Ambulance services to see boost in Medicare payment rates

As of July 1, Medicare boosted payments for ground ambulance services in Rhode Island more than 20 percent. The increase is the result of a temporary ambulance fee schedule required by the adoption of the Medicare modernization law.

The regional fee schedules will not result in decreased payment rates for any area of the country, but will raise the payment rates in the five regions that have been paid at lower rates in the absence of a base rate. The provision expires at the close of 2009 and is designed specifically to ease the transition of ambulances in certain regions of the country to a national fee schedule.

In an interim final rule, with comment period, issued on June 30, the Centers for Medicare & Medicaid Services established nine regions. The rule will increase Medicare payments to ambulance services by $840 million over the next five years according to provisions outlined in the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The act is meant to benefit both hospital-based providers and free-standing suppliers of ground ambulance services to Medicare beneficiaries.

The act offers temporary additional funding to ambulance services as they transition to the national fee schedule that went into effect in April 2002. Before the fee schedule, ambulances operated by providers (hospitals, nursing facilities or home health agencies) were paid on a reasonable cost basis. Free-standing ambulance operators were paid reasonable charges.

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“The increases we are implementing today will help to ensure that all beneficiaries continue to have access to medically necessary ground ambulance services,” said CMS Administrator Mark B. McClellan.

Urban services will see a 1 percent increase in payments and rural ambulances will receive a 2 percent increase to all services received through 2006. Through the end of 2008, urban and rural ambulances will receive a 25 percent increase in their mileage rates beyond the 50th mile. Through 2009, a “super-rural bonus,” increasing an ambulance’s base rate by 22.6 percent, will be in effect for services that originate in areas in the lowest 25th percentile of all rural populations by population density.

The temporary payment provisions do not apply to air ambulance services, which are also paid under the national ambulance fee schedule.

Comments will be accepted on the rule until Aug. 30 and a final rule responding to those comments will be published at a later date. More information is available on the CMS Web site at