Department  of Health  and Human  Services 
OFFICE  OF

NSPECTOR  GENERAL

AMBUIANCE  SERVICES  FOR

MEDICARE  END-STAGE  RENAL

DISEASE  BENEFICIARIES:

PAYMENT  PRACTICES

MARCH  1994
 OFFICE OF INSPECTOR GENERAL 
The  mission  of the  Office of Inspector  General  (OIG),  as mandated  by Public  Law 95-452, as 
amended,  is to protect  the  integrity  of the  Department of Health  and Human  Services (HHS) 
programs  as well as the  health  and welfare  of beneficiaries  served  by those  programs.  This 
statutory  mission  is carried  out  through  a nationwide  network  of audits,  investigations,  and 
inspections  conducted  by three  OIG  operating  components:  the  Office  of Audit  Services, the 
Office of Investigations,  and the  Office of Evaluation  and Inspections.  The  OIG  also informs 
the  Secretary  of HHS  of program  and management  problems  and recommends  courses  to 
correct  them. 
OFFICE OF AUDIT  SERVICES 
The  OIGS Office of Audit  Semites  (OAS)  provides  all auditing  services for HHS,  either  by 
conducting  audits  with its own audit  resources  or by overseeing  audit work  done  by others. 
Audits  examine  the  performance  of HHS  programs  and/or  its grantees  and contractors  in 
carrying out  their  respective  responsibilities  and are intended  to provide  independent 
assessments  of HHS  programs  and operations  in order  to reduce  waste,  abuse,  and 
mismanagement  and to promote  economy  and efficiency throughout  the  Department. 
OFFICE OF INVESTIGATIONS 
The  OIGS  Office of Investigations  (01)  conducts  criminal,  civil, and administrative 
investigations  of allegations  of wrongdoing  in HHS  programs  or to HHS  beneficiaries  and of 
unjust  enrichment  by providers.  The  investigative  efforts  of 01  lead to criminal  convictions, 
administrative  sanctions,  or civil money  penalties.  The  01  also oversees  State  Medicaid  fraud 
control  units which investigate  and prosecute  fraud  and patient  abuse  in the  Medicaid  program. 
OFFICE OF EVALUATION  AND  INSPECIIONS 
The  OIGS  Office of Evaluation  and Inspections  (OEI)  conducts  short-term  management  and

program  evaluations  (called  inspections)  that  focus on issues of concern  to the Department,

the  Congress,  and the  public.  The  findings  and recommendations  contained  in these  inspection

reports  generate  rapid,  accurate,  and up-to-date  information  on the efficiency, vulnerability,

and effectiveness  of departmental  programs.

This report  was prepared  in the  Philadelphia  regional  office under  the direction  of Joy Quill,

Regional  Inspector  General  and Robert  A  Vito,  Deputy  Regional  Inspector  General.  Project

staftl

Isabelle  Buonocore,  Project  Leader  Wm. Mark  Krushat,  MPH,  SCD

Nancy J. Molyneaux,  Lead  Analyst  Brian  Ritchie

Ahalya  Nava, Intern  Hugh  Hetzer

For  additional  copies  of this report,  please  contact  the Philadelphia  regional  office at (215)

596-0606.
 Department  of Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
AMBULANCE  SERVICES  FOR

MEDICARE  END-STAGE  RENAL

DISESE  BENEFICIARIES:

