Re:CMS-1002-FC Medicare Program; Fee Schedule for Payment of Ambulance Services and Revisions to the Physician Certification Requirements for Coverage of Non-emergency Ambulance Services; Final Rule (67 Federal Register 9100), February 27, 2002

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Thursday, March 21st 2002

Thomas Scully
Administrator
The Centers for Medicare & Medicaid Services
200 Independence Avenue, SW
Hubert H. Humphrey Building, Room 443-G
Washington, DC 20201

Dear Mr. Scully:

The American Hospital Association (AHA) represents nearly 5,000 hospitals, health systems, and other providers of care, about a quarter of which operate air or ground ambulance services. On behalf of these ambulance providers, we appreciate the opportunity to comment on the Centers for Medicare & Medicaid Services' (CMS) final rule implementing a fee schedule for ambulance payment under the Medicare program.

The Balanced Budget Act of 1997 (BBA) mandated the development of a Medicare ambulance fee schedule to replace a payment system based on costs and charges that varied greatly by provider and location. The primary purpose of the fee schedule is to create a more uniform payment system for ambulance services. The BBA also called for a negotiated rulemaking process to assist CMS in designing specific aspects of the new payment system. The AHA participated in the rulemaking process as one of 10 stakeholders. All members of the rulemaking committee are precluded from commenting on any issue that was part of the consensus agreement signed in February 2000. The final rule includes decisions and recommendations made by the rulemaking committee, as well as decisions made by CMS. Because of the AHA's participation on the negotiated rulemaking committee, our comments will focus on issues outside of the scope of the committee.

The Medicare ambulance fee schedule will base payments to ambulance providers on a national average amount, resulting in lower payments for those areas currently receiving higher-than-average payments, and raising payments in those areas with lower-than-average payments. The new payment system also encourages volunteer ambulance providers to begin to bill the Medicare program for their services, which will further redistribute payments. The AHA is concerned that major redistribution of dollars could impede beneficiary access to ambulance services because certain providers may not be able to cover the costs of providing the service. In addition, CMS deducted $67 million from its base calculation for the fee schedule, citing that amount as what would have been saved if the agency had finalized its 1997 proposed rule for ambulance services (which was preempted by the BBA). Because there was no final rule published due to a need for mandated negotiated rulemaking, we are unaware of any legal precedent, nor did the agency cite any statutory or regulatory authority, for making this decision. This decision allows the government to arbitrarily recoup funds for what might have been, rather than what is, in current law and regulation. The AHA continues to advocate that CMS add $67 million back into ambulance base payments.

Rural Adjustment
The September 12, 2000 ambulance proposed rule established an additional per mile payment amount for rural providers, but this enhanced payment covered only the first 17 miles of an ambulance trip. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) mandated that rural ambulance mileage greater than 17 miles and up to 50 miles be increased by not less than one-half of the additional payment per mile established for the first 17 miles of a rural ambulance trip. The AHA is extremely disappointed that CMS set the final payment rate at exactly one-half, or the minimum amount required by law. This amount is not enough to offset the costs of many rural ambulance providers, especially essential ambulance services that may furnish few trips over the course of a typical month because of a small rural population.

In addition, the final rule defines a rural area as one outside a Metropolitan Statistical Area (MSA) or a New England County Metropolitan Area, or an area within an MSA identified as rural, using the Goldsmith modification. And the application of the rural adjustment is based on the geographic location of the patient at pick up. In relying solely on MSA/non-MSA criteria, it is highly unlikely that the rural bonus payment will go only to those rural ambulances that are truly isolated, essential, low-volume providers. The AHA is extremely disappointed that CMS did not take the time necessary to adopt a more precise methodology for determining which providers and suppliers should receive the rural adjustment. Although CMS has indicated that the rural adjustment in the final rule is a "temporary proxy," the AHA recommends maintaining the current cost based payment system to rural providers until a more adequate and acceptable methodology is developed.

Critical Access Hospitals
BIPA also mandated that Critical Access Hospitals (CAHs), or entities owned and operated by CAHs, be paid for ambulance services based on reasonable cost if there is no other ambulance provider or supplier within a 35-mile drive. These entities are exempt from the ambulance fee schedule, as well as the current cost-per-trip inflation cap applicable to providers (this cap, established by the BBA, had limited the annual increase in ambulance costs per trip by the consumer price index for all urban consumers [CPI-U] less one percentage point). The AHA is concerned that a number of CAHs may not qualify for exemption owing to this 35-mile criterion, and will continue to urge Congress to remove this mileage limit.

Thank you for your consideration of these comments. We look forward to working with CMS on the development of a more appropriate adjustment factor for low-volume rural providers. If you or your staff have any questions regarding our comments, please feel free to contact either me, Carmela Coyle, senior vice president for policy, at (202) 626-2266, or Talatha Vaughters, health policy fellow, at (202)-626-2970.

