the focus of this review is not on your billing practices. Rather, the focus is on whether your contractor processed your claim correctly. This is not to say that CMS will not attempt to recoup payment on the claim if it ultimately determines that the claim was paid in error; it will. However, from your perspective, that recoupment is the end of the matter.

In other words, the worst that can happen with a CERT review is that you would have to repay that single claim. It will not result in a large extrapolated overpayment. Nor is the denial of that claim likely to trigger a larger postpayment review. Therefore, other than being sure to respond to the record request in a timely fashion, there is little to fear from CERT.

I hope this helps put your mind at ease!

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

ACA Repeal & Reform – What It Means for Ambulance Services

Written by Tristan North on . Posted in Government Affairs, Member Advisories.

By: Tristan North and Kathy Lester, JD, MPH

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

Overview

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

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

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

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

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

Government Affairs Update: Protecting the Ambulance Add-ons

Written by Tristan North on . Posted in Advocacy Priorities, Government Affairs, Legislative, Member Advisories, Member-Only, Reimbursement.

Medicare Ambulance Relief and Reform

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

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

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

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

Ambulance Advocacy Webinar

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

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

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

HHS Letter to Governors on Medicaid Changes

Written by Mark Postma on . Posted in Government Affairs, Medicaid, Member Advisories, Regulatory, Reimbursement.

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

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

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

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

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

Thank you for your attention to this critical issue.

Mark Postma
President, American Ambulance Association
Representing EMS in America

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

Administration’s Proposed Rule on Marketplace Stabilization

Written by Kathy Lester on . Posted in Government Affairs, Medicaid, Medicare, Member Advisories, Member-Only, Private Insurance, Regulatory.

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

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

Changes to Open Enrollment/Special Enrollment Periods

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

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

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

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

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

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

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

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

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

Network Adequacy

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

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

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

Interpretation of the Guaranteed Availability Requirement

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

De Minimis Variation in the Actuarial Values

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

Essential Community Providers

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

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

[2]Id.

[3]Id.

[4]Id.

[5]Id.

[6]Id.

[7]Id.

[8]Id.

[9]Id.

[10]Id.

[11]Id.

[12]Id.

CMS Extends Temporary Moratorium (NJ, PA, TX)

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

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

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

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

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

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

GAO Report on Revised Provider Enrollment Screening Process

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

In March 2011, the Centers for Medicare and Medicaid Services (CMS) implemented a revised process for processing the enrollment of new Medicare providers and suppliers. This revised process also applied to existing Medicare providers and suppliers that were revalidating their enrollment information. This new process included assigning all providers and suppliers to one of three risk categories—limited, moderate, and high—based on the perceived risk of fraud and abuse. The risk category then determines the applicable screening process used for providers within that risk category.

Please note that ambulance providers and suppliers were placed in the moderate risk category. This risk category includes a verification of the information provided by the provider on its enrollment application, a check of the provider’s state licensure, a check of any adverse legal actions against the provider, and a site visit of the provider.

On December 15, 2016, the Government Accountability Office (GAO) released a report on the initial results of this revised provider enrollment screening process.

In its report, the GAO indicated that CMS applied its revised enrollment screening process to over 2.4 million newly enrolling and revalidating Medicare providers and suppliers from March 25, 2011 through December 31, 2015. Other relevant findings include:

