The Negotiated Rulemaking Committee on Medicare Ambulance Fee Schedule has concurred in the following recommendations, considered as a whole, on the content of a proposed rule (and its preamble) pursuant to section 1834(l) of the Social Security Act. In its negotiations, the Committee took into account the factors listed in the Act. Some of these factors are explicitly mentioned in the Committee Statement. Others are implicitly reflected in the recommended provisions. The Committee accepted the advisory report from the Medical Workgroup.

Section 1834(l) of the Social Security Act requires that, in developing the Medicare ambulance service fee schedule, the Committee consider the following issues regarding:

• Definitions that link payment to the type of services furnished.
• Appropriate regional and operational variations.
• Methodology to phase-in the revised payment in an efficient and fair manner.
• Mechanisms to control increase in expenditures for ambulance services.
• Adjustments to account for inflation and other factors.

1. Ambulance Service Level

1. Basic Life Support (BLS): Where medically necessary, the provision of basic life support (BLS) services as defined in the National EMS Education and Practice Blueprint for the EMT-Basic including the establishment of a peripheral intravenous (IV) line.

2. Advanced Life Support, Level 1 (ALS1): Where medically necessary, the provision of an assessment by an advanced life support (ALS) provider and/or the provision of one or more ALS interventions. An ALS provider is defined as a provider trained to the level of the EMT-Intermediate or Paramedic as defined in the National EMS Education and Practice Blueprint. An ALS intervention is defined as a procedure beyond the scope of an EMT-Basic as defined in the National EMS Education and Practice Blueprint.

3. Advanced Life Support, Level 2 (ALS2): Where medically necessary, the administration of at least three different medications and/or the provision of one or more of the following ALS procedures:
   • Manual defibrillation/cardioversion.
   • Endotracheal intubation.
   • Central venous line.
   • Cardiac pacing.
   • Chest decompression.
   • Surgical airway.
   • Intraosseous line.

4. Specialty Care Transport (SCT): Where medically necessary, in a critically injured or ill patient, a level of inter-facility service provided beyond the scope of the Paramedic as defined in the National EMS Education and Practice Blueprint. This is necessary when a patient’s condition requires ongoing care that must be provided by one or more health professionals in an appropriate specialty area (nursing, medicine, respiratory care, cardiovascular care, or a paramedic with additional training).

5. Paramedic Intercept (PI): These services are defined in 42 CFR 410.40. They are ALS services provided by an entity that does not provide the ambulance transport . Under limited circumstances, these services can receive Medicare payment.

6. Fixed Wing Air Ambulance (FW): Fixed wing air ambulance is provided when the patient’s medical condition is such that transportation by either basic or advanced life support ground ambulance is not appropriate. In addition, fixed wing air ambulance may be necessary because the point of pick-up is inaccessible by land vehicle, or great distances or other obstacles (for example, heavy traffic) are involved in getting the patient to the nearest hospital with appropriate facilities.

7. Rotary Wing Air Ambulance (RW): Rotary wing air ambulance is provided when the patient’s medical condition is such that transportation by either basic or advanced life support ground ambulance is not appropriate. In addition, rotary wing air ambulance may be necessary because the point of pick-up is inaccessible by land vehicle, or great distances or other obstacles (for example, heavy traffic) are involved in getting the patient to the nearest hospital with appropriate facilities.

B. Emergency Response Modifier
For the BLS and ALS1 levels of service, an ambulance service that qualifies as an emergency response will be assigned a higher relative value to recognize the additional costs incurred in responding immediately to an emergency medical condition. An immediate response is one in which the ambulance provider begins as quickly as possible to take the steps necessary to respond to the call. There is no emergency modifier for PI, ALS2, or SCT.

2. Regional and Operational Variations

No operational differences will be recognized. All types of providers will be paid under the same fee schedule. Thus, the same payment will be made for a comparable service provided by a private, volunteer, municipal, or hospital ambulance.

