[Federal Register Volume 62, Number 116 (Tuesday, June 17, 1997)]
[Proposed Rules]
[Pages 32715-32733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15829]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 410 and 424
[BPD-813-P]
RIN 0938-AH13
Medicare Program; Ambulance Services
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would update and revise HCFA's policy on
coverage of ambulance services. It would base Medicare coverage and
payment for ambulance services on the level of medical services needed
to treat the beneficiary's condition. It also clarifies Medicare policy
on coverage of non-emergency ambulance services for Medicare
beneficiaries.
DATES: Comments will be considered if we receive them at the
appropriate address, as provided below, no later than 5 p.m. on August
18, 1997.
ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: BPD-813-P, P.O. Box 26676,
Baltimore, MD 21207-0476.
If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code BPD-813-P. Comments received timely will be available for
public inspection as they are received, generally beginning
approximately 3 weeks after publication of a document, in Room 309-G of
the Department's offices at 200 Independence Avenue, SW., Washington,
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.
(phone: (202) 690-7890).
FOR FURTHER INFORMATION CONTACT: Margot Blige, (410) 786-4642.
SUPPLEMENTARY INFORMATION:
I. Background
A. Statutory Coverage of Ambulance Services
Under section 1861(s)(7) of the Social Security Act (the Act),
Medicare Part B (Supplementary Medical Insurance) covers and pays for
ambulance services, to the extent prescribed in regulations, when the
use of other methods of transportation would be contraindicated. The
House Ways and Means Committee and Senate Finance Committee Reports
that accompanied the 1965 Social Security Amendments suggest that the
Congress intended that (1) the ambulance benefit cover transportation
services only if other means of transportation are contraindicated by
the beneficiary's medical condition, and (2) only ambulance service to
local facilities be covered unless necessary services are not available
locally, in which case, transportation to the nearest facility
furnishing those services is covered (H.R. Rep. No. 213, 89th Cong.,
1st Sess. 37, and S. Rep. No. 404, 89th Cong., 1st Sess., Pt I, at 43
(1965)). The reports indicate that transportation may also be made from
one hospital to another, to the beneficiary's home, or to an extended
care facility.
B. Current Medicare Regulations for Ambulance Services
Our regulations relating to ambulance services are located at 42
CFR part 410, subpart B. Section 410.10(i) lists ambulance services as
one of the covered medical and health services under Medicare Part B.
Ambulance services are subject to basic conditions and limitations set
forth at Sec. 410.12 and to specific conditions and limitations
included at Sec. 410.40.
Section 410.40(a) defines an ``ambulance'' as a vehicle that is
specially designed for transporting the sick or injured, containing a
stretcher, linens, first aid supplies, oxygen equipment, and other
lifesaving equipment required by State or local laws, and staffed with
personnel trained to provide first aid treatment.
Section 410.40(b) permits Part B coverage of ambulance services
when the use of other means of transportation
[[Page 32716]]
would be contraindicated and Part A coverage is not available. For
hospital or rural primary care hospital (RPCH) inpatients, it states
that the transportation must be furnished by, or under arrangements
made by, the hospital or RPCH, or that the transportation be furnished
by an ambulance supplier with which the hospital does not have an
arrangement and the hospital has a waiver under which Medicare Part B
payment may be made to the ambulance supplier.
Section 410.40(c) limits origins and destinations. Medicare payment
is made for transportation to a hospital, RPCH, or skilled nursing
facility (SNF), from any point of origin; to the home of a beneficiary
from a hospital, RPCH, or SNF; or round trip from a hospital, RPCH, or
SNF to a supplier outside of those facilities to obtain medically
necessary diagnostic or therapeutic treatment not available where the
beneficiary is an inpatient.
Section 410.40(d) limits Part B coverage of ambulance services
furnished outside of the United States. Medicare payment is made for
transportation to a foreign hospital only in conjunction with a
beneficiary's admission for medically necessary inpatient services.
Section 410.40(e) limits Medicare payment for ambulance services.
Medicare payment is made for the following services:
Transportation to a facility that is in the same locality
as the beneficiary's home or to the nearest facility if the one closest
to the beneficiary's home is unable to provide the necessary service to
the beneficiary.
Transportation to the beneficiary's home from the facility
where the beneficiary was treated.
Round trip transportation to the nearest outside supplier
capable of furnishing necessary diagnostic and therapeutic services not
available at the facility where the beneficiary is an inpatient.
C. Current Medicare Policy and Manual Instructions for Ambulance
Services
We issue instructions to our contractors for processing Medicare
claims in the Medicare Carriers Manual (MCM) and the Medicare
Intermediary Manual (MIM). The current instructions for Medicare
coverage and payment of ambulance services appear in sections 2120 and
5116 of the MCM and sections 3660 and 3618 in the MIM. For the most
part, the manual instructions repeat the provisions of the regulations
in part 410 pertaining to ambulance services.
The manual instructions expand on the regulations by--
Requiring carriers to take appropriate action, including
conducting on-site inspections, to verify that an existing ambulance
supplier meets all applicable requirements when there are no State or
local laws defining an ambulance, when suppliers fail to comply with
the documentation requirements, or whenever there is a question about a
supplier's compliance.
Recognizing some technological advances in ambulance
equipment and training of personnel that enable suppliers to make
available medical treatment beyond the basic lifesaving techniques.
Addressing the issue of determining the base rate
allowance for the advanced life support (ALS) level of ambulance
services, as contrasted with basic life support (BLS) level. The manual
states that the ALS reasonable charge may be used as a basis for
payment when an ALS level of ambulance services is used. However, there
may be instances when the supplier exhibits a pattern of uneconomical
care such as repeated use of ALS level ambulances in situations in
which it should have known that the less expensive BLS ambulance was
available and that its use would have been medically appropriate. While
we allow higher payment for the ALS level of ambulance services, the
carrier is responsible for evaluating the appropriate level of services
for each claim.
Covering transportation of ESRD beneficiaries to renal
dialysis facilities under certain circumstances, assuming that
transportation in vehicles other than ambulances would be
contraindicated. Transportation to a hospital is covered. Also, under
the following circumstances, a nonhospital-based or independent renal
dialysis facility may meet the destination requirements for purposes of
coverage of ambulance services for an ESRD beneficiary:
The facility is located ``on or adjacent to'' the premises
of the hospital.
The facility furnishes services to patients of the
hospital, for example on an outpatient or emergency basis, even though
the facility is primarily in business to furnish dialysis services to
its own patients.
There is an ongoing professional relationship between the
two facilities. For example, the hospital and the facility have an
agreement that provides for physician staff of the facility to abide by
the bylaws and regulations of the hospital's medical staff.
Ambulance services from a beneficiary's home to any dialysis
facility are not covered unless these conditions are met. However, the
carriers have the authority to interpret the meaning of the phrase ``on
or adjacent to'' the premises of a hospital for purposes of coverage of
ambulance services for ESRD beneficiaries to facilities to receive
renal dialysis therapy. Medicare carriers have not been consistent in
their interpretation of manual instructions on ambulance services for
ESRD beneficiaries to and from hospital-based and nonhospital-based
dialysis facilities.
D. Studies and Reports on Ambulance Services
In a 3-year period, four government reports were issued addressing
Medicare payments for ambulance services.
Under the Omnibus Budget Reconciliation Act of 1989 (OBRA '89)
(Pub. L. 101-239), the Congress mandated a study of payment practices
for ambulance services under Medicare. This study, ``A Study of
Payments for Ambulance Services Under Medicare'', was conducted by
Project Hope and was issued in 1994. The study focused on the rapid
growth of Medicare Part B payments for ambulance services. In 1987 (the
year selected for this report's analysis), Medicare's allowed charges
for ambulance services amounted to almost $602 million. By 1991,
allowed charges increased to $1.23 billion, double the amount of 1987.
The report showed that Medicare's allowed charges for ambulance
services have risen at an average annual rate of 20 percent since 1974.
The rapid increase of Medicare Part B payments for ambulance
services was also highlighted in an October 1992 audit report conducted
by the Department's Office of Inspector General (OIG) entitled,
``Review of Medical Necessity for Ambulance Services, (A-01-91-
00513)''. In its report, the OIG notes that, in the 3-year period
between 1986 and 1989, there was a significant increase in the use of
and payment for the ALS level of ambulance services when compared to
the BLS level of ambulance services.