  • The total number of enrolled Medicare providers and suppliers increased from 1.4 million in March 2011 to 1.9 million in December 2015, an increase of more than 30%.
  • CMS denied more than 6,000 applications for ineligible providers and suppliers. The most commonly cited reason for a denial was the failure of applicant to meet the provider/supplier type requirements. This included situations where the provider/supplier did not hold the required certification for that provider/supplier type.
  • CMS rejected 17,000 applications as incomplete. The GAO found that approximately 25% of the rejected applications were the result of the application being filed in error, either by the provider/supplier or the MAC. 21% of applications were rejected as being duplicates. Another 16% of rejections were the result of the provider/supplier failing to timely respond to the MAC’s request for additional information.
  • CMS screening of existing providers/suppliers resulted in more than 660,000 provider numbers being deactivated. This was typically (47%) the result of the provider failing to respond to the MAC’s request that they revalidate. Another 29% were the result of the provider/supplier voluntarily withdrawing from the Medicare program. Another 5% of deactivations were the result of the provider/supplier not submitting a claim to Medicare within the previous 12 months. The majority of these were likely individual practitioners (e.g., physicians) that either died, or who retired from professional practice, and who failed to inform the MAC at the time of retirement to request that their provider number be deactivated. This could also include organizational providers that were sold or otherwise no longer operational.
  • These were frequently the result of an individual practitioner (e.g., a physician) failing to deactivate his or her Medicare number upon their retirement, and their either not responding to a request to revalidate, or notifying the MAC of their retirement and agreeing to voluntarily withdraw
  • CMS revoked the billing privileges of 43,000 provider/suppliers. The most common reason cited (61%) was the failure of the provider/supplier to be professionally licensed. However, within the moderate risk category, which includes ambulance, 26% of all revocations were the result of a “CMS-approved revocation,” e.g., the result of some adverse legal action against the provider/supplier which was not properly disclosed to the MAC within 30 days.

 

CMS estimated that its revised screening procedures avoided $2.4 billion in Medicare payments to ineligible providers and suppliers over this period.

CMS also reported that it made several changes to its screening process over this period. This includes the implementation of a continuous license monitoring report in November 2013, and a continuous criminal monitoring report in July 2015. This also includes fingerprint-based criminal background checks for the owners and certain key employees of categorically high-risk providers and suppliers. In December 2015, CMS also began conducting site-visits for certain limited-risk providers and suppliers.

Despite the progress made by CMS, the GAO did find that certain program vulnerabilities still exist. For example, the GAO found that CMS had not established performance measures to monitor its ability to place providers and suppliers in the proper risk categories. The GAO recommended that CMS establish objectives and performance measures for assessing its progress in establishing better screening procedures for new enrollments and revalidations. CMS ultimately agreed with this recommendation.

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

 

CMS Announces 2017 Inflation Factor

Written by David Werfel on . Posted in Government Affairs, Medicare, Member Advisories, Member-Only, Regulatory, Reimbursement.

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

The calculation for determining the Medicare ambulance inflation factor is as follows: Consumer Price Index – Urban (which is the change in the CPI-U from June to June) minus the non-farm business multi-factor productivity adjustment (MFP) as projected by the Secretary of HHS (10-year average). The CPI-Urban for 2017 is 1.0% with a MFP of 0.3% which equals the 0.7% inflation factor. As part of the Affordable Care Act, a productivity adjustment is subtracted from the CPI-Urban for the final inflation update.

CMS Issues Transmittal on Changes to Ambulance Staffing Requirements

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

CMS Issues Transmittal on Changes to Ambulance Staffing Requirements; Clarifications to Service Level Definitions for Ground Ambulance Services

On September 12, 2016, the Centers for Medicare & Medicaid Services (CMS) issued Transmittal 226.  This Transmittal incorporates the recent changes to the vehicle staffing requirements into the Medicare Online Manual System.  The Transmittal is also intended to provide clarification on the definitions for certain levels of ground ambulance service.  The changes made by this Transmittal go into effect on December 12, 2016. 

 Vehicle Staffing Requirements

 In the CY 2016 Physician Fee Schedule final rule (November 16, 2015), CMS revised its regulations related to the staffing of ground ambulance services.  Previously, the Medicare regulations at 42 C.F.R. 410.41 required that all ground ambulances be staffed by a minimum of two crewmembers, at least one of whom must be certified as an EMT-Basic and who must be legally authorized to operate all of the lifesaving and life-sustaining equipment on board the vehicle.  For ALS vehicles, there was a further requirement that at least one of the two crewmembers must be certified as a paramedic or EMT and qualified to perform one or more ALS services.