PAYMENT  PRACTICES

MARCH  1994  OEI-03-90-02131

!  EXECUTIVE  SUMMARY

PURPOSE 
This  report  describes  growth  in Medicare  expenditures  for  Part  B ambulance  services 
for persons  with  end-stage  renal  disease  (ESRD)  and  problems  with  the  coding  and 
payments  systems  for this semice. 
BACKGROUND 
Persons  with  ESRDare  entitled  to Medicare  coverage  under  1972 amendments  to the 
Social  Security  Act.  In 1991, there  were  193,883 ESRD  beneficiaries  with  Medicare 
Part  B claims. 
Medicare  Part  B covers  ambulance  semices  under  certain  conditions.  Ambulance 
transport  must  be  reasonable  and  medically  necessary.  Other  coverage  requirements 
are  that  the  vehicle  and  crew meet  certain  criteria  and  the  ambulance  trip  be within 
distance  and  destination  limits. 
Some  ESRD  beneficiaries  need  ambulance  transport  to  hospital-based  facilities  for 
dialysis therapy.  Generally,  ESRD  patients  require  dialysis  three  times  a week.  Both 
the  dialysis treatment  and  ambulance  transport  are  scheduled  in advance. 
In  1991, Part  B claims  representing  $101 million  in total  ambulance  allowances  for 
ESRD  beneficiaries  were  handled  by insurance  carriers  under  contract  with the  Health 
Care  Financing  Administration  (HCFA).  Ambulance  company  services  and  charges 
are  represented  by alphanumeric  codes  which  the  Medicare  program  uses  to analyze 
utilization  and  payments. 
We  reviewed  1991 and  1988 Part  B claims  data  for  ESRD  beneficiaries  in HCFAS 
databases  and  interviewed  carriers  regarding  coding  and  payment  issues.  We  reviewed 
ambulance  studies  conducted  within  the  Department  between  1986 and  1993.  We  also 
performed  probability  tests  to determine  future  Medicare  expenses  for ESRD 
beneficiaries  needing  scheduled  ambulance  transport,  and  we estimated  potential 
savings  on scheduled  transports.  A future  report  will address  coverage  issues. 
FINDINGS 
Less  than 2 percent  of ESRD benejiciati  accounted for  75 pement  ($76 millwn)  of total 
ESRD  ambulance  allbwanizs. 
While total ESRD  arnbukmce allowances more than doubkd  from  1988 to 1991, cetia~ 
utiuahon patk?rns remained the same. 
High volume  users can be identi!  prospective~. Cam-en do not use ambulance  codes unijorndy. 
l%e payment  system does not take into account the row  predictable  nature of 
scheduled  ambuhmce  transport. 
  Ambulance  payments  are  based  on an outmoded  payment  system. 
	 The  payment  system  does  not  take  advantage  of the  lower  costs associated  with 
high-volume  scheduled  transports. 
RECOMMENDATIONS 
We believe  coding  changes  will result  in greater  accuracy  in monitoring  and  analysis  of 
Medicare-covered  ambulance  services.  Therefore,  we recommend  that  HCFA: 
.  Establish  a code  for scheduled  transports. 
  Require  uniform  use  of national  ambulance  codes. 
We  also  offer  optional  strategies  to ensure  fairer  payment  for services  rendered.

While  these  options  may require  legislation  and  start-up  costs, implementation  of one

or more  options  could  result  in $11.4 to $34.1 million  in savings annually  ($57 to $170

million  over  a 5-year  period)  as shown  in Appendix  E.  The  HCFA  may consider

combining  two or more  of the  following  strategies  and  establishing  demonstration

projects  in particular  geographic  areas.

	 Establish  a payment  schedule  for ambulance  transport  to maintenance  dialysis, 
and  set  the  fee  lower  than  what  is paid  for unscheduled,  emergency  transports. 
	 Negotiate  preferred  provider  agreements  with  ambulance  companies  to provide 
scheduled  transportation  for ESRD  beneficiaries. 
	 Undertake  competitive  bidding  to establish  a price  for scheduled  transports  for 
ESRD  beneficiaries  or to select  companies  who  agree  to provide  such services. 
	 Establish  a rebate  program  for companies  that  routinely  transport  ESRD 
beneficiaries. 
	 Provide  an add-on  to the  composite  rate  Medicare  pays dialysis facilities  to 
cover  the  cost  of transportation  for these  beneficiaries,  allowing  the  facility to 
negotiate  agreements  with  ambulance  companies  rather  than  the  program. 
We  are  continuing  our  work  to determine  whether  payments  for  1991 Part  B 
ambulance  transportation  for ESRD  beneficiaries  met  Medicare  coverage  guidelines. 
Such information  will also help  HCFA  in its continuing  efforts  to assess  payment 
policies  for this  semice. 
ii  COMMENTS 
The  HCFA  commented  on the  draft  of this report.  They  concur  with  our 
recommendation  to make  coding  changes,  and  they  concur  with  the  intent  of our 
recommendation  to ensure  fairer  payment  for services  rendered.  The  HCFA  is 
exploring  the  feasibility  of revising  the  coding  system and  is engaged  in a 
comprehensive  effort  to improve  overall  coverage  and  payment  policies... including 
those  involving payment  for non-emergency  transport  services.  The  full text  of this 
agencys  comments  are  in Appendix  F. 
... 
111  TABLE  OF  CONTENTS

