• Meeting convened at 9:10 a.m.
• A presentation by Project Hope showed results from the National Survey of Ambulance Providers. Refer to Attachment 6-2 (hard-copy images of the slides presented by Project Hope) which was handed out regarding detailed information.

• One attachment not included was for a proposed RVU scale. Because of anomalous results from the Project Hope survey data, this scale was derived mostly from work done by Project Hope in 1991. It employs an estimating methodology used in other studies in health care research:

• Project Hope was publicly thanked for all of its work.

• Q: Response times; no data available for mandated vs. non-mandated?
• A: None that really made a difference.
• Q: Likely that low volume rural provider will have similar cost to low volume urban provider?
• A: Not much of a review has been done at this time.
• Q: ALS ambulance 160 miles from nearest tertiary. The provider is low volume and hospital based. Can the hospital keep that service without going out of business?
• A: There will be tables presented tomorrow.

• The RVU would be between 1.0 and 2.0 for BLS base rate to ALS base rate (ALS2).
• BLS=1.0 Modifier would be .3 for all emergency services.
• ALS1=1.3 This would be added to the services.
• ALS2=2.0
• Specialty Care=?
• Therefore, BLS with a modifier would be 1.3, ALS1 emergency with a modifier would be 1.6, and ALS2 emergency with a modifier would be 2.3
• The committee would like to think more about the value for ALS2 emergency.
• A suggestion was made that the non-emergency category would mainly be for ALS1; there would be no emergency/non-emergency distinctions for ALS2.
• An agreement was made regarding total services. There were six services agreed upon. This would create an additional service.
• It was stated that there is concern with a "flat 2" unless ALS2 was used with an RVU of 2.3.
• It was stated that ALS2=2.0 would be very minimal.
• A suggestion was made to have the RVU as one number on specialty care.

Consensus: One RVU number on ALS2 and specialty care.
• One number will be for ALS2.
• A suggestion was made for ALS2=2.0.
• One suggestion was to hold off on voting this until tomorrow.
• It was agreed to vote on the ALS2 number tomorrow.
• A suggestion was made to have specialty care be at 3.0.
• A further suggestion required committee members to think about this number and to reach determination on a number by tomorrow (similar plan to the ALS2 decision).

• Modeling for low-cost providers
  - It was proposed that HCFA should account for the fact that some providers will choose to bill at levels below the fee schedule amount.
  - It was also proposed that the rulemaking committee require HCFA to look into this.
  - The modeling group proposes that HCFA discount the low charging or no charging of providers.
  - HCFA stated that they will address this issue in the proposed fee schedule published in the Federal Register. Since the issue is "off the table" for the committee, all participants may comment on HCFA’s proposal to address it once it is published in the Federal Register.
• Assumptions used in service levels and volume of claims
  - HCFA is starting with the universe of ambulance claims for calendar year 1998.
  - HCFA needs to characterize each claim and place it in the chart stated above (RVU) by category.
  - Information should include ICD9 code, origin, destination, and other billed services on ALS claims.
  - There are 4 different billing methods used by providers.
  Modeling Work Group Report (continued)
  - Carrier claims by groups were distributed:
     - Group 1=BLS non-emergency
     - Group 2=BLS emergency
     - Group 3=ALS non-emergency, non-specialized
     - Group 4=ALS non-emergency, specialized
     - Group 5=ALS emergency, non-specialized
     - Group 6=ALS emergency, specialized
• Rural adjustment
  - The work group did not have much time to work on this.
  - The work group needed more data from Project Hope.

• Question: A question was raised about whether to conclude that there is not enough information to continue this discussion and continue having this at the state level.
  
• Answer: A consensus was reached regarding this at the last meeting. Agreement to use the 89 localities was also discussed at the last meeting.
  
• Question: To what percentage of the total payment should the practice expense portion of the GPCI be applied?
  
• Answer: The committee has asked Project Hope to determine the labor-related portion of ambulance costs. Hopefully, this information will be obtained later today or tomorrow.
  
