- - -- --------  -o-f -- -
OFFICE  OF 
INSPECTOR  GENERAL 
FEBRUARY 1998 
OEI-09-95-00410  E X E C U T I V E   S U M M A RY

PURPOSE 
To provide baseline data about the ambulance industry and determine how State and local 
ordinances affect the delivery of ambulance services. 
BACKGROUND 
According to Section 1861(s)(7) of   Social Security Act, Medicare pays for medically 
necessary ambulance services when other forms of transportation would endanger the 
beneficiarys health. Ambulance suppliers provide two distinct levels of service--advanced 
life support and basic life support.  The major distinctions between the levels are the types 
of vehicles and the skills of the personnel and the services they render. 
The Health Care Financing Administration (HCFA) is considering proposed Medicare 
regulations that would base reimbursement for ambulance services on the patients 
condition rather than the type of vehicle and personnel used.  The final rule may include a 
special waiver for suppliers in non-Metropolitan Statistical Areas who would be hurt 
financially if they use only advanced life support ambulances. The HCFA may consider 
several options and may include a special waiver only if HCFA is convinced through 
overwhelming information of the need for the waiver. 
We decided to examine the effect and need for a special waiver based on Metropolitan 
Statistical Areas and non-Metropolitan Statistical Areas. In addition, we developed 
baseline information on the number of ambulance suppliers, vehicles, and personnel 
nationwide. We conducted in-person and telephone interviews with 53 State Emergency 
Medical Services Directors for the 50 States, the District of Columbia, the Commonwealth 
of Puerto Rico, and the U.S. Virgin Islands.  Using a structured discussion guide, we 
(1) identified State, county, and municipal mandates that require specific levels of 
ambulance services and (2) obtained baseline data on the number of suppliers, licensed 
vehicles, and certified personnel operating within the States in 1995 and 1996. We 
analyzed the 1995 universe of Medicare ambulance claims to determine the distribution of 
allowed claims by Metropolitan Statistical Areas and non-Metropolitan Statistical Areas 
for the 53 States. We also reviewed financial analyst reports on the ambulance industry. 
FINDINGS 
Medicare ambulance costs and services are skyrocketing 
Between 1987 and 1995, Medicare allowances increased 229.1 percent from $602 million 
to almost $2.0 billion.  More than four out of five Medicare ambulance services are 
provided in Metropolitan Statistical Areas.  In 1995, this translated to about 6 million of 
the 7.5 million services rendered in Metropolitan Statistical Areas. 
1  Ambulance service is a growth industry controlled by a few major corporations 
The Emergency Medical Services Directors in 41 of the 53 States noted that three large 
corporations are buying out small private ambulance companies in their States. The three 
major  corporations--Laidlaw,  American  Medical  Response,  and  Rural/Metro--are  located 
in all 41 primary and shared State markets.  By the end of 1996, these three corporations 
owned at least 20 percent of the national private ambulance market. 
All States regulate ambulance services; however, less than half mandate levels of service 
and only one requires advanced life support 
All States have administrative codes and regulations that set standards for ambulance 
services. The codes and regulations set requirements for licensure, certification, and 
recertification of ambulance suppliers, vehicles, and personnel to operate within the 
States. Nationally, 21 of the 53 States legislatively mandate a minimum level of 
ambulance services. Of these, Hawaii is the only State that requires advanced life support 
services.  Approximately 11 percent of localities also mandate ambulance services, and 
another 11 percent of localities contract for ambulance services using general tax 
revenues. 
Only two States use Metropolitan Statistical Areas to designate ambulance service areas 
Of the 53 States, 5 1 (or 96.2 percent) do not define their ambulance service areas as 
Metropolitan Statistical Area and non-Metropolitan Statistical Area. The significance is 
that HCFA may consider a waiver exception in the proposed ambulance regulations based 
on a Metropolitan Statistical Area/non-Metropolitan Statistical Area designation. If the 
waiver exception is based on this designation and all non-Metropolitan Statistical Area 
suppliers qualified for waivers, HCFA would continue to allow at least $185.7 million 
annually in advanced life support reimbursement.  Furthermore, a portion of the current 
$134.0 million in basic life support allowed services may be billed and allowed at the 
higher advanced life support level assuming suppliers with waivers converted their 
programs to provide advanced life support services only. 
RECOMMENDATION 
Previous Office of Inspector General studies have recommended that HCFA base 
reimbursement on the patients condition rather than the type of vehicle and personnel 
used. We continue to support this recommendation. In addition, HCFA should: 
re-evaluate its proposal to use the Metropolitan Statistical Area/non-Metropolitan 
Statistical Area designation as the basis for granting waivers when determining a 
waiver policy in its final rule on ambulance coverage. 
ii  AGENCY  COMMENTS 
We received comments on the draft report from the Assistant Secretary for Management 
and Budget (ASMB) and HCFA.  The HCFA concurred with the general findings and 
recommendation of our draft report.  Since we released the draft report, HCFA published 
the Notice of Proposed Rulemaking for Medicare ambulance services on June 18, 1997. 
The proposal includes two options for a waiver provision for suppliers in 
non-Metropolitan Statistical Area designations. 
Both HCFA and ASMB stated that HCFA had not yet decided which option, if any, it 
would use to grant waivers.  Based on these agency comments, we modified the 
recommendation on the Metropolitan Statistical Area/non-Metropolitan Statistical Area by 
making an explicit reference to   proposed rule. We also made changes based on 
 technical comments. 
The full text of each agencys comments appears in appendix D. 
111  T A B L E   O F   C O N T E N TS

PAGE

EXECUTIVE  SUMMARY 
INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1 
FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7 
Medicare ambulance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 
 
Growth industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 
 
State standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 
 
Metropolitan Statistical Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 
 
RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 
AGENCYCOMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 
APPENDICES 
A:  Emergency  Medical  Services  Training  Requirements  for  Ambulance  Personnel  .  .  A-l 
B:  Number  of  Ambulance  Suppliers,  Vehicles,  and  Personnel 
for 1995 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-l 
C: Breakdown of 1995 Ambulance Services and Allowed Amounts by 	
and   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-l 
D: Agency Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-l  I N T R O D U C T I ON

PURPOSE 
To provide baseline data about the ambulance industry and determine how State and local 
ordinances affect the delivery of ambulance services. 
BACKGROUND 
Coverage and payment for ambulance services under Medicare depend on a variety of 
factors including the patients medical condition, the equipment used to transport the 
patient, and the types of personnel rendering services.  To help explain these factors, we 
have included the following scenario. 
John Blue, age 72, gets up early one Saturday morning to mow the lawn. 
He has not been feeling well the last few days and dreads the yard work. 
He starts the mower, however, and begins to mow. After making the first 
pass over the lawn, he feels a terrible pressure in his chest, as if someone 
kicked him. He leaves the mower running and sits down on the lawn. By 
now, he is pale and is sweating profusely. He then clutches his chest, his 
vision goes black, and he falls to the ground. 
Across the street, Jane Smith is returning from her morning jog and sees 
Mr. Blue collapse.  Jane runs across the street and quickly senses that her 
neighbor may be in cardiac arrest.  She calls 911 for help from her cellular 
telephone, gives the information to the dispatcher, and starts 
cardiopulmonary resuscitation (CPR) . 
The dispatcher sends emergency medical services teams. Within 2 minutes, 
the first responders, who are volunteer fire fighters, arrive. They begin 
two-person CPR. Within another 2 minutes, paramedics arrive by 
ambulance. They quickly evaluate Mr. Blues condition and apply an 
automatic defibrillator to electrically stimulate the heart. Mr. Blue now has 
a pulse and is being ventilated with supplemental oxygen. The paramedics 
administer medication and start an intravenous drip. The paramedics then 
transport Mr. Blue to Central Hospital. Within minutes of his collapse, 
Mr. Blue is on his way to the hospital. 
We will use this scenario to illustrate Medicare coverage and reimbursement for 
emergency ambulance services in this report. 
Scenario adapted from Bryan Bledsoe, Robert Porter, and Bruce Shade, Paramedic 
Emergency  Care, 3rd edition, 1997, p. 18. 
1  Medicare Coverage of Ambulance  Services 
Medicare pays for medically necessary ambulance services, according to