The report further indicates that some carriers pay Medicare claims
at the ALS level when that level of services is required by State or
local laws. The study noted that the significant increase in the use of
the ALS level of services and in Medicare payments could be attributed
to our coverage and payment policies under which payment is based on
the type of ambulance in which a beneficiary is transported and not on
the medical necessity for the level of services furnished by the
ambulance.
[[Page 32717]]
The OIG recommended that we take the following actions: (1) Modify
the MCM to require carriers to pay for non-emergency ambulance services
at the BLS level of service if they are medically necessary, (2)
establish controls for the carriers to ensure that Medicare payment for
the ALS level of service is based solely on the medical need of the
beneficiary, and (3) closely monitor carrier compliance.
After we published the ambulance regulations, major legislative
changes provided broad coverage for dialysis services to end-stage
renal disease (ESRD) beneficiaries. Between 1978 and 1990, there was a
significant increase in the number of ESRD beneficiaries. Ambulance
services furnished to this population also increased significantly. The
OIG issued two reports concerning ambulance services furnished to ESRD
beneficiaries.
The first ESRD report, ``Ambulance Services For Medicare End-Stage
Renal Disease Beneficiaries: Payment Practices, (OEI-03-90-02131)'',
issued in March 1994, found that about two percent of ESRD
beneficiaries are associated with an extremely high frequency of using
ambulance services; that is, these ESRD beneficiaries are using
ambulance services three times a week for transportation to routine
maintenance dialysis. The report notes that we do not differentiate
between predictable routine, scheduled transportation, and emergency
acute care transportation. It concludes that we do not take advantage
of lower costs associated with high-volume scheduled transportation.
The report also notes that some carriers do not use the HCFA Common
Procedural Coding System (HCPCS) codes uniformly. The report recommends
that we require uniform use of the HCPCS codes and establish a code for
scheduled, non-emergency transportation.
(We recently implemented coding changes through an update to the
MCM that addresses the latter recommendation. These coding changes
differentiate between transportation to a hospital-based dialysis
facility (or hospital-related) and a nonhospital dialysis facility.)
The second ESRD report, ``Ambulance Services for Medicare End-Stage
Renal Disease Beneficiaries: Medical Necessity, (OEI-03-90-02130)'',
issued in August 1994, retrospectively examines the medical necessity
of ambulance claims for ESRD beneficiaries. This report concludes that
70 percent of the dialysis-related ambulance services did not meet
Medicare coverage guidelines. However, claims were not being denied as
medically unnecessary. The report offers several alternative strategies
for making improvements to the program. Some of the recommendations
suggest significant policy changes that we believe represent potential
improvements to administering the ambulance services benefits.
II. Reasons for Considering Changing Medicare Policy and
Regulations
A. Public Concerns about Ambulance Services
For many years, we have had discussions with representatives from
the ambulance industry covering a variety of issues including: The
definition of an ambulance, the appropriate billing for the ALS level
of services, and clarification of our coverage and payment guidelines
regarding ALS and BLS levels of services. A frequent question is
whether the coverage of an ambulance service is affected by the
individual beneficiary's need for specific services or by the type of
vehicle and staff that are used to transport the beneficiary.
In December 1994, the Subcommittee on Labor, HHS, Education, and
Related Agencies under the Senate Appropriations Committee held a
hearing, ``Ambulance Costs under Medicare'', to review Medicare
coverage and payment of ambulance services. Many of the issues
identified in the government reports described earlier were raised by
this subcommittee. At the hearing, we assured the members of the
subcommittee that we would act aggressively to revise our regulations
to address the problems identified with the increasing expenditures for
ambulance services and the suppliers furnishing the services.
In January 1995, we held a 2-day conference on ambulance services
with representatives from the ambulance industry. We met with several
entities, including the American Ambulance Association, the National
Association of State Emergency Medical Services Directors, the
International Association of Firefighters, the American College of
Emergency Physicians, and the American Hospital Association. The
meeting allowed us to consult with experts in ambulance services and
discuss issues of particular concern to us and ambulance suppliers
before we developed regulations and instructions that change our
ambulance services policy. The meeting provided us with an opportunity
to establish positive working relationships and access to valuable
information resources.
The industry representatives provided us with a considerable amount
of information about the industry and made recommendations on various
Medicare policy issues related to ambulance services. Two frequent
problems they brought to our attention follow:
Some local ordinances mandate that all 911 emergency calls
be answered by an ALS-level ambulance rather than a BLS-level
ambulance. This causes a problem when a carrier determines that payment
should be made at the BLS level.
There is a need for national policy requiring physician
certification for scheduled ambulance transportation.
In addition to issues raised by the industry, the OIG identified as
problematic the notable increases in the use of ALS-level ambulances to
transport Medicare ESRD beneficiaries to scheduled, routine dialysis
treatments. The OIG believes scheduled services can usually be
furnished by a BLS-level ambulance.
The industry representatives (and others) urged us to
comprehensively revise the regulations covering ambulance services to
address these problems.
B. Vehicles Used To Furnish Services
Section 410.40(a) does not explicitly state that ambulance services
must be furnished in a vehicle designed and equipped to respond to
medical emergencies. In most States, an ambulance is defined by State
or local laws as a vehicle that is intended for emergency
transportation of patients. In some States or localities, there are no
laws defining an ambulance; in others, the laws do not require that the
vehicles used as ambulances be designed or equipped as emergency
vehicles.
In addition, there are suppliers operating in some States who
believe their vehicles, despite not meeting State or local
requirements, meet the Federal definition of an ambulance contained in
Sec. 410.40(a). These suppliers bill Medicare for transportation in
vehicles that are not equipped to respond to emergencies even though
they are required by State or local law to be so equipped. As a result,
we have made Medicare payments to some suppliers of transportation
services for furnishing transportation in a vehicle that is not an
ambulance or does not meet State or local requirements for emergency
vehicles. Typically these suppliers furnish services to persons who
have scheduled medical or other appointments and use vehicles such as
ambulettes, ambu-vans, medi-transports, invalid coaches, and other
similar vehicles. Transportation in these vehicles is furnished to
persons who
[[Page 32718]]
may need assistance in being transported to caregivers, for example,
because of difficulty ambulating, but who do not require emergency
transportation for purposes of obtaining acute care. More specifically,
the condition of the beneficiary is such that transportation by means
other than in a vehicle designed and equipped to respond to a medical
emergency would not be contraindicated. Transportation in these
vehicles is not covered by Medicare Part B. In other instances,
ambulance suppliers fail to submit adequate documentation to carriers
showing that they comply with State or local laws.
C. Staff Furnishing Services
Section 410.40(a) states that a vehicle used as an ambulance must
be staffed with personnel trained to provide first aid treatment. In
the absence of applicable State or local requirements, the staff must
meet standards established by the Federal Department of Transportation.
A vehicle used for emergency transportation generally contains
highly sophisticated medical and communications equipment. Hence, the
major differences between BLS and ALS levels of services usually is the
training level of the staff on board the vehicle. The industry standard
is that the BLS-level ambulance is staffed with two people, each of
whom is trained to provide basic first aid and certified as an
emergency medical technician-basic (EMT-B). The ALS-level ambulance is
staffed with two people trained to provide basic first aid, one of whom
is also trained and certified at the advanced first aid level and
certified either as a paramedic or as an emergency medical technician-
advanced (EMT-A). The EMT-A has received additional training and
certification to perform one or more ALS services. Paramedics and
emergency medical technicians must be certified by the State or local
authority in the area in which the services are furnished and be
legally authorized to operate all life-saving and life-sustaining
equipment that is on board. Section 410.40(a) does not describe the
level of training necessary to provide either the basic or advanced
level of care.
D. Origins and Destinations
Section 410.40(c) sets forth our longstanding policy that coverage
is not authorized for ambulance services to destinations other than
those that were specified in the committee reports accompanying the
1965 Social Security Amendments (H.R. Rep. No. 213, 89th Cong., 1st
Sess. 37, and S. Rep. No. 404, 89th Cong., 1st Sess., Pt. I, at 43
(1965)). Thus, under Sec. 410.40(c), Medicare Part B covers ambulance
services for a beneficiary only if other methods of transportation
would be contraindicated and the transportation is to one of the
following destinations:
To a hospital, which includes a RPCH, or SNF from any
point of origin.