In the 2016 final rule, CMS revised the regulation to further require that the ambulance supplier meet all applicable state and local laws related to the staffing of vehicles.  CMS indicated that these changes are intended to address jurisdictions that impose more stringent requirements on ambulance providers (e.g., a requirement that both staff members be certified as EMTs).  CMS further indicated that these changes were prompted, in part, by a report from the HHS Office of the Inspector General, which expressed concern over the fact that the current regulations do not set forth licensure or certification requirements for the second crew member.

In this Transmittal, CMS is updating Section 10.1.2 of Chapter 10 of the Medicare Benefit Policy Manual to reflect the changes to the underlying regulations.  Specifically, the Manual Section now makes clear that BLS and ALS vehicles must meet the staffing requirements under state and local laws.  For BLS vehicles, the new definition also clarifies that at least one of the crewmembers must be certified at a minimum at the EMT-Basic level by the state or local authority where the services are being furnished.  For ALS vehicles, the new definition clarifies that at least one of the crewmembers must be certified as an EMT-Intermediate or EMT-Paramedic by the state or local authority where the services are being furnished.

Note: A number of AAA members have expressed concern with the reference to “EMT-Intermediate” in the paragraph defining the staffing requirements for ALS vehicles.  These members note that their state may be moving away from the “EMT-I” designation, in favor of the “Advanced EMT,” “EMT-Enhanced,” or other similar designation.  These members expressed concern that Medicare contractors may interpret this clarification literally, and therefore downgrade claims properly billed ALS based on the services provided by Advanced EMTs or other higher EMT certifications.

The AAA recognizes the concerns expressed by these members.  It should be noted that the Manual changes being made by this Transmittal accurately reflect the current wording of the regulation.  It should also be noted that these changes do not impact the definition of “Advanced Life Support (ALS) personnel” set forth in 42 C.F.R. §414.605.  While that definition also makes reference to the EMT-Intermediate licensure, the definition makes clear that any individual trained to a higher level than the EMT-Basic licensure qualifies as an ALS crewmember.

Ground Ambulance Service Definitions

 The Transmittal also makes a number of clarifications to the ground ambulance services definitions set forth in Section 30.1.1 of Chapter 10 of the Medicare Benefit Policy Manual.  These changes are summarized below:

  • Basic Life Support (BLS) – CMS is revising the definition to align with the new minimum staffing requirements discussed above.
  • Basic Life Support (BLS) – Emergency – The current definition of the BLS emergency level of service reads as follows:

“When medically necessary, the provision of BLS services, as specified above, in the context of an emergency response.  An emergency response is one that, at the time the ambulance provider or supplier is called, it responds immediately.  An immediate response is one in which the ambulance provider/supplier begins as quickly as possible to take the steps necessary to respond to the call.”

 CMS is removing the second and third sentences of the current definition.  In their place, CMS is inserting a parenthetical referencing the definition of an “emergency response” later in this same section of the manual.

  • Advanced Life Support, Level 1 (ALS1) – CMS is revising the definition to align with the new minimum staffing requirements discussed above. It is also clarifying that the ALS assessment must be provided by ALS personnel.
  • Advanced Life Support Assessment – The existing definition in the CMS Manual ends with the following sentence: “An ALS assessment does not necessarily result in a determination that the patient requires an ALS level of service.” In recent years, a number of Medicare contractors have interpreted this sentence to mean that the provision of a valid ALS assessment would not necessarily entitle the ambulance supplier to bill for the ALS emergency base rate, unless the documentation clearly established the provision of an ALS intervention.

CMS is adding a sentence to the end of the definition that clarifies that an ambulance supplier would be permitted to bill for the ALS emergency base, even if the ALS assessment results in a determination that the patient would not require one or more ALS interventions.  CMS further clarified that the ability to bill for an ALS emergency base rate is predicated on the ambulance transport otherwise meeting the medical necessity requirement.

