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CMS Extends Moratorium on Non-Emergency Ground Services

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

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

On January 30, 2018, 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 and Pennsylvania. The extended moratoria will run through July 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. These moratoriums were subsequently extended on August 1, 2014, February 2, 2015, July 28, 2015, and February 2, 2016.

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 revised moratorium on newly enrolling non-emergency ground ambulance providers was subsequently extended on January 9, 2017 and July 28, 2017.

On September 1, 2017, CMS issued a notice on its website indicating that it had elected to lift the moratorium on the enrollment of new Part B non-emergency ambulance suppliers in Texas, effective September 1, 2017. CMS indicated that this decision was made to assist in the disaster response to Hurricane Harvey.  CMS published formal notice of the lifting of this moratorium on November 3, 2017.

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

Have any Medicare questions? Contact Brian at bwerfel@aol.com

Should I Hold My Medicare Claims?

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

The Great Medicare Debate: Should I Hold My Medicare Claims?

By: Brian S. Werfel, Esq. and Rebecca Williamson, Chair, AAA Medicare Regulatory Committee

Ambulance suppliers face an important decision at the start of every calendar year on whether to hold their Medicare claims for the first few weeks of the calendar year.

This decision historically revolved around the patient’s Medicare Part B deductible ($183 in 2018).  The argument in favor of holding claims was that a brief claims hold would allow time for the patient’s deductible to be satisfied by another health care provider, thereby relieving the ambulance supplier of the time and expense involved in billing the patient (or their secondary insurance) for the deductible.  Ambulance suppliers that hold claims believe that this ultimately results in higher collections.  The argument against holding claims is that any increase in overall collections is likely to be minimal, and that the resulting disruption to the company’s cash flow more than offsets any potential benefits from those higher collections.

This year, the debate is complicated by the events surrounding the expiration of the temporary add-ons for urban, rural, and super-rural ground ambulance transports on December 31, 2017.  These temporary add-ons increased the Medicare allowables by 2%, 3%, and 22.6%, respectively.  Congress failed to act upon these temporary add-ons prior to its adjournment.  However, there remains strong bipartisan support for reinstating these add-ons – – and Medicare extenders for other types of Medicare providers – – early in the 2018 Legislative Calendar.  The AAA’s political consultants believe these Medicare extenders will likely be included in the next government funding legislation, which must be passed by January 19, 2018.

Assuming our temporary add-ons are reinstated, they are likely to be made retroactive to January 1, 2018.  This would require CMS to retroactively adjust claims previously paid at the current (lower) rate.  This may also require secondary payers, including State Medicaid Programs, to retroactively adjust their payment amounts to reflect increased cost-sharing amounts.  There is precedent for these sort of retroactive adjustments.  Most recently, the Affordable Care Act, which was enacted on March 23, 2010, provided for a reinstatement of these same temporary add-ons, retroactive to January 1, 2010.

In this inaugural edition of the Great Medicare Debate, AAA Medicare Regulatory Committee Chair Rebecca Williamson and AAA Medicare Consultant Brian S. Werfel, Esq. debate the merits of holding claims pending a resolution of the add-on issue vs. submitting claims.

Ambulance suppliers would likely benefit from holding their claims for some period of time pending clarity on the status of our temporary add-ons.

Rebecca Williamson, Chair of the AAA’s Medicare Regulatory Committee:

According to CMS, 73% of all ambulance service suppliers bill less than 1,000 Medicare covered transports per year. Additionally, 54% of ambulance suppliers bill less than 250 Medicare covered transports per year. Assuming an average claim amount of $400.00 per call (base rate plus mileage), an ambulance supplier with 1,000 Medicare covered transports per year could collect approximately $320,000.00 per year in a best case scenario ($400,000.00 X 80%). This leaves the service with copays of $80,000.00 to be collected from patients. By adding $183.00 as a deductible for each of these 1,000 patients, the collection from Medicare decreases to only $173,600.00. This means the service now must collect an additional $43,400.00 . In other words, if the patient has not met the deductible, the deductible is applied first and a $400.00 allowable becomes a $217.00 allowable. Medicare now pays 80% of $217.00 which is $173.60. Multiplied by 1,000 claims, Medicare pays a total of $173,600.00 and the balance owed to the supplier is the deducible of $183,000.00 and copayments of $43,400.00.

