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Medicare Prescription Act Means Money to EMS
On December 8, 2003, President Bush signed into law the Medicare Prescription Drug and Modernization Act of 2003. When the Act was signed, almost every broadcast news organization focused on the cost seniors would have to pay for prescription drugs in the future. The summer of 2003 was filled with news stories of seniors who had to choose between food and prescription drugs because of the rising cost of prescribed medicine. The governor of Illinois even launched an initiative to begin buying prescription drugs for state employees from Canada, where the drugs are much cheaper.
However, buried deep inside this 678-page Act are benefits for emergency medical service ground and air transport systems. Some of the benefits help EMS systems on a national level, while other provisions are designed to benefit regional systems. Altogether, spread over a 10-year period, there is an estimated $600 million in financial aid to ground ambulance transport systems and another $100 million for air ambulance systems.
Interpreting the Bill
As it seems with every large bill that comes out of Washington, DC, there is sometimes confusing language within the bill, with varying interpretations and clarifications that need to be addressed. The Medicare Prescription Drug and Modernization Act of 2003 is no different. Many leaders of national EMS organizations, including members of the Centers for Medicare and Medicaid Services, are trying to interpret various sections of the Act.
One provision of the Act includes a fee increase for all services. Transports that originate in rural areas will see a 2% rate increase, while transports originating in urban or suburban areas will see a 1% increase. Unfortunately, this increase will only be in effect from July 1, 2004, to December 31, 2006.
Another short-lived provision of the Act is a 25% mileage bonus for any transport more than 50 miles, regardless of where the transport originated. This will only last from July 1, 2004, until December 31, 2008.
Section 414 of the Act calls for the Centers for Medicare and Medicaid Services to develop nine regional ambulance fee schedules to assist services that are changing over from what were traditionally higher reimbursement rates to lower reimbursement rates under the national fee schedule.
According to language in the Act, the Centers for Medicare and Medicaid Service must “calculate a regional conversion factor and a regional mileage payment rate using the same payment adjustments and the same relative value units as used in the current fee schedule.”
Beginning July 1, 2004, ambulance services may choose to receive their payments based upon the new regional schedule, or they may choose to stay with the current blended national fee schedule. What does this mean for your service? You choose whichever payment is higher as your method of reimbursement. If you would receive less under the new regional schedule than the national fee schedule, then you should stay with the national fee schedule. If you receive more reimbursement under the new regional fee schedule, you should choose the regional fee schedule that CMS will be working out.
However, in 2010, every ambulance service will receive 100% reimbursement based upon the timetable of the original national fee schedule.
It is expected that ambulance services that had traditionally high reimbursement rates prior to implementation of the national fee schedules, such as those in California, New Jersey and New England, will benefit most from the regional fee schedules.
Another section of the Act provides additional financial aid, beginning in 2005, to ambulance services in 17 states with the largest populations of undocumented immigrants. There is no age restriction for reimbursement for undocumented immigrants.
Reimbursement will not come directly from Medicare, however. In a distribution plan, states will receive a share of the $250 million earmarked for the program each year between 2005 and 2008. Reimbursement will be based upon a formula that has yet to be developed.
Another provision of the Act provides for an assessment of how the national fee schedule has impacted ambulance services. The General Accounting Office must submit an initial report to Congress by December 31, 2005, and a final report by December 31, 2007. Essentially, Congress wants to determine if the national fee schedule has caused ambulance services to fail based on how costs differ among the types of ambulance service providers, and on access, supply and quality of services in those states that have a reduction in payment under the Medicare ambulance fee schedule.
Section 415 of the Act tackles medical necessity for rural air ambulance transport and reimbursement. This section removes some discretion from intermediaries and carriers that currently downcode air ambulance claims to ground rates.
Obviously, this Act is some welcome relief for those EMS agencies that are or will be feeling the financial pinch in the future.
If you would like to view or read the Medicare Prescription Drug and Modernization Act of 2003, go to https://thomas.loc.gov and type HR1 in the search bill area. The provisions impacting EMS can be found in sections 414 and 415.