Sincerely,

Rick Pollack
Executive Vice President

Thomas Scully
Administrator
The Centers for Medicare & Medicaid Services
200 Independence Avenue, SW
Hubert H. Humphrey Building, Room 443-G
Washington, DC 20201

Ref: [CMS-1002-FC] Medicare Program; Fee Schedule for Payment of Ambulance Services and Revisions to the Physician Certification Requirements for Coverage of Non-emergency Ambulance Services; Final Rule (67 Federal Register 9100), February 27, 2002

Dear Mr. Scully:

The American Hospital Association (AHA) represents nearly 5,000 hospitals, health systems, and other providers of care, about a quarter of which operate air or ground ambulance services. On behalf of these ambulance providers, we appreciate the opportunity to comment on the Centers for Medicare & Medicaid Services' (CMS) final rule implementing a fee schedule for ambulance payment under the Medicare program.

The Balanced Budget Act of 1997 (BBA) mandated the development of a Medicare ambulance fee schedule to replace a payment system based on costs and charges that varied greatly by provider and location. The primary purpose of the fee schedule is to create a more uniform payment system for ambulance services. The BBA also called for a negotiated rulemaking process to assist CMS in designing specific aspects of the new payment system. The AHA participated in the rulemaking process as one of 10 stakeholders. All members of the rulemaking committee are precluded from commenting on any issue that was part of the consensus agreement signed in February 2000. The final rule includes decisions and recommendations made by the rulemaking committee, as well as decisions made by CMS. Because of the AHA's participation on the negotiated rulemaking committee, our comments will focus on issues outside of the scope of the committee.

The Medicare ambulance fee schedule will base payments to ambulance providers on a national average amount, resulting in lower payments for those areas currently receiving higher-than-average payments, and raising payments in those areas with lower-than-average payments. The new payment system also encourages volunteer ambulance providers to begin to bill the Medicare program for their services, which will further redistribute payments. The AHA is concerned that major redistribution of dollars could impede beneficiary access to ambulance services because certain providers may not be able to cover the costs of providing the service. In addition, CMS deducted $67 million from its base calculation for the fee schedule, citing that amount as what would have been saved if the agency had finalized its 1997 proposed rule for ambulance services (which was preempted by the BBA). Because there was no final rule published due to a need for mandated negotiated rulemaking, we are unaware of any legal precedent, nor did the agency cite any statutory or regulatory authority, for making this decision. This decision allows the government to arbitrarily recoup funds for what might have been, rather than what is, in current law and regulation. The AHA continues to advocate that CMS add $67 million back into ambulance base payments.

Rural Adjustment
The September 12, 2000 ambulance proposed rule established an additional per mile payment amount for rural providers, but this enhanced payment covered only the first 17 miles of an ambulance trip. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) mandated that rural ambulance mileage greater than 17 miles and up to 50 miles be increased by not less than one-half of the additional payment per mile established for the first 17 miles of a rural ambulance trip. The AHA is extremely disappointed that CMS set the final payment rate at exactly one-half, or the minimum amount required by law. This amount is not enough to offset the costs of many rural ambulance providers, especially essential ambulance services that may furnish few trips over the course of a typical month because of a small rural population.

In addition, the final rule defines a rural area as one outside a Metropolitan Statistical Area (MSA) or a New England County Metropolitan Area, or an area within an MSA identified as rural, using the Goldsmith modification. And the application of the rural adjustment is based on the geographic location of the patient at pick up. In relying solely on MSA/non-MSA criteria, it is highly unlikely that the rural bonus payment will go only to those rural ambulances that are truly isolated, essential, low-volume providers. The AHA is extremely disappointed that CMS did not take the time necessary to adopt a more precise methodology for determining which providers and suppliers should receive the rural adjustment. Although CMS has indicated that the rural adjustment in the final rule is a "temporary proxy," the AHA recommends maintaining the current cost based payment system to rural providers until a more adequate and acceptable methodology is developed.

Critical Access Hospitals
BIPA also mandated that Critical Access Hospitals (CAHs), or entities owned and operated by CAHs, be paid for ambulance services based on reasonable cost if there is no other ambulance provider or supplier within a 35-mile drive. These entities are exempt from the ambulance fee schedule, as well as the current cost-per-trip inflation cap applicable to providers (this cap, established by the BBA, had limited the annual increase in ambulance costs per trip by the consumer price index for all urban consumers [CPI-U] less one percentage point). The AHA is concerned that a number of CAHs may not qualify for exemption owing to this 35-mile criterion, and will continue to urge Congress to remove this mileage limit.

Thank you for your consideration of these comments. We look forward to working with CMS on the development of a more appropriate adjustment factor for low-volume rural providers. If you or your staff have any questions regarding our comments, please feel free to contact either me, Carmela Coyle, senior vice president for policy, at (202) 626-2266, or Talatha Vaughters, health policy fellow, at (202)-626-2970.

Sincerely,

Rick Pollack
Executive Vice President

 

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