Section 1861(s)(7) of The Social Security Act, when the use of other methods of

transportation is contraindicated by the individuals condition, but only to the extent

provided in regulations.  Health Care Financing Administration (HCFA) regulations state

that ambulance services are covered only if other forms of transportation would endanger

the beneficiarys health.  Medicare does not cover other forms of transportation, such as a

wheelchair or stretcher van, that could transport patients who do not require ambulance

services. In the scenario, other forms of transportation may have endangered Mr. Blues

condition.

Ambulance suppliers* must satisfy State and local requirements to operate within a State

and must comply with   regulations to qualify for Medicare reimbursement. To

meet   definition of an ambulance, each vehicle must (1) be designed specifically

for transporting the sick or injured; (2) contain a stretcher, linens, first aid supplies,

oxygen equipment, and other lifesaving equipment required by State or local ordinances

(usually adapted from the General Services Administration KKK-A-1822 standards); and

(3) be staffed with personnel trained to provide first aid treatment.  The paramedics in the

scenario provided emergency medical treatment and then transported the patient to the

hospital in an ambulance.

Levels of Ambulance Service 
Ambulance suppliers provide two distinct levels of service, advanced life support (ALS) 
and basic life support (BLS).  In order to be considered ALS, the ambulance must be 
equipped with specialized equipment and medications such as defibrillators and 
pulmonary/cardiac  monitors.  The specialized equipment may be permanently mounted or 
portable in nature.  The ALS vehicles also maintain radio-telephone contact with 
physicians or hospitals. 
A more important distinction between ALS and BLS is the personnel who staff the 
ambulance. In most States, BLS services are rendered by basic and intermediate 
emergency medical technicians   and the more intensive ALS services are rendered 
by paramedic  The ALS services may include: 
administering intravenous medications, 
defibrillating the patient, and 
performing other advanced life support services, such as electrocardiogram 
monitoring and airway monitoring. 
 will refer to ambulance companies, services, and providers as ambulance suppliers. 
2  Currently, ambulance reimbursement is based on the type of ambulance and personnel 
used (ALS or BLS) and the service status (emergency or non-emergency). In the 
scenario, the ambulance supplier would bill Medicare for emergency ALS services. 
Growth of State Emergency Medical Services Systems 
The emergency medical services (EMS) system emerged only in the past 30 years. Prior 
to the late   local fire departments provided most EMS.  Fire fighters often had 
minimal training in emergency procedures, airway management, or other lifesaving 
techniques. The emphasis was on rapid transportation; the prevailing belief was that 
care began in the hospital emergency room.  Rescue techniques, personnel training, and 
equipment were rudimentary. 
The federal government allocated funds for EMS after publication of a major study on 
prehospital emergency medical care.  In 1966, the National Academy of Science/National 
Research  Council  published  Accidental Death and Disability:  The Neglected Disease of 
Modern Society. The report suggested developing EMS systems, training prehospital 
emergency care providers, and upgrading ambulances and their equipment. This led to 
the enactment of the National Highway Safety Act of 1966 that compelled States to develop 
EMS systems or lose highway funding.  The Emergency Medical Services Act of 1973 
funded the development of regional EMS systems.  Since 1981, the Consolidated  Omnibus 
Budget Reconciliation Act eliminated all federal funding for EMS except block grants. 
The Departments of Transportation and Health and Human Services administer these 
grants. 
The EMS system is marked by increased technology and upgraded professional standards 
for regulating and licensing ambulance vehicles and for training and certifying ambulance 
 However, regional differences may exist in the frequency and sophistication 
of prehospital care. 
Licensing Vehicles and Certifying Personnel in States 
The State EMS Directors oversee (1) inspecting and licensing   and (2) testing 
and certifying emergency medical personnel within the States. The organizational 
structure of these offices varies considerably throughout the country. Some offices are 
located in the States Public Health Department or Department of Health and Human 
Services, while others are in the Department of Public Safety. A few States have an 
independent board that proposes regulations and reports directly to the Governors office. 
All State EMS Directors set administrative policies and procedures for vehicle and 
 pp. 5 and 20. 
 will refer to registering or permitting ambulance vehicles as licensing vehicles. 
 will refer to credentialing, registering, or licensing EMS personnel as certifying 
personnel. 
3  personnel  standards.  The chart below describes the major EMS personnel who provide 
prehospital medical care to patients. 
KEY  PLAYERS  IN  PREHOSPITAL  EMERGENCY  MEDICAL  CARE 
A first responder is a police officer, fire fighter, or lay person who has received 
basic emergency medical training such as CPR and basic airway management in an 
approved first responder program.  This persons role is to stabilize the patient until 
the EMT or paramedic arrives.  First responders usually do not transport patients. 
The following personnel do transport patients: 
A basic EMT is currently certified through the U.S. Department of Transportation 
National Standard Curriculum for basic   The person is competent in CPR, 
airway  management,  hemorrhage  control,  fracture  stabilization,  emergency 
childbirth, basic extrication (disentanglement), communications, and use of a 
pneumatic anti-shock garment. 
An intermediate EMT is a person who has all the basic EMT skills and is competent 
in limited advanced life support care (typically intravenous therapy and advanced 
airway  management). 
A paramedic EMT is a person with the highest level of training for prehospital 
providers. The person has all the basic and intermediate EMT skills and is trained in 
advanced  patient  assessment,  trauma  management,  pharmacology,  cardiology,  and 
other medical emergencies.  Paramedics should successfully complete Advanced 
Cardiac Life Support and Pediatric Advanced Life Support courses as offered by the 
American  Heart  Association. 
Several States certify various combinations of EMT levels with airway and/or cardiac 
management,  defibrillation,  and  intravenous  therapy. 
The HCFA requires at least two trained personnel in the ambulance, one of whom must 
have first aid training.  As shown in the scenario, prehospital emergency care services are 
rendered by various levels of personnel, from first responders to paramedics. The 
U.S. Department of Transportation has developed standardized curricula for initial training 
and recertification of first responders and all three levels of  The initial training 
includes classroom lectures, practical skills laboratory work, and hospital clinical 
experience. At the advanced levels, training may include a supervised field internship. 
Continuing education includes refresher courses and periodic in-service skills training. 
Most States use U.S Department of Transportation curricula to train and certify their 
 pp. 28-29.  ambulance personnel.  The other States enhance these basic curricula with more 
requirements.  (The  requirements  for  initial  training,  continuing  education,  and 
recertification for EMT personnel are described in appendix A.) 
Ambulance Industry Consolidation 
Until recently, the $7 billion ambulance industry was very   Most ambulance 
suppliers were fire department rescue squads and other public agencies, many operating 
with only one ambulance.  The remaining suppliers were private companies, primarily 
small Mom and Pop firms.  Several years ago, several large suppliers started 
acquiring  competitors.  After years of consolidation,  these suppliers have emerged with 
a substantial share of the national ambulance market. 
Proposed Changes for Medicare Coverage of Ambulance Services 
The HCFA is considering proposed regulations to revise Medicare guidelines for 
ambulance services. Under current HCFA regulations, the type of vehicle and EMS 
personnel who render medically necessary services determine whether the supplier 
receives BLS or ALS reimbursement. In the scenario, paramedics treated the patient, 
transported him to the hospital in an ALS vehicle, and subsequently the ambulance 
supplier submitted a Medicare claim for ALS reimbursement. Under proposed 
regulations, HCFA may consider reimbursing suppliers based on the patients  condition 
rather than the type of vehicle and personnel used.  The final rule may include a waiver 
for suppliers outside Metropolitan Statistical Areas   who might be hurt financially 
if they use only ALS ambulances.  The HCFA may consider several options and may 
include a special waiver only if HCFA is convinced through overwhelming information of 
the need for the waiver. 
METHODOLOGY 
We decided to examine the effect and need for a special waiver based on Metropolitan 
Statistical Areas and non-Metropolitan Statistical Areas. In addition, we developed 
baseline information on the number of ambulance suppliers, vehicles, and personnel 
nationwide. We conducted in-person or telephone interviews in November and 
December 1996 with 53 State EMS Directors including the 50 States, the District of 
Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands. (We will 
refer to the 53 States and territories collectively as States.) We excluded the Pacific 
Ambulance Chasing,  Time Magazine, December 9,  1996, p. 58. 
 Companies Adapt to Market,  Modern Healthcare, May 27, 1996, p. 40. 
 Magazine, op. cit. 
5  Island Trust Territories because of the small number of services rendered during 1995. 
Using a structured discussion guide, we: 
identified State, county, and municipal legislative mandates that require specific 
levels of ambulance services; 
identified the responsibilities of the EMS office for inspecting and licensing 
ambulance vehicles and training and certifying ambulance personnel; 
obtained data on the number of ambulance suppliers currently operating within 
each State; 
obtained data on the number of ambulance vehicles licensed in 1995 and 1996 by 
type of vehicle; and 
obtained data on the number of personnel certified in 1995 and 1996. 
We analyzed the 1995 universe of ambulance claims to determine the distribution of 
allowed claims by   and   for the 53 EMS States. We also reviewed 
financial analyst reports and articles on the ambulance industry. 
This report is the first in a series on Medicare ambulance services prepared by the Office 
of Inspector General. 
6
 F I N D I N GS