By holding claims for a brief period, usually thirty days, ambulance services increase the likelihood that another provider, often a hospital, will file claims with Medicare first, meaning collecting patients’ deductibles becomes the facilities’ responsibility.

Of course these numbers are only examples and many factors affect the actual billing and collection process. Some Medicare beneficiaries will promptly pay the deductible, many will have secondary payers or insurances, and a certain percentage will be dually eligible for Medicare and Medicaid, all of which results in higher collection ratios for the ambulance service. However, in plain terms, collecting $320,000.00 versus $173,600.00  can make a very real difference in the viability of a small service.  Each service should look carefully at its own payer mix, patient statistics, and demographics to determine individual service projections.

Another good reason to hold claims, this year in particular, is the almost certainty of Congress reinstating the extenders. For those of us who have been in this industry for a long time, the expiration of the add-ons this year is a painful reminder of 2010  when the extenders expired and were not reinstated until March 23, 2010. It wasn’t until July 2010 that CMS even began the process of correcting previously processed claims , and by January 2011 many claims were still outstanding and had not been completely reprocessed. Also by that time, which could have been as long as a year after the date of service, many secondary payers were either unwilling or unable to retroactively correct the reprocessed claims. Some Medicaid states, such as Oklahoma, simply did not have the manpower or ability to even attempt it.

The administrative burden imposed on ambulance suppliers by having claims retroactively reprocessed by CMS, then reprocessed again by secondary payers – potentially incorrectly, if at all – along with the many manual adjustments required in-house, make it even more attractive to advocate and advise holding claims for as long as financially feasible. Of course not every service has the cash reserve to be able to do this, and I would generally not advise holding claims for as long as it may take for Congress to reinstate the extenders and for CMS to implement the correction  for services who cannot afford to, but for those who can, not only will they almost certainly increase the amount of payments collected, they will decrease overhead administrative costs.

I am very optimistic that Congress will include the ambulance extenders in legislation as well as being optimistic that it will be sooner rather than later. I know others disagree, but the higher likelihood of it happening versus not, make this a good bet to take. 

Ambulance suppliers should disregard the status of the temporary add-ons when making their decision on whether to hold claims for some period of time

By: Brian S. Werfel, Esq.:

Rebecca makes a strong argument about the benefits of holding claims.  Moreover, I have long advocated in favor of holding claims for the patient’s deductible.  For these reasons, I would understand if ambulance suppliers elect to hold claims for the patient deductible.  However, I would question the wisdom of holding claims pending further clarity on the status of the temporary add-ons.

My argument against holding claims for that reason boils down to a single word: uncertainty.  In this context, I am referring to four specific types of uncertainty:

  1. Uncertainty over whether the temporary add-ons will be extended.
  2. To the extent legislation is passed extending the temporary add-ons, uncertainty as to whether the higher rates will be made retroactive to January 1, 2018.
  3. To the extent legislation is passed extending the temporary add-ons, uncertainty as to how quickly CMS will implement the revised rates for new claims and adjust claims paid at the original, lower rates.
  4. Uncertainty over how the various secondary payers will handle their adjustments.

With respect to the extension of the add-ons, I agree that they are likely to be included with other Medicare adjusters in the budget resolution that must pass before January 19, 2018.  Likewise, at this point, there is no reason to think that these add-ons will not be made retroactive to January 1, 2018.  However, there are no guarantees.  It is possible that the Republicans and Democrats fail to reach agreement on the larger budgetary issues, including the status of the so-called “Dreamers”, and a government shutdown results.

My larger concern relates to how quickly CMS revises its fee schedule, and implements instructions to its contractors.  As Scott noted above, the last time we faced this issue was in 2010.  The Affordable Care Act was signed into law on March 23, 2010.  However, CMS didn’t issue a transmittal to its contractors until May 21, 2010, and even then, didn’t instruct its contractors to start paying the higher rates until July 6, 2010.

