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Author: Brian Werfel

Brian S. Werfel, Esq. is a partner in Werfel & Werfel, PLLC, a New York based law firm specializing in Medicare issues related to the ambulance industry. Brian is a Medicare Consultant to the American Ambulance Association, and has authored numerous articles on Medicare reimbursement, most recently on issues such as the beneficiary signature requirement, repeat admissions and interrupted stays. He is a frequent lecturer on issues of ambulance coverage and reimbursement. Brian is co-author of the AAA’s Medicare Reference Manual for Ambulance, as well as the author of the AAA’s HIPAA Reference Manual. Brian is a graduate of the University of Pennsylvania and the Columbia School of Law. Prior to joining the firm in 2005, he specialized in mergers & acquisitions and commercial real estate at a prominent New York law firm. Werfel & Werfel, PLLC was founded by David M. Werfel, who has been the Medicare Consultant to the American Ambulance Association for over 20 years.

HHS OIG Issues Proposed AKS Safe Harbor Rule

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

On Thursday, October 17, 2019, the HHS Office of the Inspector General (OIG) issued a proposed rule titled “Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalties Regarding Beneficiary Inducements.”  The proposed rule would amend the existing safe harbors to the Federal Anti-Kickback Statute (AKS) and the civil monetary penalty rules (CMPs).  These changes are part of HHS’ Regulatory Sprint to Coordinated Care.  The stated purpose of these changes is to reduce the regulatory barriers and accelerate the transformation of the healthcare system away from the traditional fee-for-service payment model, and towards a value-based system that rewards healthcare providers for better outcomes.  The proposed rule can be viewed in its entirety at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22027.pdf.

The proposed rule makes nearly a dozen major changes to the safe harbors under the AKS and the rules related to CMPs.  Among these are revisions to the recently created safe harbor for local transportation.  The proposed change to the safe harbor for free or discounted local transportation is discussed in greater detail below.

The OIG is soliciting comments on a wide range of topics raised in the proposed rule. The AAA is not taking any formal position with respect to the proposed changes or the requests for additional information set forth in this proposed rule.  However, we encourage any member that wishes to comment to do so. 

To be considered, comments must be submitted no later than 5 p.m. on December 31, 2019.  Comments may be submitted electronically by going to: http://www.regulations.gov. Commenters would then need to click the link for “Submit a comment” and follow the instructions from there.  Comments may also be submitted by courier or by regular, express, or overnight mail to the following address: Office of Inspector General, Department of Health and Human Services, Attention: OIG-0936-AA10-P, Room 5521, Cohen Building, 330 Independence Avenue SW, Washington, DC 20201.

Revisions to Safe Harbor for Free or Local Transportation

In 2014, the OIG created a new safe harbor for free or discounted local transportation provided to Federal health care program beneficiaries. This safe harbor applied to non-ambulance transportation (e.g., wheelchair van, bus and shuttle services, taxis, etc.) provided under the following conditions:

  1. The free or discounted transportation was provided by an “Eligible Entity.” For these purposes, an “Eligible Entity” is any individual or entity, other than individuals or entities (or family members or others acting on their behalf) that primarily supply health care items;
  2. The free or discounted transportation was provided pursuant to an existing policy of the Eligible Entity, and which is applied in a uniform and consistent manner;
  3. The transportation services are not air, luxury, or ambulance transportation;
  4. The Eligible Entity does not publicly market or advertise the free or discounted local transportation services, and no cross-marketing of other health care services occurs during the course of transportation, or at any time by the drivers providing such transportation. In addition, the drivers and anyone arranging the transportation cannot be paid on a per-beneficiary-transported basis;
  5. The transportation services are limited only to “established patients” of the Eligible Entity; and
  6. The transportation is limited to 25 miles in urban areas, or 50 miles in rural areas.

 The safe harbor also permitted the use of “shuttle services” (i.e., a vehicle that runs on a set route, on a set schedule) if the following conditions are met:

  1. The shuttle service is not air, luxury, or ambulance-level transportation;
  2. The shuttle service is not marketed or advertised, and no cross-marketing occurs during the transportation, or at any time by the driver providing such transportation. In addition, the driver and anyone else arranging the transportation cannot be paid on a per-beneficiary-transported basis;
  3. The shuttle services has no stop that is more than 25 miles from any stop on the route where health care items or services are provided, except that this mileage restriction is expanded to 50 miles in rural areas.

In either situation, the safe harbor also requires the Eligible Entity to bear all costs of furnishing such transportation, i.e., they cannot shift that cost onto any Federal health care program, any other payer, or the individual.

In the current proposed rule, the OIG indicated that it received numerous comments from stakeholders that suggested that the 50-mile limit for residents of rural areas was insufficient, as many rural residents might need to routinely travel more than 50 miles to obtain certain medical services.  As a result, the OIG is proposing to expand this limit to 75 miles.

The OIG is also soliciting comments on whether the proposed 75-mile is sufficient, or whether an even larger expansion is warranted.  To the extent you intend to submit comments arguing for a greater mileage limit, the OIG is asking that you submit data or other evidence to support a more appropriate mileage limitation for the safe harbor.  The OIG is also specifically requesting information on how an Eligible Entity would provide transportation over distances in excess of 50 miles (e.g., shuttle services, bus or taxi fare, ride-sharing programs, mileage reimbursement programs, etc.).

Expansion of Safe Harbor for Transportation of Patients Being Discharged After an Inpatient Stay

The OIG is also proposing to eliminate any mileage restriction on transportation of patients back to their residence after being discharged from a facility where that patient had been admitted as an inpatient, regardless of whether the patient resides in an urban or rural area.  The OIG is also proposing to eliminate the mileage restrictions on discharges to another residence of the patient’s choice (such as a friend or relative who will care for the patient post-discharge).

The OIG further indicated that it is considering protecting transportation to other locations of the patient’s choice, including another health care facility.  The OIG is soliciting comments on the potential fraud and abuse risks associated with permitting free or discounted transportation to other health care facilities, and whether transportation should be protected (and, if so, under what circumstances) when the patient has not previously been admitted to an inpatient facility (e.g., where the patient had been seen as an outpatient in a hospital emergency department).  Finally, the OIG is soliciting comments on whether the transportation of patients being discharged beyond the applicable safe harbor mileage limitations should be limited to patients with demonstrated financial or transportation needs, and, if so, what standards should apply to such demonstration of need.

Possible Expansion to Include Transportation to Non-Medical Services

In the 2014 final rule creating the new safe harbor for local transportation, the OIG declined to extend the safe harbor protections to transportation for purposes other than obtaining medically necessary services or items (although they permitted a qualifying shuttle service to make stops at locations that do not relate to a particular patient’s medical needs).  The OIG has since received numerous comments suggesting that the safe harbor should protect transportation for non-medical purposes that may nevertheless improve or maintain health, e.g., transportation to food banks, social services, exercise facilities, support groups, etc.  The OIG indicated that it considering a further expansion of the safe harbor to include such non-medical needs, and is therefore seeking comments on how the safe harbor could be expanded to such needs without creating an unacceptable risk of fraud and abuse. 

 Clarification of Policy Regarding the Use of Ride-Sharing Services

 Finally, the OIG is clarifying its interpretation of the applicability of the existing safe harbor to the use of ride-sharing services.  In the preamble to the 2014 final rule, the OIG discussed the possibility that patient transportation might be provided via taxi.  In the proposed rule, the OIG indicates that, while it did not explicitly reference ride-sharing services, it views these services are being similar to taxi services for the purposes of the safe harbor.  Specifically, the OIG noted that nothing in the language of the safe harbor expressly precludes their use (or the use of self-driving cars or other similar technology that may become available at some point in the future).  The OIG is inviting anyone that disagrees with this approach to explain the possible basis for exclusion of ride-sharing services.

The OIG did reiterate that the prohibition of the marketing of such free or discounted transportation would still apply.  The OIG indicated that it would be permissible for ride-sharing services to advertise that they provide transportation to medical appointments, and to recommend that patients contact their medical providers to determine if they qualified for free or discounted transportation.  By contrast, the OIG indicated that it would not be appropriate for the ride-sharing service to advertise that it provided free or discounted transportation to particular health care providers.

Other Changes in the Proposed Rule

 In addition to the revisions to the existing safe harbor for free or discounted transportation, the OIG is proposing:

  1. The creation of three new safe harbors for participants in value-based arrangements that promote better coordinated and managed patient care. These include: (i) a safe harbor for Care Coordination Arrangements to Improve Quality, Health Outcomes, and Efficiency, (ii) Value-Based Arrangements with Substantial Downside Financial Risk, and (iii) Value-Based Arrangements with Full Financial Risk.
  2. The creation of a new safe harbor for certain tools and support furnished to patients to improve quality, health outcomes, and efficiency.
  3. The creation of a new safe harbor for remuneration provided in connection with CMS-sponsored models. The purpose of this new safe harbor is to eliminate the need for the OIG and CMS to issue model-specific waivers.
  4. The creation of a new safe harbor for donations of cybersecurity technology and services.
  5. Proposed modifications to the existing safe harbor for electronic health records items and services.
  6. Proposed modifications to the existing safe harbor for personal services and management contractors, in order to add flexibility with respect to outcomes-based payments and part-time arrangements.
  7. Proposed modifications to the existing safe harbor for warranties, to better address bundled warranties covering multiple health care items or services.
  8. The codification of the existing statutory exception for ACO Beneficiary Incentive Programs under the Medicare Shared Savings Program.
  9. A proposed amendment to the definition of “remuneration” under the CMP rules for certain telehealth technologies furnished to in-home dialysis patients.

CMS Announces Extension of Prior Authorization Program

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

On September 16, 2019, CMS published a notice in the Federal Register that it would be extending the prior authorization demonstration project for another year. The extension is limited to those states where prior authorization was in effect for calendar year 2019. The affected states are Delaware, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia and West Virginia, as well as the District of Columbia. The extension will run through December 1, 2020. 

