Scully began the meeting briefly discussing CMS, its budgeted appropriation and its use of contractors to process and pay claims. He reported that CMS currently deals with some fifty-one contractors and that ideally he would like to see that number reduced to approximately twenty.

When questioned about ambulance provider issues, Scully advised the KAPA group that he was quite aware of ambulance provider's issues including the implementation of the new national fee schedule. He reported that he expected the "final rule" on the fee schedule to be released within the next forty-five days. With the release of the final rule, he then indicated that it would take some six months to complete the necessary computer code changes. Subsequently, he expected the new national fee schedule to be implemented on April 1, 2002. He did not advise or indicate what computer code changes were necessary or if these changes were possibly the new patient condition codes.

With regards to the use of the Project Hope base figure in computing the new national fee schedule, Scully did not offer any hope for its adoption, but rather seemed to imply that the base figure had been increased from what had been previously proposed, although a specific amount was not mentioned. In addition, he stated that any of the budgeted funds appropriated for ambulance transportation not expended in the first year of the new national fee schedule would be added to the next year's ambulance transportation appropriation. Since the funds would not be lost, he left open the possibility of an additional increase in the fee schedule.

Lastly, Scully advised the group that a decision as to whether the new fee schedule phase in period would be done over a four or five-year period had not yet been determined.