In other words, if you elected to hold claims to avoid having them paid and then reprocessed, you would have needed to hold claims for more than 6 months.

To me, the strongest argument for holding claims is not how Medicare would handle the adjustment.  I recognize the administrative burden created by having to post and then re-post the same claim once it was adjusted.  However, I trust that CMS will eventually get it right (emphasis on eventually).

I have far less confidence in how the secondary payers, including State Medicaid Programs, will handle the adjustments.  When this happened in 2010, we had numerous reports from A.A.A. members of secondary payers incorrectly processing the adjustment.  For example, some State Medicaid Programs didn’t simply issue a supplemental check for the higher copayment.  Instead, the Medicaid Program took back its initial payment, and then reprocessed the claim in its entirety.  Unfortunately, in some instances, the Medicaid rates changed in the interim, and Medicaid then repaid a lower amount.  In other instances, they failed to repay the patient’s deductible.  Similar issues were noted with commercial secondary payers, Medicaid managed care organizations, etc.

In sum, if your company has historically held claims during the first few weeks of the year for the patient’s deductible, I see no reason to discontinue that practice.  If, however, you historically submitted claims without regard to the patient’s deductible, I see little benefit to holding claims pending action by Congress on our add-ons.

Have any Medicare questions? Contact Brian at bwerfel@aol.com

Alert: Medicare Increases Will Expire For Now: What You Need to Know

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

While the Congress succeeded in passing the Republican tax bill and keeping the federal government open with a short-term continuing resolution that included a temporary extension for the State Children’s Health Insurance Program (CHIP), it did not act upon the several Medicare extenders that expire on December 31, 2017. This extenders package includes the ambulance add-ons for urban, rural, and super-rural areas, as well as a moratorium on therapy caps, extenders for hospitals, and several other extenders important to other Medicare providers.

Despite the fact that the Congress left town, there is still strong bipartisan support for reinstating these extenders – including the ambulance extenders – early in January 2018. The most likely time frame will be for the extenders to be added to the next government funding legislation, which must be passed by January 19.

First, do not panic. As you may have already heard, CMS is telling providers and suppliers that the add-ons will expire at the end of the month. Technically that is true. The Agency is simply stating the obvious; but no one should imply from such statements that the Congress will not fix them or not make them retroactive. Historically, CMS has followed this pattern of indicating the add-ons have expired until legislation extending the add-ons has passed both chambers of Congress and the President has signed the bill into law.  CMS will make similar statements relative to the other Medicare extenders as well.

Second, prepare. To the extent you are able to do so, you may hold your claims. Medicare requires providers to files claims no later than 12 months after the date when the services were provided. (See Medicare: File a Claim; see also section 6404 of the Affordable Care Act). While this may not work for all claims, holding claims will reduce the number that would have to be reprocessed once the add-ons become law. If CMS believes at some point the legislation will pass, it may also break with its own precedent and indicate that has asked the contractors to hold claims for a short period of time as well. It did this in 2014 when it discovered errors in a final fee schedule rule. Once the claims are processed, so long as the add-ons have been extended by law, the add-on dollars will appear in the reimbursement amounts sent to providers and suppliers.

Third, retroactivity can be expensive, but CMS can mitigate the costs. CMS did this most recently in May of 2017. Then, CMS announced that it would implement the retroactive extension of a transitional payment for durable medical equipment suppliers by having the contractors automatically reprocess claims from the period when the transitional payment was made retroactive. This approach reduced the burden on providers and suppliers by eliminating the need to resubmit claims.

Despite the fact that there are ways to mitigate the problem, the American Ambulance Association (AAA) remains deeply concerned that the Congress did not extend the add-ons before they left for the holidays. We understand that for ambulance services across the country receiving timely payments from Medicare can be the difference between being able to make payroll or not. Having the dollars from the add-ons is also crucial to ensuring adequate cash flow. Therefore, while we advise you to think through your options and take the steps that best meet your needs and the needs of your employees, patients, partners, and businesses, we also ask that you reach out to the Congress and let them know how important it is to get the add-ons extended as early in January as possible. Make your voice heard by going to the AAA’s grassroots page. There you can send an email or reach out through social media to your Members of Congress.  We need everyone, including your employees, patients, and others who support high quality ambulance services, to reach out today.

