Tag: Medicare

Prior Authorization Data Shows Dramatic Reductions in Spending on Dialysis Transports

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).

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

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.

AAA Resolves Members’ Cahaba Mileage Reimbursement Issues

Many AAA members have recently reported erroneous across-the-board denial of mileage reimbursement by Cahaba. AAA board member Russell Honeycutt of Central EMS, along with several other AAA leaders, reached out to Cahaba and was able to help the carrier identify their internal process problem. Per Cahaba staff, these unjustified mileage reimbursement denials should not happen moving forward.

Ambulance services operating under Cahaba’s jurisdiction are requested to resubmit their claims electronically. Although Cahaba believes the problem is resolved, AAA encourages members to then closely monitor their Explanation of Medicare Benefits (EOMB) after resubmission to ensure that the resubmitted claims are not mistakenly denied as duplicates.

Now Available 2016 Medicare Reference Manual!

Medicare Reference Cover 2016 - 275px

Novitas – Denials

This advisory is for members who have Novitas as their Medicare Administrative Contractor.

On August 17, 2016, Novitas called me to let me know that they are seeing many ambulance claims denied due solely to the diagnosis codes that are listed on claims. Novitas requires a minimum of two ICD-10 codes, as follows:

  • A primary diagnosis code that describes the patient’s medical condition at the time of transport, AND
  • A secondary diagnosis code that reflects the patient’s need for the ambulance at the time of transport.

The list of primary ICD-10 codes was published by Novitas in their Ambulance Local Coverage Article A54574. While the ICD-10 codes in A54574 are not the only codes that will be accepted, it is highly recommended that you use one of those as your primary code, whenever possible.

Novitas also requires a secondary “diagnosis code”. This list is in their Ambulance Local Coverage Determination (LCD) Policy L35162. That has the four “Z” codes, at least one of which must be used as the secondary diagnosis code:

  • Z74.01 – Bed Confined
  • Z74.3 – needs continuous supervision (includes EKG)
  • Z78.1 – physical restraints (patient safety, danger to self/others)
  • Z99.89 – dependence on enabling machines (includes IV fluids, active airway management)

If the claim does not list a primary AND a secondary code, the claim is automatically denied. While the claim can be corrected and resubmitted for processing, that delays cash flow and adds time and expense for the ambulance supplier. Therefore, please make sure you list an appropriate primary code AND an appropriate secondary code.


AAA 2016 State Balanced Billing & Direct Pay Survey Results Released

The AAA is providing its members with the results of two important surveys conducted of state laws impacting ambulance services.  The first chart entitled “2016 State Balance Billing Survey” shows whether a state restricts balancing billing of patients.  The second entitled “2016 State Direct Pay Survey” lists whether a state has a law requiring an insurer to send payment directly to a non-contracted ambulance service or a law allowing the insurer do send payment to the patient.  We thank AAA Medicare Consultant Brian Werfel for compiling the data and members of the AAA Medicare Regulatory Committee and the AAA membership to which Brian reached out for their assistance.

A Preliminary Estimate of 2017 Medicare Rates

 On July 15, 2016, the Bureau of Labor Statistics released its monthly report on inflation.  This release includes the change in the Consumer Price Index for all urban consumers (CPI-U) for June 2016.  As a result, it is now possible to make a preliminary estimate of the Ambulance Inflation Factor (AIF) for calendar year 2017.  The AIF is main factor that determines the increase (or decrease) in Medicare’s payment for ambulance services.

Calculating the 2017 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 2017, this means the 12-month period ending on June 30, 2016.  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%.

Fortunately, it seems unlikely that we will see a negative AIF in 2017.  For the 12-month period ending in June 2016, the Bureau of Labor Statistics (BLS) currently calculates the change in the CPI-U to be exactly 1.00%.

CMS has yet to release its estimate for the MFP in calendar year 2017.  However, assuming CMS’ projections for the MFP are similar to last year’s projections, the 2017 MFP is likely to be in the 0.5% range.

Therefore, at this time, my best guess is that the 2017 Ambulance Inflation Factor will be a positive 0.5%.

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 2017 AIF would need to be adjusted accordingly.  Ultimately, the 2017 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 2017 Medicare rates would be a relatively simple exercise, i.e., you would simply add 0.5% to your 2016 rates.  However, as part of its 2017 Physician Fee Schedule Proposed Rule (issued on July 15, 2016), CMS proposed extensive 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 2017 PFS Proposed Rule GPCI Public Use Files” (located in the Downloads section).  You would then need to open the file for “CY 2017 Proposed Addendum E.”

If the PE GPCI in your area is proposed to increase, you can expect your 2017 Medicare rates to increase by slightly more than 0.5%.  If the PE GPCI in your area is proposed to decrease, you can expect your 2017 Medicare rates to increase by slightly less than 0.5%.

