Revenue Cycle

Changes in ambulance billing rules for CAHs

Medicare Update for CAHs, October 5, 2011

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This past August, CMS published in the Federal Register the 2012 inpatient prospective payment system final rule. Within this rule were a number of items that pertain to critical access hospitals, including a clarification of an existing ambulance billing rule.

As it stands now, payment for ambulance services furnished by a CAH or an entity that is owned and operated by a CAH is paid based on 101% of reasonable costs of the CAH or the entity that furnishes those services, but only if the CAH or entity is the only provider or supplier of ambulance services located within a 35-mile drive of the CAH or entity, according to Section 413.70(b)(5) of the existing regulations.

Because this regulation only requires that there be no other provider or supplier of ambulance services within a 35-mile drive of the CAH and does not address what happens when there is another provider or supplier of ambulance services within a 35-mile drive of the CAH/entity, CMS believes that the CMS regulation is not consistent with section 1834(1)(8) of the Act, and therefore is making a number of changes to the existing guidance.

CMS, in order to make these regulations consistent, are § 413.70(b)(5)(i) by adding a new paragraph (C) to state:

Effective for cost reporting periodsbeginning on or after October 1, 2011, payment for ambulance services furnished by a CAH or by a CAH-ownedand operated entity is 101% of reasonable costs of the CAH or the entity in furnishing those services, but only if the CAH or the entity is the only provider or supplier of ambulance services located within a 35-mile drive of the CAH.

With this change, the CAH/entity would be paid 101% of reasonable costs for ambulance services only if there is no other provider or supplier of ambulance services within a 35-mile drive of the CAH. If there is a provider or supplier of these services within the 35-mile radius, the CAH/entity would not be paid at 101% of reasonable cost, but would instead be paid under the ambulance fee schedule, according to CMS, which believes that this change will continue to allow for sufficient ambulance services to CAHs. On the other hand, the regulation clarifies that if the CAH’s ambulance is outside of the 35-mile radius and there is another ambulance and the CAH ambulance is the closest provider, then the CAH can still be paid on a cost basis.

Considering the changes at hand, critical access hospitals should review the IPPS final rule in the Federal Register, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

“There are four different diagrams within the rule that clearly explain the changes for reimbursing CAHs under the cost methodology in particular situations,” she says. “CAHs should review the rule to understand the potential impact to their revenues, particularly the situations where a CAH will be paid under the ambulance fee schedule instead of cost.”



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