November 2, 2006

On November 1, 2006, the Centers for Medicare and Medicaid Services (CMS) released an advance copy of a Final Rule that is scheduled to be published in the December 1, 2006.  In this Final Rule, CMS is announcing several important decisions ambulance payment that were first raised in the CMS May 26, 2006 Proposed Rule.  The advance copy of the Final Rule is contained in a 1,418 page document on physician reimbursement and other Medicare issues.

To read the advance text of the Final Rule on the ambulance issues only, CLICK HERE (63 pages, PDF format).

For the entire Final Rule, CLICK HERE (1,418 pages, PDF format).

The Final Rule addresses five major issues and contains mostly positive news for the industry.  The major ambulance-related aspects of the Final Rule are:

1) The 2007 inflation factor will be 4.3%, effective for dates of service January 1, 2007 or after.

2) CMS has withdrawn its proposal to change the definition of "Specialty Care Transport" (SCT) from "interfacility" transportation to "hospital to hospital" transportation.  This rule would have reduced the combinations of origins and destinations for which ambulance services could be reimbursed for an SCT.  Therefore, the definition of SCT will remain as it currently exists in the Medicare regulations.  This proposed change would have had negative consequences on ambulance reimbursement, and thankfully CMS has heeded the requests of numerous commenters and withdrawn its proposed change to this definition.  CMS also clarified that "facilities" for SCT purposes can include skilled nursing facilities, as well as Medicare hospitals, such as rehabilitation hospitals, cancer hospitals, children’s hospitals, psychiatric hospitals, Critical Access Hopitals (CAHs), inpatient acute-care hospitals, and Sole Community Hospitals (SCHs).

3) CMS has withdrawn its proposed changes to the "emergency response" definition that would have limited the ability of ambulance services to bill at the emergency rate for transports originating at hospitals.  Therefore, the "emergency response" definition will remain the same as in the current regulations.

4) CMS is adopting the proposed reclassification of "rural" areas, following the new OMB "core based statistical area" formula.  This will mean that some zip codes that are currently "rural" (for purposes of certain payment "bumps" that ambulance providers receive in rural and "super rural" areas) will be reclassified as "urban" and vice versa.

5) CMS is eliminating the requirement that it annually review the "conversion factor" payment amounts under the fee schedule and will instead monitor payment rates on an ongoing basis.