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 2017 unadjusted base rates are reproduced below:

Base Rate (HCPCS Code)

2017 Unadjusted Base Rate
BLS non-Emergency (A0428)                     $221.84
BLS emergency (A0429)                     $354.95
ALS non-emergency (A0426)                     $266.21
ALS emergency (A0427)                     $421.51
ALS-2 (A0433)                     $610.08
Specialty Care Transport (A0434)                     $721.00
Paramedic Intercept (A0432)                     $388.23
Fixed Wing (A0430)                     $3,010.52
Rotary Wing (A0431)                     $3,500.17


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 would be to apply the current adjustments for urban (2%), rural (3%) and super-rural (22.6% over the corresponding rural rate).

2017 Projected Rates for Mileage:

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

Base Rate (HCPCS Code) 2017 Unadjusted Base Rate
Ground Mileage – Urban                     $7.28
Ground Mileage – Rural Miles 1 – 17                     $11.02
Ground Mileage – Rural Miles 18+                     $7.35
Fixed Wing Mileage – Urban                     $8.54
Fixed Wing Mileage – Rural                     $12.81
Rotary Wing Mileage – Urban                     $22.79
Rotary Wing Mileage – Rural



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.

MedPAC Issues June 2016 Report to the Congress

MedPAC Issues June 2016 Report to the Congress with Chapter on Improving Efficiency and Preserving Access to Emergency Care in Rural Areas

Medicare Payment Advisory Commission (MedPAC or the Commission) has issued its June 2016 Report to the Congress.   The June report includes recommended refinements to Medicare payment systems and identifies issues affecting the Medicare program, broader changes in health care delivery, and the market for health care services.

Chapter 7 focuses on preserving access to emergency care in rural areas.  The Commission recognizes that access to inpatient and emergency services in rural areas is threatened because of the dwindling populations.  Declining populations can lead to fewer hospital admissions and reduced efficiencies that can create financial and staff problems for hospitals.  The Report notes that “[d]eclining volume is a concern because low-volume rural hospitals tend to have worse mortality metrics and worse performance on some process measures.” In addition, “low-volume CAHs have the difficult job of competing with each other for a shrinking pool of clinicians who want the lifestyle of operating an outpatient practice during the day, covering inpatient issues that arise at night, and covering the emergency department.”

Under current policies, most rural hospitals are critical access hospitals (CAHs).  They receive a cost-based payment for providing inpatient and outpatient services to Medicare beneficiaries.  To receive these payments, a hospital must maintain acute inpatient services.  In rural areas, many small towns do not have a sufficient population to support such a model.  Yet eliminating these services would mean giving up the supplemental payments that their hospitals receive through the CAH cost-based payment model.

The hospital prospective payment system serves as the payment model for other hospitals.  Rural providers receive supplemental payments, which are also linked to providing inpatient services.

MedPAC highlights the concerns with cost-based payment models:

  • Cost-based payments do not direct payments toward isolated hospitals having the greatest financial difficulty, but rather reward hospitals in high-income areas with higher non-Medicare margins by providing them with higher Medicare payments.
  • Cost-based payments encourage providers to expand service lines with high Medicare and private-payer shares rather than primarily focus on services that are needed on an emergency basis.
  • Cost-based models reduce the incentive for hospitals to control their costs, which can lead to unnecessary growth in capital costs, despite declining volumes.

In light of these challenges, MedPAC sets forth a two of options that would give isolated rural hospitals the option of converting to an outpatient-only model while maintaining their special payment arrangements.  These models seek to ensure access to essential services:

  • Establishing a 24/7 emergency department model; and
  • Adopting a clinic with ambulance services model.

Under the 24/7 emergency department model, the hospital would be paid under the outpatient prospective payment rates and would receive an annual grant/fixed payment from Medicare to cover the standby costs associated with 24/7 emergency services.  The current supplemental payments would be redirected to support this annual grant/fixed payment amount.  If a hospital chose to use inpatient beds as skilled nursing facility (SNF) beds, it would be reimbursed under the Medicare SNF prospective payment system.  The hospital could be required to use the fixed payment for emergency standby capacity, ambulance service losses, telehealth capacity, and uncompensated care in the emergency department.

Under the clinic and ambulance model, hospitals could convert their existing inpatient facilities into primary care clinics.  These clinics would be “affiliated” with an ambulance service.   Medicare would pay the prospective rates for primary care visits and ambulance transports.  Medicare would provide an annual grant/fixed payment to support the capital costs of having a primary care practice, the standby costs of the ambulance service, and uncompensated care costs.

The Commission recognizes that the “low population density would also make it difficult to retain primary care providers and support an ambulance service.”  It could also be difficult to describe the exact level of primary care and ambulance access that is required to receive the fixed Medicare payment.

MedPAC reiterates its position that “supplemental payments beyond the standard PPS rates should be targeted to isolated rural providers that are essential for access to care.”  Thus, it states that a program to support stand-alone emergency departments should be limited to facilities that are a minimum distance in road miles from the nearest hospital.