In its notice, CMS indicated that the prior authorization demonstration project is being extended “while we continue to work towards nationwide expansion.”  This strongly suggests that CMS believes the program has met the statutory requirements for nationwide expansion under the Medicare Access and CHIP Reauthorization Act of 2015.  However, CMS indicated that it would use the additional year to continue to test whether prior authorization helps reduce expenditures, while maintaining or improving the quality of care offered to Medicare beneficiaries.

CMS has also updated its CMS Ambulance Prior Authorization webpage to reflect the expansion of prior authorization in the existing states through December 1, 2020.

Preliminary Calculation of 2020 Ambulance Inflation Update

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

Section 1834(l)(3)(B) of the Social Security Act mandates that the Medicare Ambulance Fee Schedule be updated each year to reflect inflation. This update is referred to as the “Ambulance Inflation Factor” or “AIF”.

The AIF is calculated by measuring the increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year. Starting in calendar year 2011, the change in the CPI-U is now reduced by a so-called “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private nonfarm business multi-factor productivity index (MFP). The MFP reduction may result in a negative AIF for any calendar year. The resulting AIF is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

For the 12-month period ending in June 2019, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased by 1.65%.

CMS has yet to release its estimate for the MFP in calendar year 2020. However, assuming CMS’ projections for the MFP are similar to last year’s projections, the number is likely to be in the 0.6% range.

Accordingly, the AAA is currently projecting that the 2020 Ambulance Inflation Factor will be approximately 1.1%. 

Cautionary Note Regarding these Estimates

Members should be advised that the BLS’ calculations of the CPI-U are preliminary, and may be subject to later adjustment. The AAA further cautions members that CMS has not officially announced the MFP for CY 2020. Therefore, it is possible that these numbers may change. The AAA will notify members once CMS issues a transmittal setting forth the official 2020 Ambulance Inflation Factor.

New SNF Consolidated Billing Edits: FAQs

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

On April 1, 2019, CMS implemented a new series of Common Working File (CWF) edits that it stated would better identify ground ambulance transports that were furnished in connection with an outpatient hospital service that would be bundled to the skilled nursing facility (SNF) under the SNF Consolidated Billing regime.

Unfortunately, the implementation of these new edits has been anything but seamless. Over the past few weeks, I have received numerous phone calls, texts, and emails from AAA members reporting an increase in the number of Medicare claims being denied for SNF Consolidated Billing.

This FAQ will try to explain why you may be seeing these denials.  I will also try to provide some practical solutions that can: (1) reduce the number of claims denied by the edits and (2) help you collect from the SNFs, when necessary.

Please note that, at the present time, there is no perfect solution to this issue, i.e., there is nothing that you can do to completely eliminate these claim denials.  The solutions discussed herein are intended only to minimize the disruption to your operations caused by these denials.  

I am new to Medicare ambulance billing. Can you explain what the SNF Consolidated Billing regime is, and how it operates?

Under the SNF Consolidated Billing regime, SNFs are paid a per diem, case-mix-adjusted amount that is intended to cover all costs incurred on behalf of their residents.  Federal regulations further provide that the SNF’s per diem payment generally the cost of all health care provided during the beneficiary’s Part A stay, whether provided by the SNF directly, or by a third-party.  This also includes the majority of medically necessary ambulance transportation provided during that period.  For these purposes, the “Part A Period” refers to the first 100 days of a qualified SNF stay.

However, medically necessary ambulance transportation is exempted from SNF Consolidated Billing (referred to hereafter as “SNF PPS”) in certain situations.  This includes medically necessary ambulance transportation to and from a Medicare-enrolled dialysis provider (whether free-standing or hospital-based).  Also excluded are ambulance transportations:

  • To an SNF for an initial admission;
  • From the SNF to the patient’s residence for a final discharge (assuming the patient does not return to that SNF on the same day);
  • To and from a hospital for an inpatient admission;
  • To and from a hospital for certain outpatient procedures, including, without limitation, emergency room visits, cardiac catheterizations, CT scans, MRIs, certain types of ambulatory surgery, angiographies (including PEG tube procedures), lymphatic and venous procedures, and radiation therapy.

For a fuller description of the SNF Consolidated Billing Regime, including a discussion of when ambulance services may be separately payable by Medicare Part B, I encourage members to consult the AAA Medicare Reference Manual.

Purchase the 2019 Medicare Reference Manual

Can you explain what prompted CMS to implement these new edits? 

In 2017, the HHS Office of the Inspector General conducted an investigation of ground ambulance claims that were furnished to Medicare beneficiaries during the first 100 days of a skilled nursing home (SNF) stay. The OIG’s investigation consisted of a review of all SNF beneficiary days from July 1, 2014 through June 30, 2016 to determine whether the beneficiary day contained a ground ambulance claim line. The OIG excluded beneficiary days where the only ambulance claim line related to: (1) certain emergency or intensive outpatient hospital services or (2) dialysis services, as such ambulance transportation would be excluded from SNF Consolidated Billing.

The OIG determined that there were 58,006 qualifying beneficiary days during this period, corresponding to $25.3 million in Medicare payments to ambulance suppliers. The OIG then selected a random sample of 100 beneficiary days for review.  The OIG determined that 78 of these 100 beneficiary days contained an overpayment for the associated ambulance claims, as the services the beneficiary received did not suspend or end their SNF resident status, nor was the transport for dialysis. The OIG determined that ambulance providers were overpaid a total of $41,456 for these ambulance transports.  The OIG further determined that beneficiaries (or their secondary insurances) incurred an additional $10,723 in incorrect coinsurance and deductibles. Based on the results of its review, the OIG estimates that Medicare made a total of $19.9 million in Part B overpayments to ambulance suppliers for transports that should have been bundled to the SNFs under SNF Consolidated Billing regime.  The OIG estimated that beneficiaries (and their secondary insurances) incurred an additional $5.2 million in coinsurance and deductibles related to these incorrect payments.

The OIG concluded that the existing edits were inadequate to identify ambulance claims for services associated with hospital outpatient services that did not suspend or end the beneficiary’s SNF resident status, and which were not related to dialysis. The OIG recommended that CMS implement additional edits to identify such ambulance claims.

The OIG’s report prompted CMS to issue Transmittal 2176 in November 2018.  This transmittal instructed the CWF Maintainer and the Medicare Administrative Contractors (MACs) to implement a new series of edits, effective April 1, 2019.

Can you provide a simple overview of how these new CWF edits operate?

Before we turn to the new edits, I think it is important to understand that CMS has had long-standing edits to identify outpatient hospital services that should be bundled to the SNF under SNF PPS.  These edits work by comparing the Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) codes on the outpatient hospital claim to applicable lists of excluded codes.  To the extent the HCPCS or CPT code appears on the applicable list of excluded codes, the outpatient hospital claim will bypass the edit for SNF PPS, and be separately payable by the MAC.  To the extent the HCPCS or CPT code on the outpatient hospital claim does not appear on the applicable list of excluded codes, the claim will be denied as the responsibility of the SNF.  The new CWF edits for ambulance claims simply extend the existing process one step further, i.e., they compare the ambulance claim to the associated hospital claim.

Conceptually, the new edits “staple” the ambulance claim to the outpatient hospital claim, with our coverage piggybacked on whether the outpatient hospital claim is determined to be bundled or unbundled.

How would I identify a claim that is denied for SNF Consolidated Billing?

Typically, the denial will be evidenced by a Claim Adjustment Reason Code on the Medicare Remittance Advice.  The denial will typically appear as an “OA-190” code, with the following additional explanation: “Payment is included in the allowance for a Skilled Nursing Facility (SNF) qualified stay.  The “OA” stands for “Other Adjustment,” and is intended to notify you that the SNF is the correct payer.  Note: in some instances, the denial may appear as “CO-190” on the remittance advice.  However, the effect of the denial is the same, i.e., they are indicating that the SNF is financially responsible for payment.

Frequently, the denial will be accompanied by Remittance Advice Remark Code “N106,” which indicates “Payment for services furnished to Skilled Nursing Facility (SNF) inpatients (except for excluded services) can only be made to the SNF.  You must request payment from the SNF rather than the patient for this service.”

I have heard you refer to the new CWF edits as over-inclusive.  What do you mean by that?

When CMS elects to implement a new edit to the CWF, it has to make some decisions on how to structure the edit.  Two typical decisions that must be made are:

  1. Will the edit be conditional based on the submission of other Medicare claims? And
  2. Is the edit designed to be under- or over-inclusive?

For these purposes, a conditional edit is one where the coverage or lack of coverage depends, in part, on the claims submitted by other health care providers that furnished services to the same beneficiary (typically on the same date).  As you are probably aware, the Medicare rules for all Part B payments prohibit payment whenever the service has been paid for, directly or indirectly, under Medicare Part A.  Thus, all edits for hospital and SNF bundling are conditioned, in part, on the patient’s Part A inpatient status at the time of transport.

By contrast, an unconditional edit is one that operates the same regardless of other types of claims for the same patient.  For example, with respect to ambulance claims, the MACs medical necessity edits are unconditional, i.e., they apply to all ambulance claims, regardless of the patient’s inpatient status at a Part A facility.  The edits for origin/destination modifiers are another example of an edit that is typically unconditional.

In addition, CMS has to decide whether to make an edit under- or over-inclusive.  This is because no edit can be perfectly tailored to be applied to all qualifying claims, but no non-qualifying claims.  An “underinclusive” edit is one that is designed to identify the majority – – but not all – – of the claims that should be denied based on the edit criteria.  By contrast, an “overinclusive” edit is one that would deny not only all of the qualifying claims, but also some non-qualifying claims.

In many instances related to EMS coverage, the underlying facts and circumstances of the transport are ultimately what determines the coverage.  It is frequently difficult – – if not impossible – – to fully describe these circumstances with enough specificity on the electronic claim for CMS to perfectly apply its edits.  For that reason, CMS has historically elected to design its ambulance edits to be underinclusive.

Unfortunately, the new SNF edits are both conditional AND overinclusive.  To further complicate matters, they are not only conditioned on the claim of a single Part A provider, but two separate Part A providers, i.e., in order for the new edits to work properly, CMS is reliant upon information from both the SNF and the hospital to properly apply its new edits.