MEDICARE  AMBULANCE  COSTS  AND  SERVICES  ARE  SKYROCKETING 
The cost of Medicare ambulance services has skyrocketed over an   period.  Between 
1987 and 1995, Medicare allowances increased from $602 million to almost $2.0 billion. 
The graphic below shows the 229.1 percent increase. 
2.1   $ 
1.8  
1987  1994  1995 
Year 
The number of ambulance personnel, vehicles, and services provided also is increasing 
dramatically. According to the States, between 1995 and 1996, licensed vehicles 
increased from approximately 28,000 to more than 45,000 (60.7 percent increase) and 
certified ambulance personnel increased from approximately 427,000 to nearly 7 15,000 
(67.4 percent increase). (See appendix B for further detail.) According to HCFA, the 
number of services increased from 7.2 million in 1994 to 7.4 million in 1995. 
More than four out of five Medicare ambulance services are provided in  In 1995, 
this translated to about 6 million of the 7.5 million services rendered in  These 
services represented about $1.6 billion of Medicare payments.  Almost half of the services 
 define an ambulance service as a one-way or round-trip ambulance service provided on 
a single date by a supplier. 
7  in   are BLS services.  The table below shows the breakdown of national 
expenditures by type of service for   and 
1995 National Expenditures for Ambulance Services 
Category/Type of Service 
Cannot  determine 
ALS or BLS 
SUBTOTAL  19.1  17.3 
Virgin Islands (not categorized
into MSA/non-MSA)  230  0.0  $66,423  0.0 
Zip code outside United States, 
101  0.0  $33,604  0.0 
Puerto Rico, and Virgin Islands 
Cannot determine location of zip 
7,883  0.1  0.1 
code 
TOTALS  100.0  100.0 
AMBULANCE SERVICE IS A GROWTH INDUSTRY CONTROLLED BY A FEW 
MAJOR CORPORATIONS 
Beginning in 1991, several large ambulance suppliers started consolidating the industry by 
acquiring competitors, large and small. By the end of 1996, three major suppliers had 
emerged with at least 20 percent of the national private ambulance market.  American 
Medical Response (AMR), after absorbing 75 competitors in 4 years, now operates in 
The total amounts and percents may not exactly equal the sums of individual amounts and 
percents because of rounding. 
8  28 States with annual revenues of more than $500 million.   a subsidiary of the 
Toronto-based   Inc., grew ten-fold into at least a $500 million operation in 
23 States. Rural/Metro, operating in 14 States, increased its revenues 46 percent to 
$250 million.  In January 1997,   announced that it will purchase AMR and 
merge it with   estimates that it then will have about 14 percent of the 
U. S . ambulance market. 
The EMS Directors in 41 of the 53 States (or 77.4 percent) noted that three large 
corporations are buying out small private ambulance companies in their States.  The three 
major corporations--Laidlaw, AMR, and Rural/Metro--are located in all 41 primary and 
shared State markets. Many factors are combining to favor consolidation and to insure the 
growth of the ambulance industry and the costs of ambulance services: 
The aging of the U.S. population is likely to increase the total number of 
ambulance services per year, both emergency and non-emergency. 
Rapidly advancing technology and skills are expanding the range of procedures that 
can be performed by ambulance personnel, thereby increasing the average revenue 
per service. 
Privatization of municipal emergency response and fire protection services may 
increase as cities and towns contract with ambulance suppliers. Financial analysts 
expect this to overcome a counter reverse privatization trend where municipal 
fire departments take over emergency services in addition to providing first 
response. 
Increasingly, volunteer municipal rescue squads, which have been providing 
essentially free ambulance services, will bill Medicare and other third party 
insurers for their costs. 
Growing economies of scale for regionally dominant ambulance suppliers will take 
market share from smaller firms.  These economies are a result of the minimum 
staffing and response time requirements for EMS services and the cost of 
purchasing and maintaining a fleet of ambulances and dispatching operations. By 
combining contiguous operations, a larger player is able to consolidate dispatching 
and eliminate duplicate ambulance units. 
Increasing the need for non-emergency interfacility ambulance services will result 
from managed care plans discharging their members from hospitals sooner into less 
expensive alternative care sites. 
 on market share are based on financial analyst reports about the ambulance 
industry copyrighted by The Investext Group 1996; State EMS Directors reported State coverage 
by  consolidators. 
 New York Times, January 7, 1997, p. C-2. 
9  Increasing use of non-emergency or scheduled ambulance service, especially 
among large ambulance corporations, will continue. Only 11 States license other 
health care vehicles, such as wheelchair vans. In other States, these vehicles are 
licensed by the same agencies that inspect and license taxicabs. Although these 
11 States licensed 4,158 wheelchair vans and other vehicles in 1996, these vehicles 
represent only about 9.2 percent of all licensed patient transportation vehicles. 
The map and chart on the next page show the State EMS Directors responses about the 
extent of ambulance corporations nationwide. 
10
 National Ambulance Transportation Corporations 
and their 41 Primary and Shared State Markets 
 AMR only 
AMR and other 
Other 
iz None 
With the merger of AMR and   the new AMR (AMR, MEDTRANS, and 
will have a major presence in 19 STATES and operate in 16 other STATES.  RURAL/METRO will 
maintain a presence in 2 STATES and operate in 12 other STATES, including  10 with AMR. 
2 STATES have corporations other than AMR and RURAL/METRO, and 12 STATES have no known 
corporations.  ALL  STATES  REGULATE  AMBULANCE  SERVICES;  HOWEVER,  LESS  THAN 
HALF MANDATE LEVELS OF SERVICE AND ONLY ONE REQUIRES 
ADVANCED  LIFE  SUPPORT 
All States have administrative codes and regulations that set standards for ambulance 
services. The codes and regulations set requirements for licensure, certification, and 
recertification of ambulance suppliers, vehicles, and personnel to operate within the 
States. Four States require ambulance suppliers to apply for a certificate of need and 
appear at a hearing to justify the need for their services.  Suppliers can operate within 
these States only after receiving the certificate of need. 
Nationally, 21 of the 53 States legislatively mandate a minimum level of ambulance 
services. Of these, Hawaii is the only State that requires ALS services. The other 
20 States require at least BLS services.  Often the mandates are described as minimum 
levels of trained personnel who attend patients.  For example, to provide BLS services, 
most States require at least two personnel in the vehicle, with one EMT (basic or 
intermediate) in the back with the patient.  The remaining 32 of the 53 States do not 
legislatively mandate a minimum level of ambulance services. 
Approximately 11 percent of localities mandate minimum standards for ambulance 
services. Throughout our interviews, respondents emphasized that almost all localities 
voluntarily exceed the minimum State standards by providing BLS and ALS services. As 
an example, an EMS Director mentioned,  Though we do not have a State law mandating 
any level of ambulance services, ALS services are available to 98 percent of our 
population. 
Another 11 percent of localities contract for ambulance services using general tax 
revenues. State EMS Directors noted that a locality may solicit bids for BLS and ALS 
services and use tax revenues to finance the contracts.  Of the localities with contracts, 
about 44 percent contract for BLS services and 40 percent contract for ALS services. 
ONLY TWO STATES USE METROPOLITAN STATISTICAL AREAS TO 
DESIGNATE  AMBULANCE  SERVICE  AREAS 
Of the 53 States, 5 1 (or 96.2 percent) do not define their ambulance service areas as MSA 
and non-MSA. The State EMS Directors define the service areas by (1) counties, 
(2) naturally-occurring population densities, or (3) suppliers areas of coverage when they 
initially apply to provide services. 
The significance is that HCFA may consider a waiver exception in the proposed 
ambulance regulations based on an MSA/non-MSA designation. A waiver may allow 
non-MSA suppliers to demonstrate financial hardships resulting from lower BLS 
reimbursement because they operate with ALS vehicles and personnel only. Some State 
EMS Directors believe that most non-MSA suppliers in their States would apply for a 
waiver. For example, one Director believes that most of his 275 suppliers would apply 
for waivers. 
12
 If HCFA considers and includes a waiver exception in any proposed ambulance 
regulations, this exception may have a financial impact on Medicare reimbursement. The 
table on page 8 shows that HCFA allowed about $342.8 million (or 17.3 percent) in 
 for ambulance services nationally in 1995. The breakdown was about 
$185.7 million for ALS services and $134.0 million for BLS services (we cannot 
determine the exact level for about $23.1 million of    services).  If the waiver 
exception is based on an MSA or non-MSA designation and all non-MSA suppliers 
qualified for waivers, HCFA would continue to allow at least $185.7 million annually in 
ALS reimbursement. Furthermore, a portion of the current BLS allowed services may be 
billed and allowed at the higher ALS level assuming suppliers with waivers converted 
their programs to provide ALS services only. 
13
 R E C O M M E N D A T I ON