AAA Issues Response to GAO Claims Report

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

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

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

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.

CMS Releases Ambulance Cost Data Collection Report

The Centers for Medicare and Medicaid Services (CMS) has released its report on the feasibility of collecting cost data from ambulance service providers.  Under the American Taxpayer Relief Act of 2012, Congress directed CMS to conduct the report entitled “Evaluation of Hospitals’ Ambulance Data on Medicare Cost Reports and Feasibility of Obtaining Cost Data from All Ambulance Providers and Suppliers”. The report can be accessed here.

The report states that due to the diverse nature of our industry with a majority of providers being small entities, traditional mandatory ambulance cost reporting is not feasible.  While it does not make a recommendation on a data collection system, the report highlights the work of the AAA with The Moran Company and will be helpful in our push for a survey approach to collecting ambulance cost data.  Here is AAA’ summary of the report, AAA Summary of CMS Acumen Cost Analysis.

The survey approach to collecting ambulance cost data is a major component of the Medicare Ambulance Access, Fraud Prevention and Reform Act (S. 377, H.R. 745) which would make the current Medicare ambulance increases permanent.  The data collected through the survey would help the AAA make data-driven recommendations to the Congress and CMS on future changes to the Medicare ambulance fee schedule.

The contractor, Acumen, who developed the report, was also asked to look to see if cost data submitted by hospital-based ambulance service providers would be helpful.  Acumen determined that the data submitted varied significantly and thus was not useful.

For questions about the AAA efforts on cost data collection, please contact AAA Senior Vice President of Government Affairs Tristan North at tnorth@ambulance.org.

CMS Announces 2016 Inflation Factor

The Centers for Medicare and Medicare Services (CMS) has officially announced that the inflation factor for payments under the Medicare ambulance fee schedule for 2016 will be negative .4% (-0.4%). As part of the Affordable Care Act, a productivity adjustment has been part of the calculation for the last several years which for 2016 has resulted in a negative update.

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 2016 is 0.1% with a MFP of 0.5% which equals negative .4%.

The AAA had projected an inflation factor of negative .5%.

HHS OIG Report Discussion Added to Annual Conference

Late breaking AAA Conference update:

In order to address a Medicare reimbursement issue we feel is critical, AAA has decided to modify the Tuesday afternoon conference session being led by Brian S. Werfel, Esq.

Instead of covering medicare audits in this session, Mr. Werfel will now be leading an in depth discussion about a recent OIG Report on Questionable Billing Practices. The originally schedule session on preparing for medicare audits will be offered as a webinar. Further information about this new conference session is provided below.

Understanding the Recent OIG Report on Questionable Billing Practices

On September 29, 2015, the Department of Health and Human Services Office of the Inspector General released a report on “Inappropriate Payments and Question Billing for Part B Ambulance Transports”.  The report concluded that Medicare paid $24.2 million during the first half of 2012 for ambulance transports that did not meet Medicare program requirements.
In this special session, AAA Medicare Consultant Brian S. Werfel, Esq. will breakdown the OIG’s report, with special attention being paid to each of the 7 billing practices the OIG identified as “questionable”.  The session will include strategies that companies can implement to avoid these practices.  Brian will also discuss ongoing OIG enforcement activities related to the issues identified in this report.  The session will conclude with a Question & Answer period.

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Submit Comment Letters on CY2016 Proposed Rule

The American Ambulance Association (AAA) recently drafted a comment letter in response to the Centers for Medicare and Medicaid Services (CMS) proposed rule for changes to the Medicare ambulance fee schedule for 2016.   The AAA letter requests that CMS make several changes to improve the methodology and data used to determine urban and rural areas under the fee schedule.

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CMS Issues Proposed Rule for Calendar Year 2016

On July 8, 2015, the Centers for Medicare and Medicaid Services (CMS) published a display copy of a proposed rule titled “Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2016”.  The proposed rule makes a number of changes to the Medicare Physician Fee Schedule.  It also makes certain changes to the Medicare Ambulance Fee Schedule.  These proposed changes are summarized below.

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Comment Letter on Proposed Fee Schedule Changes

On August 29, 2014, the AAA sent a Proposed Rule Comment Letter to the Centers for Medicare and Medicaid Services (CMS) regarding the CY2015 Fee Schedule Changes.  The AAA determined the recently published proposed rule on updates to the Medicare ambulance fee scheduled for CY 2015 likely significantly underestimated the number of zip codes that would change geographic area designation. In the proposed rule, CMS stated 120 zip codes would change from rural to urban and 100 zip codes would change from urban to rural. The AAA has estimated 1,524 zip codes would change from rural to urban and 449 zip codes would change from urban to rural.

AAA Proposed Rule Comment Letter

2015 Changed Zip Totals by State