I recently received a denial for an emergency transport from an SNF to the hospital for an emergency room visit.  I thought emergency ambulance transports were excluded from SNF PPS?

They are. The denial was likely the result of your claim being submitted prior to Medicare’s receipt of the associated outpatient hospital claim.

As noted above, the new edits are both conditional and overinclusive.  In this context, they are designed to deny the ambulance claim UNLESS there is a hospital outpatient claim for that same patient with the same date of service.  If there is no hospital outpatient claim on file when your ambulance claim hits the system, the edit indicates that the MAC should deny your claim for SNF PPS.

OK, that makes some sense.  Does that mean I have to appeal the denial?

In theory, no.  The instructions in Transmittal 2176 make clear that the CWF should “adjust” the ambulance claim upon receipt of the associated hospital claim.  For these purposes, that adjustment should take the form of re-processing the ambulance claim through the edits to compare it to the associated hospital claim, and to bypass the new CWF edits if the hospital claim contains an excluded code.

However, there is no timeframe for how quickly these adjustments should take place.  Most ambulance providers are reporting that they are seeing few, if any claims, being reprocessed.

I submitted several claims without knowing the patient was in the Part A Period of an SNF stay.  These claims were initially paid, but a few days later, I received a recoupment request from the MAC indicating that the claim was the responsibility of the SNF under SNF PPS. 

As noted above, the edits were designed to deny claims to the extent CMS was unable to determine whether they should be bundled to the SNF, i.e., to deny if the associated hospital claim was not already in the system.  Therefore, in theory, it should be impossible for the ambulance provider to receive a payment and then a recoupment for SNF PPS.

I suspect the situation described above is one where the ambulance claim is submitted prior to CMS’ receipt of the associated SNF claim for the patient.  As noted above, in order for the edits to work properly, both the associated hospital and SNF claims must be in the system.  While CMS clearly contemplated the possibility that the ambulance claim might be submitted prior to the associated hospital claim, they do not appear to have considered the possibility that the ambulance claim might beat the associated SNF claim into the system.

When that happens, there is nothing in the CWF to indicate that the patient was in a Part A SNF Stay.  As a result, the claim bypasses these new edits entirely, and frequently ends up being paid by the MAC.  I suspect what happens next is that the SNF claim hits the system, and triggers CMS to automatically recoup the payment for the ambulance claim.

What should happen at that point is the ambulance claim should then be run through the new edits.  If the hospital claim is already in the system, the ambulance claim gets “stapled” to that claim, and then either passes the edit or gets denied based on the information on the hospital claim.  If the hospital claim is not in the system, the ambulance provider gets the “interim” denial discussed above, and the claim should be further adjusted if and when the hospital claim is submitted.

However, at this point, it is entirely possible that these claims are not being put through the edit.  The AAA has asked CMS to look into whether the new edits are working as intended in these situations.

This sounds like a complete mess:  

Not really a question, but you are not wrong.

This sounds extremely complicated.  Is there anything I can do to reduce the possibility that my claims get denied?

I think it is important to distinguish between: (1) denials that are correct based on the HCPCS or CPT codes on the associated hospital claim and (2) denials that are based solely on the timing of your claim, i.e., denials based on your claim being submitted prior to the submission of the associated hospital claim.  For these purposes, I will refer to the latter category as “interim denials.”

At the onset, I think all members should recognize that there is nothing you can do to eliminate denials for claims that are properly bundled to the SNF based on the HCPCS or CPT codes on the associated hospital claim.

For numerous reasons, I think the proper focus should be on reducing the interim denials.  First and foremost, the difficulty with an interim denial is that you don’t know whether that denial will ultimately prove to be correct, or whether the claim will ultimately be reprocessed and paid by the MAC.  Second, even if the claim will be reprocessed, there currently appears to be a significant delay in “when” that reprocessing takes place.  Finally, without knowing whether the claim will be reprocessed (and whether that reprocessing will result in a payment), you can’t know whether you should be billing the SNF.

What information would be helpful in reducing these interim denials?

You would need to know the following data points prior to the submission of your claim:

  1. Whether the patient was in a Part A SNF Stay on the date of transport?
  2. What was the specific procedure/service the patient received at the hospital?

If you knew with certainty that the patient was not in the Part A Period of their SNF stay, you would know that the new edits would be inapplicable to your claim, and you could submit it to Medicare as part of your normal billing workflow.

If you also knew the specific procedure/service the patient received at the hospital, you would also be in a position to know whether the service was the financial responsibility of the SNF, assuming the patient was in the Part A Period.  When you know the claim is the financial responsibility of the SNF, you could then immediately invoice the claim to the SNF.  If your arrangement with the SNF requires you to first obtain a Medicare denial, you would also have the option of submitting the claim and getting the proper OA-190 denial, and then invoicing the SNF. Note: in these situations, you would receive the oA-190 denial regardless of whether your claim was submitted prior to the hospital claim.

By contrast, when you know the patient is in the Part A Period AND the procedure/service is one that would be excluded from SNF PPS, you can avoid the interim denial by ensuring that your claim is not submitted until after the associated hospital claim. In other words, this is a situation where holding your claim for a reasonable period of time might be beneficial.

We currently ask the SNF to provide information on the patient’s Part A status.  However, they frequently tell us that they don’t know, or that we are not entitled to this information.  What can we do?

First, they are absolutely permitted to share this information with you.  Both you and the SNF are “covered entities” under the HIPAA Privacy Rule.  In this instance, information on the patient’s Part A status would be helpful to you in managing your payment practices.  The regulations at 45 C.F.R. 164.506(c)(3) permit one covered entity to share protected health information with another covered entity for the payment activities of that entity.

However, it is important to note that, while the SNF may share that information with you, the Privacy Rule does not require them to provide you with this information absent a written authorization from the patient.

This information is critical to navigating the new edits.  If you haven’t been asking for it up until this point, I would strongly encourage you to consider having a discussion with the local SNFs to explain why you will be asking for this information in the future.  You may also want to consider developing a specific form that they must complete (similar to the PCS form) that would provide this information.

We have asked for this information in the past, and are typically told that if we continue to ask, the SNF will consider using our competitor, who doesn’t ask too many questions. 

I understand.  I would try to explain to the SNF that the reason you are asking for this information is to be able to make an intelligent determination on whether the transport is likely to the be financial responsibility of the SNF.  This information allows you to avoid denials in certain instances where they would otherwise not be responsible.  If they don’t provide you with this information, the foreseeable consequence is that you will end up getting interim denials from Medicare, which may leave you no choice but to bill the SNF for the transport.

I feel bad for the person that asked the previous question.  Fortunately for me, we are the only ambulance provider in the area, so the threat of going to a competitor rings a bit hollow.  Do I have any additional options to get this information?

You do.  I would try to insert language into your agreements with the SNFs that obligate them to provide you with this information.  You could also try to insert language that makes them financially responsible whenever they fail to provide this information.

We don’t have agreements with the local SNFs.  Do we need an agreement?

One of the foreseeable consequences of this new edit is that it will increase the frequency with which you bill the SNFs.  One of the most common complaints I hear is that SNFs refuse to pay their bills.  In most instances, the problem is that the ambulance service lacks a written agreement with the SNF, and, as a result, they frequently end up in disputes about when the SNF is responsible.  A written agreement that clearly spells out when the SNF is responsible can not only minimize the potential for misunderstandings, but also afford you greater remedies when the SNF refuses to pay.

With respect to the new edits, what should that agreement say?

You should consult with your local attorney regarding the applicable language.  However, conceptually, you want to include language that indicates that a Medicare denial is conclusive evidence that the SNF is financially responsible.  This provision could then go on to provide that, in the event Medicare should reprocess and pay a particular claim, then you would refund the SNF’s payment.

What can I do to help the AAA in minimizing the administrative burden associated with these new edits?

The AAA is currently conducting a survey of members to help get a sense of the magnitude of the issues created by these new edits. If you would like to participate in the survey, you can click here.

Take the Survey

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

ET3 Model Application Portal Now Open

Written by Brian Werfel on . Posted in ET3, News, Reimbursement.

Emergency Triage, Treatment and Transport (ET3) Model Application Portal is Now Open!

On August 5, 2019, the Center for Medicare and Medicaid Innovation (CMMI) announced that it had opened its Request for Application (RFA) Online Portal. The Online Portal can be found on the ET3 Model website. The Online Portal can also be accessed directly by clicking here.

As a reminder, CMMI will be hosting a webinar about the Online Portal on Thursday, August 8, 2019.  This webinar will take place from 12:00 p.m. to 1:30 p.m. EDT. If you are interested in participating in this webinar, you can register by clicking here.

CMMI Releases Preview of ET3 RFA

Written by Brian Werfel on . Posted in ET3, Member Advisories, Member-Only, News, Reimbursement.

On May 22, 2019, the Center for Medicare and Medicaid Innovation (CMMI) released a preview of the Request for Applications (RFAs). This documentation will be used by ambulance providers and suppliers to apply for inclusion as “Participants” in the Emergency Triage, Treat, and Transport (ET3) pilot program.

Webinar: Learn More About the RFA

June 13, 2019 | 2:00 PM Eastern
Speakers: Brian Werfel, Kathy Lester, Rebecca Williamson, Asbel Montes
$99 for Members | $198 for Non-Members

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Relevant Background

On February 14, 2019, CMMI announced the creation of a new 5-year pilot program designed to give participating EMS agencies greater flexibility to address the needs of Medicare beneficiaries following a 911 call. The ET3 model would create a new payment model under which participating EMS agencies will be eligible for Medicare reimbursement for: (1) transportation to alternative treatment destinations and (2) treatment at the scene. At the time, CMMI indicated that it anticipated starting the ET3 model in early 2020. To that end, CMMI anticipated soliciting Requests for Participation in the Summer of 2019.

Participation in this pilot program is voluntary. Regardless of whether an ambulance provider or supplier participates in the pilot program, payment for ambulance transportation currently covered under the Medicare Ambulance Fee Schedule will not be affected.