Previous Office of Inspector General studies have recommended that HCFA base 
reimbursement on the patients condition rather than the type of vehicle and personnel 
used. We continue to support this recommendation. In addition, HCFA should: 
re-evaluate its proposal to use the Metropolitan Statistical Area/non-Metropolitan 
Statistical Area designation as the basis for granting waivers when determining a 
waiver policy in its final rule on ambulance coverage. 
We have included national and State baseline ambulance data in appendices B and C for 
HCFAs information and analysis. 
AGENCY  COMMENTS 
We received comments on the draft report from the Assistant Secretary for Management 
and Budget (ASMB) and HCFA.  The HCFA concurred with the general findings and 
recommendation of our draft report.  Since we released the draft report, HCFA published 
the Notice of Proposed Rulemaking for Medicare ambulance services on June 18, 1997. 
The proposal includes two options for a waiver provision for suppliers in 
non-Metropolitan Statistical Area designations. 
Both HCFA and ASMB stated that HCFA had not yet decided which option, if any, it 
would use to grant waivers.  Based on these agency comments, we modified the 
recommendation on the Metropolitan Statistical Area/non-Metropolitan Statistical Area by 
making an explicit reference to HCFAs proposed rule.  We also made changes based on 
HCFAs technical comments. 
The full text of each agencys comments appears in appendix D. 
14
 A P P E N D I X  A