• It was suggested that the GPCI would not apply to mileage.
  Consensus: GPCI will be applied strictly to the base rate only and not to mileage.
  
• Question: Is mileage being paid as a surrogate for other expenses?
  
• Question: What does mileage cover?
  
• Options: It was suggested that some services be bundled into the base rate. The real kick in dollars would be for longer services.
  
• It was suggested that mileage be used as a proxy for the rural modifier.
  - Percentage of mileage rate over x miles.
  - It was suggested to use a base rate plus number of miles.
     - A $6-$8 range per mile was proposed.
     - Another proposal called for $9-$10 per mile.
     - It was stated that the national average is $4-$5 per mile.
     - It was noted that other areas may suffer if dollars are placed in mileage only; in particular, urban areas.
     - A proposal was made to keep the range at $6-$8.
     - Another suggestion was for incremental increases.
  Consensus: One mileage rate for all forms of ground transport.
  Consensus: No bundling of mileage into the base rate. All mileage from the first mile will stand-alone (i.e., be paid the rate for mileage).
  
• It was suggested that the committee use the designation of CAH (critical access hospitals) to recognize those ambulance services used for these patients.
  - HCFA stated that this cannot be done.
• All ambulance services will be paid under the fee schedule.

Discussion of GPCI (continued)
• Question: Will bumping up the mileage rate adversely affect the base rate?
• Question: Is there a listing of providers who have low volume?
• Answer: HCFA does not have information to identify low-volume ambulance providers.
• Information HCFA does have:
  - 161.4 million BLS mileage
  - 134.1 million ALS mileage
  - Out of 2.1 billion total miles
  - 14% total
• A calculation will be made to review the mileage rates for data that shows on the Internet for each of the following mileage rates: $4, $6, $8, $10, and $12.
• Data to be dispensed tomorrow.
• HCFA distributed a consensus listing (see attachment 6-10, Ambulance Reg Neg Consensus Items).

• Attachment 6-12 (Negotiated Rulemaking Committee for Ambulance Fees: Medical Workgroup Report, December 7, 1999) was discussed.
  
• Levels of service
  Question: The levels of services are intended to be examples.
  Answer: Correct, these are not all-inclusive.
  Consensus: Definitions for levels of service approved, up through specialty care, as stated in Attachment 6-12.
  
• Emergency/non-emergency conditions
  - The workgroup was commended by the committee for identifying these conditions.
  Consensus: Recognize and accept the recommended service levels and emergency/non-emergency conditions, as stated in Attachment 6-12.
  
• Air medical transport guidelines
  Consensus: Recognize and accept the recommendations regarding the air medical transport guidelines, as stated in Attachment 6-12.

• Meeting adjourned at 5:05 p.m.

• Meeting convened at 9:05 a.m.
  A presentation was made on the overall structure of the air medical services industry
  
• Helicopters cost $3-$6 million, with an hourly operating cost of $400-$700.
  
• Planes (fixed wing) cost $2-$9 million with an hourly operating cost of $300-$900.
  
• National Air Ambulance Cost Study
  - Ernst & Young made a presentation
     - Finding: Average cost per trip went down as total volume went up.

• Please refer to Attachment 6-15 (Report of Findings from the National Air Ambulance Cost Study) for additional details regarding findings in the report.

• Dr. Graham Atkinson made a presentation that included the Ernst & Young study (see Attachment 6-16). -
  - Committee representation of the air ambulance industry suggested the following calculations for modeling:

  - Ground	Air
  X - Air	Rotor Wing=3,806 x volume
  	Fixed Wing=3,190 x volume

  - Calculate the above to get to a final rate for each type of service.
  - Combine the rates of ground and air to establish final RVU rates.
• Questions:
  - Q: Did Ernst &Young take into consideration other indirect expenses associated to hospital not necessarily dedicated to ambulance services?
  - A: Ernst &Young did not fully take into consideration those charges.
  A presentation was made on the overall structure of the air medical services (continued)
  
• Questions (continued):
  - Q: Was the possible outlier in the sample an urban or rural company?
  - A: It was believed to be rural.
  - Q: How does the average cost compare to the current reimbursement allowed by Medicare?
  - A: What is reimbursed now is similar to the model shown above (previous page). This includes mileage. However, most reimbursement is for hospital based service; there are very few freestanding air ambulance services.
  - Q: Is what you get now comparable to the model?
  - A: Yes, it is within the range.
  