Write to Your Members of Congress

The AAA will continue our direct efforts on Capitol Hill to make sure these add-ons are extended and overly burdensome new requirements are not placed on ambulance services. With your help, we can get the add-ons extended. For more information please visit https://ambulance.org/advocacy/.

Summary of December 2017 Ambulance Open Door Forum

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

On December 14, 2017, CMS held its latest Open Door Forum. As usual, it started with a few announcements, as follows:

  1. Ambulance Inflation Factor – CMS announced that it had published Transmittal 3893 on October 27, 2017, which sets forth the Ambulance Inflation Factor (AIF) for calendar year 2018. In that Transmittal, CMS indicated that the CY 2018 AIF would be 1.1%. This is based on an increase in the CPI-U of 1.6%, and a multi-factor productivity adjustment of 0.5%.
  1. Expiration of Temporary Adjustments – CMS indicated that the current temporary adjustments for urban (2%), rural (3%) and super rural ground ambulance transports are set to expire on December 31, 2017. CMS also indicated that they were aware of proposed legislation that would extend these adjustments for 2018 and beyond, but that they have yet to be enacted into law.
  1. CY 2018 Public Use File – CMS indicated that the Public Use File on its website has been updated to include Medicare allowables for 2018. CMS made a point of noting that the 2018 rates do not include the temporary adjustments, as they are set to expire on December 31, 2017.
  1. Prior Authorization Demonstration Project – CMS indicated that it had decided to extend the Prior Authorization Demonstration Project for schedule, non-emergency ground ambulance transportation of repetitive patients for another year. The extension is limited to the 8 states (DE, MD, NJ, NC, PA, SC, VA, and WV) and the District of Columbia in which the program was in effect in 2017.  CMS further indicated that the extension would be effective for dates of service on or after December 5, 2018.  As a result, claims for dates of service between December 2 and December 4 would not be subject to prepayment review if a prior authorization was not received; however, ambulance providers in these states would be permitted to request prior authorization for those dates. CMS further indicated that it had developed a “streamlined” process to allow for prior authorization of transports in situations where the patient was approved for transport, but where the duration of the authorization was shortened from the normal 60-day period to account for the program’s scheduled expiration on December 1, 2017. An example would be an authorization that was granted for transports starting on November 1, 2017. The provider was likely given authorization for only a 30-day period. The streamlined process would allow them to submit a request to allow that 30-day authorization to be extended to a fully 60 days. CMS indicated that the streamlined process would not require the submission of medical records to establish medical necessity for the ambulance.

As with previous forums, CMS then fielded questions from the audience. The majority of these questions focused on the prior authorization process. As with previous ODFs, CMS declined to answer most of the questions on the call, instead asking the provider to submit their questions to CMS via email.

CMS did answer the following questions on the call:

  1. CMS was asked when it anticipated issuing its report on the effectiveness of the Prior Authorization Demonstration Program.  CMS responded that it expected to issue that report during the first quarter of 2018.
  2. CMS was asked when it expected to expand the Prior Authorization Demonstration Program to additional states and/or the nation as a whole.  CMS responded that it was still evaluating the effectiveness of the program.  Therefore, CMS indicated that no decision on national expansion had been made at this time.

Have questions? Please write to the Werfels at bwerfel@aol.com.

CMS Lifts Moratorium Enrollment Non-Emergency Providers (TX)

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

In order to assist with the disaster response to Hurricane Harvey, CMS has announced that it has lifted the temporary moratorium on the enrollment of new Part B non-emergency ambulance suppliers in Texas, effective September 1, 2017. The lifting of this moratorium applies to new enrollments in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). CMS indicated that it will publish a notice in the Federal Register to formally announce the lifting of the moratorium.

As a result, Part B ambulance suppliers that are not otherwise already enrolled as non-emergency ambulance provider in the State of Texas will be permitted to enroll in the Medicare Program. The lifting of the moratorium will also permit companies that are already enrolled as non-emergency ambulance suppliers to add additional practice locations throughout the state. CMS has indicated that both new enrollments and changes in enrollment to add additional practice locations will be subject to “high” screening under 42 C.F.R. §424.518(c)(3)(iii).