EMERGENCY  MEDICAL  SERVICES  TRAINING  REQUIREMENTS 
FOR  AMBULANCE  PERSONNEL 
Since the   the National Highway Traffic Safety Administration of the 
U.S. Department of Transportation (DOT) has provided National Standardized Curricula 
for prehospital EMS personnel.  Most States have incorporated these DOT standards into 
their  certification  requirements  for  emergency  medical  technicians   All curricula 
allow students to gain the knowledge, skills, and attitude necessary to be a competent, 
productive, and valuable member of the EMS team.  Courses are designed to instruct 
students to serve as a vital link in the chain of the health care team.  Training includes all 
skills necessary for   to provide emergency medical care at the BLS or ALS level 
with an ambulance or other specialized service.  All States require continuing education 
and recertification for EMS personnel at all levels. Specific courses and refresher skills 
vary among States. 
In addition to requirements summarized below, DOT also has curricula for EMS 
dispatchers and emergency vehicle operators. 
FIRST RESPONDERS 
The first responder is the first individual who arrives at the scene regardless of the 
individuals certification.  It is the goal of the DOT First Responder: National Standard 
Curriculum to provide students with the core knowledge, skills, and attitudes to   a 
limited amount of equipment to perform initial assessment and intervention, and assist 
other EMS providers.  The DOT course provides an introduction to these concepts and 
an orientation to the specific systems and services with which the first responder will be 
affiliated.  This level of provider is not intended to be utilized as the minimum staffing for 
an ambulance. Enrichment programs and continuing education help fulfill other specific 
needs for first responder training. 
Twenty-two States report that they currently certify first responders or have plans to do so 
shortly. 
BASIC  EMT 
The core curriculum is presented within a 1 lo-hour training program.  The basic EMT 
works with other health care professionals to deliver professional prehospital emergency 
medical care. After successfully completing the program, the student is capable of 
performing the following functions at the minimum entry level: 
Recognize the nature and seriousness of the patients condition or extent of injuries 
to assess requirements for emergency medical care; 
A -l  Administer appropriate emergency medical care based on assessment findings of 
the patients condition; 
Lift, move, position, and otherwise handle the patient to minimize discomfort and 
prevent further injury; and, 
Perform safely and effectively the expectations of the job description. 
Twenty-four States require the basic   DOT course, 12 States require 120 hours, 
and the remaining 17 States require more than 120 hours of training. 
INTERMEDIATE  EMT 
The intermediate EMT course includes basic EMT skills and training in specific medical 
management skills. These skills include the use of 12-lead electrocardiogram machines, 
airway management by endotracheal intubation and defibrillating life-threatening 
arrhythmias, plus the provision of certain intravenous medications. 
The intermediate EMT training requirements vary widely. Ten States do not certify this 
EMT level. For the other 43 States, additional training ranges from 27 to 300 hours. 
PARAMEDIC  EMT 
As the highest-trained prehospital emergency care person in the EMS system, the 
paramedic concentrates on the care and well-being of the patient.  Paramedics  must 
complete from 500 to more than 1,800 hours of training beyond the other EMT levels. 
Paramedics must complete training in advanced medical techniques, such as 
transcutaneous cardiac pacing, drug therapy, chest decompression, gastric tube placement, 
and the administration of a large range of medications. 
Minimum training requirements for paramedics vary substantially from State to State. 
Thirty-two States require less than 900 hours, 16 States require between 900 and 
1,400 hours, and 5 States do not specify the minimum hours. 
A -2
 A P P E N D I X   B

NUMBER OF AMBULANCE SUPPLIERS, VEHICLES, AND PERSONNEL 
FOR 1995 AND 1996 
During the interviews with EMS Directors, we obtained data on the number of services, 
licensed ambulance vehicles by type, and the number of ambulance personnel by type of 
certification. While most States had some data available, many do not have computerized 
databases and keep cumulative counts of services, vehicles, and personnel only. 
PLEASE NOTE: 
For States with available data, EMS Directors stated that 18,523 ambulance suppliers 
operate in the 53 States as of December 1996. 
For the number of licensed ambulance vehicles: 
10 of the 53 States (18.9 percent) did not have statistics available for 1995. 
4 of the 53 States (7.5 percent) did not have statistics available for 1996. 
5 of the 53 States (9.4 percent) did not have statistics available for both years. 
For the number of certified ambulance personnel, many States could not provide separate 
statistics for both years.  They did, however, provide cumulative statistics for 1996. 
The percents of vehicles and personnel may not total 100.0 percent due to rounding. 
B -l  LICENSED  AMBULANCE  VEHICLES

1995  1996 
VEHICLE TYPE 
Vehicles  Percent  Vehicles  Percent 
ALS-only vehicle  9,284  33.4  14,773  32.6 
BLS-only vehicle  7,337  26.4  10,580  23.4 
vehicle  7,266  26.1  12,363  27.3 
Rescue  vehicle  I  548  I  2.0  I  918  I  2.0 
Fire trucks  I  974  I  3.5  I  1,925  I  4.3 
Air  ambulances  286  1.0  570  1.3 
(fixed wing and rotor) 
Water/Marine  6  0.02  6  0.01 
ambulances 
Wheelchair  vans  807  2.9  954  2.1 
Other health care  1,305  4.7  3,204  7.1 
vehicles 
TOTALS  I  27,813  I  100.0  I  45,293  I  100.0 
CERTIFIED  AMBULANCE  PERSONNEL 
PERSONNEL  TYPE 
*NOTE:  These statistics include the cardiac technician and other advanced level personnel 
between the basic and paramedic levels.  A P P E N D I X  
BREAKDOWN  OF  1995  AMBULANCE  SERVICES  AND  ALLOWED  AMOUNTS 
BY   AND 
The following tables display the number of services and allowed amounts for 1995 Medicare 
ambulance services, broken out by Metropolitan Statistical Area (MSA) and type of service, 
for each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and 
the U.S. Virgin Islands.  In these tables, the total amounts and percents may not exactly 
equal the sums of individual amounts and percents because of rounding.  We defined a 
service as a one-way or round-trip ambulance service provided on a single date by a single 
supplier. 
ALABAMA 
Category/Type of Service 
Cannot 
Cannot  determine 
ALS or BLS 
SUBTOTAL  47,894  29.7  31.8 
TOTALS  161,069  100.0  100.0 
C -l  ALASKA

Cannot  determine 
ALS or BLS 
ARIZONA 
non-MSA  Cannot determine 
ALS or BLS 
SUBTOTAL  8,926  14.4  20.5 
TOTALS  62,178  100.0  100.0 
c -2  -
ARKANSAS 
Services 
Category/Type of Service 
Number  Percent 
ALS  40.6 
BLS  $707,472  2.4 
MSA  Cannot  determine 
$229,112  0.8 
ALS or BLS 
SUBTOTAL  37,577  45.9  43.7 
ALS  36,159  44.1  49.5 
BLS  5.7 
t 
non-MSA  Cannot  determine 
739  0.9 
ALS or BLS 
SUBTOTAL  -
TOTALS 
-
CALIFORNIA 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Amount  Percent 
ALS  45.8 
BLS  42.7 
MSA  Cannot determine 
6.3 
ALS or BLS 
SUBTOTAL  553,863  96.2  94.7 
ALS  14,045  2.4 
BLS  1.0 
t 
non-MSA  Cannot  determine 
1,872  0.3  0.8 
ALS or BLS 
SUBTOTAL  -
TOTALS 
c -3  COLORADO

Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  22,162  44.3  48.6 
BLS  17,058  34.1  28.2 
MSA  Cannot determine
ALS or BLS  2,438  4.9  6.8 
SUBTOTAL  41,658  83.3  83.6 
ALS  4,234  8.5  9.7 
BLS  3,694  7.4  $835,641  5.6 
non-MSA  Cannot determine
ALS or BLS  414  0.8  $173,425  1.2 
SUBTOTAL  8,342  16.7  16.4 
TOTALS  50,000  100.0  100.0 
CONNECTICUT 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
Cannot determine 
Cannot determine
ALS or BLS 
SUBTOTAL 
TOTALS 
c -4  DELAWARE

Category/Type  of Service 
Cannot  determine 
ALS or BLS 
DISTRICT OF COLUMBIA 
Medicare 
Category/Type of Service 
Cannot determine 
ALS or BLS 
SUBTOTAL  0  0.0  $0  0.0 
TOTALS  18,568  100.0  100.0 
C -5
 -
FLORIDA 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS 
BLS 
MSA  Cannot  determine 
2.0 
ALS or BLS 
SUBTOTAL  383,830  93.6  1  93.7 
ALS 
BLS  8,208  2.0 
t 
non-MSA  Cannot  determine 
611  0.1 
ALS or BLS 
SUBTOTAL  - 1  6.3 
TOTALS  100.0 
-
GEORGIA 
E 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  33.5 
BLS  30.0 
MSA  Cannot  determine 
4.6 
ALS or BLS 
SUBTOTAL  149,345  69.0  68.2 
ALS  36,594  16.9  18.9 
BLS  27,973  12.9  11.1 
t 
non-MSA  Cannot  determine 
ALS or BLS 
SUBTOTAL  -
TOTALS 
C -6
 HAWAII

Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
-
ALS  6,357  1  58.3  41.0 
BLS  834    7.6  $228,011  8.7 
MSA  Cannot  determine 
80  0.7  $50,582  1.9 
ALS or BLS 
SUBTOTAL  7,271    66.7  51.6 
ALS  2,875  1  26.4  $484,911  18.4 
BLS  340  1  3.1 
non-MSA  Cannot determine 
418  3.8  $693,336  26.4 
ALS or BLS 
SUBTOTAL  3.633  1  33.3 
TOTALS  10,904  I  100.0
IDAHO 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent
ALS  2,310  1  15.5 
BLS  3.091    20.7 
MSA  Cannot  determine 
0  130.   1  9 $41,682  1.5 
ALS or BLS  II 
SUBTOTAL  5,531  37.1  I  35.3  11 
ALS  2,627  1  17.6 
BLS  6,306    42.3 
non-MSA  Cannot determine 
460  3.1  $122,636  4.3 
ALS or BLS  II
SUBTOTAL  9,393    62.9 
TOTALS  14,924  1  100.0
c -7  ILLINOIS

Services  Medicare  Allowed  Amount 
Category/Type of Service  I 
Number  Percent  Amount    Percent 
-
-
ALS  24.7 
BLS  51.9 
MSA  Cannot determine 
22,207  5.7 
ALS or BLS  I 
L 
SUBTOTAL  318,997  81.3  83.5 
ALS  15,715  4.0 
BLS  53,848  13.7 
non-MSA 
Cannot determine 
1.3 
ALS or BLS  I  II 
SUBTOTAL  1  16.5  11 
TOTALS  100.0  II 
INDIANA 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Amount  Percent 
ALS  32.3 
BLS  39.5 
MSA 
Cannot  determine 
$484,387  2.1 
ALS or BLS 
SUBTOTAL  94,311  73.0  73.8 
ALS  11,520  8.9  11.4 
BLS  22,678  17.6  13.8 
non-MSA 
Cannot  determine 
ALS or BLS 
SUBTOTAL 
TOTALS  ; 
C -8
 IOWA

Category/Type of Service 
Cannot  determine 
KANSAS 
Medicare 
Category/Type of Service 
Cannot determine
ALS or BLS  1,668  2.8  $644,920  4.4 
SUBTOTAL  29,573  49.6  46.7 
TOTALS  59,608  100.0  100.0 
c -9  KENTUCKY

Category/Type of Service 
Cannot  determine 
ALS or BLS 
SUBTOTAL  85,533  50.3  52.9 
TOTALS  170,198  100.0  100.0 
LOUISIANA 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  49,309  35.2  39.5 
BLS  48,418  34.6  26.5 
MSA  Cannot determine
ALS or BLS  5,703  4.1  5.7 
SUBTOTAL  103,430  73.9  71.7 
ALS  20,593  14.7  18.3 
BLS  14,327  10.2  8.1 
non-MSA  Cannot  determine 
1,554  1.1  $884,974  1.9 
ALS or BLS 
SUBTOTAL  36,474  26.1  28.3 
TOTALS  139,904  100.0  100.0 
c - 10
 MAINE

Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  9,700  21.1  22.6 
BLS  15,398  33.5  26.5 
MSA  Cannot  determine
ALS or BLS  1,193  2.6  $396,832  3.3 
SUBTOTAL  26,291  57.1  52.3 
ALS  6,905  15.0  20.2 
BLS  11,245  24.4  22.8 
non-MSA 
Cannot  determine
ALS or BLS  1,584  3.4  $576,818  4.7 
SUBTOTAL  19,734  42.9  47.7 
TOTALS  46,025  100.0  100.0 
MARYLAND

Category/Type of Service 
Cannot  determine 
Cannot  determine
ALS or BLS  262  0.2  $50,464  0.1 
SUBTOTAL  11,732  7.5  7.1 
TOTALS  157,464  100.0  100.0 
c-  11
 MASSACHUSETTS

Services  Medicare  Allowed  Amount 
Category/Type of Service 
Amount  Percent 
-
ALS  17.8 
BLS  79.4 
MSA  Cannot  determine 
2.6 
ALS or BLS 
SUBTOTAL  358,838  99.8  99.8 
ALS  55  0.0 
BLS  532  0.1  $196,227  0.1 
non-MSA  Cannot  determine 
$79,913  0.1 
ALS or BLS 
SUBTOTAL 
TOTALS 
MICHIGAN 
Services  Medicare  Allowed  Amount  II 
Category/Type of Service 
Amount  Percent 
ALS  45.0 
BLS  36.8  11 
MSA  Cannot determine 
ALS or BLS  I  3.2  II 
SUBTOTAL  250,170  86.9  1  84.9  11 
II 
ALS  18,950  6.6  1  9.9 
II 
BLS  4.3 
non-MSA  Cannot  determine 
0.9  $617,463  1  1
ALS or BLS 
SUBTOTAL  1  15.1 
II 
TOTALS  100.0  -
MINNESOTA 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent 
ALS 
BLS 
MSA  Cannot determine 
$850,768  5.5 
ALS or BLS  I 
SUBTOTAL  33,804  64.3  1  65.0  11 
ALS  5,669  10.8  17.2 
BLS  t  11,984  22.8  14.0 
non-MSA  Cannot determine 
$590,803  3.8 
ALS or BLS 
-
SUBTOTAL  35.0 
TOTALS  100.0  II 
-
MISSISSIPPI 
Services 
Category/Type of Service 
$13.513.552  56.6  11 
MSA  Cannot  determine 
ALS or BLS 
SUBTOTAL  36,158  48.8  1  58.7 
ALS  18,177  24.5  1  27.9  11 
BLS  t  18,544  25.0  1  11.5  11 
non-MSA  Cannot  determine 
1.9  $459,441  /  1
ALS or BLS 
-
SUBTOTAL  1  41.3 
TOTALS  1  100.0 II 
c - 13
 MISSOURI

Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  58,306  42.8  49.8 
BLS  34,106  25.1  19.7 
MSA  Cannot determine
ALS or BLS  2,089  1.5  $899,727  2.4 
SUBTOTAL  94,501  69.4  71.9 
ALS  30,755  22.6  22.2 
BLS  9,408  6.9  4.6 
non-MSA  Cannot determine
ALS or BLS  1,445  1.1  $495,693  1.3 
SUBTOTAL  41,608  30.6  28.1 
TOTALS  136,109  100.0  100.0 
MONTANA 
Category/Type of Service 
Cannot determine 
Cannot  determine
ALS or BLS  918  7.6  $334,007  11.2 
SUBTOTAL  8,832  73.3  70.6 
TOTALS  12,047  100.0  100.0 
c - 14
 NEBRASKA