• A question was presented to the committee asking if there were any objections to this model?
  - There was not total "comfort" with approving the model due to the volumes being an unknown at this time.
  - The total number of services by air needs to be provided to HCFA by tomorrow.
  Consensus: For modeling purposes only, rotor wing will be set at $3,806 ($3,000 base rate and $16 per statute mile). Fixed wing will be set at $3,190 ($1,500 base rate and $6 per statute mile).

Approval of the minutes from the last meeting


• Committee received a copy of the minutes as revised by AAA.

  Consensus: Work with the AAA revised minutes.
  Consensus: To approve minutes as revised.
  Consensus: Committee adopts the Medical Workgroup Report as a document in total.

Mileage Data


• It was discussed hypothetically that based on the following assumptions:
  - $4 at 8.05 base rate miles.
  - Going from $4 to $5, the base rate goes down by $5.98.
  - Going to $6, the base rate goes down $5.97.
• Rural Information
  - A presentation was made on rural charges.
• Rural providers and where they fit:
  - 26% were hospital based.
  - 22% were volunteer.
  - 25% were private, non-volunteer.
  - 22% were non-private, non-volunteer.
• 38% of all providers were volunteer
  - Of which 50% existed in an MSA.
  - The other 50% is non-MSA.
  - The 38% represents 3% of overall rural transports.
• Look for low population density. This will reveal rural areas.
  - The best way to identify rural providers is by population density in zip code areas.

Mileage Data (continued)
- HCFA cannot now model or administer a fee schedule system based on population density and zip codes; they can do it by proxy through MSA and non-MSA.
- HCFA could use MSA/non-MSA to identify urban and rural areas, and may also be able to employ the Goldsmith modifier.
- HCFA currently uses this modifier for other payment purposes.
- This modifier uses population density as a further refinement to MSA/non-MSA classification.
- However, it mainly applies in large counties.
- A suggestion was made that payment for mileage be used to modify payments for services in rural areas.
- Example: If the mileage in an MSA were paid at $8 per mile, a non-MSA rate would be $12.
- There was concern regarding low mileage, non-MSA providers not receiving sufficient payment under this methodology.
- Perhaps reimburse at a base rate versus mileage.
- Or, adjust the base rate and the mileage rate.
- Example: base rate of 1.25 and mileage rate of 2.00 times the MSA rate.
- A recommendation was to run models to identify what the rates would be under different assumptions.
- It was asked if HCFA can identify rural providers.
- HCFA cannot.
- If a rural modifier were to go, it would have to go by the way of MSA/non-MSA.
- The only way to conclude if the rural modifier were to go will be through modeling.
- Before modeling occurs, HCFA needs numbers from the committee.
Consensus: For modeling purposes only, use MSA/non-MSA (with the Goldsmith modifier, if possible) as the basis for a rural modifier.

Proposed RVU Levels to be used for modeling

Service Level	Non-Emergency		Emergency
BLS	1.0		1.3
ALS1	1.3		1.6
ALS2		2.3
Specialty Care		3.0
Paramedic Intercept		1.3

• Paramedic Intercept=ALS2 – BLS
  
• Run 2.5 for specialty care also as modeling.
  
• HCFA will need a hierarchy of what modeling options are to be done. It needs the committee to prioritize its modeling requests.
  Consensus: For modeling purposes only, the above chart will be used for ground RVU.