Summary of September 2017 Ambulance Open Door Forum

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

On September 14, 2017, CMS held its latest Open Door Forum. As usual, it started with a few announcements, as follows:

  1. “Locality” Rule – On 6/16/17 CMS issued Transmittal 236, to amend the Benefit Policy Manual, Chapter 10, section 10.3.5 to give Medicare Administrative Contractors discretion to determine the “locality”. This is for the issue of the nearest appropriate facility.

Transmittal 236

  1. ALS Assessment – The same Transmittal also amended section 30.1.1 to indicate that if an ALS assessment is performed, then the ALS emergency base rate shall be paid, even if there is no ALS intervention.
  2. Multiple Patient Transports – On 9/1/17, CMS issued Transmittal 3855 to restore to its Claims Processing Manual, Chapter 15, section 30.1.2 instructions for multiple patients transported in the same vehicle. This is not a change in policy. The section was inadvertently omitted from the Internet Only Manual.

Transmittal 3855

  1. Temporary Adjustments – The 2%, 3% and 22.6% temporary adjustments for ground ambulance transports originating in urban, rural and super-rural areas will expire 12/31/17, unless legislation is enacted. Later on the call, they indicated that they are aware of a legislative initiative in Congress that includes this issue (S.967, H.R. 3236).

Support Extending the Medicare Add-ons!

       Following these announcements, a Q & A period ensued. Most of the questions were not answered on the call, other than to advise the caller to submit their question via e-mail and CMS will respond to their concern via e-mail or to contact their Medicare Administrative Contractor.

Two items of note in the Q & A were as follows:

  • CMS has left it up to the MACs to define the “locality” for purposes of the nearest appropriate facility requirement. Therefore, providers and suppliers should ask their MAC for their definition.
  • CMS was asked whether the prior authorization program would continue nationwide, after this year. The representatives from CMS did not answer the question other than to advise the person who asked the question to submit it in writing to CMS.

Have questions? Please write to the Werfels at bwerfel@aol.com.

2016 National and State-Specific Medicare Data

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

The American Ambulance Association is pleased to announce the publication of its 2016 Medicare Payment Data Report. This report is based on the Physician/Supplier Procedure Summary Master File. This report contains information on all Part B and DME claims processed through the Medicare Common Working File and stored in the National Claims History Repository.

The report contains an overview of total Medicare spending nationwide in CY 2016, and then a separate breakdown of Medicare spending in each of the 50 states, the District of Columbia, and the various other U.S. Territories.

For each jurisdiction, the report contains two charts: the first reflects data for all ambulance services, while the second is limited solely to dialysis transports. Each chart lists total spending by procedure code (i.e., base rates and mileage). For comparison purposes, information is also provided on Medicare spending in CY 2015.

2016 National & State-Specific Medicare Data

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

 

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.

 

 

 

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.

Court Decision Overpayment Determination Statistical Sampling

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

Maxmed is a home health agency. In 2011, Medicare reviewed a sample of 40 claims involving 22 Medicare beneficiaries and determined that all but one were not medically necessary. The sample was extrapolated to their universe of claims, resulting in an overpayment of $773,967. The Administrative Law Judge invalidated the extrapolation methodology, but the Medicare Appeals Council reversed and Maxmed appealed to Federal District Court, where it lost. Maxmed then appealed claiming:
  • the extrapolation was invalid because the contractor failed to document the random numbers used in the sample and how they were selected.
  • a valid random sample must be for claims that are “defined correctly and independent” and here the same Medicare beneficiary had multiple claims in the sample.
On June 22, 2017, the U.S. Court of Appeals, Fifth Circuit, found the extrapolation and sampling methodology used was proper. The decision, Maxmed Healthcare Inc. v. Price, is just the latest in a recent line of decisions making it harder and harder to challenge statistical sampling and extrapolation of overpayments.

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.