Category/Type of Service 
NEVADA 
non-MSA  Cannot determine 
112  0.6  $138,071  1.8 
ALS or BLS 
SUBTOTAL  2,666  13.2  $998,073  13.3 
TOTALS  20,257  100.0  100.0 
c - 15
 NEW  HAMPSHIRE

Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  5,714  18.3  23.3 
BLS  14,860  47.5  41.2 
MSA  Cannot determine
ALS or BLS  933  3.0  $325,645  4.0 
SUBTOTAL  21,507  68.7  68.5 
ALS  2,916  9.3  $909,306  11.1 
BLS  6,531  20.9  19.0 
non-MSA  Cannot determine
ALS or BLS  351  1.1  $119,091  1.4 
SUBTOTAL  9,798  31.3  31.5 
TOTALS  31,305  100.0  100.0 
NEW JERSEY

Category/Type of Service 
Cannot determine
ALS or BLS  0  0.0  $0  0.0 
SUBTOTAL  0  0.0  $0  0.0 
TOTALS  236,896  100.0  100.0 
C - 16
 NEW MEXICO

Category/Type  of Service 
Cannot determine 
ALS or BLS 
NEW YORK

non-MSA  Cannot  determine
ALS or BLS  1,176  0.2  $529,448  0.4 
SUBTOTAL  31,201  6.0  6.5 
TOTALS  522,924  100.0  100.0 
c - 17
 NORTH CAROLINA

Category/Type  of  Service 
Cannot determine 
NORTHDAKOTA 
Cannot  determine 
ALS or BLS 
SUBTOTAL  8,084  68.1  62.9 
TOTALS  11,879  100.0  100.0 
c - 18
 Category/Type of Service 
Cannot  determine 
ALS or BLS 
SUBTOTAL  65,699  17.0  12.9 
TOTALS  387,460  100.0  100.0 
OKLAHOMA 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  30,114  36.8  45.5 
BLS  9,060  11.1  6.6 
MSA  Cannot  determine
ALS or BLS  4,679  5.7  7.2 
SUBTOTAL  43,853  53.6  59.3 
ALS  19,667  24.0  29.3 
BLS  16,745  20.5  8.9 
non-MSA  Cannot determine 
1,587  1.9  $655,936  2.5 
ALS or BLS 
SUBTOTAL  37,999  46.4  40.7 
TOTALS  81,852  100.0  100.0 
c - 19
 OREGON

Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  60.2 
BLS  6.8 
MSA  Cannot determine 
$173,276  0.9 
ALS or BLS 
SUBTOTAL  27,578  66.7  67.9 
ALS  9,454  22.9  26.1 
BLS 
non-MSA  Cannot determine 
280  0.7  $148,001  0.8 
ALS or BLS 
SUBTOTAL 
TOTALS 
PENNSYLVANIA

Services  Medicare  Allowed  Amount  II 
Category/Type of Service 
Amount  Percent 
ALS  27.2 
BLS  59.2  11 
MSA  Cannot determine 
2.0 
ALS or BLS  II 
SUBTOTAL  88.4 
II 
ALS  1  4.1 
BLS 
non-MSA  Cannot determine 
0.3  $537,124  /  1
ALS or BLS 
SUBTOTAL  11.6 
II 
TOTALS  664,507    100.0  1  100.0 
c - 20
 -
-
PUERTO  RICO 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
-
ALS  $64,483  0.7 
BLS  89.6 
MSA  Cannot  determine 
$43,348  0.4 
ALS or BLS 
SUBTOTAL  46,154  91.3  90.6 
ALS  50  0.1  $16,943  0.2 
BLS  4,346  8.6  f 
non-MSA  Cannot determine 
- $12,077  0.1 
ALS or BLS 
-
SUBTOTAL 
TOTALS  -
-
RHODE ISLAND 
II 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  23.4 
BLS  74.9  11 
MSA  Cannot determine 
$187,016 
ALS or BLS  I  1.6  II 
SUBTOTAL  44,675  100.0  100.0 II 
 I   II 
ALS  0  0.0 
 I   II 
BLS  t 
non-MSA  Cannot determine  1 
0  0.0 
ALS or BLS 
-
SUBTOTAL 
TOTALS  1  100.0  II 
c - 21
 SOUTH  CAROLINA

Category/Type of Service 
Cannot  determine 
SOUTH  DAKOTA 
non-MSA  Cannot  determine 
215  1.5  $55,517  2.3 
ALS or BLS 
SUBTOTAL  11,432  79.0  81.0 
TOTALS  14,468  100.0  100.0 
c - 22
 TENNESSEE

Category/Type of Service 
TEXAS 
non-MSA  Cannot  determine
ALS or BLS  5,935  1.4  2.3 
SUBTOTAL  87,151  20.0  20.4 
TOTALS  435,893  100.0  100.0 
C - 23
 UTAH

Category/Type  of Service 
VERMONT

Cannot determine 
ALS or BLS 
SUBTOTAL  11,495  74.5  75.4 
TOTALS  15,429  100.0  100.0 
C - 24
 VIRGIN  ISLANDS

Services  Medicare  Allowed  Amount 
Type of service 
Number  Percent  Amount  Percent 
ALS  30  13.0  $8,329  12.5 
BLS  198  86.1  $53,034  79.8 
Cannot determine ALS or 
2  0.9  $5,060  7.6 
BLS 
TOTALS  230  100.0  $66,423  100.0 
This table combines the MSA and non-MSA data, because the Virgin Islands have not been 
categorized into MSA and non-MSA areas. 
VIRGINIA 
Category/Type  of Service 
Cannot determine 
ALS or BLS 
SUBTOTAL  30,772  27.3  29.9 
TOTALS  112,810  100.0  100.0 
c - 25  WASHINGTON

Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
-
ALS  34.1 
BLS  39.3 
MSA  Cannot  determine 
$644,412  2.5 
ALS or BLS 
SUBTOTAL  65,397  77.8  75.9 
ALS  9,329  11.1  14.5 
BLS  8,692  10.3 
non-MSA  Cannot  determine 
ALS or BLS 
SUBTOTAL 
TOTALS  ; 
WEST  VIRGINIA

Services 
Category/Type of Service 
I 
Number  Percent 
ALS  1  17.1  11 
BLS  1  18.8  11 
MSA  Cannot determine 
$249,986 
ALS or BLS 
SUBTOTAL  37.3  11 
ALS  17.213  1  16.6 
BLS 
non-MSA  Cannot  determine 
ALS or BLS 
SUBTOTAL  61,798  59.5  62.7  11 
TOTALS  103,834  100.0  100.0 11 
C - 26
 WISCONSIN

Services 
Category/Type of Service 
-
ALS  21.4 
BLS  48.9 
MSA 
Cannot  determine 
8.3 
ALS or BLS 
SUBTOTAL  86,640  76.0  78.6 
I  I 
ALS  5,538  4.9  7.3 
BLS  19,770  17.4  11.3 
non-MSA  Cannot determine 
$703,751 
ALS or BLS 
SUBTOTAL 
TOTALS  Jl 
WYOMING 
Services  Medicare  Allowed  Amount 
Category/Type of Service 
Number  Percent  Amount  Percent 
ALS  $163,440  11.6 
BLS  $153,452  10.9 
MSA 
Cannot determine 
$46,695  3.3 
ALS or BLS 
SUBTOTAL  1,517  27.0  $363,587  25.9 
ALS  2,148  38.2  $658,828  46.9 
BLS  1,838  32.7  $339,937  24.2 
non-MSA 
Cannot  determine 
ALS or BLS 
SUBTOTAL 
TOTALS 
C - 27
 A P P E N D I X  D