To the beneficiary's home from a hospital, RPCH, or SNF.
To an outside supplier to obtain medically necessary
diagnostic or therapeutic services not available in the hospital, RPCH,
or SNF where the beneficiary is an inpatient from a hospital, RPCH, or
SNF (including the return trip).
Transporting hospital or RPCH inpatients to and from an outside
supplier to obtain medically necessary diagnostic or therapeutic
services is a Medicare Part A service and the cost is paid in the
appropriate ancillary cost center of the hospital or RPCH where the
beneficiary is an inpatient.
Section 410.40(e) limits Medicare payment to the destinations
described in Sec. 410.40(c).
Sections 410.40(c) and (e) do not permit routine coverage of, or
payment for, transportation to nonhospital-based or independent
diagnostic and treatment facilities. Currently, we pay for
transportation to these types of facilities only if the beneficiary is
an inpatient at a hospital, RPCH, or SNF and the treatment needed is
not available at that inpatient facility. We do not cover round trip
transportation to nonhospital-based facilities from the beneficiary's
home.
E. Basic Life Support and Advanced Life Support Services
When section 1861(s)(7) of the Act was passed, only one level of
ambulance service was being furnished; that is, BLS. The vehicle was
equipped with basic first aid equipment such as a stretcher, linens,
and emergency lights and sirens. The staff was trained to provide basic
first aid treatment, for example, to stop bleeding, splint fractures,
or administer cardio-pulmonary resuscitation to restore breathing or
heartbeat. Since ambulance services were first covered under Medicare,
the advancement of first aid techniques assisted in the creation of the
ALS level of ambulance services. These techniques included the ability
to treat severe trauma and to administer drugs and biologicals, as well
as to perform other more advanced lifesaving and/or lifesustaining
treatments.
Since 1982, we have recognized different payment levels for
ambulance services depending on whether the services furnished are
described as a BLS or ALS level of service. However, our regulations
have not kept up with the changing use of technology, and so we have no
way of ensuring that we are paying properly for the services that are
furnished.
F. Location and Availability of Ambulance Suppliers
Ambulance services are furnished by for-profit companies and non-
profit companies. The for-profit ambulance companies charge an amount
sufficient to cover costs and a return on investment. The non-profit
companies, once the predominant suppliers of these services, are
largely volunteer organizations. Many of these volunteer organizations
are located in areas that were considered rural. Although increases in
population have changed some rural areas into urban areas, many of the
suppliers continue to be volunteer organizations. Still other areas
remain largely underpopulated; however, the services furnished have
increased because of the level of training and technology available.
Other non-profit ambulance suppliers are local governments, either
cities or other incorporated entities. Until recently, within the last
10 to 15 years, the non-profit volunteer companies and the municipal
organizations did not charge Medicare for their services. Because the
cost of furnishing services has become increasingly more expensive and
the level of training and certification more sophisticated, many of
these organizations have begun to charge for part or all of the
services that they furnish.
III. Proposed Changes to Medicare Policy and Regulations
There is a need to make policy changes so that the Medicare
coverage criteria are consistent and clear and reflect the advances
that have occurred in the health care and ambulance industries. Our
current regulations inadequately address technological advances. We
believe it is appropriate at this time to establish criteria under
which Medicare carriers can determine when the ALS level of service is
necessary and covered and when the condition of the beneficiary
requires only the BLS level of service.
We propose to amend our regulations to clarify that the basis for
covering ambulance services is the medical condition of the beneficiary
for transportation furnished by an ambulance. To accomplish this
clarification of determining the level of medically necessary services
for
[[Page 32719]]
coverage and payment purposes, we propose that the suppliers use
diagnostic codes designated by HCFA that would describe the nature of
the beneficiary's medical condition. We propose to designate the
International Classification of Diseases, 9th revision, Clinical
Modification (ICD-9-CM) diagnostic codes that would describe the nature
of the beneficiary's medical condition. The use of these codes would
also assist the ambulance suppliers in billing the medically necessary
BLS or ALS level of ambulance service.
A. Medicare Coverage of Ambulance Services
As a means of distinguishing ambulance services covered under Part
B from other modes of patient-related transportation, we propose
revising existing Sec. 410.40. In Sec. 410.40(a), we would provide for
Part B coverage of ambulance services only if the supplier meets the
applicable vehicle, staff, and billing and reporting requirements in
Sec. 410.41, and the medical necessity and origin and destination
requirements in Sec. 410.40. Also, even when all other coverage
requirements are met, Medicare Part B would cover the services as
ambulance services only if they are not services that can be paid for
directly or indirectly under Part A. The cost of the transportation
paid for under Part A is ordinarily considered part of the cost related
to the hospital's care of the beneficiary as a patient. If the hospital
is paid under the prospective payment system (PPS), payment is made
under the appropriate diagnosis-related group (DRG). If the hospital is
not paid under PPS, payment is made on a reasonable cost basis per
hospital stay, subject to the Tax Equity and Fiscal Responsibility Act
(TEFRA). If the beneficiary's stay is covered under Medicare Part A,
payment for the stay will reflect the transportation and that
transportation cannot be covered under the Part B ambulance services
benefit.
B. Levels of Services
We propose in Sec. 410.40(b) to cover ambulance services in the
United States at either the BLS or ALS level of services. We would
determine the level of payment based on the level of services medically
necessary to treat a beneficiary's condition as described by the ICD-9-
CM diagnostic codes used to bill for ambulance services. We would make
an exception to the BLS/ALS distinction for certain non-Metropolitan
Statistical Areas (non-MSA) and cover ALS services if certain criteria
in Sec. 410.40(e) are met.
C. Medical Necessity
We propose in Sec. 410.40(c)(1) that ambulance services are covered
by Medicare based on the beneficiary's medical condition. A listing of
medical conditions and the proposed corresponding ICD-9-CM diagnostic
codes is included in Addendum 1 of this proposed rule.
The codes would indicate the need for medically necessary BLS or
ALS level of ambulance services. More specifically, the ICD-9-CM
diagnostic codes would be used as indicators of medical necessity by
describing the nature of the symptoms or injury; that is, they describe
the beneficiary's medical condition that makes the ambulance
transportation necessary. If more specific information about the
beneficiary's condition is available, that information would also be
coded using ICD-9-CM diagnostic codes. More specific information might
be available, for instance, when a beneficiary is transferred from one
facility to another and the physician provides the ambulance personnel
with pertinent information about the beneficiary's condition. While
this list is not exhaustive, it does represent what we have identified,
through discussions with the industry and carrier representatives, as a
range of the types of medical conditions to which ambulance suppliers
currently respond.
The ICD-9-CM diagnostic list includes the code v49.8, Other
Specified Problems Influencing Health Status. For example, this code
would be applicable when a beneficiary with end-stage renal disease
needs regular dialysis treatment and cannot use regular transportation
because he or she is bed-confined. To assist in determining medical
necessity as it relates to this code, we are proposing that for
purposes of Medicare Part B, the term bed-confined is defined as
follows: ``bed-confined'' denotes the inability to get up from bed
without assistance, the inability to ambulate, and the inability to sit
in a chair or wheelchair. This definition also applies to the terms
``bedridden'' and ``stretcher-bound''. Bed-confined is not synonymous
with non-ambulatory since a paraplegic or quadriplegic person is non-
ambulatory but spends a significant amount of time in a wheelchair.
Bed-confined is also not synonymous with bed rest, a recommended state
of affairs that does not exclude an occasional ambulation to the
commode or time spent in a chair.
We recognize that unusual circumstances exist that warrant the need
for ambulance services. In these circumstances, the publication of the
list does not preclude the Carrier from accepting other ICD-9-CM
diagnostic codes to describe a medical condition that is not included
on the list. However, we believe that these circumstances will be rare.