OIG Looking into SNF Consolidated Billing Claims

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

Over the past few weeks, we have been contacted by a number of ambulance suppliers that have received letters from the HHS Office of the Inspector General (OIG). These letters indicate that the OIG is conducting a national review of ambulance services that are subject to the consolidated billing provisions of the skilled nursing facility (SNF) prospective payment system. The review covers claims for ambulance services with dates of service from July 2014 through June 2016.

In each case, the ambulance supplier is being asked to provide documentation on a handful of round trip transports of an SNF patient. The letter indicates that these services were furnished to a Medicare beneficiary during the beneficiary’s Part A SNF stay, and therefore “may be subject to consolidated billing.” The letter asks the ambulance supplier to complete a short (3-page) questionnaire related to the identified transports, and to return the completed questionnaire to the OIG within seven business days.

The questionnaire asks some fairly basic questions related to the identified transports, including whether the ambulance supplier actually furnished the identified transports, whether it was paid by Medicare, the point of pickup and destination, and information on who called to request the transport. The questionnaire also asks for information on how the ambulance supplier determined whether the patient was in the Part A period, and what information the ambulance supplier obtained in order to make its determination that the claims were separately payable by Medicare Part B.

The OIG has conducted similar reviews in the past. For example, in August 2009, the OIG issued a report on payments for ambulance transportation provided to SNF beneficiaries during calendar year 2006. That report concluded that 61 of the 114 claims it reviewed (53%) were incorrectly billed to Medicare Part B, as opposed to the SNF. Based on its sample, the OIG estimated that Medicare made $12.7 million in incorrect payments to ambulance suppliers during calendar year 2006.

It is possible that the OIG is simply updating its previous report on SNF Consolidated Billing and ambulance transports. However, there is another possible explanation for the OIG’s renewed interest in these types of transports. Many of the claims the OIG has requested information on relate to transports to what appears to be a physician clinic located on a hospital’s campus. If correct, the SNF would have been responsible for payment for the physician’s services (in addition to the ambulance claims). If so, it is possible that the OIG’s interest was triggered by the lack of a corresponding hospital claim being submitted to Medicare on that date.

If this sounds familiar to you, it should.

In September 2015, the OIG issued a report in which it highlighted seven so-called “questionable billing practices” by ambulance suppliers. One of these billing practices was the existence of an ambulance claim for a particular date of service, but where there was no corresponding hospital claim (or any other claim from a Part A institution) for the beneficiary on that same date. The OIG identified $30.2 million in payments during the first half of 2012 that tested positive for this measure.

In an earlier blog post, we discussed the Supplemental Medical Review Contractor (SMRC), StrategicHealthSolutions, LLC. The SMRC is tasked with lowering the improper payment rate and increasing efficiencies of the medical review functions of the Medicare and Medicaid programs. The SMRC has recently started auditing ambulance suppliers, and it appears to be focusing, in large part, on claims where patients were evaluated at a physician’s clinic located on a hospital’s campus. It is possible that the OIG is conducting its own inquiry of this same issue.

This leaves us with a basic question: Is the OIG simply updating an earlier report, or is this sort of audit going to be become the new “normal” for ambulance suppliers? Ultimately, time will tell.

However, regardless of the OIG’s motives, this recent string of audits serves as a valuable reminder to the industry that many hospitals do sublease space to physician practices, and that these independent practices are licensed separately from the hospital. A transport to these independent physician practices would be bundled to the SNF under SNF Consolidated Billing. As an industry, we need to identify these transports when they occur, and be sure to bill the SNF, whenever appropriate. Otherwise, the OIG is likely to continue these sorts of audits.

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.

UnitedHealthCare Denials for ALS-2 Claims

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

Talking Medicare

with Brian S. Werfel, AAA Medicare Consultant

Over the past few weeks, we have received emails from ambulance providers across the country reporting that UnitedHealthCare (UHC) has started to deny claims for the ALS-2 base rate. Affected claims include both commercial and Medicare Advantage claims. These providers are reporting that UHC is requiring the use of Current Procedural Terminology (CPT) Codes to support the ALS-2 level of service.