  • Advanced Life Support, Level 1 (ALS1) – Emergency – Similar to the change to the definition of BLS emergency discussed above, CMS is removing the second and third sentences of the current definition, and replacing them with a parenthetical reference to the definition of an “emergency response.”
  • Advanced Life Support, Level 2 (ALS2) – CMS is rewording the definition, without making any substantive change. ALS-2 continues to be billable in situations involving a medically necessary transport of a patient, where the crew either: (1) provides one of the seven listed ALS-2 procedures (manual defibrillation/cardioversion, endotracheal intubation, etc.) or (2) the administration of three or more medications by IV push/bolus or continuous infusion.  The changes largely relate to how you count, for purposes of determining whether you can bill ALS-2, multiple administrations of the same IV medication.  Conceptually, CMS is indicating that a single “dose” requires a suitable quantity and amount of time between administrations, in accordance with standard medical protocols.  CMS is further indicating that a deliberate attempt to administer a standard dose in increments would not qualify as ALS-2.  In sum, to the extent a medication is administered in standard doses in accordance with pre-existing protocols, each separate administration would count separately towards the ALS-2 standard of three or more administrations; however, any attempt to cut the standard dose into multiple administrations would count as only a single administration for purposes of determining whether the ALS-2 standard was met.
  • Specialty Care Transport (SCT) – CMS is rewording the language in the “Application” section of this definition, without making any substantive change.
  • Paramedic Intercept (PI) – CMS is revising the definition to reflect the change in how a “rural area” is identified. The old definition included any area: (1) designed as rural by a state law or regulation or (2) any area outside a Metropolitan Statistical Area (MSA) or in New England, outside a New England County Metropolitan Area.  Under the new definition, an area is considered rural to the extent it is designated as such by state law or regulation or to the extent it is located in a rural census tract of an MSA using the most recent version of the Goldsmith Modification.
  • Services in a Rural Area – CMS is eliminating the reference to New England County Metropolitan Areas, as these areas are no longer relevant to a determination of rural. Under the new definition, an area will be considered rural to the extent: (1) it is located outside a Metropolitan Statistical Area (MSA) or (2) is identified as rural using the most recent version of the Goldsmith Modification, even though the area falls within an MSA.
  • Emergency Response – CMS is adding language clarifying that the nature of an ambulance provider’s response (i.e., emergent or non-emergent) does not independently establish medical necessity for the ambulance transport.
  • Interfacility Transport – CMS is adding a new definition for the purposes of billing SCT, which establishes that the interfacility transportation requirement is met whenever the origin and destination are both one of the following: (1) a hospital or skilled nursing facility that participates in the Medicare program or (2) a hospital-based facility that meets Medicare’s requirements for provider-based status.

AAA Issues Response to GAO Claims Report

Written by Tristan North on . Posted in Medicare, Member Advisories, Regulatory.

On May 13, the Government Accountability Office (GAO) issued a report entitled “Claim Review Programs Could Be Improved with Additional Prepayment Reviews and Better Data“. In the report, the GAO recommended that CMS be provided legislative authority to allow Recovery Auditors to use prepayment claims reviews to address improper Medicare payments. CMS fortunately disagreed with the GAO on the recommendation and cited better options such as prior authorization to address potentially improper payments.

The AAA has now issued a Formal Statement in response to the GAO report noting the problems with prepayment claims review for ambulance services and promoting the better alternative of prior authorization for nonemergency BLS transports of dialysis patients. The statement is in follow up to our Member Advisory providing an in-depth review of the report. Please feel free to share the statement if you receive questions about the report.

On June 26, 2015, the AAA had participated in a conference call with the GAO officials conducting the report in which AAA representatives had pushed for recommendations in line with our statement. The AAA will continue to advocate for policies to address improper payments that address the issue but are also the least burdensome to AAA members and help ensure our ability to continue to provide high-quality emergency and nonemergency ambulance services to patients.

The GAO Releases New Report on Claims Review Programs, Recommending Additional Prepayment Review Authority and Written Guidance on Calculating Savings from Prepayment Review

Written by Kathy Lester on . Posted in Government Affairs, Medicare, Member Advisories, Reimbursement, Talking Medicare.

On Friday, May 13, the Government Accountability Office (GAO) publicly released a new Medicare report entitled, “Claim Review Programs Could Be Improved with Additional Prepayment Reviews and Better Data,” which it shared with the Congress and the Centers for Medicare & Medicaid Services (CMS) in April. The report is addressed to the Senate Finance Committee Chairman Orrin Hatch (R-UT) in response to his request.