GPCI

• Total percentage of ambulance labor cost of ambulance total cost=69.3%, according to Project Hope.
  GPCI (continued)
• A proposal was made, stating that the GPCI should be applied to 70% of the base rate for ground transportation.
  - Air ambulance information to be determined.
  - Use the 89 GPCI areas.
  - Including the 0.7 labor cost.
  - Possible solution: Do not go below 1.0 in rural areas.
  - If in an area where the GPCI is higher, go with that number.
  - Intent is to recognize areas with high rates, and recognize other costs.
  - Question: Does the 1.0 become the rural modifier?
  - A proposal emphasized that the GPCI should be applied to 70% of the base rate, and return to address the rural areas at a later date.
  - Modeling to occur from address on the claim form.

Mileage


• For every $1 increase in the mileage rate, there is a $6 decrease in BLS base rates.
  - Proposal: Establish mileage at $8 per mile.
  - A suggestion was made that mileage be paid at the cost and address rural area issues with another method.
  - Another suggestion was to review and re-address by tomorrow.
  - Review the impact on ALS1 and ALS2.
  - Suggestion is to postpone this decision for tomorrow.
  - To be the first item on the agenda.
  Consensus: For modeling purposes only, to apply the GPCI to 70% of the base rate for ground service; air to be determined after facts are gathered. Address rural area issues with another method.

• Meeting adjourned at 4:10 p.m.

• Meeting convened at 8:35 a.m.
  Mileage
  
• A suggestion was made to set the mileage rate at $7 per mile.
  Consensus: $7 mileage for ground transport to be used for modeling purposes.

Air - GPCI
Consensus: The GPCI applies to 50% of the air base rate to be used for modeling purposes.

Rural Modifier
• Use as many alternatives as possible
  - A suggestion was made to look at how to negate a negative impact to any provider through implementation.
    - Potentially modify the schedule as needed.
  - Another suggestion was that if a rural provider demonstrates to the carrier that the fee schedule has a negative impact, they can be placed in a customized reimbursement at the carrier level.
  - A third suggestion was to target ambulance providers in rural areas serving sole community hospitals and critical access hospitals.
    - HCFA needs criteria and a remedy to be able to model this.
    - Increase the base rate for rural providers.
  - A fourth suggestion was for some sort of rural modifier created here. At least a 2 to 1 bump for rural cost on mileage and base rate. If you leave the mileage alone, you must triple the base.
    - Use the Goldsmith measurement for non-MSA providers only.
  - Another proposal was for a mileage bump after the first 10 to 15 miles.
  - Another proposal called for a short-term interim solution consisting of some bump on the mileage and the base rate. A more refined adjuster would then be developed over time.
     - The committee was cautioned about the difficulty of removing an adjuster that provides for increased payment.
       - HCFA agrees and recommended that any interim adjuster be on the conservative side.
  - Another suggestion was for crafting criteria that state EMS directors could use to identify rural providers.
  - Another suggestion recommended that pick up must be in a rural area and patient delivered to a critical access hospital or sole community hospital, or go more than 20 miles. Modifier is on the base rate.

Rural Modifier (continued)
  For HCFA to model:
   - For air, apply 25% of both base rate and mileage rate for non-MSA areas.
   - For ground, at 15 miles break point--25% bump.
     - Or, start bump at mile 1 of 50% and cap at mile 25 for non-MSA pick up.
   - Suggestion to Model: For modeling purposes only, bump the mileage rate at mile 1 and cap at 25 miles to 50% for non-MSA ground pick-up.
   - Suggestion to Model: For modeling purposes only, boost 25% for the combined total payment rates for non-MSA ground pick-up.
     - Which of these consensus to run as a priority?
Consensus: HCFA to model first a ground and air system without the rural modifier.
Consensus: HCFA to model second a boost in mileage to 50% in a non-MSA area for ground miles 1 through 25.
Consensus: HCFA to model third a boost of 25% for the combined total payment rate (i.e., base rate plus mileage) for non-MSA ground pick-up.
Consensus: For the second and third ground models, HCFA to model for air, by applying 25% of both base rate and mileage rate for non-MSA areas.
Consensus: For modeling purposes, water ambulance is treated the same as ground ambulance.

• Meeting adjourned at 12:15 p.m.

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Last Updated January 27, 2000