When these providers call UHC to question the denials, the customer service representative refers them to UHC’s online policies and procedures manual. The section of that manual devoted to the ALS-2 base rate largely mirrors Medicare’s definition. For example, it indicates that ALS-2 can be billed based on three separate administrations of one or more medications by IV push/bolus or continuous infusion, or upon provision of one or more of the designated ALS-2 procedures (e.g., an endotracheal intubation).

However, the manual section then goes on to indicate that “Ambulance Providers or Suppliers are required to report CPT or HCPCS codes… when reporting A0433.  Ambulance transport services that do not include the services described in criteria 1 or 2 above should be reported with a more appropriate ambulance transport code.”

The manual section concludes with links to two lists of CPT codes. The first list, designated as “ALS2 Criteria 1 Codes” relate to the intravenous administration of various medications. These codes fall within the range of: 96365 – 96376. The second list, designated as “ALS2 Criteria 2 Codes” correspond to the various ALS interventions:

CPT Code:                            Description:
31500                                    Endotracheal Intubation, Emergency
31603                                    Under Incision Procedures on Trachea and Bronchi
31605                                    Under Incision Procedures on Trachea and Bronchi
36000                                    Under Intravenous Vascular Introduction & Injection Procedure
36555                                    Central Venous Catheter Placement, Patient Under Five Years
36556                                    Central Venous Catheter Placement, Patient Over Five Years
36568                                    Insertion of Central Venous Access Device
36569                                    PICC Line Insertion
36680                                    Intraosseous Line Infusions
92950                                    Cardiopulmonary Resuscitation
92953                                    Other Therapeutic Cardiovascular Services
92960                                    External Electrical Cardioversion, Non-Emergency
92961                                    External Electrical Cardioversion, Emergency

The ambulance providers have indicated that they have questioned UHC on the necessity of including CPT codes on these claims. These providers argue, correctly, that CMS does not require the use of CPT codes on Medicare claims. Instead, Medicare requires the ambulance provider to document in the billing narrative the justification for billing ALS-2. For example, a provider might list multiple administrations of epinephrine, the use of an intraosseous line, etc.

The fact that UHC is asking for the CPT codes suggests that it does not currently review the billing narratives. Instead, UHC appears to be using the CPT codes to ensure that the ALS-2 criteria are met.

Is UHC correct to insist upon the use of CPT codes? Probably not, at least for its Medicare Advantage claims. However, I think the more appropriate question to ask ourselves is whether it is worth fighting UHC on this issue? If using CPT codes ensure that UHC correctly processes and pays these claims with minimal delay, my opinion is that it is probably easier just to comply with their policy.

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

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)

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!

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.

Prior Authorization Data Shows Dramatic Reductions in Spending on Dialysis Transports

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

In May 2014, CMS announced the implementation of a three-year prior authorization demonstration project for repetitive scheduled non-emergency ambulance transports.  CMS initially elected to limit this demonstration to three states: New Jersey, Pennsylvania, and South Carolina.  These states were selected based on higher-than-average utilization rates and high rates of improper payment for these services.  The Medicare Payment Advisory Commission (MedPAC) had previously singled out these states as having higher than average utilization of dialysis transports in a June 2013 report to Congress.

This demonstration project went into effect on December 15, 2014.  The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) subsequently expanded the demonstration project to five additional states and the District of Columbia on January 1, 2016, with a further expansion to all remaining states expected to occur at some time during 2017.  However, national expansion is contingent upon CMS determining that the demonstration project has been effective in reducing Medicare expenditures without jeopardizing patient’s access to necessary medical care.

Every year, CMS also releases data on aggregate Medicare payments for the preceding year.  This file is referred to as the Physician/Supplier Procedure Master File (PSP Master File).  This past month, CMS released the 2016 PSP Master File, which contains information on all Part B and DME claims processed through the Medicare Common Working File with 2015 dates of service.  I will be discussing this report in greater detail in next month’s blog.

This month, I want to focus on the impact the prior authorization project has had on total dialysis payments in the original three target states.  Reproduced below is a chart tracking the total payments for dialysis transports in these three states between 2010 and 2015.  Interestingly, these three states demonstrated very different trajectories prior to last year.