The Report examines:

1. The differences, if any, between prepayment and post-payment reviews, and the extent to which the contractors utilize these types of reviews;

2. The extent to which the Medicare claim review contractors focus their reviews on different types of claims; and

3. CMS’s cost per review and the amount of improper payments identified by the claim review contractors per dollar paid by CMS.

In compiling the Report, the GAO reviewed Administration documents, interviewed CMS officials, Recovery Auditors (RAs), and Medicare Administrative Contractors (MACs). The GAO also interviewed representatives from 10 Medicare provider/supplier organizations that have experienced claim reviews on both a pre- and post-payment review basis. The AAA worked the GAO by participating in a telephone interview and providing written comments.

The GAO examined three types of contractors – the RAs, the MACs, and the Supplemental Medicare Review Contractor (SMRC). These contractors are responsible for reviewing claims that are at high risk of improper payment and claims that pose the greatest financial risk to Medicare. Only MACs conduct both pre- and post-payment reviews. RAs and the SMRC conduct only post-payment reviews, but RAs did participate in a pre-payment review demonstration project. RAs are paid on a contingent basis from recovered overpayments. During the demonstration, RAs were paid contingency fees based on claim denial amounts.

In its review, the GAO found that few differences exist between pre- and post-payment reviews, but noted that pre-payment reviews “better protect Medicare funds.” The GAO found that CMS is not always able to collect overpayments from post-payment reviews and that post-payment reviews require more administrative resources than pre-payment reviews.

The provider/supplier organizations highlighted two issues that need to be resolved with regard to pre-payment review audits. First, they identified that the option to hold discussions with RAs before payment determinations are made in the context of post-payment reviews can be helpful. These discussions are not part of the pre-payment review process; nor are they part of the MAC process. CMS indicated that it is not practical to have such an option in these contexts because of the timing requirements.

Second, the providers/suppliers noted that pre-payment reviews create cash flow burdens, in light of the appeals process. When appealing a post-payment review, providers/suppliers retain their Medicare payments through the first two rounds of review. If the denial is overturned at a higher level, CMS must pay back the recovered amount with interest accrued. However, for pre-payment reviews, providers/suppliers do not receive payment and CMS does not provide interest on the dollars withheld if the provider/supplier wins on appeal.

MACs have traditionally relied upon post-payment review. MACs will also use post-payment reviews to analyze billing patterns to inform other review activities, such as future pre-payment reviews and educational outreach. CMS has encouraged MACs to perform extrapolation, especially for providers/suppliers that submit large volumes of low-dollar claims with high improper payment rates.

The SMRC reviews often include studies to develop sampling methodologies or other policies that could be rolled out more broadly in the future.

The GAO also found that different contractors focused on different claims during 2013 and 2014. RAs focused on inpatient claim reviews primarily. RAs have the discretion to select the claims they review and the GAO stated that “their focus on reviewing inpatient claims is consistent with the financial incentives associated with the contingency fees they receive, as inpatient claims generally have higher payment amounts compared to other claim types.” The GAO also found that RA claim reviews had higher average identified improper payment amounts per post-payment claim review relative to other claim types in 2013 and 2014. For the upcoming contracts, CMS has indicated that it will more closely monitor RAs to ensure that they are reviewing all types of claims. For DME claims in particular, CMS has increased the contingency fee percentage paid to the RAs for DME, home health agencies, and hospice claims.

In contracts, MAC claim reviews focused primarily on physician and DME claims. DME claims accounted for 29 percent of their reviews in 2013 and 26 percent in 2014, while representing 22 percent of total improper payments in fiscal year 2013 and 16 percent of improper payments in fiscal year 2014. DME claims also had the highest rates of improper payments in both years.

Physician claims is a broadly used term that includes labs, ambulances, and individual physician.

The SMRC focused its claim reviews on studies that CMS directs the contractor to conduct. In 2013, the SMRC reviews focused on outpatient and physician claims, but in 2014 the focus shifted to home health agency claims and certain DME suppliers.