EXECUTIVE  SUMMARY 
INTRODUCIION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..o.  o*o1 
FINDINGS

Ambulance  allowances  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..o-04

Growth  and  utilization  pattern.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  .5

Identifying  high-volume  users..  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...6

Ambulance  code  problems  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
.  .  .  .  .  ..*o6

Payment  systemproblems  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..7

RECOMMENDATIONS  AND  AGENCY  COMMENTS  . . . . . . . . . . . . . . . . . ...9

ENDNOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...11

APPENDICES

Ambulance  Code  Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  A-1

Carriers  Interviewed  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...  B-1

Comparison  of Carriers  (1991 - 1988)....  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  c-1

Identificationof  High-Volume  Ambulance  Users  . . . . . . . . . . . . . . . . . . . . . . . . .  D-1

Potential  Savings on Scheduled  Transports  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  E-1

Comments  from  the  Health  Care  Financimz  Administration  . . . . . . . . . . . . . . . . .  F-1
 INTRODUCTION 
PURPOSE 
This  report  describes  growth  in Medicare  expenditures  for Part  B ambulance  sewices 
for beneficiaries  with  end-stage  renal  disease  (ESRD)  and  problems  with  the  coding 
and  payment  systems  for this service. 
BACKGROUND 
Medicare  coverage  was extended  to persons  with ESRD  under  the  1972 amendments 
to the  Social  Security  Act.  Persons  with ESRD  require  dialysis therapy  at least  three 
times  a week,  or a kidney  transplant  in order  to sumive.  There  were  193,883 ESRD 
beneficiaries  with Medicare  Part  B claims  in  1991. 
Under  Medicare  Part  B, ambulance  transports  are  a covered  service.  However, 
transports  must  be  reasonable  and  medically  necessary.  Medical  necessity  is indicated 
when  any means  of transportation  other  than  an ambulance  would  endanger  the 
beneficiarys  health.  Other  coverage  requirements  are  that  the  vehicle  and  crew meet 
certain  criteria  and  the  ambulance  trip  be within  distance  and  destination  limits. 
In calendar  year  1991, carriers  processed  Part  B ambulance  claims  totaling  $101 
million  in allowances  for ESRD  beneficiaries.  Carriers  are  the  insurance  companies 
under  contract  with  the  Health  Care  Financing  Administration  (HCFA)  to process  and 
pay Medicare  Part  B claims. 
While  the  Medicare  reimbursement  is 80 percent  of the  allowed  payment  for  service 
rendered  to the  beneficiary,  the  carrier  determines  the  payment  allowance.  The 
ambulance  company  providing  the  service  receives  80 percent  of the  payment 
allowance  from  the  carrier  and  the  remaining  20 percent  from  the  beneficiary. 
An  alphanumeric  coding  system  is used  by HCF~  carriers,  and  ambulance  companies 
to represent  the  type  of ambulance  service  provided.  These  codes  explain  what 
ambulance  companies  billed  for and  what  services  Medicare  carriers  paid  for.  Some 
codes  are  national  and  defined  by HCFA  under  its health  care  procedure  code  system. 
Other  codes  are  established  and  defined  locally.  (Currently,  there  is a movement  away 
from  the  use  of local  codes.) 
Codes  signify several  things.  For  example,  certain  ones  signify mileage  charges,  while 
others  signify a base  charge  for ambulance  transport.  The  codes  also  indicate  whether 
the  level  of service  was basic  life support  (BLS)  or advanced  life support  (AI-S),  and 
whether  the  transport  was an emergency  or non-emergency.  (See  Appendix  A for 
definitions  of eight  national  ambulance  codes.)  The  HCFA  is responsible  for administration  of the  ESRD  and  Medicare  programs.  It 
maintains  data  on ESRD  Program  enrollees,  Part  B ambulance  claims,  and  payment 
allowances  at its headquarters.  The  HCFA  regional  offices  monitor  and  evaluate  the 
carriers  handling  of Part  B claims. 
This report  is based  on our  on-going  national  study  of ambulance  transportation  for 
ESRD  beneficiaries.  A future  report  will deal  with whether  1991 Part  B ambulance 
claims  for  ESRD  beneficiaries  met  Medicare  coverage  requirements. 
SCOPE  AND  METHODOLOGY 
Our  primary  sources  of information  were  HCFAS Common  Working  File  (CWF)  and 
Part  B Medicare  Annual  Data  (B-MAD)  file (which was replaced  by the  CWF  after 
1989), and  structured  interviews  with carrier  staff.  We  also  reviewed  ambulance 
studies  conducted  within  the  Department  between  1986 and  1993, and  met  with 
HCFA  staff  and  representatives  of the  American  Ambulance  Association  (MA).  The 
data  was collected  and  analyzed  between  November  1992 and  June  1993. 
We  selected  a sample  of 1991 ambulance  claims  for  ESRD  beneficiaries  as follows: 
	 Using  the  Medicare  Status  Code,  we identified  all ESRD  beneficiaries  with 
1991 CWF  Part  B claims.  Then  all 1991 CWF  ambulance  claims  were  selected 
for these  beneficiaries  based  on eight  national  ambulance  codes  (the  eight 
codes  are  in Appendix  A). 
	 These  ambulance  claims were  then  summarized  by Part  B carrier,  and we 
arrayed  the  56 jurisdictions  of all 36 carriers  by total  allowed  payments.  Two 
carriers  were  then  excluded:  Maryland  Blue  Shield  (because  of a number  of 
active  investigations)  and  the  Railroad  Retirement  Board  (because  of the  large 
geographical  area  that  it covers). 
From  the  remaining  54 carrier  jurisdictions,  we identified  the  top  16, 
representing  87 percent  of the  total  ESRD  ambulance  allowances  for  1991 
($85.3 of $97.3 millionl).  From  the  top  16 we randomly  selected  a sample  of 8 
(see  Appendix  B for sample  carriers). 
	 Finally,  a simple  random  sample  of 35 ESRD  ambulance  claims  was selected 
from  each  of these  8 carriers.  These  280 claims  represented  277 beneficiaries. 
We  conducted  structured  interviews  with carriers  in our  sample  regarding  coverage  of