The RFA provides a good deal of additional information regarding the proposed operation of the ET3 Model. These additional details are summarized below.

Eligibility Criteria/Application Process

To be eligible to participate, you must be a Medicare-enrolled ambulance provider or supplier.  In addition, CMMI is limiting eligibility to ambulance providers and suppliers that are located in a state or state in which at least 15,000 Medicare FFS emergency ambulances took place in calendar year 2017.  Note: based on this restriction, ambulance providers and suppliers in the State of Alaska would not be eligible for participation in the ET3 Model.

Medical Necessity Requirement

CMMI previously indicated that the existing medical necessity requirements would apply to ambulance transportation to alternative treatment destinations. In the RFA, CMMI reiterated this requirement. As a result, EMS agencies will only be eligible for reimbursement for transportation to alternative treatment destinations to the extent the beneficiary’s condition is such that safe transport by other means is contraindicated.

CMMI indicated that beneficiaries that do not meet the medical necessity requirements for ambulance transportation may still meet the medical necessity requirements for a Medicare-covered item or service furnished by a qualified health care practitioner, and, therefore, may allow an EMS agency to receive payment for treatment at the scene under the ET3 Model.

Payments under the ET3 Model

The ET3 Model provides for a number of new payment streams.  The two payment streams being made available to participating EMS agencies are: (1) payment for transportation of Medicare beneficiaries to alternative treatment destinations and (2) payment for treatment of the Medicare beneficiary at the scene, where such care was rendered by a qualified health care practitioner either at the scene or via telehealth.

Payment for Transportation to Alternative Treatment Destinations

When the ET3 Model was first announced, CMS indicated that the reimbursement to EMS agencies for providing transportation to alternative treatment destinations would be based on the corresponding BLS “base rate” in the area. However, in the RFA, CMMI indicates that the payment for transportation to an alternative treatment destination will now be made at either the applicable BLS emergency or ALS emergency base rate.  In order to qualify for payment at the applicable ALS emergency rate, the EMS agency must meet Medicare’s definition of “Advanced Life Support” (i.e., the provision of valid ALS intervention and/or the provision of a qualifying ALS assessment).  The payment for this base rate would include the current adjustments for transports provided in urban, rural, or super-rural areas.

The EMS agency would also be eligible for payment for all loaded mileage, at the applicable Medicare mileage rate. This payment would include all current adjustments, including the “bonus” paid for the first 17 rural miles.

Note: CMMI indicated that it would be creating an exception to general Medicare requirement that patients be transported to the nearest appropriate facility. Based on the language in the RFA, it appears clear that CMMI would cover all of the mileage to an alternative treatment destination, even where transportation to the nearest hospital ED would have been shorter.

Based on the language in the RFA, it appears that claims for transportation to alternative treatment destinations will be submitted using the normal ambulance HCPCS codes (i.e., A0427 for an ALS emergency and A0429 for a BLS emergency).

Payment for Treatment at the Scene

When the EMS agency facilitates in-person treatment by a qualified health care practitioner (QHP), the EMS agency will be paid an amount equivalent to the BLS emergency or ALS emergency base rate.  In order to qualify for payment at the applicable ALS emergency rate, the EMS agency must provide medically necessary supplies and services and either a qualifying ALS assessment or the provision of at least one ALS intervention. When the EMS agency facilitates treatment in pace via telehealth, the EMS agency will be paid a modified “telehealth originating site facility fee” equivalent to the applicable BLS emergency or ALS emergency base rate.

Claims submitted for treatment at the scene, whether by the QHP in person or via telehealth, will be submitted using a model-specific code (yet to be announced).

Performance-Based Payment Adjustment for EMS Agencies

EMS agencies that provide transportation to alternative treatment destinations and/or treatment at the scene may be eligible for performance-based payment adjustments of up to 5%, based upon meeting certain performance and reporting metrics. These adjustments will become available no earlier than Year 3 of the ET3 Model, and are not guaranteed.  Performance-based payment adjustments would be based on performance during the previous year (e.g., if the EMS agency meets the performance criteria in Year 3, it would see an increase in Year 4). These performance-based payment adjustments apply only to payments under the ET3 Model, i.e., they do not apply to Medicare payments made under the current Medicare Ambulance Fee Schedule.

Payment for Non-Participant Partners

When an EMS agency transports a patient to an alternative treatment destination, that facility will bill Medicare for the services it renders to the beneficiary using its normal claims submission procedures.

Payment for Qualified Health Care Practitioners

A QHP that partners with an EMS agency to provide treatment at the scene will bill Medicare using the applicable HCPCS code for the services it furnished under existing Medicare FFS rules.  When that service is furnished via telehealth, the QHP must submit a claim to Medicare for telehealth services furnished from the distant site.  QHPs that provide services to Medicare beneficiaries during non-business hours (defined as being from 8:00 p.m. to 8:00 a.m. local time) will be eligible for a 15% increase in the payment rates normally applicable to their in-person or telehealth services.

Notice of Funding Opportunity for 911 Dispatch Centers

Separate from the RFA process, CMMI expects to allocate funding to governmental entities and their designees that operate 911 dispatch centers.  The purpose of this funding is to support the successful implementation of medical triage lines integrated into the local 911 system.  These Notice of Funding Opportunity (NOFOs) will be released following the first round of Participant selection (i.e., likely in the Fall/Winter of 2019).

Application Timelines

The RFA is the first of up to three potential RFAs that will be used to select EMS agencies to participate in the ET3 Model as “Participants.” CMMI is indicating that it hopes to select enough EMS agencies to participate to capture up to 30% of the existing volume of Medicare FFS emergency ground ambulance transports. Additional RFAs will be considered based on available funding and evidence that the ET3 Model is working as intended.

CMMI is not currently accepting applications. Round 1 applications will be accepted via an application portal that will be opened at a later date. Information on the applicable process, including the date the application portal will be opened will be posted on the ET3 Model website: https://innovation.cms.gov/initiatives/et3

Application Submission Process

If you elect to apply for participation in the ET3 Model, you will be required to identify a “region” in which you propose to implement the model. CMMI indicates that this region should be a county or equivalent entity, or multiple counties or equivalent entities.

In selecting Participants, CMMI indicated that it will give preference to applicants who propose a region that includes at least one county (or county-equivalent) where at least 7,500 Medicare FFS emergency ground ambulance transports occurred in 2017. CMMI provided a list of the number of Medicare FFS emergency ground ambulance transports that occurred in each county (organized by state)  That list can be obtained by clicking here.

Applicants will be required to participate in the transportation to alternative treatment destination (ATD) portion of the program. Applicants will have the option – – but not be required – – to propose the creation of a program to provide treatment at the scene in conjunction with QHPs.  Note: CMMI indicated that applicants that elect to implement the treatment at the scene intervention will earn additional points towards their overall application score.

In order to implement the ATD portion, you will be required to partner with alternative destination sites (e.g., Urgent Care Centers), which must be enrolled in Medicare or employ or contract with Medicare-enrolled practitioners, and which must be able to accept and treat Medicare FFS beneficiaries.  If you elect to implement the treatment at the scene portion, you must also partner with QHPs to provide treatment at the scene. These contractual partners are referred to in the RFA as “Non-Participant Partners” (NPPs). To qualify, you must contract with NPPs that can ensure the availability of services for ET3 Model beneficiaries on a 24 hours per day, 7 days a week basis. CMMI will have the right to accept or reject a proposed Non-Participant Partner.

Applicants will also be required to describe their strategy for engaging other payers in their proposed service area, or explain how they can successfully implement the model for Medicare FFS beneficiaries only.

Accountability and Performance Metrics/Ongoing Educational Commitments

Participants in the ET3 will be required to report certain metrics to CMMI and its contractors. You will also be required to participate in what CMMI is calling a “Learning System.”  This is a structured approach to sharing, integrating, and actively applying quality improvement concepts, tactics, and lessons designed to improve the likelihood of success of the model. At a minimum, this will include consistent participation in monthly ET3 Model learning activities, and participation in at least one in-person event, with the location to be determined by CMMI at a later date.

The above is a brief summary of the new information available regarding the ET3 Model. It is not intended to be a complete discussion of all of the requirements for participation. AAA Members are strongly encouraged to read the RFA for themselves to determine whether they want to participate in the ET3 Model.

New SNF PPS Edits Highlight the Importance of Facility Agreements

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

On April 1, 2019, CMS implemented a new series of Common Working File (CWF) edits that are intended to better identify ground ambulance transports that are furnished in connection with an outpatient hospital service that is properly bundled to the skilled nursing facility (SNF) under the SNF Consolidated Billing regime.

These edits work by comparing the ambulance claim to the associated outpatient hospital claim.  Hospital claims were already subject to CWF edits designed to identify outpatient hospital services that should be bundled to the SNF.  These hospital edits operate by referencing a list of Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) codes that correspond to outpatient hospital services that are expressly excluded from SNF Consolidated Billing.  Hospital claims for outpatient services that are submitted with one of these excluded codes bypass the existing CWF edits, and are then sent to the appropriate Medicare Administrative Contractor for further editing and payment.  Hospital claims submitted without one of these codes are denied for SNF Consolidated Billing.

The new ambulance edits will extend these process one step further.  The ambulance claim will be associated with the outpatient hospital claim on the same date.  To the extent that hospital claim is bundled under SNF Consolidated Billing, the associated ambulance claim will also be bundled.  To the extent the hospital claim is unbundled, the associated ambulance claim will be unbundled.

In order for these new edits to work properly, there must be an outpatient hospital in Medicare’s claim history. If the ambulance claim beats the hospital claim into the system, the ambulance claim will be rejected. If and when an outpatient hospital claim with the same date of service enters Medicare’s system, the initial rejection of the ambulance claim will be overturned, and the ambulance claim will be reprocessed using the same edits.

It is important to note that the new edits were designed to reject the ambulance claim as a bundled service unless the hospital claim indicates that it should not be bundled.  In other words, these edits are designed to be “over inclusive.”  This over-inclusiveness creates the potential for ambulance denials in situations that, on their face, would not appear to be bundled.