The GAO concluded that both RAs and SMRC generated savings for CMS, but unreliable data prevented comparing these results to those of MACs. CMS paid the RAs an average of $158 per review; the RAs averaged $14 in identified improper payments per dollar paid by CMS in both 2013 and 2014. CMS paid the SMRC an average of $256 per review, and the SMRC averaged $7 in identified improper payments per dollar paid in 2013 and 2014. The higher SMRC costs related to the study costs and extrapolation.

CMS lacks reliable MAC cost and savings data. CMS does not collect reliable data on claim review funding and does not have consistent data on identified improper payments. While CMS has established ways to collect this information, some MACs are not reporting it. MACs also use different methods to calculate and report savings.

The GAO recommended that CMS take two actions:

• In order to better ensure proper Medicare payments and protect Medicare funds, CMS should seek legislative authority to allow the RAs to conduct prepayment claim reviews.

• In order to ensure that CMS has the information it needs to evaluate MAC effectiveness in preventing improper payments and to evaluate and compare contractor performance across its Medicare claim review program, CMS should provide the MACs with written guidance on how to accurately calculate and report savings from prepayment claim reviews.

CMS did not agree with the first recommendation, stating that it has a strategy to move away from “pay and chase” using different policies, such as prior authorization initiatives and enhanced provider enrollment screening. CMS concurred with the second recommendation.

CMS Releases Medicare Provider Utilization and Payment Data for CY 2014 for Ambulance Suppliers, Physicians and Other Part B Organizations

Written by Brian Werfel on . Posted in Government Affairs, Medicare, Member Advisories, Reimbursement, Talking Medicare.

On May 5, 2016, CMS publicly released the “Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use File,” which provides information on the services and procedures provided to Medicare beneficiaries by ambulance suppliers, physicians and other healthcare provider groups.  The data file is based on calendar year 2014 data. This release follows on last year’s release of payment data for calendar year 2012.

The database lists all individual and organizations providers by National Provider Identifier (NPI), and provides information on utilization, total payments and submitted charges.  It can also be searched by Healthcare Common Procedure Coding System (HCPCS) code and place of service.

The Public Use File can be obtained here. Please note that you will need to download the desired file and then import it into an appropriate database or statistical software program.  CMS is indicating that Microsoft Excel is not sufficient for these purposes, and that importing it into Excel may result in an incomplete loading of data.

A number of news organizations have already created searchable databases that will allow you to search the CY 2012-2013 data by physician/organizational name, provider specialty, city, state, etc.  It is expected that these news organizations will be updating their websites to incorporate the CY 2014 data in the coming weeks. The searchable database created by the Wall Street Journal can be accessed here.

Prior Authorization Pilot Program – Status Update

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

CMS released preliminary data on the impact of the prior authorization demonstration program on Medicare payments for ambulance services.  This data is limited to the three states (NJ, PA, and SC) that were included in the demonstration program’s first year.

CMS noted that it has observed a dramatic decrease in expenditures for repetitive non-emergency ambulance transports since the program’s implementation.  CMS released the following data for the first 10 months of the program (i.e. December 2014 – September 2015), comparing that data to the first 11 months of 2014:

  • Payments for repetitive non-emergency ambulance transportation in these states averaged $5.4 million per month, down from nearly $18.9 million per month prior to the program’s implementation. This is a reduction of more than 70%.
  • In the states that were not part of the demonstration program, payments have decreased very slightly for the 10 months in 2014 and are very similar to the payments in the 11 months prior to the program beginning in SC, NJ and PA.
  • 18,367 prior authorization requests were received and finalized by Medicare’s contractors. Of these, 6,430 (35.0%) were approved.

CMS is closely monitoring these results to evaluate its effectiveness. Here is the full status update.