ambulance  codes,  claims  processing,  identification  of non-covered  claims,  and

detection  of overpayments.  The  carriers  sent  us documents  to support  their  interview

responses,  copies  of the  claims  in our sample,  and  profiles  of the  ambulance

companies  that  submitted  the  claims.

2
 Using  HCFAS 1991 CWF  claims  data  and  1988 B-MAD  claims  data,2 we compared: 
(1) total  allowed  ambulance  payments  for ESRD  beneficiaries,  and  (2) carriers  with 
beneficiaries  who had  over  $10,000  in ambulance  allowances  (see  Appendix  C). 
We  conducted  a probability  analysis  using the  number  of submitted  ambulance  claims 
per  ESRD  beneficiary  (in  1991) in order  to identify  high volume  ambulance  users  (see 
Appendix  D).  We  used  the  percentages  of beneficiaries  requiring  the  largest  amount 
of ambulance  allowances  to predict  future  trends  in carrier  payments. 
We  also estimated  potential  savings  on scheduled  ambulance  transports  for ESRD 
beneficiaries  (see  Appendix  E). 
We  met  with HCFA  staff  and  AAA  representatives  to determine  the  availability  of 
data  and  to clarify issues.  We  reviewed  past  ambulance  studies  to determine  what 
work  had  already  been  done. 
This  study was conducted  in accordance  with  the  Quality Standards for Inspections 
issued  by the  Presidents  Council  on Integrity  and  Efficiency. 
3
 FINDINGS