A few examples will help illustrate this point. Imagine a situation where the patient elects, for whatever reason, to pay out-of-pocket for their hospital care (in a situation where that care would not be bundled to the SNF), and, as a result, the hospital does not submit a bill to Medicare for its services.  Based on how the new edits are designed, your ambulance claim for the transport to that excluded service will be rejected based on the lack of a hospital claim. Or maybe the patient has both Medicare and the V.A., and has elected to have the V.A. be the primary payer for their required hospital care.  Again, there would likely be no outpatient hospital claim submitted to Medicare on that date of service, resulting in the rejection of your ambulance claim.

I can see your point, but those examples are pretty far-fetched.  How big an issue is this really?

I agree those examples are pretty far-fetched.  However, there are other situations that create the same problem.  For example, what about an emergent response to transport an SNF patient to the hospital for necessary emergency services?  Imagine if you are called to respond late at night (e.g., 11:30 p.m.) tonight.  Now imagine that, by the time you get to the patient, load them into the vehicle, and transport them to the ED, it has crossed over midnight into the next day.

What date of service is going to be on the hospital’s claim?  Almost certainly, the hospital will use tomorrow’s date.  As a result, when your claim hits Medicare’s system, there will not be an associated hospital claim, which will result in your claim being rejected as the responsibility of the SNF.  In this situation, Medicare’s edit has worked as intended, but the result is the denial of a claim that should be separately payable by Medicare Part B.

Okay, I can see how this might be annoying,
but I can appeal the claim and likely win on appeal, right? 

Yes and no.  The problem is that you are not likely to win on either of the first two levels of appeal, as they are likely going to rely upon the information in the CWF.  I can see you possibly winning your appeal at the ALJ level…5 to 7 years from now.

In other words, the appeals process is unlikely to provide an acceptable resolution.  Instead, I think the majority of ambulance providers are going to look to the SNFs to make good in these situations.  Of course, the SNFs are likely going to disclaim liability, arguing (correctly) that ambulance transportation to an ED is an excluded service.

This is where the agreement with the SNF comes into play.  One key purpose of contracts is to allocate known risks between the parties.  In this instance, the “risk” that needs to be addressed is the possibility that Medicare might incorrectly reject your claim thinking it is bundled to the SNF.  I would argue that this risk should be absorbed by the SNF.  The transport to the ED should have suspended the patient’s SNF stay, which would have allowed you to receive a separate payment from Medicare.  However, the fact that your claim was rejected is proof positive that the CWF does not reflect the suspension of the patient’s SNF stay.  Indirectly, it also serves as proof that the SNF received a per diem payment for the patient on that date.  To me, the fact that they accepted the per diem payment means they accepted the risk of a bundled ambulance service on that date.  I would also argue that it was their failure to properly suspend the patient’s SNF stay that set in motion your denial.  Either way, I would be looking to the SNF for payment.

Based on my experience, the typical agreement with an SNF does not address this situation.  Frequently, these agreements do not even address the specifics of SNF Consolidated Billing.  Instead, I tend to see general language indicating that the ambulance provider will bill the SNF when payment responsibility lies with the SNF under an applicable federal or state health care program.  I doubt that language is going to convince an SNF to take financial responsibility for the situation discussed above.

The good news is that your existing agreements can easily be revised to address this situation.  The language I would recommend is something along the lines of:

“The parties acknowledge and agree that a denial from Medicare for SNF consolidated billing shall constitute conclusive evidence that a transportation service is the financial responsibility of the facility.” 

In sum, the new SNF Consolidated Billing edits are going to increase the frequency with which we are forced to look to the SNFs for payment.  In most instances, it will be a situation where the SNF is legally responsible under SNF Consolidated Billing.  However, there will also be situations where the over-inclusive nature of the edits results in the claim being incorrectly denied as the SNF’s responsibility.  The question becomes how you want to handle these incorrect denials.  Do you want to appeal and hope CMS reverses its decision?  Or do you want to hold the SNF responsible?  If you want to hold the SNF responsible, you will likely need to revise your agreements with the SNFs.

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

Summary of March 28, 2019 Ambulance ODF

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

The Centers for Medicare and Medicaid Services (CMS) held its latest Open Door Forum on Wednesday, March 28, 2019.  As with past Open Door Forums, CMS started the call with the following announcements:

  1. Ambulance Cost Data Collection – CMS reminded the industry that the Bipartisan Budget Act of 2018, enacted on February 9, 2018, requires CMS to create a new cost data collection system by December 31, 2019.
  2. Emergency Triage, Treat, and Transport Model – A representative from the Innovation Center within CMS provided an overview of the “Emergency Triage, Treat, and Transport Model” or “ET3.” This is a 5-year pilot program intended to provide ambulance providers with greater flexibility to handle low-acuity 911 calls, by providing Medicare payment for: (a) ambulance transportation to alternative treatment destinations and (b) treatment at the scene. The CMS representative indicated that CMS is in possession of data that suggests that 16% of emergency ambulance transports to a hospital emergency department could have been resolved by transporting the patient to an alternative treatment site, e.g., an urgent care center. CMS estimates that had all of these patients elected to receive care in the lower-acuity setting, it would have saved the Medicare Program approximately $560 million each year. With respect to the operation of the model itself, CMS essentially repeated the information that had been previously provided on its webinars. You can view the AAA Member Advisory on the ET3 Model by clicking here.
  3. Ambulance Inflation Factor – CMS reiterated that the 2019 Ambulance Inflation Factor is 2.3%.

Following the announcements, CMS moved into a Question & Answer period. The majority of the questions related to the ET3 pilot program. As is typical, many questions were not answered on the call; instead, CMS asked the individual to submit their question in writing. However, the following questions were answered on the call:

  1. Payment Rates under ET3 – CMS was asked whether the BLS base rate payment would be the BLS emergency base rate. It was not clear that the CMS representative fully understood the question, although she indicated that it would.
  2. Eligibility for Government Agencies – CMS was asked whether governmental agencies that operate 911 centers would submit applications to participate as part of the RFA process in the Summer of 2019. CMS responded that governmental agencies that operate 911 centers would not submit RFAs, but would rather wait for the Notice of Funding Opportunity (NOFO), which will be issued after the ambulance providers and suppliers are selected for participation (expected to be the late Fall/Winter of 2019). CMS further confirmed that if the governmental agency also operated its own ambulance service that it would be eligible to apply for both aspects of the ET3 Model.
  3. Limit on Ambulance Providers – CMS was asked whether it would cap the number of ambulance providers and suppliers selected to participate in the program. CMS responded that, at the present time, it has no intent to cap the number of participating ambulance providers and suppliers at any specific number.
  4. Return Transports from Alternative Treatment Destinations – CMS was asked whether the model would provide for ambulance payment for the return transport after a patient was transported to an alternative treatment site. CMS indicated that the model does not provide for payment for the return transport.
  5. Definition of “Telehealth” – CMS confirmed that the model will use the same definition of “telehealth” used in other areas of the Medicare Program. CMS further confirmed that telehealth encounters require both audio and video connections.
  6. Approval of Alternative Treatment Sites – CMS confirmed that state and local regulatory agencies would have final approval over acceptable alternative treatment sites.
  7. Qualified Health Care Practitioner – CMS confirmed that a “qualified health care practitioner” would be an individually enrolled Medicare practitioner, which includes physicians and nurse practitioners. In some instances, it can also include physician’s assistants. CMS confirmed that the definition would not include registered nurses or advance scope paramedics.
  8. NOFO Funding – CMS indicated that, at the present time, it is not prepared to release additional details on the nature or size of the funding opportunities available to governmental agencies and their designees that operate or have authority over 911 centers.
  9. Medicare Advantage and Other Payers – CMS confirmed that the ET3 Model applies only to Medicare beneficiaries enrolled in FFS Medicare. It does not apply to Medicare Advantage enrollees, Medicaid recipients, etc.

Questions? Email Brian at bwerfel@aol.com

HHS OIG Issues Advisory Opinion on Community Paramedicine

Written by Brian Werfel on . Posted in Member Advisories, Member-Only, News, Operations, Patient Care, Talking Medicare.

HHS OIG Issues Advisory Opinion Permitting Community Paramedicine Program Designed to Limit Hospital Readmissions

On March 6, 2019, the HHS Office of the Inspector General (OIG) posted OIG Advisory Opinion 19-03. The opinion related to free, in-home follow-up care offered by a hospital to eligible patients for the purpose of reducing hospital admissions or readmissions.

The Requestor was a nonprofit medical center that provides a range of inpatient and outpatient hospital services. The Requestor and an affiliated health care clinic are both part of an integrated health system that operates in three states. The Requestor had previously developed a program to provide free, in-home follow-up care to certain patients with congestive heart failure (CHF) that it has certified to be at higher risk of admission or readmission to a hospital. The Requestor was proposing to expand the program to also include certain patients with chronic obstructive pulmonary disease (COPD). According to the Requestor, the purpose of both its existing program and its proposed expansion was to increase patient compliance with discharge plans, improve patient health, and reduce hospital inpatient admissions and readmissions.

Under the existing program, clinical nurses screen patients to determine if they meet certain eligibility criteria. These include the requirement that the patient have CHF and either: (1) be currently admitted as an inpatient at Requestor’s hospital or (2) be a patient of Requestor’s outpatient cardiology department, and who had been admitted as an inpatient at Requestor’s hospital within the previously 30 days. The clinical nurses would identify those patients at higher risk of hospital admission based on a widely used risk assessment tool. The clinical nurses would also determine whether the patient had arranged to receive follow-up care with Requestor’s outpatient CHF center. Patients that do not intend to seek follow-up care with the CHF center, or who have indicated that they intend to seek follow-up care with another health care provider, would not be informed of the current program. Eligible patients would be informed of the current program, and offered the opportunity to participate. The eligibility criteria for the expanded program for COPD patients would operate in a similar manner.