The codes in Addendum 1 of this proposed rule would enable the supplier
to know whether a claim may be paid at the BLS or ALS level of
ambulance services. The use of ICD-9-CM diagnostic codes is intended to
promote consistency in claims processing. Use of the ICD-9-CM
diagnostic codes, however, does not make the claim payable if the
beneficiary could have been transported by other means. Proposed
Sec. 410.40(c)(3) provides that we will establish guidelines on the use
of the designated codes that would ensure medical necessity of
ambulance services, coverage at the appropriate level, and consistency
in claims filing. We will, in the event that there are subsequent
revisions to the listing of ICD-9-CM diagnostic codes to describe the
medical condition of the beneficiary, publish the updated listing of
codes used for ambulance services as a Notice in the Federal Register.
Proposed Sec. 410.40(c)(2) provides for coverage of non-emergency
services (including, but not limited to, transportation for an ESRD
beneficiary) if the ambulance supplier, before furnishing services to
the beneficiary, obtains a current written physician's order certifying
that the beneficiary must be transported in an ambulance because other
means of transportation would be contraindicated. The physician's order
must be dated no earlier than 60 days before the date a service is
furnished. The ambulance supplier would also be responsible for
obtaining additional written certifications for each subsequent 60-day
period.
We believe the requirement for physician's certification for
scheduled ambulance services would ensure that scheduled ambulance
services are necessary as other means of transportation would be
contraindicated. Adding the requirement is consistent with the
Secretary's authority to ensure that all claims for services are
reasonable and necessary in accordance with section 1862(a)(1) of the
Act.
The requirement that this certification be renewed every 60 days is
consistent with the Secretary's authority under section 1835(a)(2)(B)
of the Act. This section ensures, that, in the case of medical and
other health services furnished by a provider, a physician certifies
that such services, including
[[Page 32720]]
those furnished over a period of time, are medically necessary.
D. Origins and Destinations
In Sec. 410.40(d), we propose to modify the limits on origins and
destinations that currently appear in Sec. 410.40(c). We would also
remove reference to round-trip ambulance transportation of inpatients
of hospitals and RPCHs to outside facilities from this section since
this is a Part A benefit and more properly belongs in another section.
We will consider the appropriate placement of this text and place it in
the proper section in the final rule. We would add a provision that,
under Part B, ambulance transportation is permitted from an SNF to the
nearest supplier of medically necessary services not available at the
SNF where the beneficiary is an inpatient, including the return trip.
We would also add a provision that would cover medically necessary
ambulance services for an ESRD beneficiary living at home to the
nearest dialysis facility capable of furnishing the necessary dialysis
services without regard to whether that dialysis facility is hospital-
based. Thus, round-trip ambulance services furnished to a beneficiary
from his or her residence would be covered. Our purpose in proposing
this modification is to make Sec. 410.40(d) consistent with our policy
of transporting beneficiaries to the nearest appropriate facility.
E. Consideration of a Coverage Exception for ALS services in Non-
Metropolitan Statistical Areas
We are concerned that our policy determining the level of Medicare
payment based on the level of medically necessary services may have
some negative impact on an ambulance supplier's ability to furnish
services in communities with small populations. In addition, several
industry representatives have voiced their concerns that this proposed
change could possibly decrease access to service or, in extreme
circumstances, lead to the collapse of some emergency medical systems.
Additional discussions have led us to look further at the need for any
exception to these rules. To help us to better understand the extent to
which a problem exists, or could potentially exist, we are soliciting
information from interested parties on the need for an exception and
the areas where it may apply. We are requesting information that would
help identify the sole suppliers of ambulance services in non-MSAs and
other suppliers that may qualify for an exception. The information
could include a list of sole suppliers in rural counties of a State, a
description of the level of services offered by these suppliers, the
size of the community they serve, the population of the service area,
the distance to the nearest carrier, the number of vehicles operated by
the supplier(s), time and distance factors related to providing
service, and any other information, including relevant economic
information that would have a bearing on the need for an exception to
our proposed coverage and payment policy.
The solicitation of information is not to determine whether an
individual supplier meets eligibility requirements for an exception.
This is solely a request for information that will assist us in making
the final determination as to whether an exception process is
warranted. If we do not receive compelling information regarding the
need for an exception, we may choose not to provide an exception to the
rule that suppliers bill for the level of services furnished. If we
implement an exception to our general ambulance coverage policy, we
would review the need for the policy within 5 years after we implement
it. We would want to ensure that there is a continued need for an
exception and consider any changes that may be needed to reflect
current trends in population and the ambulance industry.
To further facilitate our understanding of this issue, we have
especially involved the Department's Office of Rural Health Policy and
consulted with various industry representatives in an effort to address
this issue and consider alternatives that would mitigate negative
impact on communities. With these special circumstances in mind, we
have examined what special considerations may be warranted for
communities.
Absent the detailed information we are requesting through our
solicitation, we have developed two alternatives that we could use if
we decide that an exception is warranted.
Under our first, and preferred alternative, we would propose in
Sec. 410.40(e) to pay ambulance suppliers in non-MSAs for the ALS level
of services in all cases if the State Emergency Medical Services (EMS)
Director annually makes one of the following certifications:
The ambulance supplier serves a non-MSA, is the sole
supplier of ground ambulance services in the area, owns and operates
ambulance vehicles, and furnishes only ALS ambulance vehicles and
staff.
If there is more than one ground ambulance supplier in the
non-MSA area, the ambulance supplier seeking the exception is located
more than 40 miles from the nearest available ground ambulance supplier
in the area.
In order to qualify for this exception, the supplier would submit
to the carrier, on an annual basis, financial information demonstrating
that without payment at the ALS level, the financial impact would
jeopardize beneficiary access to ambulance services in the area. The
supplier would also submit information showing Medicare utilization of
ambulance services compared to total service; total volume of services
furnished by the supplier; and any other specific, pertinent
information documenting the impact on beneficiaries' access to
ambulance services that might result from payments at the BLS level for
suppliers that have ALS ambulances only. On an annual basis, the
ambulance supplier would also be responsible for submitting to the
State EMS Director information demonstrating that it meets the
established geographic exception criteria. Based on the State EMS
Director's certification of the geographic criteria and the carrier's
review of the financial information, the carrier would determine if the
ambulance supplier meets the requirements to qualify for an exception.
We chose the 40-mile standard because, after consultation with the
National Highway Traffic Safety Administration, we determined that 40
miles is a reasonable indicator of access to services. It assumes that
20 minutes is an acceptable maximum response time in most areas. The
establishment of a distance criteria is consistent with other access
standards used for rural areas, including Medicare's criteria for
designating Sole Community Hospitals (42 CFR 412.92). In addition, the
use of a distance criterion would be relatively easy to administer
compared with other possible criteria. We believe ease of
implementation is important because the proposed exception would
require active participation by the State EMS Directors in certifying
the ambulance suppliers that would qualify for the exception. The
National Highway Traffic Safety Administration has suggested that in
many cases, while distance may be an acceptable criteria, time factors
also are important. We did not propose time factors in our first
alternative because they would be difficult to administer.
Nevertheless, we recognize that time factors may be more appropriate
than distance in some areas and we would like to receive comments on
this issue.
The second alternative we have considered would be to create an
exception with criteria similar to those
[[Page 32721]]
used for the sole community hospitals under Medicare's prospective
payment system for hospitals. Under this alternative, we would require
that the State EMS Director certify that the ambulance supplier is the
sole supplier of ambulance services, or is located in an urban or rural
area (as defined in Sec. 412.62(f)(1)(ii) and (f)(1)(iii)) and meets
one of the following conditions:
The ambulance supplier is located between 25 and 35 miles
from other like ambulance suppliers.
The ambulance supplier is located between 15 and 25 miles
from other like ambulance suppliers, but because of distance, local
topography, and weather conditions, the travel time between the
supplier and the other nearest ambulance supplier is at least 45
minutes.
These criteria are much more complex than the first alternative and
would be difficult to administer. The amount of data that would need to
be collected and evaluated would be considerable. It is for this reason
that we do not favor this alternative.
F. Limitation on Services Outside the United States
We would redesignate Sec. 410.40(d) as Sec. 410.40(f), ``Specific
limits on coverage of ambulance services outside the United States,''
without changing the policy.
