Brian S. Werfel, AAA Medicare Consultant
Every year, the Centers for Medicare and Medicaid Services (CMS) releases data on Medicare payments for the preceding year. The 2015 Physician/Supplier Procedure Master File (PSP Master File) was released in late November 2015. This report contains information on all Part B and DME claims processed through the Medicare Common Working File with 2014 dates of service.
In last month’s post, I focused on total Medicare spending. This month, I want to shine the spotlight on Medicare’s payment for ambulance transports to and from dialysis.
It is no secret that the federal government has long viewed dialysis transports with suspicion. In 1994, the HHS Office of the Inspector General (OIG) issued a report citing dialysis transports as an area of concern. In a 2013 report, the OIG cited the dramatic increase in the volume of dialysis transports since the implementation of the Medicare Ambulance Fee Schedule as evidence that the Medicare ambulance benefit is vulnerable to fraud and abuse. Dialysis transports were also featured heavily in the OIG’s 2015 report on questionable billing practices. A 2013 report by the Medicare Payment Advisory Commission (MedPAC) noted that the utilization of BLS non-emergency transports, dialysis in particular, had grown faster than the utilization of other ambulance levels of service.
The Numbers Don’t Lie…
According to statistics provided by the U.S. Department of Health and Human Services, the population of ESRD patients increased by 85% from 2002 to 2011. Over that same period of time, the OIG noted that the number of covered ambulance transports to and from dialysis increased by more than 269%. In other words, while the ESRD population has grown steadily over time, an increasing number of those patients are transported to and from their dialysis appointments by ambulance.
Medicare payment data confirms this. In 2007, Medicare paid a total of $445.8 million for dialysis transports. In 2014, Medicare paid $717.1 million for dialysis, an increase of 60.86%. The increase is even more dramatic when you consider that Congress mandated a permanent 10% reduction in Medicare’s payments for dialysis transports furnished on or after October 1, 2013. Without that reduction, Medicare’s payments for dialysis would have been closer to $800 million in 2014, an increase of nearly 80%. Over that same period of time, total Medicare payments for ambulance increased by only 27.08%.
Between 2007 and 2014, Medicare’s payments for ambulance services increased by approximately $1.06 billion, with dialysis transports accounting for $354 million. In other words, approximately one-third of the total increase in Medicare spending on ambulance is attributable to dialysis.
If you focus only on BLS non-emergency transports, the impact of dialysis is even more striking. In 2014, Medicare paid $1.139 million for BLS non-emergency transports (not counting mileage). This is almost essentially unchanged from the $1.131 million it spent in 2010. However, during that same period, payments for BLS non-emergency transports to dialysis increased from $513.7 million to $558.4 million. Put another way, if you remove transports for dialysis, Medicare’s payments for BLS non-emergency transports (and non-emergency transports in general) actually declined over the past five years.
In its 2013 report on ambulance utilization, the OIG noted that dialysis transports had increased to 19% of all covered ambulance transports in 2011, up from 9% in 2002. Note: in 2014, dialysis transports had dropped to 17.1% of all covered transports, suggesting we may start to see the pendulum shifting back a bit.
Our industry may ultimately look back on 2013 as a tipping point. That year marked the first time that the total volume of BLS non-emergency transports to and from dialysis exceeded the number of BLS non-emergency transports to or from places other than dialysis.
But They don’t Tell the Full Story Either…
While the overall trend has been upwards, the increase in dialysis transports is not a national phenomenon. Rather, this increase is largely confined to a handful of states.
As noted above, Medicare’s payments for dialysis transports increased by approximately $45 million between 2010 and 2014. During that same period, Medicare’s payments for dialysis transports in New Jersey increased by $50.7 million. You read that right, if you exclude New Jersey, total Medicare payments for dialysis would have declined nationwide. If you have ever asked: “Why was New Jersey selected to be one of the initial 3 states for the prior authorization program?”, you have your answer.
Other states that saw significant increases over that period include:
| State |
2010 Dialysis Payments |
2013 (2014)
Dialysis Payments |
| California |
$87.7 million |
$106.0 million |
| Georgia |
$25.5 million |
$69.9 million (2014) |
| Illinois |
$13.5 million |
$19.3 million (2014) |
| Louisiana |
$4.0 million |
$6.4 million |
| Michigan |
$12.7 million |
$17.5 million |
| New York |
$23.5 million |
$30.1 million (2014) |
| South Carolina |
$51.1 million |
$62.4 million |
| Virginia |
$25.3 million |
$30.2 million |
| West Virginia |
$7.9 million |
$9.9 million (2014) |
If your state is not one of the ones listed above, chances are Medicare’s payments for dialysis are lower today than they were 5 years ago. This includes a number of states and/or territories that, historically, have been recognized as having a so-called “dialysis problem.” For example, total payments for dialysis have declined in Texas from $86.7 million in 2010 (itself a significant reduction from 2007) down to $53.8 million in 2014. This is likely the result of ongoing enforcement efforts in the state, including a moratorium on the enrollment of new ambulance providers. Pennsylvania, also selected to be part of the initial prior authorization program, saw payments for dialysis transports drop to $39.2 million in 2014, down from $62.6 million in 2010.
As I look at this data, two thoughts come to mind. The first is that, to the extent you agree that there is a problem with dialysis transports (and I am one of those that does), it is clear that the problem is largely confined to a handful of states.
The second is that our overall perspective on our industry may need to change. Traditionally, we have viewed the industry through the prism of “emergency” vs. “non-emergency.” And there are valid operations reasons to distinguish between these two categories. However, I can’t help but wonder if that worldview isn’t overly simplistic these days. Maybe we need to start viewing our industry as having three components, emergencies, non-emergencies, and dialysis.
AAA members, submit a Medicare question to Brian! Not yet a member? Learn more.