Eligible patients that elect to participate in the current program or the expanded program would receive in-home follow up care for a thirty (30) day period following enrollment. This follow up care would consist of two visits every week from a community paramedic employed by the Requestor. As part of this in-home care, the community paramedic would provide some or all of the following services:

  • A review of the patient’s medications;
  • An assessment of the patient’s need for follow-up appointments;
  • The monitoring of the patient’s compliance with their discharge plan of care and/or disease management;
  • A home safety inspection; and/or
  • A physical assessment, which could include checking the patient’s pulse and blood pressure, listening to the patient’s lungs and heart, checking the patient’s cardiac function using an electrocardiogram, checking wounds, drawing blood and running blood tests, and/or administering medications.

The community paramedic would use a clinical protocol to deliver interventions and to assess whether a referral for follow-up care is necessary. To the extent the patient requires care that falls outside the community paramedic’s scope of practice, the community paramedic would direct the patient to follow up with his or her physician. For urgent, but non-life threatening conditions, the community paramedic would initiate contact with the patient’s physician.

The Requestor certified that the community paramedics would be employed by the Requestor on either full-time or part-time basis, and that all costs associated with the community paramedic would be borne by the Requestor or its affiliates.  The Requestor further certified that no one involved in the operation of the program would be compensated based on the number of patient’s that enroll in the programs. While one of the states in which the Requestor operates does reimburse for community paramedicine services, Requestor certified that it does not bill Medicaid for services provided under the program.

The question posed to the OIG was whether any aspect of the program violated either the federal anti-kickback statute or the prohibition against the offering of unlawful inducements to beneficiaries.

In analyzing the program, the OIG first determined that the services being offered under the program offer significant benefit to enrolled patients. The OIG specifically cited the fact that one state’s Medicaid program reimbursed for similar services as evidence of this value proposition. For this reason, the OIG concluded that the services constitute “remuneration” to patients. The OIG further concluded that this remuneration could potentially influence a patient’s decision on whether to select Requestor or its affiliates for the provision of federally reimbursable items and services.  Therefore, the OIG concluded that the program implicated both the anti-kickback statute and the beneficiary inducement prohibition.

The OIG then analyzed whether the program would qualify for an exception under the so-called “Promoting Access to Care Exception.” This exception applies to remuneration that improves a beneficiary’s ability to access items and services covered by federal health care programs and which otherwise pose a low risk of harm. The OIG determined that while some aspects of the program would likely fall within this exception, other aspects would not. Specifically, the OIG cited the home safety assessment as not materially improving a beneficiary’s access to care.

Having concluded that there was no specific exception that would permit the arrangement, the OIG then analyzed the arrangement under its discretionary authority, ultimately concluding that the program posed little risk of fraud or abuse. In reaching this conclusion, the OIG cited several factors:

  1. The OIG felt that the potential benefits of the program outweighed the potential risks of an improper inducement to beneficiaries. The OIG cited the fact that beneficiaries must have already selected Requestor or its associated clinic as their provider of services before learning about the program. As the OIG indicated “the risk that the remuneration will induce patients to choose Requestor or the Clinic for CHF- or COPD-related services is negligible because patients already have made this selection.” The OIG also noted that the community paramedic will inform beneficiaries of their right to choose a different provider prior to referring the beneficiary to the Requestor or its clinic for services outside the scope of the program.
  2. The OIG noted that, to the extent the program works as intended, it would be unlikely to lead to increased costs to federal health care programs. As noted above, Requestor had certified that it would not bill federal health care programs for the services of the community paramedic.
  3. The program was designed in a way as to minimize the potential for interference with clinical decision-making.
  4. The Requestor certified that it would not advertise or market the program to the public, thereby minimizing the chances of beneficiaries learning about the program prior to selecting Requestor for their CHF- or COPD-related care.
  5. The OIG noted that the program appeared to be reasonably tailored to accomplish the goal of reducing future hospital admissions. For example, the OIG cited the fact that the Requestor limited inclusion in the program to patients deemed to be at a higher-than-normal risk of hospital admission or readmission, and that it made these determinations using a widely used risk assessment tool.  The OIG noted that these patients would likely benefit from the continuity of care offered under the program. In addition, the OIG noted that the community paramedics would be in a position to keep the patients’ physicians appraised of their health by documenting all of their activities.

Potential Impact on Mobile Integrated Health and/or Community Paramedicine Programs

OIG advisory opinions are issued directly to the requestor of the opinion. The OIG makes a point of noting that these opinions cannot be relied upon by any other entity or individual. Legal technicalities aside, the OIG’s opinion is extremely helpful to the industry, as it lays out the factors the OIG would consider in analyzing similar arrangements. Thus, the opinion is extremely valuable to ambulance providers and suppliers that current operate, or are considering the operation of, similar mobile integrated health and/or community paramedicine programs. 

Update on New SNF Edits

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

CMS Set to Implement New Common Working File Edits to Identify Ambulance Services Provided in Connection with Outpatient Hospital Services that should be bundled to the SNF under Consolidated Billing.

In a Member Advisory issued last week, the AAA provided an update on a series of new Common Working File (CWF) edits intended to identify ambulance transports furnished in connection with outpatient hospital services that are properly bundled to the skilled nursing facility under the SNF Consolidated Billing regime. These new edits are set to go into effect on April 1, 2019. 

In our discussion of the implementation specifics, we attempted to answer the question of what would happen when an ambulance claim is submitted prior to the receipt of the associated hospital outpatient claim, and where the associated hospital claim eventually hit Medicare’s system. Specifically, we indicated as follows:

“The Transmittal contains further instructions that the CWF be updated to identify previously rejected ambulance claims upon receipt of an associated hospital claim for the same date of service that contains an Exempted Code.  Once identified, the Shared System Maintainer (SSM) is supposed to adjust the previously rejected or denied ambulance claim.  At this point, the nature of that “adjustment” is unclear, i.e., it is unknown whether the SSM will automatically reprocess the ambulance claim for payment.  The AAA is seeking additional clarification from CMS on this important point.”

On March 15, 2019, CMS responded to our request for clarification. Specifically, CMS indicated that it has instructed the SSM and/or its Medicare Administrative Contractor (MAC) to automatically reprocess claims that were rejected for lack of an associated hospital outpatient claim.

Upon reprocessing, the claims will pass the edits to the extent the associated hospital claim contains a HCPCS or CPT code that indicates that the hospital outpatient service was excluded from SNF Consolidated Billing. Such claims would then be forwarded to the MAC for further editing, and either paid or denied. By contrast, when the associated hospital outpatient claim contains HCPCS or CPT codes that suggest the hospital services should be bundled to the SNF, the claim will be reprocessed and denied by the MAC with a remittance advice code indicating that the SNF is financially responsible.

AAA Webinar on New SNF Consolidated Billing Edits

March 27, 2019 | 2:00 PM Eastern
Speakers: Brian Werfel, Esq.
$99 for Members | $198 for Non-Members

Join AAA Medicare Consultant Brian Werfel, Esq., to go over the new SNF Consolidated Billing edits that go into effect April 1, 2019. These edits are being implemented by CMS in response to 2017 investigation by the HHS Office of the Inspector General that determined that CMS lacked the appropriate claims processing edits to properly identify ambulance transports provided in connection with hospital outpatient services that are not expressly excluded from SNF PPS. The implementation of these new edits will force ambulance providers and suppliers to rethink their current claims submission processes for SNF residents. Ambulance providers and suppliers will need to make a decision on what to do with these claims moving forward. Sign up today to make sure your service is ready!

Register for the Webinar

CMS SNF Edits Go Into Effect – April 1, 2019

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

CMS Set to Implement New Common Working File Edits to Identify Ambulance Services Provided in Connection with Outpatient Hospital Services that should be bundled to the SNF under Consolidated Billing

On November 2, 2018, the Centers for Medicare and Medicaid Services (CMS) issued Transmittal 2176 (Change Request 10955), which would establish a new series of Common Working File (CWF) edits intended to identify ambulance transports furnished in connection with outpatient hospital services that are properly bundled to the skilled nursing facility under the SNF Consolidated Billing regime. These new edits are set to go into effect on April 1, 2019. 

Why these edits are necessary?

In 2017, the HHS Office of the Inspector General conducted an investigation of ground ambulance claims that were furnished to Medicare beneficiaries during the first 100 days of a skilled nursing home (SNF) stay. Under the SNF Consolidated Billing regime, SNFs are paid a per diem, case-mix-adjusted amount that is intended to cover all costs incurred on behalf of their residents.  Federal regulations further provide that, with limited exceptions, the SNF’s per diem payment includes medically necessary ambulance transportation provided during the beneficiary’s Part A stay. The OIG’s report was issued in February 2019.

The OIG conducted a review of all SNF beneficiary days from July 1, 2014 through June 30, 2016 to determine whether the beneficiary day contained a ground ambulance claim line. The OIG excluded beneficiary days where the only ambulance claim line related to: (1) certain emergency or intensive outpatient hospital services or (2) dialysis services, as such ambulance transportation would be excluded from SNF Consolidated Billing. The OIG determined that there were 58,006 qualifying beneficiary days during this period, corresponding to $25.3 million in Medicare payments to ambulance suppliers.

The OIG then selected a random sample of 100 beneficiary days for review. The OIG determined that 78 of these 100 beneficiary days contained an overpayment for the associated ambulance claims, as the services the beneficiary received did not suspend or end their SNF resident status, nor was the transport for dialysis. The OIG determined that ambulance providers were overpaid a total of $41,456 for these ambulance transports. The OIG further determined that beneficiaries (or their secondary insurances) incurred an additional $10,723 in incorrect coinsurance and deductibles.

Based on the results of its review, the OIG estimates that Medicare made a total of $19.9 million in Part B overpayments to ambulance suppliers for transports that should have been bundled to the SNFs under SNF Consolidated Billing regime. The OIG estimated that beneficiaries (and their secondary insurances) incurred an additional $5.2 million in coinsurance and deductibles related to these incorrect payments.

The OIG concluded that the existing edits were inadequate to identify ambulance claims for services associated with hospital outpatient services that did not suspend or end the beneficiary’s SNF resident status, and which were not related to dialysis. The OIG recommended that CMS implement additional edits to identify such ambulance claims.