G. Limitation on Liability
In considering changes to Medicare coverage of ambulance services,
we are mindful of the effect any changes may have on beneficiaries,
particularly on beneficiary liability for payment of services. We
intend that a beneficiary not pay for an ambulance service for which we
deny payment because of a lack of medical necessity, when a beneficiary
did not know that the service is not covered. Existing regulations
concerning limitations on liability under Medicare in Secs. 411.400,
411.402, and 411.406 (part 411, subpart K) would apply to ambulance
services. Under the limitation on liability, Medicare payment may be
made for certain claims for a service if we exclude the service from
coverage in accordance with Sec. 411.15(k) and section 1862(a)(1) of
the Act as not medically necessary. A beneficiary who did not know and
could not reasonably have been expected to know that payment would be
denied for a service under section 1862(a)(1) of the Act generally
receives protection from financial liability in accordance with the
limitation on liability provisions of section 1879 of the Act as
implemented by part 411, subpart K of our regulations. Similarly, when
the beneficiary is protected and the ambulance supplier also did not
know and could not reasonably have been expected to know that payment
would be denied, the supplier also receives protection from financial
liability in accordance with the limitation on liability provision. In
this case, Medicare payment may be made to the supplier.
A Medicare payment reduction from the ALS to BLS level of services
would constitute a partial denial of payment for the ALS level of
services. If we reduce payment from the ALS to the BLS level of service
on the basis of a lack of medical necessity in accordance with
Sec. 411.15(k) and section 1862(a)(1) of the Act, the beneficiary and
supplier protections under the limitation on liability provisions in
part 411, subpart K and section 1879 of the Act would apply to the
payment reduction.
With respect to ambulance services, the limitation on liability
applies only in a narrow range of cases in which the denial is made
under section 1862(a)(1) of the Act; that is, because the service
furnished was not reasonable or necessary. Most denials of Medicare
payment for ambulance services are made on the basis of section
1861(s)(7) of the Act and implementing regulations in existing
Sec. 410.40 because the services do not meet the definition of
ambulance services. When, for example, ambulance services do not meet
the rule that other means of transportation would be inappropriate for
the beneficiary's condition (proposed Sec. 410.40(c)), or when they
violate the limits on origin and destination or the nearest appropriate
facility rule (proposed Sec. 410.40(d)), the statutory basis for denial
is section 1861(s)(7) of the Act, and the limitation on liability
provisions do not apply.
In proposed Sec. 410.40(g), we specify the narrow class of medical
necessity denials to which the limitation on liability provisions of
part 411, subpart K apply. We state, however, that Sec. 411.404
concerning criteria for determining that a beneficiary knew that
services are excluded from Medicare coverage does not apply to medical
necessity payment denials for ambulance services.
Under this proposed rule, the use by suppliers of written advance
notices to the beneficiaries of the likelihood of noncoverage by
Medicare of ambulance services would not be permitted. We believe it
would be inappropriate to allow an ambulance supplier to give written
advance notice of the likelihood of noncoverage or to attempt to obtain
an agreement from a beneficiary to pay for ambulance services when the
circumstances surrounding the need for ambulance services usually do
not permit a beneficiary to make a rational, informed consumer
decision. Nonetheless, if a supplier could not have been expected to
know that a particular ambulance service was not medically necessary,
the supplier would also not be held liable.
If, upon review, the carrier determines that the services furnished
were not reasonable and necessary, and denies coverage of the services,
partially or in full, the ambulance supplier has the right to appeal
the determination as stated in part 405 subpart H. Consistent with
existing policy, the right to appeal applies only to those ambulance
suppliers that accept assignment. (This would not be an appropriate
application when the supplier does not accept assignment and payment is
made directly to the beneficiary. If the supplier does not accept
assignment, the beneficiary has the right to appeal.) It is our belief,
however, that proposed use of the ICD-9-CM diagnostic codes to describe
the condition of the beneficiary would provide suppliers and ambulance
personnel with additional knowledge that they need to make the correct
decision when submitting a claim for payment. Therefore, we expect that
there would be few instances when there would be appeals.
H. Requirements for Ambulances Services
1. Vehicle
We propose in Sec. 410.41(a) that a vehicle used as an ambulance
must be designed and equipped to respond to medical emergencies and, in
non-emergency situations, be capable of transporting beneficiaries with
acute medical conditions. The vehicle must also comply with all
relevant State and local laws governing licensing and certification of
an emergency medical transportation vehicle.
We would also require that, at a minimum, an ambulance contain a
stretcher, linens, emergency medical supplies, oxygen equipment, and
other lifesaving emergency medical equipment and be equipped with
emergency warning lights, sirens, and two-way telecommunications.
2. Vehicle Staff
We propose in Sec. 410.41(b)(1) the staffing requirements for the
BLS level of services. We propose that the vehicle be staffed by at
least two persons each trained to provide first aid and certified as an
emergency medical technician-basic (EMT-B) by the State or local
[[Page 32722]]
authority where the services are furnished and legally authorized to
operate all lifesaving equipment on board the vehicle.
In Sec. 410.41(b)(2), we propose the staffing requirements for the
ALS level of services. The ALS-level ambulance would include at least
two staff members. One of the staff members must be trained to provide
basic first aid at the EMT B level and another member who must be
trained and certified as a paramedic or as an emergency medical
technician-advanced (EMT-A) who must also be trained and certified to
perform one or more ALS services. Paramedics and emergency medical
technicians must be certified by the State in which the services are
furnished and legally authorized to operate all lifesaving equipment on
board.
3. Billing and Reporting Requirements
We propose in Sec. 410.41(c) that a supplier must use diagnostic
and procedure codes designated by HCFA. We propose to designate the
HCFA Common Procedure Coding System (HCPCS) codes describing the origin
and destination of the services and ICD-9-CM diagnostic codes
describing the beneficiary's medical condition (see Addendum 1 of this
rule) to bill for covered ambulance services. We also would require
that a supplier must, at the carrier's request, complete and return an
ambulance supplier form established by HCFA and provide Medicare
carriers with documentation of its compliance with State and local
emergency vehicle and staff licensure and certification requirements
(see Addendum 2 of this rule). In this paragraph, we also would
require, upon the carriers request, that the supplier provide any
additional information as required, for example when a supplier does
not submit the required form and documentation or whenever there is a
question about the supplier's documentation or there is a question
about the supplier's compliance with any of the requirements for
vehicle and staff.
To be covered ambulance services, the services must be medically
necessary in accordance with section 1862(a)(1) of the Act. Medical
necessity is usually established on the basis of the description of the
beneficiary's condition at the time of the transportation. Currently,
we require the use of International Classification of Diseases, Ninth
Revision, Clinical Modification (ICD-9-CM) diagnostic codes on Part B
claims submitted by physicians as well as by other providers. Forty-six
of the 53 Medicare carriers require the ambulance suppliers to include
ICD-9-CM diagnostic codes to confirm medical necessity.
As stated above, we intend that all suppliers who bill Medicare for
ambulance services use the HCPCS codes describing origin and
destination, and the ICD-9-CM diagnostic codes to describe a
beneficiary's condition, based on the information from the emergency
medical technician or paramedic who furnishes treatment at the scene
and during transportation.
The documentation required from each supplier would ensure that the
vehicles used to furnish ambulance services are equipped and staffed to
respond to emergency situations and in scheduled situations to be able
to properly respond to acute care needs. The ambulance supplier form
requirement would ensure that the documentation requirements are met.
IV. Other Information
A. Paperwork Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
requires that we solicit comment on the following issues:
Whether the information collection is necessary and useful
to carry out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
Therefore, we are soliciting public comment on each of these issues
for the following sections of this document that contain information
collection requirements.
The information collection requirements in Sec. 410.40(c)(2)
require the ambulance supplier to obtain certification from the
beneficiary's physician to document the beneficiary's need for non-
emergency, scheduled transportation by ambulance. We believe it is
necessary to ensure that the ambulance services are medically
necessary. The requirement for the physician's certification does not
require a particular form or format and can be simply a letter written
to describe the beneficiary's condition that supports the need for
ambulance services. This could take as little as 10 minutes of the
physician's time per patient and could be used by the supplier for a
60-day period. The burden on the supplier is to send in the
certification with the first claim to the Medicare carrier or
intermediary to validate the need for the transportation. We do not
know how many suppliers or beneficiaries would be affected by this
requirement; however, we do not believe the number to be substantial,
nor do we believe the burden to be significant. The following chart
shows the potential paperwork burden that may be imposed on physicians
by this proposed rule.
