MEDICARE NEWS 
FOR IMMEDIATE RELEASE 
Monday September 11, 2000 
Contact: HCFA Press Office (202) 690-6145

Medicare to Establish New Ambulance Fee Schedule

The Health Care Financing Administration today proposed a new Medicare payment system to ensure that both senior citizens and Medicare pay appropriately for ambulance services.

Under the proposal, Medicare will pay for covered ambulance services using a fee schedule beginning Jan. 1, 2001. The fee schedule will replace the current system of reimbursing suppliers based on their charges or costs with a system that pays them a set amount based on the service provided.

As required by the Balanced Budget Act of 1997, HCFA participated in negotiations with affected industry groups to develop the new ambulance fee schedule. The proposed rule reflects the consensus of the negotiated rulemaking committee, which included representatives of affected industry groups and other affected organizations.

"We want to make sure that beneficiaries continue to get needed ambulance services and that Medicare pays ambulance suppliers more fairly and accurately" HCFA Administrator Nancy-Ann DeParle said. "These changes will protect beneficiaries and taxpayers from paying too much while preserving access to needed services."

Under the proposed rule:

• Seven categories of ground ambulance services, ranging from basic life support to specialty care transport, and two categories of air ambulance services will be established;
• Payment for each category is based on the relative cost of the service, adjusted to reflect wage differences in different parts of the country. Mileage will also affect payment levels;
• Ambulance providers will not be allowed to charge beneficiaries more than 20 percent of Medicare's approved amount for the service. Currently, providers can charge beneficiaries higher rates;
• The fee schedule allows for increased payments when ambulance services are provided in rural areas.

To better serve beneficiaries in rural areas, HCFA will consider alternative approaches to ensure adequate payment for isolated, essential, low-volume, rural ambulance suppliers as data becomes available.

The new fee schedule will be phased-in over four years starting Jan. 1, 2001, blending the current payment with the proposed fee schedule. In 2001, the blend will be 20 percent of the fee schedule rate and 80 percent of current rates. In 2002, the blend will be a 50-50 split. In 2003, the blend will be 80 percent fee schedule and 20 percent current rates, and in 2004, the rates will be based entirely on the fee schedule.

By law, Medicare pays for medically necessary ambulance services in emergencies and other situations when other methods of transportation would pose a risk to the beneficiary’s health. Medicare covers almost 9 million ambulance transports each year on behalf of 39 million elderly and disabled Americans.

The negotiated rulemaking committee included the American Ambulance Association, the American Hospital Association, the Association of Air Medical Services, the International Association of Firefighters, the International Association of Fire Chiefs, the National Volunteer Fire Council, the National Association of Counties, the National Association of State Emergency Medical Services (EMS) Directors, and the National Association of EMS Physicians.

The proposed fee schedule will be published in the Sept. 12 Federal Register. After accepting and reviewing public comment, HCFA will publish a final rule that establishes the fee schedule.