Congress Extends Ambulance Add-Ons, Cuts ESRD Transport Reimbursement, and Requires Cost Data Collection

On Friday, February 9, 2018, the President signed into law the Bipartisan Budget Act of 2018, (BBA) containing three key changes for the ambulance industry. 

Ambulance Add-on Payments

Congress passed a five-year extension of the following Medicare add-on payments:

  • 2% increase for transports originating in urban areas
  • 3%  increase for transports originating in rural areas
  • 22.6% increase for transports originating in super-rural areas

The continuation of these add-ons is retroactive to January 1, 2018, meaning ambulance services will be reimbursed by Medicare with the add-on amounts on all claims with dates of service on or after January 1, 2018, , just as they were from July 1, 2008 through December 31, 2017.  Hopefully CMS will issue guidance concerning how contractors will handle claims that were already processed after the add-ons expired at the end of 2017, but have now been retroactively reinstated. 

The BBA extends the so-called add-on payments for a full five years – they will now expire on December 31, 2022.

Additional Reduction in Medicare ESRD Transport Payments

Congress said that to pay for the 5-year add-on extension, it is once again reducing reimbursement (calling it an “offset”) for transports of non-emergency ESRD patients by an additional 13%.  Congress had previously reduced Medicare reimbursement for non-emergency transports of ESRD beneficiaries by 10% beginning on October 1, 2013.  Under this Bill, the reduction for these transports will increase by 13%, bringing the total reduction for non-emergency ESRD transports to 23% beginning on October 1, 2018. 

Ambulance Cost Data System

Finally, HHS is required to develop a “data collection system” (which may include use of a cost survey) to collect cost, revenue, utilization, and other information from ground ambulance providers and suppliers. (This measure does not apply to air ambulance services). HHS will collect cost information on:

  • Whether reported costs actually relate to ambulance payment rates;
  • The utilization of capital equipment and ambulance capacity; and
  • Different types of ground ambulance services furnished in different geographic locations.

By December 31, 2019, HHS is to identify a “representative sample” of ground ambulance services to submit cost data. The sample must be representative of the different types of ground ambulance services (e.g., emergency, non-emergency, governmental) from a mixture of urban, rural, and low population density areas.  No specific information is contained in the BBA about the size of the sample, or the specific details of the cost reporting system as the law gives the Secretary of HHS broad discretion is developing the data collection system.   

Before 2024, ground ambulance services may not be selected to submit a cost report in two consecutive years.  After 2024, HHS shall require ground ambulance services to submit cost data “as HHS determines” – but not less than once every three years.  (The initial measure passed by the House of Representatives would have required all ambulance services to submit cost reporting data at the outset).  

The good news here is that the BBA requires the Medicare Payment Advisory Commission – by March 15, 2023 - to assess and complete a report on the data collected, adequacy of payments to ground ambulance services, and the geographic variations in costs of providing ambulance service.  The report must also contain an analysis of the burden on ambulance services associated with the data collection system, and a recommendation as to whether the data collection system should continue or if it should be revised.   

The Penalty: If an ambulance service fails to report required cost data when requested, HHS shall reduce Medicare payments to that service by 10% for one year. There is a “hardship exception” to the penalty  if HHS determines an “event of significant hardship” interfered with the ability for a ground ambulance service to submit a cost report in a timely manner.

Much more information concerning these and other important changes – such as significantly higher civil and criminal penalties for fraud and abuse – at the abc360 conferences this spring in Las Vegas, St. Louis, and Orlando.

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