Estimated Paperwork Burden on Physicians
----------------------------------------------------------------------------------------------------------------
Estimated
annual number Estimated
of ambulance average time Estimated
CFR Section trips in minutes to total annual
requiring complete each burden hours
certification statement
statements
----------------------------------------------------------------------------------------------------------------
410.40(c)(2).................................................... 3,000 10 500
----------------------------------------------------------------------------------------------------------------
The information collection requirements in Sec. 410.41(c)(1)
concern treatment furnished to beneficiaries transported by ambulance.
Suppliers would be required to use ICD-9-CM diagnostic codes describing
the beneficiary's condition to complete the claims form to bill the
Medicare program for payment for ambulance services. The diagnostic
coding system we propose to use is a system of ICD-9-CM diagnostic
codes and therefore
[[Page 32723]]
the transition from the coding system used by the great majority of
suppliers to the new system would be seamless. In addition, the use of
the new diagnostic codes would eliminate the narrative description of
the beneficiary's condition currently required. Therefore, we believe
this requirement would lessen the existing information collection
burden on the supplier. The time estimated to place the correct codes
on the form is approximately 1 minute. We do, however, acknowledge that
using the ICD-9-CM diagnostic coding system may initially require more
time than the estimated 1 minute. We would like to solicit comments
from those contractors who do not require suppliers to submit claims
with diagnostic codes. Specifically, we would like to receive
information that will assist us in determining how problematic, if at
all, required use of diagnostic codes will be to the contractor and its
suppliers and the costs associated with the implementation of such a
requirement.
Section 410.41(c)(2) requires the supplier to complete an ambulance
supplier form and to provide documentation of vehicle and staff
licensure and certification to the Medicare carrier. This simply
requires photocopying documentation already required by the State or
local law and in the possession of the supplier and sending those
copies, along with the form, to the carrier. We would require ambulance
suppliers to complete the Ambulance Supplier form on an annual basis or
in keeping with licensure or certification requirements established by
State or local laws. It is our understanding that an overwhelming
number of States require ambulance supplier licensure or certification
renewal on an annual basis.
Our decision not to state a specific time frame in which ambulance
suppliers will be required to submit the form took into consideration
the potential burden on those suppliers operating in areas with renewal
requirements other than on an annual basis. The supplier is also
required to notify the carrier when a new vehicle or staff member is
added to the business. Suppliers will not be required to complete a new
form. Carriers may accept the supplier's statement and accompanying
documentary evidence that vehicle and personnel requirements are met.
We believe receipt of this documentation is necessary to ensure that
newly acquired vehicles that will be used to furnish ambulance services
are properly equipped and that newly hired EMS personnel are trained
and certified to provide the appropriate level of emergency medical
service to respond to emergency situations and, in non-emergency
situations, are able to respond to the acute care needs of the
beneficiary. It is estimated that the time to complete this form is no
more than 32 minutes.
Section 410.41(c)(3) requires that the supplier provide any
additional information necessary to ensure that the carriers records
are complete and up-to-date. Although we are unable to estimate the
time that may be necessary to meet this requirement, we do not believe
it will take the supplier longer than a couple of minutes to copy and
send the additional documentation.
Section 410.40(e) provides for the criteria for our preferred
alternative of an exception to the ALS and BLS payment criteria which
will allow all payments to a supplier that met the criteria to be made
at the ALS level. We may not include an exception in the final rule
unless documentation is furnished convincing us that an exception
process is necessary, but we have shown the potential paperwork burden
associated with our preferred alternative and an alternative that is
spelled out in the preamble to this rule.
The following chart shows the potential paperwork burden that may
be imposed on the ambulance suppliers by this proposed rule.
Estimated Annual Supplier Reporting Burden
----------------------------------------------------------------------------------------------------------------
Estimated Estimated
CFR Sections Estimated number of ambulance average burden annual burden
suppliers per response hours
----------------------------------------------------------------------------------------------------------------
410.41(c)(1) ICD-9-CM diagnostic codes ALS/BLS 9,000........................... 1 min. 150
410.41(c)(2) ambulance supplier form and 9,000........................... 32 min. 4,530
documentation.
410.41(c)(3) any additional information....... 9,000........................... 2 min. 300
410.40(e) Annual submission of supporting (Potential) 3,000............... 60 min. 3,000
financial documentation for an ALS exception.
OPTION #1.
OPTION #2 FOUND IN THE PREAMBLE............... (Potential) 3,000............... 60 min. 3,000
----------------------------------------------------------------------------------------------------------------
We have submitted a copy of this proposed rule to OMB for its
review of the information collection requirements in Secs. 410.40 and
410.41.
For comments that relate to information collection requirements,
mail comments to:
Health Care Financing Administration, Office of Financial and Human
Resources, Management Planning and Analysis Staff, 7500 Security
Boulevard, Room #C2-26-17 Baltimore, Maryland, 21244-1850.
Mail a copy of your comments to: Office of Information and
Regulatory Affairs, Office of Management and Budget, Room 10235, New
Executive Office Building, Washington, DC 20503, Attn: Allison Herron
Eydt, HCFA Desk Officer.
B. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the ``DATES''
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the comments in the preamble to that
document.
V. Regulatory Impact Statement
Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612), we prepare a regulatory flexibility analysis unless the
Secretary certifies that a rule would not have a significant economic
impact on a substantial number of small entities. For purposes of the
RFA, all suppliers of ambulance services are considered to be small
entities. Individuals, carriers, and States are not considered to be
``small entities''.
In addition, section 1102(b) of the Act requires the Secretary to
prepare a regulatory impact analysis if a rule may have a significant
impact on the
[[Page 32724]]
operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 50 beds.
As illustrated below the impact of this regulation does not meet
the criteria under E.O. 12866 to require a regulatory impact analysis;
however, the following information, together with information provided
elsewhere in this preamble constitute a voluntarily analysis and moot
the requirements of the RFA. First, this proposed rule was initiated
partly because of the concern over the rapid increase in the cost to
the Medicare program for furnishing ambulance services to
beneficiaries. This rapid increase in expenditures can be attributed to
a variety of causes that include the following:
A greater number of ambulance suppliers provide only the
more expensive ALS level of services even if only a BLS level of
services is warranted.
High costs for equipment, supplies, and trained personnel
incurred by all ambulance suppliers are passed on to the public.
Provision of scheduled ambulance services to ESRD
beneficiaries for treatment or therapy to hospital-based facilities
that may be farther away from the beneficiary's home than nonhospital-
based facilities offering the same service. These transports cost the
Medicare program more because of the higher mileage charges.
Erroneous Medicare payment of claims for ambulance
services from suppliers of non-emergency vehicles that transport
beneficiaries whose medical condition is such that transportation in an
ambulance is unnecessary.
Second, we believe the proposals contained in this rule would
result in the consequences outlined below:
The requirement that ambulance services be furnished in a
vehicle equipped and staffed to respond to a medical emergency or an
acute care situation would improve the overall quality of services
furnished to beneficiaries and eliminate payment for transportation
services that are furnished in a vehicle not equipped or staffed to
provide ambulance services. This particular aspect of the proposed rule
may cause some suppliers to have to upgrade their vehicles, equipment,
or staff training and certification so that the vehicles meet the
definition of an ambulance. There may be some, however, who may not be
able to upgrade their vehicles or staff. We do not know how many
suppliers this requirement would affect; however, because we believe
the entities that may be affected by this proposal primarily provide
transportation services, such as wheelchair van transportation, we do
not believe the number to be substantial. In an effort to determine the
impact of this proposed change, we are requesting information from
those suppliers of ambulance services who will potentially be affected
by this proposal.
The requirement for suppliers to use ICD-9-CM diagnostic
codes to bill ambulance services would promote consistency in Medicare
carrier processing of claims for ambulance services. The use of these
codes would also reduce the uncertainty currently experienced by
suppliers concerned about whether they will receive payment for their
claims for specific types of services, because using the codes would
assist suppliers in filing claims properly. The use of the appropriate
ICD-9-CM diagnostic code to describe a beneficiary's medical condition
would justify the need for ambulance services and determine the
appropriate level of coverage. However, use of the appropriate
diagnostic code does not make the claim payable if the beneficiary
could have been transported by other means.