1. Cost of Living Differences

An adjustment will be made to recognize the cost of maintaining an ambulance supplier in various geographic areas. While not specifically directed at the expenses of ambulance suppliers, the Committee agrees that the most appropriate available index to use for this purpose is the practice expense (PE) component of the geographic practice cost index (GPCI) as used in the Medicare physician fee schedule. The Committee agrees that the index is applied to 70 percent of the ground and water ambulance base rate amount and 50 percent of the air base rate amount. This modifier is applied based on the location from which the beneficiary is transported.

2. Rural Services

The Committee agrees that an adjustment needs to be made to the rates paid for ambulance services provided in rural areas with low population density to recognize the higher costs per transport incurred by those suppliers. However, the Committee was informed that none of the options for recognizing geographic disparities other than MSA/non-MSA could be easily adopted and implemented by HCFA. In order to compensate for these costs, while recognizing the inadequacy of the methodology to properly address this problem, the Committee agrees that an additional adjustment will be made to the mileage rate if the location from which the beneficiary is transported is located in a rural area. The definition of a rural area is an area outside a Metropolitan Statistical Area (MSA) or a New England County Metropolitan Area (NECMA) or an area within an MSA identified as rural, using the Goldsmith modification. The calculation of this modifier is discussed below as part of the Fee Schedule.

The Committee recognizes that this rural adjustment is a temporary proxy to recognize the higher costs of low-volume suppliers. It believes that, as soon as possible, a methodology needs to be developed that more appropriately addresses payment to low-volume rural ambulance suppliers.

3. Medicare Ambulance Fee Schedule

The ambulance fee schedule payment equals a base rate payment plus a payment for mileage. Ground and water ambulance services are paid using the same fee schedule. The Committee agrees that HCFA will set the amount of the base year (CY 1998) expenditures to be used for determining the payment levels for air ambulance services between $134,827,792 and $158,000,000.

A. Base Rate
The relative value unit (RVU) scale for the ambulance fee schedule is as follows:

Ground or Water

Air Service Level
FW and RW HCFA sets the RVUs based on the amount of base year expenditures.

Ground or Water: The practice expense (PE) portion of the physician GPCI applied to 70 percent of the base rate.

Air: The PE portion of the GPCI applied to 50 percent of the base rate.

Ground or Water: A 50 percent add-on to the mileage rate (that is, a rate of $7.50 per mile) for each of the first 17 miles. The regular mileage allowance will apply for every mile over 17 miles.

Air: The modifier is applied to the total payment for the services (that is, the sum of the base rate adjusted by the geographic modifier and the mileage). The value of the modifier is dependent on the air base year expenditures as follows:

The ambulance fee schedule will be phased in over a 4-year period. The payment during the transition period will be based on a combination of the fee schedule payment and the amount the carrier would have paid absent the fee schedule. Payment in the first year of the transition will be the sum of 20 percent of the fee schedule and 80 percent of the former payment methodology. The fee schedule percentage will increase by 30 percentage points for each of the second and third years, with the former payment percentage decreasing by the same percentage points during that time. The fee schedule becomes fully implemented at 100 percent in the fourth year. Implementing payment under the fee schedule at only 20 percent in the first year is intended to give ambulance providers a period of time to adjust to the new payment amounts, which for some providers may be substantially lower than current payments. Thus, the transition is as follows:

Unlike other Medicare services that have become subject to a fee schedule, the ambulance industry cannot arbitrarily increase the number of services it furnishes in order to circumvent lower payments per service. Therefore, the Committee has not suggested mechanisms to control expenditures.

The Committee acknowledges that the statutory provisions regarding annual updates, as stated in section 1834(l)(3)(B) of the Social Security Act, will be the adjustments to account for inflation. That section provides for an annual update based on the percentage increase in the consumer price index for all urban consumers (CPI-U; U.S. city average) for the 12-month period ending with June of the year previous to its application to the fee schedule. For 2001 and 2002, the increase in the CPI-U is reduced by 1.0 percentage points for each year. Other than the Geographic and Rural adjustments, the Committee agrees not to make any other adjustments to the fee schedule.

Last Updated February 17, 2000