New Jersey saw a sustained, dramatic increase in payments over that time, increasing from approximately $56 million in 2010 to more than $106 million in 2014, an increase of nearly 90% over a 5-year period.  (Note: spending figures for 2014 and 2015 take into account the 10% reduction in payments for dialysis transports).
werfel-chart

South Carolina saw a much more moderate increase over that same period, increasing from $51 million in 2010 to slightly more than $60 million in 2014, an increase of roughly 18%.  By contrast, payments in Pennsylvania peaked in 2011 at $69.6 million, and have been in steady decline ever since.

While these states’ trajectories were different prior to 2015, the results for 2015 are fairly similar.  Each state saw a significant reduction in the total expenditures for dialysis once the prior authorization project went into effect. 

 The fact that these states saw a reduction in overall spending on dialysis is not surprising (to me at least, I recognize this came as a shock to many providers in these states).  These states were not selected at random; CMS selected these states based on its belief that they were particularly suspect to overutilization.

What I do find surprising is the relative sizes of the declines in these states.  New Jersey and Pennsylvania both experienced a more than 80% reduction in payments for dialysis.  By contrast, the reduction in South Carolina (approximately 25%) was far less dramatic.

Does this suggest that abuse was more prevalent in New Jersey and Pennsylvania?  Perhaps.  An ongoing federal Medicare Strike Force in the Philadelphia metropolitan area has resulted in a number of convictions against fraudulent providers in these states.  However, the impact has not been limited to these alleged “bad actors.”  Even those companies employing accepted best practices have seen significant reductions in their approved patient populations.

To me, the common factor seems to be the applicable Medicare contractor.  New Jersey and Pennsylvania are both administered by Novitas Solutions, Inc., whereas South Carolina is administered by Palmetto GBA.  While Medicare’s coverage standards are intended to be national, it seems reasonable to conclude that Novitas has taken a far harder stance on dialysis than Palmetto.  Anecdotal evidence from the states that came went live with prior authorization in January 2016 seems to confirm this thesis, although we will not be able to know for sure until the 2016 Medicare payment data is released this time next year.

Those of you that have attended this year’s AAA Regional Conferences, or who participated on AAA webinars this past year have heard me say that the Medicare Administrative Contractor’s stance on dialysis is the most important factor in determining whether an ambulance provider needs to rethink its current approach to its repetitive patient population.  To the extent the MAC takes a fairly lenient stance, providers will likely find that only a few “tweaks” are needed to align their existing practices with a prior authorization regime.  AAA members in these states may even find it worthwhile to even considering expanding the spectrum of patients they accept for transport. If, however, the MAC takes a fairly restrictive stances (as Novitas has clearly done), providers will likely find it necessary to dramatically trim these populations, or to arrange for alternative sources of payment for these transports.

I also encourage AAA members to attend our panel discussion at this year’s Annual Conference & Tradeshow in exciting Las Vegas (November 7 – 9th).  I have the privilege of serving as the moderator for a panel consisting of several providers that are currently operating under the prior authorization project.  These providers will talk about their experiences, and will be able to offer helpful tips on how to best navigate this major shift in Medicare’s coverage rules. (See full Conference Agenda)

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

Prior Authorization Expansion Delay

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

Prior Authorization – Repetitive Non-Emergencies – Expansion Delay

CMS has notified the American Ambulance Association that the expansion of Prior Authorization for repetitive non-emergencies, to the states not already on Prior Authorization, will not be implemented January 1, 2017.

The reason for the delay is that, pursuant to Section 515(b) of the Medicare Access and CHIP Reauthorization Act (MACRA), CMS must make determinations as to whether: (1) Prior Authorization for repetitive non-emergencies saves money, (2) it adversely affects quality of care and (3) it adversely impacts access to care.

These studies are being conducted and are expected to show the program saves money without adversely affecting quality or access to care.

For those of you in states currently not under Prior Authorization, it is highly recommended that you still prepare for it to be implemented, even though it will not be implemented January 1, 2017.  You should still ensure that these patients meet the requirements for medical necessity by reviewing your documents, obtaining documents from facilities, conducting assessments of repetitive patients, implementing internal procedures and processes, etc.

For those of you in states already under Prior Authorization for repetitive non-emergencies, there is no impact.  Your program continues.

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