The application of the limitation on liability protections
would provide a safeguard to beneficiaries who must use ambulance
services by ensuring that they would not be required to pay for
differences in the amounts paid for BLS and ALS services. These same
limitation on liability protections provide safeguards for the
suppliers as well. For example, if the supplier erred on the side of
caution by furnishing an (ALS level of) ambulance service that was more
costly than was necessary because the medical situation was less severe
than was first thought to have existed, the supplier would not bear the
adverse economic burden of that decision.
The requirement for physicians to certify the need for
scheduled ambulance services of beneficiaries who are inpatients to
outside facilities to receive therapy or treatment would ensure that
those beneficiaries receiving the services actually need them. Also,
the provision permitting ESRD beneficiaries to be transported to
nonhospital-based facilities nearest their home would be more
convenient, since they would no longer have to be transported to
hospital-based facilities that may be farther away. In addition, for
those beneficiaries this is a more cost-effective policy since
regularly transporting beneficiaries further from their homes would be
more costly.
Third, if we are convinced that an exception to the ALS/BLS rule is
necessary, the non-Metropolitan Statistical Area exception that would
permit coverage of the more costly ALS level of services in non-
Metropolitan Statistical Areas could assure access to ambulance
services where there is only one ambulance supplier. However we will
create an exception only if we believe that the rule would impose
financial hardship on isolated suppliers that cannot maintain both BLS
and ALS vehicles.
Last, the overall savings that this rule would generate are listed
below:
Medicare Program Savings
[In millions]
----------------------------------------------------------------------------------------------------------------
Fiscal Years
-----------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
----------------------------------------------------------------------------------------------------------------
$50......................................................... $55 $60 $65 $75
----------------------------------------------------------------------------------------------------------------
A primary concern in basing coverage and payment on medical
necessity is the issue of ambulance services in sparsely populated
areas. We realize that there are areas where multiple ambulances, a mix
of BLS and ALS, are not economical and, as such, acknowledge that the
distributive effect of this regulation may be perceived as uneven
because billing for ALS only services occurs only in some areas. In
terms of expenditure cutbacks the estimated $50 million in spending
reductions in the first year out of a total of $1.83 billion has been
determined to result in a national
[[Page 32725]]
reduction of about 2.7 percent of the total expenditures for ambulances
services. Through further analysis of this circumstance we have
determined that we can expect to see that a limited impact of one half
of the anticipated cutback in payments (approximately $25 million)
would take place in northern California, Florida, Mississippi, Texas,
and Ohio, and one-fourth of the cutback (another $12.5 million) would
take place in Alabama, Arkansas, Georgia, Louisiana, Oklahoma, and
Oregon. We are able to identify these areas on the basis of regional
patterns that reflect areas where there is use of predominately ALS
services. There are, however, no national data identifying communities
that mandate using ALS services exclusively. The program used to
determine this impact is aggregated by locality and does not contain
provider specific information. Therefore, while we are unable to
determine exactly how many suppliers in the aforementioned areas will
be affected, we have estimated the dollar impact by State if the areas
furnished a mix of BLS/ALS services approximating the national average.
In determining what special considerations may be warranted to
mitigate the possible negative impact on non-Metropolitan Statistical
Areas of the country, we considered two alternatives as a possible
solution. Under the first and preferred alternative we would propose to
continue to reimburse ambulance suppliers in a non-Metropolitan
Statistical Area for the ALS level of service if the State EMS Director
can certify that the ambulance supplier meets established criteria. The
second alternative we considered would be to create an exception with
criteria similar to those used for sole community hospitals under
Medicare's prospective payment system for hospitals. The specifics of
both alternatives are discussed at length in the preamble. We also had
to take into consideration questions that were raised that have led us
to doubt the need for any exception to the proposed rules. To foster
better understanding of this problem or potential problem, we have
issued a request for information from interested parties on the need
for an exception and to help identify areas where it might apply. This
aspect of our analysis is also discussed at length in the preamble.
If an exception is implemented, this perceived ``uneven'' impact
may not be as significant in the States listed above. Also, we may find
that the overall national impact is less than anticipated. In any
event, our clarification of the criteria for coverage of ambulance
services should reduce allowances only to those suppliers now receiving
payments incorrectly. The limitation on liability provisions will
protect both beneficiaries and suppliers where they are ``without
fault.'
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 410
Health facilities, Health professions, Kidney diseases,
Laboratories, Medicare, Rural areas, X-rays.
42 CFR Part 424
Emergency medical services, Health facilities, Health professions,
Medicare.
42 CFR chapter IV would be amended as set forth below:
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
1. The authority citation for part 410 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
2. Section 410.40 is revised to read as follows:
Sec. 410.40 Coverage of ambulance services.
(a) Basic rules. (1) Medicare Part B covers ambulance services if
the supplier meets the applicable vehicle, staff, and billing and
reporting requirements of Sec. 410.41 and the medical necessity and
origin and destination requirements of this section.
(2) Medicare Part B covers ambulance services if Medicare Part A
payment is not made directly or indirectly for the services.
(b) Levels of services. Except as provided in paragraph (e) of this
section (concerning ALS services furnished in non-MSA areas) and based
on the level of services needed to treat a beneficiary's condition (as
described by diagnostic codes that HCFA designates for ambulance
services), Medicare covers ambulance services within the United States
as one of the following levels of services:
(1) Basic life support (BLS) services.
(2) Advanced life support (ALS) services.
(c) Medical necessity requirements. (1) Except as provided in
paragraph (c)(2) of this section, Medicare covers ambulance services if
they are furnished to a beneficiary whose medical condition is such
that other means of transportation would be contraindicated.
(2) Medicare covers non-emergency transportation services if the
ambulance supplier, before furnishing services to the beneficiary,
obtains a current written physician's order certifying that the
beneficiary must be transported in an ambulance because other means of
transportation would be contraindicated. The physician's order must be
dated no earlier than 60 days before the date the service is furnished.
(3) In accordance with section 1861(s)(7) of the Act, HCFA:
(i) Establishes guidelines on the use of diagnostic codes that
ensure the medical necessity of ambulance services, coverage at the
appropriate level of service (BLS or ALS), and consistency in claims
filing.
(ii) Updates the guidelines and codes as necessary.
(d) Origin and destination requirements. The following
transportation is covered:
(1) From any point of origin to the nearest hospital, RPCH, or SNF
that is capable of furnishing the required level and type of care for
the beneficiary's illness or injury. The hospital must have available
the type of physician or physician specialist needed to treat the
beneficiary's condition.
(2) From a hospital, RPCH, or SNF to the beneficiary's home.
(3) From a SNF to the nearest supplier of medically necessary
services not available at the SNF where the beneficiary is an
inpatient, including the return trip.
(4) For a beneficiary who is receiving renal dialysis for treatment
of ESRD if the requirements of paragraph (c)(2) of this section are
met, from the beneficiary's home to the nearest facility that supplies
renal dialysis, including the return trip.
(e) Coverage exception for ALS services in non-MSA areas. Medicare
covers ambulance services as ALS level of services if the following
conditions are met:
(1) The State Emergency Medical Services Director makes, on an
annual basis, the following certification:
(i) The ground ambulance supplier serves a county or comparable New
England entity that is not designated as a Metropolitan Statistical
Area by the Office of Management and Budget (that is, a non-MSA area).
(ii) The supplier is either the sole supplier of ground ambulance
services in the area, or is located more than 40 miles from any other
available ground emergency services vehicle in the area.
(iii) The supplier owns and operates ambulance vehicles.
[[Page 32726]]
(iv) The supplier furnishes only ALS ambulance vehicles and staff.
(2) The supplier submits annually to the carrier financial
information demonstrating that without payment at the ALS level,
beneficiary access to ambulance services in the area would be
jeopardized.
(f) Specific limits on coverage of ambulance services outside the
United States. If services are furnished outside the United States,
Medicare Part B covers ambulance transportation to a foreign hospital
only in conjunction with the beneficiary's admission for medically
necessary inpatient services as specified in subpart H of part 424 of
this chapter.