AGENCY  COMMENTS 
The full text of comments received from the Health Care Financing Administration and the 
Office of the Assistant Secretary for Management and Budget follows. 
D -l  Comments from the Health Care Financing Administration 
DEPARTMENT OF HEALTH   HUMAN SERVICES  Health Care 
 C. 
To:	 June Gibbs Brown 
 General 
SUBJECT:	  of Inspector General (OIG) Draft Report: State Ambulance Policies 
and Services, 
We have reviewed the above-referenced report, which discusses   coverage of 
 services and proposes changes to Medicares payment policies.  The report is 
one of a series of OIG reports concerning Medicare coverage and payment for ambulance 
services. Previous studies conducted   recommended that reimbursement be based 
on the patients medical condition rather   the type of   and personnel used in 
providing  an  ambulance  service.  As the report indicates, the   Care Financing 
Administration  (HCFA)  proposed  this  reimbursement  change,  along  with  a  proposal  to 
consider waivers in certain non-Metropolitan Statistical Areas   in a Notice of 
Proposed   issued in June of 1997. 
As   report suggests,   and payment for ambulance services under Medicare 
depend on a variety of factors, including the patients medical condition, the 
used to transport   patient, and the type of personnel rendering services.  Medicare pays 
for medically necessary ambulance   under section 186   of the Social 
 Act, when the use of other methods of transportation is   by the 
individuals condition, but only to the   provided in regulations. 
The OIG report explains that Medicare ambulance costs and services (defined as a 
way or round-trip ambulance service provided on a single date) have increased 
 over   past eight years. Between 1987 and 1995, Medicare allowances 
increased   million to almost   billion. The number of ambulance personnel, 
vehicles,  and  services  provided  also  increased.  The   determined that more than four 
out of five Medicare ambulance   are provided in  These   alone 
represent about   1.6 billion in Medicare payments. 
D -2
 Page Two 
OIG continues to support its prior recommendation that HCFA base reimbursement for 
ambulance services on the patients medical condition rather than the type of 
 used.  OIG also recommends that HCFA rc-evaluate the use of the 
MSA designation as a possible basis for   waivers to this payment policy. 
HCFA concurs   all OIG recommendations. Our detailed   are as follows: 
OIG  Recommendation 
HCFA should base reimbursement on the patients medical condition rather than the type 
of   and personnel used. 
HCFA 
We concur. HCFA agrees with the general findings and recommendations suggested in 
this OIG report and is considering how best to   and implement them. 
On June 17, 1997. HCFA published in the Federal   a Notice of Proposed 
 addressing several of the issues raised by the OIG report about 
 coverage and payment for ambulance  The   was based on the 
work of   convened by   which worked   with 
representatives   the ambulance industry in developing the proposed rule.  In  addition 
to proposing that payment for ambulance services be based on the medical condition of 
the   the NPRM included several other proposals to update and   Medicares 
ambulance policies, and solicited comments in all of these areas. 
In August 1997, after publication of   NPRM, the President signed into law the 
Balanced Budget Act of 1997 (BBA), which included a mandate to develop a 
schedule for ambulance services through negotiated   to take   by January 
A number of members of   subsequently raised concerns about whether 
the proposal   the NPRM to base payment on the   medical condition would 
 with payment issues to be addressed in the fee schedule regulation and urged 
HCFA to incorporate this proposal into the negotiated   mandated by the BBA. 
In addition, HCFA received approximately 2,270 public comments in response to the 
NPRM, and is reviewing those comments.  HCFA plans to proceed   further 
development of the   proposals, including the change   payment 
recommended by OIG.  However, in view of the BBA   and Congressional 
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concerns, we are   how best   the proposed policy to base 
reimbursement  on   patients medical  condition. 
  Recommendation 
HCFA   reevaluate the use of the   designation as the basis for 
granting  waivers. 
We concur.  The main issue addressed by the   report is   consideration of a 
possible waiver procedure for the proposed new ambulance rule included in the 
which would base ambulance reimbursement levels on   medical condition of the 
patient rather than on the type of   and personnel used. 
In discussions about this   proposal, some representatives of the 
industry voiced concerns that this policy could have a negative impact on a suppliers 
 to serve communities with small populations. Some representatives  argued  that, in 
areas where it is not economical to operate both basic life support (BLS) ambulances and 
advanced   support (ALS) ambulances, the policy   cause some suppliers to go out 
 discussions led   to solicit comments in the 
interested   on the need for an exception to the proposed   and the areas and 
type of suppliers to which such an exception might apply. The NPRM specifically 
described two options being considered if an exception were determined to be warranted. 
one of which (identified as the   option) would have been available only in 
MSA areas.  However, it is important to note that HCFA has not decided   to 
adopt an   at   aud if so, whether waivers should be based on a non-MSA 
designation.  HCFA  specifically  invited  comments  (which  were  due  on  August  18.1997) 
on other waiver options not included iu the   and is reviewing those comments. 
Technical 
short   entitled 
baram& This 
Consolidation  seems  incomplete.  While it tells us what the industry looked   until 
recently, it does not say how the industry has consolidated, as the title implies (e.g., 
what it looks   now). 
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 Page Four 
The  1r3ep:ort concludes that, if a waiver were to be based on a non-MSA 
designation, HCFA would continue to allow at least $185.7 million   in 
According to   data, this is the amount 
 in 1995 for ALS   in   The conclusion appears to assume that 
every non-MSA would   for a waiver.  In   proposed waiver option 
includes other   that must be met in addition to location in a non-MSA   the 
 must be the sole supplier in the area and must provide   vehicles and 
staff).   data   suggest that many   provide both ALS and 
 assumes   if a waiver based on   were to be adopted, 
all   would convert their programs to   to the waiver criteria  If so, this 
assumption should be made clear. 
D -5
 Comments from the Assistant Secretary for Management and Budget 
DEPARTMENT OF HEALTH   HUMAN SERVICES  Office of the 
Washington. 
M  A  Y  - 7 1997 
MEMORANDUM  TO:  June Gibbs Brown 
Inspector General 
FROM:  John J. Callahan 
Assistant Secretary f 
SUBJECT:  Concur with Comment: OIG Draft Report, State 
Ambulance Policies and Services 
The wording of   recommendation in this report implies that HCFA has finalized a decision to 
use   designations as the basis for granting waivers to its proposed ambulance 
coverage policy. 
In fact, HCFA is only proposing this waiver option in regulation. The regulation will also propose 
an alternative waiver option and will seek public comment on both options, as well as any other 
options commenters might suggest. 
OIG should change the language in its report to clarify that: 1) HCFA has not finalized a decision 
on granting waivers, 2) using MSA and non-MSA designations in granting waivers is only one of 
two options being considered in its ambulance regulations, and 3) commenters will be asked to 
react to the two alternatives and suggest additional options. 
OIG may also want to consider changing the wording of its recommendation to say: 
.  When determining a waiver policy in its final rule on ambulance coverage, HCFA should 
re-evaluate its proposal to use Metropolitan Statistical Area/non-Metropolitan Statistical 
Area designations as the basis for granting waivers. 
D -6