LESS  THAN2PERCENT  OF  THE  ESRDBENEFICIARIES  ACCOUNTED  FOR 
75 PERCENT  ($76 MILLION)  OF  TOTAL  ESRD  AMBULANCE  ALLOWANCES. 
As shown  in the  shaded  area  of Table  1, $76 million  was allowed  in  1991 for 
ambulance  transportation  of 2,573 ESRD  beneficiaries,  less than  2 percent  of the  total 
ESRD  population  (193,883).  Allowances  for services  to this small  group  of 
beneficiaries  represent  75 percent  of the  total  $101 million  allowed  for  ambulance 
transport  of ESRD  beneficiaries.  At least  $10,000 was allowed  in ambulance  services 
for  each  of these  2,573 beneficiaries. 
Most  ESRD  beneficiaries  have  few, if any, ambulance  transports  to  dialysis.  In fact, 
there  were  no  allowances  for ambulance  services  for  79 percent  (152,963)  of ESRD 
beneficiaries.  Another  14 percent  (27,808)  had  ambulance  allowances  of $1 to $499, 
indicating  few ambulance  transports  were  provided.  The  table  below  shows the  range 
of allowed  amounts  for all ESRD  beneficiaries. 
Table 1. 
II  RANGE  OF 1991 AMBULANCE ALLOWANCES FOR ESRD BENEFICIARIES 
Source:  HCFAS timmon  Working File -Part B Data 
4
 WHILE  TOTAL  ESRD  AMBULANCE  ALLOWANCES  MORE  THAN 
DOUBLED,  CERTAIN  UTILIZATION  PAITERNS  REMAINED  THE  SAME. 
Total  ambulance  allowances  for ESRD  beneficiaries  more  than  doubled  between  1988 
and  1991.  In  1988, carriers  allowed  $40 million  for ESRD  ambulance  transport;  by 
1991, the  total  allowed  amount  had  grown  to $101 million. 
Patterns  of utilization--high  dollars  paid  to ambulance  companies  for  services  to  a 
small  number  of beneficiaries--have  remained  the  same.  In  1988, 4 percent  of 
beneficiaries  with  ambulance  allowances  (1, 181 of 27,326)  accounted  for 65 percent  of 
total  ESRD  ambulance  allowances.  Each  of these  1,181 beneficiaries  had  allowances 
of $10,000  or more.  In 1991, 6 percent  (2,573 of 40,920)  of the  beneficiaries  with 
$10,OOOor more  accounted  for 75 percent  of the  total. 
The  distribution  of beneficiaries  among  earners  has  also  remained  essentially  the  same 
(see  Appendix  C).  The  top  16 carrier~  in  1988 and  1991 accounted  for  90 percent  of 
ESRD  beneficiaries  with  allowances  over  $10,000.  (Fourteen  of the  top  16 carriers 
were  the  same  in  1988 and  1991.) 
Transport  of ESRD  beneficiaries  for maintenance  dialysis provides  a small  number  of 
ambulance  companies  with a high volume  of generally  scheduled  transports  which 
Medicare  covers.  In fact, Table  2 below  shows that  in  1991, only 4 percent  (215 of 
Table 2 
RANGE OF 1991  AMBULANCE  COMPANY  ALLOWANCES 
FOR ESRD BENEFICIARIES 
Range of Allowance  No. of Companies  Total Allowed 
$100,000-199,999  103  $14,545,468 
200,000-299,999  38  9,294,980 
I  25  I 
300,000-399,999  8,476,857 
400,000-499,999  18  8,102,946 
500,000-599,999  8  4,245,493 
600,000-699,999  6  3,986,299 
700,000-799,999  1  732363 
800,000-899,999  2  1,671,806 
900,000-999,999  1  923,548 
1,000,000-1,999,999  11  15,053,152 
2,000,000-+  2  5,968,451 
TOTAL  215  $73,001* 
Source:  HCFAS Common Working File - Part B Data 
5  5,228)3 of all ambulance  companies  receiving  Part  B payments  had  72percent  or $73 
million  of the  total  payment  allowances  for ESRD  ambulance  transportation.  The  215 
companies  were  allowed  83 percent  of the  dollars  ($62.6  million)  for services  to the 
2,573 beneficiaries  with  allowances  over  $10,000. 
Similarly,  in  1988, the  percentage  of ambulance  companies  receiving  the  largest  share 
of allowances  was very  small.  Of the  ambulance  companies  which  provided  transports 
to ESRD  beneficiaries  in  1988, 2.1 percent  (88) accounted  for  57.6 percent  of the  total 
ESRD  ambulance  allowances. 
HIGH  VOLUME  USERS  CAN  BE  IDENTIFED  PROSPECITVELY. 
