Friday, May 3, 2013

Proposed Rule Tightens the Screw for Ambulance

Feeling Beat Up?
CMS published a proposed rule this week which intends to bolster fraud prevention and also limit certain Medicare privileges we’ve grown accustomed to in the ambulance industry. CMS is inviting comments on the proposal now through June 28, 2013.

The American Ambulance Association has committed to developing a comment letter on behalf of the AAA members, and they are asking individual ambulance companies to submit comments, as well. 

Bottom line…if the proposed rule is eventually put in place, the ambulance industry takes another one on the chin. I don’t know about you, but I feel like we’ve been getting beat-up pretty good by the Feds, lately.

Attacking “Back-Billing”
CMS is proposing placing ambulance suppliers in the same situation as other medical service providers by placing a limitation on what we call “Back-Billing.”

Right now, Medicare rules permit ambulance suppliers to submit and be paid for claims for services rendered to patients prior to the date that they submit an enrollment application to Medicare.

Under the proposed rule, this privilege will be taken away.

As you know, because of State licensing requirements and even such things as various State’s Department of Transportation registration processes and rules, an ambulance service often must wait almost to the very day they begin to operate to obtain necessary licensing and registration documents in order to fulfill the reporting requirements to CMS when filing application for Medicare billing privileges.

When those documents are finally in place, the way things work now; the ambulance begins to provide the service, submits the application to Medicare, is granted billing privileges and then bills Medicare for the services they provided during the application process time frame. Medicare then pays on claims submitted retroactively, typically back to the original State license date reported on the Medicare application when submitted.

If the proposed rule is put in place, this practice will end. CMS will only begin to allow the ambulance service to submit and instruct the various MACs to only pay claims effective on the later of these dates: 1) the date the supplier’s enrollment application is filed with the MAC or 2) the date the ambulance supplier began furnishing services at a new practice location.

Big Dollar Savings
CMS is attempting to justify this change by citing that ambulance services in some parts of the United States pose an “elevated risk” to the Medicare program. So, they are approaching this by selling this as a program integrity measure.

They cite an “overabundance of ambulance suppliers and an over-utilization of ambulance services in particular regions of the country.” CMS argues out of concern over what they identify as a demonstrated lack of compliance by ambulance suppliers in the months preceding the filing of the Medicare enrollment application.

Of course, that’s the justification, but what’s the real reason for this change?

The real reason is the $327 million per year in estimated cost savings for the Medicare program! Never mind that services were indeed provided; necessary services, we might add. CMS has just now found another way not to pay for some of them.

That’s our opinion, of course.

What’s this Really Mean?
What this means is ambulance companies, especially new ones, are going to need to plan ahead.

New ambulance suppliers will probably elect to file the application, wait on the approval from the MAC (probably a minimum or 90-days processing for the best-prepared application for most MACs) and then begin operating.

That might be okay when the service has the luxury of waiting.

But, what about those scenarios where the ambulance service is stuck between a rock and a hard place?

For example, many States are encouraging local non-profit, sometimes volunteer-based ambulance services to merge. Given the shrinking volunteer pool, fire-based EMS are increasingly looking to merge companies together to make the best use of both manpower and equipment resources, while also saving on duplicated costs for increasingly expensive supply purchases.

So ABC Fire Department, which provides ambulance service to the community, decides to merge with the neighboring XYZ Fire Department, which also has an EMS division. Previously, each department billed Medicare under two provider agreements.

The day that the new fire department is formed into one, it is licensed under the new name by the State and is incorporated with a brand new unified Federal Tax ID number. Those departments now must cease to submit claims for Medicare services under their former individual identities.

However, if CMS enacts this proposed rule, these two departments would never be compensated for the ambulance services they provided to Medicare beneficiaries from the point that the new joint department was officially recognized until the MAC issues Medicare billing privileges. 

For a relatively small to medium-sized company who has partial-career or all-career staff, this could spell financial disaster.

Plan Ahead
So you say, “Plan ahead. What’s the big deal?”

How can EMS/Fire administrators plan ahead for a scenario like the one above?

If a new entity is to be formed with a new name and different Federal Tax ID and NPI, then there’s no way to plan ahead. The State won’t “pre-license” EMS services in most cases (unless this brings about a lobby on the State licensing authority to do so moving forward) so CMS will not even allow the MACs to accept an application until all the pieces are in place. Those pieces typically don’t fall into place until the last minute.

Under these new proposed guidelines, it will already be too late.

Think “Out-of-the-Box”

We have known companies that do think out of the box and move forward effectively.

Two companies could choose to merge under one or the other’s name and/or Tax ID, instead of forming a brand new entity. Therefore, billing could continue under that entity’s identity with notification provided to the MAC following the change. Doing so would not require a brand new Provider Number (PTAN) to be issued, therefore no application process. We have known companies to follow this model and then register a “Doing Business As” name to brand the identity of the newly formed merger. 

Of course, all of this requires good legal counsel and planning, and we highly recommend legal counsel that specializes in Fire/EMS mergers, as various State and Local laws can come into play that may affect an organization’s ability to make a merger like this happen beyond just the billing implications.

Ambulance suppliers are definitely going to be required to think “out-of-the-box” on this one.

Take Action
Now’s the time to take action! Contact CMS.

Make your feelings known on the subject. Don’t be afraid to reach out to your Senator or Congressman, who can pass on your thoughts to the appropriate people within CMS.

At Enhanced, we take a very pro-active role in assisting all of our clients, either by directly educating you on the ramifications of the proposed changes or by connecting our clients to others in the industry that we have networked with who can help navigate through these important changes. Such networking partners include legal counsel and/or consultants that specialize in these matters.

Tap into our knowledge base. The best way to do that is to contact us if you’re not an Enhanced client. Becoming an Enhanced client brings more to you than just sending out bills. We’re an information resource to our clients. 

Begin the process today by contacting Business Development Manager, Chuck Humphrey. Chuck can tell you about the many features and benefits we offer to our growing client list. Contact him today at or by phone at (800) 369-7544, Extension 108.

(Sources of information for this blog include “Proposed rule to Eliminate Ambulance Backbilling and Enhance Fraud Prevention,” April 29, 2013 e-mail, Page, Wolfberg and Wirth along with AAA Member Advisory, “CMS Issues Proposed Rule Revising Medicare Incentive Program and Provider Enrollment Standards,” April 30, 2013 e-mail, American Ambulance Association.)
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