HHS Office of Civil Rights Announces Phase 2 HIPAA Audit Review Program

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

On March 21, 2016, the Office for Civil Rights of the Department of Health and Human Services announced Phase 2 of its HIPAA Audit Program.  The Health Information Technology for Economic and Clinical Health Act (HITECH) required HHS to perform periodic audits of covered entities and business associates to assess their compliance with the HIPAA Privacy, Security and Breach Notification Rules.  These rules are enforced by the HHS Office for Civil Rights (OCR).

Background on Phase 1

In 2011, OCR implemented a pilot audit program to assess the controls and processes covered entities have adopted to meet their HIPAA obligations.  The pilot audit program was conducted in three phases.  OCR first developed a set of audit protocols that it would use to evaluate covered entities’ compliance.  This protocol was then tested using a limited number of audits.   The final step involved using the revised audit protocols on a larger number of covered entities.  Ultimately, 115 covered entities were selected for review, and all audits were concluded by December 31, 2012.

Phase 2

Phase 2 of the HIPAA Audit Program will focus on the policies and procedures adopted and employed by entities to meet the requirements of the Privacy, Security, and Breach Notification Rules.  OCR has indicated that these audits will be conducted primary through desk audits (i.e., document submissions), although by a limited number of on-site audits will also be conducted.

Unlike Phase 1, which focused exclusively on covered entities, OCR is indicating that Phase 2 will involve audits of both covered entities and their business associates.

As with the initial pilot audit program, Phase 2 will consist of several stages.  The first stage involves verification of a covered entity’s or business associate’s address and contact information.  A sample address verification letter can be viewed by clicking here.  OCR has indicated that emails will be sent to entities requesting accurate contact information for the entity.  OCR will then transmit a “pre-audit questionnaire” to the entity.  These questionnaires will be used to gather data about the size, type, and operations of potential auditees.  Based on this data, OCR will create potential audit subject pools.

Note: OCR has indicated that if an entity fails to respond to OCR’s request to validate its contact information and/or fails to return the pre-audit questionnaire, OCR will use publicly available information about the entity to create its audit subject pool.  As a result, an entity that fails to respond may still be selected for audit and/or compliance review.  OCR is specifically reminding entities to check their email “junk” or “spam” folders for any communications from OCR.

Once OCR has developed its audit subject pools, it will randomly select auditees from these pools.  Auditees will then be notified by OCR of their participation.  OCR has indicated that the first set of audits will focus on covered entities, with a subsequent round of audits focused on business associates.  These audits will focus on compliance with specific requirements of the Privacy, Security, or Breach Notification Rules.  Auditees will be notified of the scope of their audit in a document request letter.  Both of these rounds will be desk audits.  OCR indicated that all desk audits will be completed by the end of December 2016.

A third round of on-site audits will take place after the completion of the desk audits, and will examine a broader scope of requirements under HIPAA.  OCR further indicated that desk auditees may also be subject to on-site audits.

If an entity is selected for audit, OCR will notify them by email.  The email will introduce the OCR audit team, explain the audit process, and discuss OCR’s expectations in greater detail.  The email notification letter will also include initial requests for documentation.  OCR has indicated that it will expect entities to respond to these documentation requests within ten (10) business days.  Documents will be submitted through a new secure online portal.  Once received, OCR’s auditors will review the submitted information and inform the entity of its draft findings.  The entity will then have ten (10) business days to respond with written comments, if any.  OCR will then review the entity’s comments and issue a final audit report within thirty (30) business days.

OCR has indicated that the audits are primarily intended as a compliance improvement activity.  OCR will use aggregated data to better understand compliance with respect to particular aspects of the HIPAA rules.  The goal being to understand what types of technical assistance and/or corrective actions would be most helpful.  In other words, OCR is indicating that the goal of these audits is to improve its understanding of the state of compliance, and not to penalize specific companies for violations.  However, OCR indicated that should an audit reveal a serious compliance issue, OCR may initiate a further compliance review of the company.

OCR indicated that it will not post a list of the audited entities, nor will its findings be available in a format that would clearly identify the audited entity.  However, OCR noted that audit notification letters and other information regarding these audits may be discoverable under the Freedom of Information Act (FOIA).

Additional information from OCR regarding the Phase 2 HIPAA Audit Program can be obtained by clicking here.

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