It is possible  to  predict  which  ESRD  beneficiaries  will be  high volume  users  of 
ambulance  services.  With  refinements,  carriers  can  use  either  of two models  in 
Appendix  D as a step  in predicting  which beneficiaries  will have  a high-volume  of 
scheduled  transports. 
We found  the  first  model,  which  identifies  beneficiaries  with  a second  transport  wthin 
3 days of the  first  to be  highly predictive.  The  beneficiaries  identified  represented  66 
percent  of the  total  allowed  amount  for ESRD  ambulance  transports  in  1991 and  71 
percent  of all ESRD  beneficiaries  with $10,OOOor more  in ambulance  allowances. 
The  second  model  identified  the  number  of transports  each  beneficiary  had within  15 
days of the  first.  Beneficiaries  with 7 transports  in this time  period  accounted  for 
nearly  half  of the  total  allowed  amounts  for ESRD  ambulance  transports.  The 
average  amount  allowed  per  beneficiary  was over  $22,000. 
Identification  of high-volume  users  could  be  part  of new payment  strategies  to save 
Medicare  funds. 
CARRIERS  DO  NOT  USE  AMBULANCE  CODES  UNIFORMLY. 
Ambulance  codes  represent  the  types  of selvice  provided  by an ambulance  company 
and  types  of service  paid  for by Medicare.  Without  uniform  use of codes  by carriers, 
HCFA  cannot  accurately  analyze  service  utilization  or payments.  For  example, 
current  coding  practices  make  it impossible  to know  the  number  of ESRD 
beneficiaries  transported  in emergency  situations  or as scheduled  trips. 
In  1991, the  eight  carriers  in our  sample  varied  in terms  of which  codes  they  covered 
and  how these  codes  were  used.  Only two carriers  covered  all eight  national  codes 
that  we examined  (Appendix  A lists the  codes).  The  remaining  carriers  covered  from 
five to seven.  They  also used  codes  differently,  so that  the  type  of service  covered 
under  a code  could  vary from  carrier  to carrier.  For  example,  one  carrier  used  a code 
(A0221)  to indicate  mileage  charges  for ALS emergency  transport,  while  another  used 
the  same  code  to indicate  a base  charge  for basic  life support  transport.  The 
6
 emergency  or non-emergency  nature  of the  transport  was irrelevant  to  the  latter 
carrier. 
Although  inconsistency  among  carriers  has been  somewhat  reduced  since  1991, it still 
exists today.  Sample  carriers  currently  lack uniformity  in distinguishing  between 
emergency  and  non-emergency  transport.  Two of the  eight  carriers  require  that 
scheduled  transport  of ESRD  beneficiaries  to maintenance  dialysis be  billed  under  a 
non-emergency  code  (e.g., A0150),  while two other  carriers  do not  cover  non-
emergency  transport  and  require  that  the  same  type  of service  be billed  under  an 
emergency  code  (e.g., AOO1O). Three  carriers  instruct  providers  to use  a non-
emergency  code  for this service.  These  three  carriers  do not  automatically  deny 
payment  if an emergency  code  is billed  for this service.  However,  if billed  routinely, 
the  carriers  would  inform  the  ambulance  company  of the  preferred  code.  The  one 
remaining  carrier  in the  sample  does  not  categorize  transports  as emergency  or non-
emergency. 
The  lack  of consistency  in coding  is further  illustrated  by variations  in the  use  of return 
trip  codes.  Of the  two carriers  who cover  only emergency  codes,  one  uses  the  return 
trip  code  (A0222)  to indicate  an  emergency  transport,  while  the  other  considers  the 
return  trip  a non-emergency  and  does  not  cover  it.  Five  other  carriers  use  the  return 
trip  code  as a non-emergency  code,  and  one  includes  both  emergency  and  non-
emergency  transport  under  this code. 
