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Principles of Healthcare
Reimbursement
Third Edition
Chapter 7
Medicare-Medicaid Prospective Payment Systems for
Nonhospitalized Patients: Ambulance Fee Schedule
© 2011
Covered Services
• Medicare Part B provides beneficiary coverage
for ambulance services
– Will provide transport service, only if other means are
inadvisable based on the beneficiary’s medical
condition
– Provided to the nearest facility that is able to provide
services for that patient’s condition
– Transported
• From one hospital to another
• To home
• To an extended care facility
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History
Two types of ambulance service entities
1. Providers: Associated with a medical facility
such as a hospital, CAH, SNF, or HHA
–
Retrospective reasonable cost payment
– Previous year’s cost-to-charge ratio (CCR)
2. Suppliers: Not associated with a medical
facility
– Reasonable charge payment mechanism
– Fours ways to report ambulance services
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History (cont.)
• Both types used HCPCS Code Set
– Providers
• A0030–A0999, excluding A0888 (ambulance
codes)
• And codes to report type of mileage
– Suppliers
• A0030-A0999, excluding A0888
• Level I codes 93005 and 93041
• Various other Level II codes
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Legislation
• BBA of 1997
– Added section 1834(1) to the SSA
– Required the creation of a fee schedule to establish
prospective payment rates for ambulance services
– Devised through negotiated rulemaking (Negotiated
Rulemaking Act of 1990)
• Negotiated Rulemaking Committee on Medicare
Ambulance Services Fee Schedule
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Legislation (cont.)
• The committee was instructed to:
– Control Medicare expenditures through PPS
– Establish service definitions to link payment to the
type of service
– Consider regional and operational differences
– Consider inflation
– Construct a phase-in period for implementation
– Require providers and supplier to accept Medicare
assignment
– Reimburse providers and suppliers at the lower of FS
or billed charges
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Legislation (cont.)
• BBA (cont.)
– Established the paramedic intercept service
type (discussed under levels of service)
• BBRA of 1999
– Modified the definition of rural for the
paramedic intercept service type
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Legislation (cont.)
• BIPA of 2000
– Excluded CAH from the fee schedule payment
methodology when the CAH is the only supplier or
provider of ambulance services within a 35 mile
drive.
• Reasonable cost basis
– Increased payment rates for rural ambulance
mileage
– Modified inflation factor for 7/1/01 to 12/31/01
• Increased 2%
– Eliminated blended payment rate for mileage phasein provision for suppliers
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Ambulance FS
• Implemented April 1, 2002
• Five year phase-in plan
• Reimbursement is based on the level of
service provided to the beneficiary
– Seven levels of service
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Levels of Service Chart:
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Service
Acronym
Description
Basic Life Support
BLS
Service level of an Emergency Medical Technician (EMT)-Basic, including
the establishment of a peripheral intravenous line.
Advanced Life Support,
Level 1
ALS1
In emergency cases, an assessment provided by an EMT-Intermediate or
Paramedic (ALS crew) to determine patient needs and the furnishing
of one or more ALS interventions. An ALS intervention is a procedure
beyond the scope of an EMT-Basic.
Advanced Life Support,
Level 2
ALS2
The administration of at least three different medications or the provision of
one or more ALS procedures.
Specialty Care Transport
SCT
For critically injured or ill patient, the level of interhospital service
furnished is beyond the scope of a paramedic. Ongoing care must be
furnished by one or more health professionals in an appropriate
specialty area.
Paramedic ALS Intercept
PI
ALS services furnished by an entity that does not provide the ambulance
transport.
Fixed Wing Air
Ambulance
FW
Destination is inaccessible by land vehicle or great distances or other
obstacles (heavy traffic) and the patient’s condition is not appropriate
for BLS or ALS ground transportation.
Rotary Wing Air
Ambulance
RW
Helicopter transport. Destination is inaccessible by land vehicle or great
distances or other obstacles (heavy traffic) and the patient’s condition
is not appropriate for BLS or ALS ground transportation.
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Provisions
• Immediate response payment
– Emergency response involves responding
immediately at the basic life support or advanced life
support level 1 of service to a 911 or 911-type call
– Immediate response is one in which the ambulance
begins as quickly as possible to take the steps
necessary to respond to a call
• Additional payment is provided for the extra
overhead expenses incurred to stay prepared at
all times for emergency service
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Provisions (cont.)
• Multiple-patient transport
– Example: traffic accident
– 2 passengers
• Each beneficiary is reimbursed at 75% of the base rate for the
level of service provided
– 3 or more passengers
• Each beneficiary is reimbursed at 60% of the base rate for the
level of service provided
– Single payment is made for the mileage
– Modifier GM is reported with level of service HCPCS
code
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Provisions (cont.)
• Transport of deceased patients
– Specific rules
• Patient is pronounced dead prior to the ambulance being called,
no payment is made to the ambulance provider/supplier
• Patient is pronounced dead after the ambulance has been called
but prior to its arrival, BLS base rate for group transport or air
ambulance base rate payment will be made. Mileage will not be
reimbursed.
• Patient is pronounced dead during transport, payment rules are
followed as if the patient were alive. Modifier QL should be
reported with the level of service code.
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Adjustments
• Regional variations
– Based on point of beneficiary pick-up (zip code)
– Geographic adjustment factor is applied
• Equal to the practice expense portion of the geographic practice
cost index used in the Medicare physician fee schedule
– Ground transport
• 70% of payment rate is adjusted
– Air transport
• 50% of payment rate is adjusted
– Mileage is not adjusted
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Modifiers
• HCPCS Level II modifiers
– Origin and destination modifier must be
reported for each trip
– Additional modifiers are used
• Provided under arrangement of a provider of
services (QM)
• Furnished directly by a provider of services (QN)
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Payment Steps
• Six step process
– Takes into consideration
•
•
•
•
•
Patient service level
Modifiers
Zip codes
Miles
Add-on payments
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Payment Steps (cont.)
1.
Identify the level of service code
for the transportation provided
•
2.
Determine the number of patients
transported
•
3.
Does the case meet emergency
response criteria?
If yes, append modifier and
reduce payment
4.
Apply the regional variation
adjustment
•
5.
6.
Identify zip code
Identify the mileage code and
number of miles
Add together the level of service
payment and mileage payment to
determine total reimbursement
Determine if the Medicare
beneficiary was pronounced dead
•
If yes, append modifier and adjust
payment
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Compliance
• “Medicare Payments for Ambulance Transports”
report
– 25% of the ambulance transport claims did not meet
CMS program requirements
– deficient claims resulted in $402 million of improper
payments
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Compliance
• OIG recommendations:
– Prepayment edits
– Post-payment review guidelines
– Education, education, education
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Condition Lists
• Numerous requests for medical condition lists to
aid in determining level of service
– Do not use ICD-9-CM
– Broad categories of issues
– Do not use a HIPAA approved code set
• CMS implemented a Medical Conditions List
February 2007
– Condition list
– Transportation indicators
• Assist with determining the appropriate level of
service
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