Overview of new claims processing edits

In response to the OIG’s report, CMS issued Transmittal 2176, which implements a new series of claims processing edits to identify ambulance claims associated with outpatient hospital services that should be bundled to the SNF. As noted above, these edits will go into effect on April 1, 2019.

These new claims processing edits are somewhat complicated. In order to properly understand how these claims edits will work, it is helpful to understand that CMS already has claims processing edits in place to identify hospital outpatient claims that should be bundled to the SNF. These CWF edits operate by referencing a list of Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) codes that correspond to outpatient hospital services that are expressly excluded from SNF Consolidated Billing. Hospital claims for outpatient services that are submitted with one of these excluded codes bypass the existing CWF edits, and are then sent to the appropriate Medicare Administrative Contractor for further editing and payment. Hospital claims submitted without one of these codes are denied for SNF Consolidated Billing. For convenience, the list of HCPCS and CPT codes excluded from SNF Consolidated Billing is hereinafter referred to as the “Exempted Codes.”

The new edits for ambulance claims will compare Part B ambulance claims to the associated outpatient hospital claim to see whether or not that hospital claim is excluded from SNF Consolidated Billing.

Specifics related to new claims processing edits

Under these new edits, the CWF will reject an incoming ambulance claim whenever the beneficiary is determined to be in an SNF Part A stay if either:

  1. There is no associated outpatient hospital claims for the same date of service on file; or
  2. There is an associated outpatient hospital claim for the same date of service on file (paid or denied), but where that outpatient hospital claim does not contain at least one Exempted Code.

When an incoming ambulance claim is rejected by the CWF, it will be sent to the applicable Medicare Administrative Contractor and rejected (Part A Ambulance Providers) or denied (Part B Ambulance Suppliers) using the applicable Claim Adjustment Reason Code/Remittance Advice Remark Code for SNF Consolidated Billing.  In other words, the ambulance claim will be denied with an indication that youshould bill the SNF.

The Transmittal contains further instructions that the CWF be updated to identify previously rejected ambulance claims upon receipt of an associated hospital claim for the same date of service that contains an Exempted Code. Once identified, the Shared System Maintainer (SSM) is supposed to adjust the previously rejected or denied ambulance claim. At this point, the nature of that “adjustment” is unclear, i.e., it is unknown whether the SSM will automatically reprocess the ambulance claim for payment. The AAA is seeking additional clarification from CMS on this important point.

Potential concerns for ambulance providers and suppliers

Based on the current experience of hospital providers, the AAA is cautiously optimistic that the new edits can be implemented in a way that proper identifies ambulance transports associated with hospital outpatient claims that should be bundled to the SNF vs. those that correctly remain separately payable by Medicare Part B.

However, the AAA has some concerns with the manner in which CMS intends to apply these edits.  Ambulance providers and suppliers are typically in a position to submit their claims earlier than the corresponding hospital, many of which submit claims on a biweekly or monthly cycle.  This creates a potential timing issue. This timing issue arises because the edits will reject any ambulance claim that is submitted without an associated hospital claim on file.  In other words, even if the hospital outpatient service is properly excluded from SNF Consolidated Billing, the ambulance claim will still be rejected if it beats the hospital claim into the system. The hope is that CMS will subsequently reprocess the ambulance claim once the hospital claim hits the system. However, at this point in time, it is unclear whether these claims will be automatically reprocessed, or whether ambulance providers and suppliers will be forced to appeal these claims for payment.

One option available to ambulance providers and suppliers would be to hold these claims for a period of time, in order to allow the hospitals to submit their claims. By waiting for the hospital to submit its claim, you can ensure that your claims will not be denied solely due to the timing issue. This should eliminate the disruption associated with separately payable claims being rejected and then subsequently reprocessed and/or appealed. It would also give you a degree of certainty when billing the SNF for claims that are denied for SNF Consolidated Billing. However, holding claims carries an obvious downside, i.e., it will disrupt your normal cash flow.

To summarize, the implementation of these new edits will force ambulance providers and suppliers to rethink their current claims submission processes for SNF residents. Ambulance providers and suppliers will need to make a decision on whether to hold claims to minimize the potential for problems, or to continue their existing submission practices and deal with any issues as they arise.

AAA webinar on new SNF Consolidated Billing edits

March 27, 2019 | 2:00 PM Eastern
Speakers: Brian Werfel, Esq.
$99 for Members | $198 for Non-Members

Join AAA Medicare Consultant Brian Werfel, Esq., to go over the new SNF Consolidated Billing edits that go into effect April 1, 2019. These edits are being implemented by CMS in response to 2017 investigation by the HHS Office of the Inspector General that determined that CMS lacked the appropriate claims processing edits to properly identify ambulance transports provided in connection with hospital outpatient services that are not expressly excluded from SNF PPS. The implementation of these new edits will force ambulance providers and suppliers to rethink their current claims submission processes for SNF residents. Ambulance providers and suppliers will need to make a decision on what to do with these claims moving forward. Sign up today to make sure your service is ready!

Register for the Webinar

AAA Releases 2019 State Medicaid Ambulance Rate Survey

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

The AAA is pleased to release its 2019 State Medicaid Rate Survey. This survey sets forth the fee-for-service Medicaid rates for all 50 states. For each state, the Survey lists the rate paid for each of the following procedure codes:

  • A0428 – BLS Non-Emergency
  • A0429 – BLS Emergency
  • A0426 – ALS Non-Emergency
  • A0427 – ALS Emergency
  • A0433 – ALS-2
  • A0434 – SCT
  • A0225 – Neonate Transport
  • A0998 – Treatment, No Transport
  • A0425 – Mileage
  • A0422 – Oxygen
  • A0382/A0398 – BLS/ALS Routine Disposable Supplies
  • A0420 – Wait Time
  • A0424 – Extra Attendant

Download the Survey

Download the Survey as Spreadsheet

The rates set out in this survey are based on publicly available information provided by the various State Medicaid agencies. While the AAA has taken steps to verify the accuracy of the information on this Survey, it is possible that the rates provided in the Survey may not reflect changes to a state’s reimbursement policies that have not been made publicly available. These rates may not also not reflect any emergency budgetary measures or other temporary reductions imposed by a state.

The AAA’s goal is to make this Survey as accurate as possible. Therefore, if you believe the rates for your state are inaccurate, please contact the AAA at info@ambulance.org or me at bwerfel@aol.com.

CMS Declines to Extend Temporary Moratorium

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

On January 30, 2019, the Centers for Medicare & Medicaid Services (CMS) announced that it had elected not to extend its temporary moratoria on the enrollment of new Medicare Part B non-emergency ground ambulance providers and suppliers in the states of New Jersey and Pennsylvania. These enrollment moratoria expired on January 29, 2019.

Federal District Court Judge Strikes Down the ACA

Written by Brian Werfel on . Posted in Legislative, Member Advisories, News, Reimbursement.

On December 14, 2018, a federal district court judge for the Northern District of Texas issued a ruling striking down the Affordable Care Act (ACA) on the grounds that the Individual Mandate was unconstitutional, and that the rest of the law cannot withstand constitutional scrutiny without the Individual Mandate.

District Court Judge Reed O’Connor’s decision relates to a lawsuit filed earlier this year by 20 states and two individuals. The plaintiffs argued that the Tax Cuts and Jobs Act of 2017 — which amended the Individual Mandate to eliminate the penalty on individuals that failed to purchase qualifying insurance effect January 1, 2019 — rendered the Individual Mandate unconstitutional. The plaintiffs further argued that the Individual Mandate was inseverable from the rest of the ACA, and, therefore, that the entire ACA should be struck down.

The defendants in this case were the United States of America, the U.S. Department of Health and Human Services (HHS), Alex Azar, in his capacity as the Secretary of HHS, and David J. Kautter, in his capacity as the Acting Commissioner of the Internal Revenue Service (IRS). 16 states and the District of Columbia intervened as additional defendants.

In order to properly understand the district court’s ruling, it is necessary to revisit the Supreme Court’s 2012 decision on the constitutionality of the ACA, National Federal of Independent Business v. Sebelius (NFIB). In that case, 26 states, along with several individuals and a business organization challenged the ACA’s Individual Mandate and Medicaid expansion provisions as exceeding Congress’ enumerated powers. In a complicated decision, the majority of Justices ruled that the Individual Mandate was unconstitutional under Congress’ authority to regulate interstate commerce, but that the provision could be salvaged under Congress’ authority to lay and collect taxes. In reaching this conclusion, the majority of Justices focused on the “shared responsibility payment” aspect of the Individual Mandate, which imposed a tax on those individuals that failed to purchase or otherwise obtain qualifying health insurance. The majority of Justices concluded that the shared responsibility payment was a “tax.” It was therefore constitutional under the Congress’ general taxing authority.

In sum, the Supreme Court ruled that Congress lacked the power to compel individuals to buy qualifying health insurance, but that it could constitutionally impose a tax on those that failed to purchase or otherwise obtain qualifying health insurance.

In the current case, the court was asked to reconsider the Individual Mandate in light of the TCJA, which “zeroed” out of the shared responsibility payment, effective January 1, 2019. The plaintiffs argued that the Individual Mandate could no longer be justified as a valid exercise of Congress’ taxing authority. The federal government and its agents did not necessarily contest the plaintiffs’ argument with respect to the Individual Mandate. By contrast, the intervening states and the District of Columbia argued that the Individual Mandate could continue to be construed as a tax because it continues to satisfy the factors set forth by the Supreme Court in NFIB.

Judge O’Connor sided with the plaintiffs, holding that, because the Individual Mandate would no longer trigger a tax beginning in 2019, the Supreme Court’s ruling on this point in NFIB was no longer applicable. He therefore concluded that the Individual Mandate could no longer be upheld under Congress’ taxing authority. Judge O’Connor then fell back on the Supreme Court’s previous holding that the Individual Mandate, as a stand-alone command, remained unconstitutional under the Interstate Commerce Clause. Judge O’Connor then ruled that the Individual Mandate could not be severed from the rest of the ACA. On this point, the judge cited the express provisions of the ACA, as well as the Supreme Court’s decisions in NFIB and King v. Burwell.