(g) Limitation on beneficiary liability. (1) If the supplier
furnishes BLS level of ambulance services to an individual, but uses an
ALS-level vehicle and submits a bill for Medicare payment of ALS level
of services, HCFA partially denies coverage of the services under
Sec. 411.15(k) of this chapter because the services are not reasonable
or necessary and reduces payment from the ALS level of services to the
BLS level of services.
(2) For amounts denied under paragraph (g)(1) of this section, the
provisions of Sec. 411.404 notwithstanding, HCFA considers
beneficiaries to meet the conditions of Sec. 411.400(a)(2) of this
chapter, that is, not to have known or been expected to know that the
services are not covered under Medicare.
3. Section 410.41 is added to read as follows:
Sec. 410.41 Requirements for ambulance suppliers.
(a) Vehicle. A vehicle used as an ambulance must meet the following
requirements:
(1) Be specially designed to respond to medical emergencies or
provide acute medical care to transport the sick and injured and comply
with all State and local laws governing an emergency transportation
vehicle.
(2) Be equipped with emergency warning lights and sirens.
(3) Be equipped with telecommunications equipment to send and
receive voice and data transmissions.
(4) Be equipped with a stretcher, linens, emergency medical
supplies, oxygen equipment, and other lifesaving emergency medical
equipment as required by State or local laws.
(b) Vehicle staff--(1) BLS vehicles. A vehicle furnishing ambulance
services must be staffed by at least two people who meet the following
requirements:
(i) Are certified as emergency medical technicians-basic (EMT-B) by
the State or local authority where the services are furnished.
(ii) Are legally authorized to operate all lifesaving and life-
sustaining equipment on board the vehicle.
(2) ALS vehicles. In addition to meeting the requirements of
paragraph (b)(1) of this section, one of the two staff members must be
certified as a paramedic or an emergency medical technician-advanced
(EMT-A) who is certified to perform one or more ALS services.
(c) Billing and reporting requirements. An ambulance supplier must
comply with the following requirements:
(1) Bill for ambulance services using HCFA designated procedure
codes to describe origin and destination and HCFA designated diagnostic
codes to describe the beneficiary's medical condition.
(2) Upon a carrier's request, complete and return the ambulance
supplier form developed by HCFA and provide the Medicare carrier with
documentation of emergency vehicle and staff licensure and
certification requirements in keeping with State and local laws.
(3) Upon a carrier's request, provide additional information and
documentation as required.
PART 424--CONDITIONS FOR MEDICARE PAYMENT
1. The authority citation for part 424 is revised to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Sec. 424.124 [Amended]
2. In Sec. 424.124, paragraph (c)(2) is amended by removing the
citation ``Sec. 410.140'' and adding in its place the citation
``Sec. 410.41''.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: January 8, 1997.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: January 29, 1997.
Donna E. Shalala,
Secretary.
Addendum 1
We would assign International Classification of Diseases 9th
revision, Clinical Modification (ICD-9-CM) diagnostic codes to each of
the following conditions:
(Listed in the first column are the medical conditions that are
encountered most frequently by ambulance crews. The second column
contains the corresponding ICD-9-CM code(s). In the third column we
have placed an ``A'' denoting ``ALS'', ``B'' denoting ``BLS'', or ``B/
A'' denoting both ``BLS/ALS''. If only an ``A'' or ``B'' is in the
column, it means that the trip will be paid as only as ALS or BLS. If
both ``B/A'' appear, while it is expected that most trips will be BLS,
the determination regarding which level of service is medically
necessary will be made, based on documentation submitted by the
supplier, at the discretion of the carrier. Please note that this list
is not exhaustive. In unusual circumstances that warrant the need for
ambulance services, the Carrier may accept the use of other ICD-9-CM
codes to describe a medical condition that is not on this list).
------------------------------------------------------------------------
BLS/ALS
Condition ICD-9-CM Code Level
------------------------------------------------------------------------
Abdominal Pain........................... 789.00, 789.07 B/A
789.09
Abnormal Electrocardiogram (EKG)......... 794.31 A
Asphyxiation and Strangulation........... 994.7 A
Backache, unspecified.................... 724.5 B
Burns.................................... 949.0, 949.1, B/A
949.2, 949.3,
949.4, 949.5
Cardiac Arrest........................... 427.5 A
Chest Pain, unspecified.................. 786.50 A
Coma..................................... 780.01 B
[[Page 32727]]
Contracture of Multiple Joints........... 718.49 B
Convulsions.............................. 780.3 B
Delirium, acute.......................... 293.0 B
Dead on Arrival (DOA) (Cause unknown; 798.2 B
death occurring in less than 24 hours
from onset of symptoms).
Drowning................................. 994.1 A
Drug Overdose; Unspecified Drug or 977.9 A
Medicinal Substance.
Effects of Lightning..................... 994.0 A
Electrocution and nonfatal effects caused 994.8 A
by electric current.
Food Poisoning; unspecified.............. 005.9 B/A
Head Injury, closed...................... 854.0 A
Head Injury, open........................ 854.1 A
Hemorrhage of Gastrointestinal Tract, 578.9 B/A
unspecified.
Hemorrhage, unspecified.................. 459.0 B/A
Hypothermia.............................. 991.6 A
Injuries, multiple....................... 959.8 A
Injury to Elbow, Forearm and Wrist....... 959.3 B
Injury to Face and Neck.................. 959.0 B/A
Injury to Hand........................... 959.4 A
Injury to Hip and Thigh.................. 959.6 B
Injury to Knee, Ankle, Leg and Foot...... 959.7 B
Injury to Shoulder and Upper Arm......... 959.2 B
Injury to Trunk.......................... 959.1 A
Instantaneous Death...................... 798.1 B
Joint Pain, multiple..................... 719.40 B
Open Wound, Unspecified Eye Ball......... 871.9 B
Other Artificial Opening (e.g., presence v44.48 B
of chest tubes).
Other Specified Problems Influencing v49.8 B
Health Status (e.g., bed-confined).
Pelvis Pain, female...................... 625.9 B/A
Pelvis Pain, male........................ 789.0 B/A
Pelvis Stiffness......................... 719.55 B/A
Poisoning, unspecified noxious substance 989.9 B/A
eaten as food.
Respiratory Arrest....................... 799.1 A
Respiratory Distress..................... 786.09 A
Shock.................................... 785.50 A
Smoke Inhalation, Symptomatic............ 987.9 A
Stroke................................... 436 A
Transient Alteration of Awareness........ 780.02 B/A
Unconscious.............................. 780.09 B
Unspecified Complication of Labor and 669.9 A
Delivery.
Wound Disruption of (Dehiscence)......... 998.3 B/A
------------------------------------------------------------------------
Addendum 2
Note To: (Insert Name of Medicare Supplier)
From: (Insert Name of Medicare Carrier)
Subject: Completion of Attached Ambulance Supplier Form
The attached form must be completed by you whenever your State and
Local laws require that you update the licensure of your vehicles and/
or staff. We are also requiring that this form be completed at the
Carriers discretion so that our agents will be assured that they have
the latest documentation on file to make appropriate claims payment
determinations.
The form is self explanatory and therefore there are no program
instructions for its completion. We do not expect that it will take
longer than 30 minutes to answer the questions and will require only
another minute or two to copy and attach the photocopies supporting the
response to some of the questions.
If you have any questions about completing this form please contact
us at (fill in the telephone number and or address of the carrier).
BILLING CODE 4120-01-P
[[Page 32728]]
[GRAPHIC] [TIFF OMITTED] TP17JN97.000
[[Page 32729]]
[GRAPHIC] [TIFF OMITTED] TP17JN97.001
[[Page 32730]]
[GRAPHIC] [TIFF OMITTED] TP17JN97.002
[[Page 32731]]
[GRAPHIC] [TIFF OMITTED] TP17JN97.003
[[Page 32732]]
[GRAPHIC] [TIFF OMITTED] TP17JN97.004
[[Page 32733]]
[FR Doc. 97-15829 Filed 6-16-97; 8:45 am]
BILLING CODE 4120-01-C