What this decision means

On its face, the decision strikes down the Affordable Care Act in its entirety. However, the ruling is likely to be appealed to the Fifth Circuit Court of Appeals. Most legal experts expect that, regardless of the decision at the Circuit Court, the case is likely to make its way up to the Supreme Court.

Pending the resolution of these appeals, the Administration has adopted a “business as usual” approach. The White House has already indicated that it will not attempt to enforce the ruling during the appeals process. CMS Administrator Seema Verma recently tweeted that the decision will have “no impact to current coverage or coverage in a 2019 plan.”

The American Ambulance Association will continue to monitor this case as it makes its way through the appeals process, and we will notify our members of any new developments.

CMS Posts 2019 Public Use File

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

On November 28, 2018, CMS posted the 2019 Ambulance Fee Schedule Public Use Files. These files contain the amounts that will be allowed by Medicare in calendar year 2019 for the various levels of ambulance service and mileage. These allowables reflect a 2.3% inflation adjustment over the 2018 rates.

The 2019 Ambulance Fee Schedule Public Use File can be downloaded from the CMS website by clicking here.

Unfortunately, CMS has elected in recent years to release its Public Use Files without state and payment locality headings. As a result, in order to look up the rates in your service area, you would need to know the CMS contract number assigned to your state. This is not something the typical ambulance service would necessarily have on hand. For this reason, the AAA. has created a reformatted version of the CMS Medicare Ambulance Fee Schedule, which includes the state and payment locality headings. Members can access this reformatted fee schedule here.

View Reformatted Fee Schedule

CMS Announces 2019 Ambulance Inflation Factor

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

On November 30, 2018, CMS issued Transmittal 4172 (Change Request 11031), which announced the Medicare Ambulance Inflation Factor (AIF) for calendar year 2019.

The AIF is calculated by measuring the increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year. Starting in calendar year 2011, the change in the CPI-U is now reduced by a so-called “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private nonfarm business multi-factor productivity index (MFP). The MFP reduction may result in a negative AIF for any calendar year. The resulting AIF is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

For the 12-month period ending in June 2018, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased 2.9%. CMS further indicated that the CY 2019 MFP will be 0.6%. Accordingly, CMS indicated that the Ambulance Inflation Factor for calendar year 2019 will be 2.3%.

CMS Announces Extension of Prior Authorization Program

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

On November 30, 2018, CMS issued a notice on its website that it would be extending the prior authorization demonstration project for another year. The extension is limited to those states where prior authorization was in effect for calendar year 2018. The affected states are Delaware, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia and West Virginia, as well as the District of Columbia. The extension will run through December 1, 2019. 

CMS indicated that the extension will provide it with an additional year to evaluate the prior authorization program, and to determine whether the program meets the statutory requirements for nationwide expansion under the Medicare Access and CHIP Reauthorization Act of 2015.

CMS has also updated its Ambulance Prior Authorization FAQs and its Physician/Practitioner Letter to reflect the expansion of the program. The updated FAQ and Physician Letter can be downloaded from the CMS Ambulance Prior Authorization webpage by clicking here.

2017 National and State-Specific Medicare Data

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

The American Ambulance Association is pleased to announce the publication of its 2017 Medicare Payment Data Report. This report is based on the Physician/Supplier Procedure Summary Master File. This report contains information on all Part B and DME claims processed through the Medicare Common Working File and stored in the National Claims History Repository.

The report contains an overview of total Medicare spending nationwide in CY 2017, and then a separate breakdown of Medicare spending in each of the 50 states, the District of Columbia, and the various other U.S. Territories.

For each jurisdiction, the report contains two charts: the first reflects data for all ambulance services, while the second is limited solely to dialysis transports. Each chart lists total spending by procedure code (i.e., base rates and mileage). For comparison purposes, information is also provided on Medicare spending in CY 2016.

2017 National & State-Specific Medicare Data

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

 

Talking Medicare: CMS Implements Further Dialysis Cuts

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

Talking Medicare: CMS Implements Further Cuts in Reimbursement for Dialysis Services; Medicare Payment Data Shows Continued Reduction in Overall Spending on Dialysis Transports, but Net Increase in Dialysis Payments in Prior Authorization States

On October 1, 2018, CMS implemented an additional thirteen (13%) cut in reimbursement for non-emergency BLS transports to and from dialysis. This cut in reimbursement was mandated by Section 53108 of the Bipartisan Budget Act of 2018. This on top of a ten (10%) cut in reimbursement for dialysis transports that went into effect on October 1, 2013. As a result, BLS non-emergency ambulance transports to and from dialysis that occur on or after October 1, 2018 will be reimbursed at 77% of the applicable Medicare allowable.

In related news, CMS has released its national payment data for calendar year 2017. This data shows a continued reduction in total Medicare payments for dialysis transports. Medicare paid $477.7 million on dialysis transports in 2017, down from $488.9 million in 2016. This continues a downward trend that has seen total payments decline from a high of more than $750 million in 2013 (see accompanying chart to the right). Not coincidentally, it was in 2013 that our industry saw its first reduction in Medicare’s payments for dialysis transports.

The payment reduction is partially the result of the reduction in the amounts paid for dialysis services. However, it is also reflective of an overall decline in the number of approved dialysis transports. For this, we can look primarily to the impact of a four-year demonstration project that requires prior authorization of dialysis transports in 8 states and the District of Columbia.

As a reminder, the original prior authorization states were selected based on higher-than-average utilization rates and high rates of improper payment for these services. In particular, the Medicare Payment Advisory Commission (MedPAC) had singled out these states as having higher-than-average utilization of dialysis transports in a June 2013 report to Congress. The chart below shows total spending on dialysis in those states in the years immediately preceding the implementation of the prior authorization project up through 2017, the third year of the demonstration project. While the three states had very different trajectories prior to 2015, each showed a significant decrease in total payments for dialysis under the demonstration project.

However, it is the trajectory of these changes that I want to discuss in this month’s blog. In previous blogs, I discussed the impact of the particular Medicare Administrative Contractor on the outcomes under prior authorization. Specifically, I noted that, while dialysis payments dropped in each state, the decline was far more dramatic in the states administered by Novitas Solutions (NJ, PA) than in the South Carolina, which was administered by Palmetto GBA. This trend continued in the second year of the program, which saw prior authorization expanded into five additional states and the District of Columbia. Those states administered by Novitas (DE, MD) saw far greater declines than the states administered by Palmetto (NC, VA, WV).

Given these declines, the data from the third year is somewhat surprising. The states administered by Palmetto continued to see declines in total dialysis payments, with the only exception being West Virginia. However, in the states administered by Novitas, we saw total dialysis payments increase, particularly in New Jersey, which saw nearly a 33% increase in total dialysis payments.

Three years into the prior authorization program, it is starting to become clear that the two MACs have approached the problem of overutilization of dialysis transports using two different approaches. Palmetto appears to have adopted a slow-and-steady approach, with total payments declining in a consistent manner year after year. By contrast, Novitas adopted more of a “shock the system” approach, where it rejected nearly all dialysis transports in the first year, and has adopted a somewhat more lenient approach in subsequent years.

Key Takeaways

 Last year, I wrote that two years of data under the prior authorization program permitted two conclusions: (1) the implementation of a prior authorization process in a state will undoubtedly result in an overall decrease in the total payments for dialysis within that state and (2) the size of that reduction appears to be highly dependent on the Medicare contractor.

With an additional year of data, I think both conclusions remain valid, although I would revise the second to suggest that the initial reduction has more to do with the Medicare contractor. The evidence from the third year of the program suggests that the trends tend to equalize after the first few years. It is also possible that Novitas felt a more aggressive approach was needed in the first few years to address evidence of widespread dialysis overutilization in the Philadelphia metropolitan area.

This has potential implications beyond the demonstration project, as CMS looks towards a possible national expansion of the program. Among other issues, it suggests that the AAA must continue its efforts to work with CMS and its contractors on developing more uniform standards for coverage of this patient population.

What the AAA is Doing

The AAA continues to work on legislation that would restructure this cut to dialysis transport reimbursement. The AAA strongly supports the NEATSA Act (H.R.6269) introduced by Congressman LaHood (R-IL) and Congresswoman Sewell (D-AL) that would restructure the offset so that a majority of the additional reduction would be focused on those ambulance service agencies in which 50% or more of their volume are repetitive BLS nonemergency transports. AAA members and the AAA are working to get a Senate companion bill introduced shortly. The goal of this legislation would be to have the restructured offset go into effect as soon as possible. Thank you to the dozens of AAA members who have already contacted their members of Congress voicing their support for this critical legislation.

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

Preliminary Calculation of 2019 Ambulance Inflation Update

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

Section 1834(l)(3)(B) of the Social Security Act mandates that the Medicare Ambulance Fee Schedule be updated each year to reflect inflation.  This update is referred to as the “Ambulance Inflation Factor” or “AIF”.

The AIF is calculated by measuring the increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year. Starting in calendar year 2011, the change in the CPI-U is now reduced by a so-called “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private nonfarm business multi-factor productivity index (MFP). The MFP reduction may result in a negative AIF for any calendar year. The resulting AIF is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

For the 12-month period ending in June 2018, the federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U has increased by 2.87%.

CMS has yet to release its estimate for the MFP in calendar year 2019. However, assuming CMS’ projections for the MFP are similar to last year’s projections, the number is likely to be in the 0.5% range.

Accordingly, the AAA is currently projecting that the 2019 Ambulance Inflation Factor will be approximately 2.4%. 

Cautionary Note Regarding these Estimates

Members should be advised that the BLS’ calculations of the CPI-U are preliminary, and may be subject to later adjustment. The AAA further cautions members that CMS has not officially announced the MFP for CY 2019. Therefore, it is possible that these numbers may change. The AAA will notify members once CMS issues a transmittal setting forth the official 2019 Ambulance Inflation Factor.

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