A study  conducted  by Project  HOPE  and  included  in a recent  HCFA  Report  to 
Congress  identified  similar  problems  in the  way codes  are  used.  The  study  suggested 
that  HCFA  encourage  the  use  of a separate  code  for  scheduled  ambulance  transport. 
THE  PAYMENT  SYSTEM  DOES  NOT  TAKE  INTO  ACCOUNT  THE  RO= 
PREDICTABLE  NATURE  OF  SCHEDULED  AMBULANCE  TRANSPORTS. 
Ambulance  payments  are based on an outmoded payment  system 
The  Medicare  payment  system  employed  by carriers  is based  on inflation  indexed 
charges  or the  customary  or prevailing  charge,  whichever  is less.  Under  this  system, 
payment  to an  ambulance  company  is determined  by what  it has  charged  in the  past 
and  what  other  ambulance  companies  in the  area  charge,  rather  than  the  cost  of 
resources  needed  to provide  the  service. 
Both  Congress  and  HCFA  have  recognized  the vulnerabilities  in payment  based  on 
reasonable,  usual,  or customary  charges.  As a result,  the  Medicare  program  now pays 
hospitals  based  on diagnostic-related  groups  and  has  established  fee  schedules  for 
physician  semices,  laboratory  services,  and  durable  medical  equipment.  The  fee 
schedule  for physician  services  is distinguished  by its use  of relative  resource 
consumption  as the  primary  basis  for payment  rather  than  historical  charges. 
7
 Under  the  current  system,  ambulance  companies  in the  same  area  providing  the  same 
service  may receive  different  payments.  In our  sample  of 1991 claims,  we found 
different  payments  for the  same  service  in metropolitan  areas  of Florida,  Michigan, 
Pennsylvania,  and  Texas.  For  example,  in Pittsburgh,  Pennsylvania  three  ambulance 
companies  transported  ESRD  beneficiaries  to dialysis facilities.  Each  billed  the  carrier 
under  the  same  base  code  for BLS emergency  transport--AOOIO--and  were  paid  base 
rates  of $140, $157, and  $175.  Each  company  also billed  under  a mileage  code  for the 
distance  traveled  between  the  beneficiarys  pick up  location  and  destination.  (The 
sample  carriers  pay only for the  miles  traveled  while  a beneficiary  is aboard.)  As with 
base  codes,  payment  for mileage  codes  varied  among  the  three  companies. 
These  variations  still occur  today.  In  1993, seven  Philadelphia,  Pennsylvania 
ambulance  companies  that  were  in our  1991 sample  had  different  allowances  ranging 
from  $130 to $183 for the  same  base  code  (BLS  emergency  transport--AOOIO). 
Another  problem  associated  with  this  system  is that  carriers  must  maintain  separate 
charge  profiles  for  each  ambulance  company.  This  is complex,  time-consuming,  and 
costly  to  administer.5 
l%e payment  system dbes not take advantage  of the lower cmts  associated  with high-
volume schedukd  transpmm. 
The  Project  HOPE  study found  ambulance  company  costs for scheduled  transport  to 
be  substantially  lower  than  costs for emergency  transports.  According  to the  study, 
scheduled  runs  are  provided  at  ... approximately  20 to 60 percent  below  the  costs  of 
providing  an emergency  BLS run  and  substantially  below  the  cost of providing  an 
emergency  ALS run  in the  surveyed  States.b  The  study  also stated  that  some  private 
ambulance  companies  specialize  in scheduled  transports  because  of the  combination  of 
lower  costs  and  the  fact that  carrier  payments  do not  differ  for scheduled  and 
unscheduled  services.  In 1987, the  Office  of Inspector  General  found  that  Veterans 
Hospitals  contract  with ambulance  companies  for scheduled  transports  at rates 
approximately  25 percent  less than  Medicare  rates  (OAI-03-86-00012). 
We  estimate  that  Medicare  could  save between  $11.4 to $34.1 million  annually  ($57 
to $170.5 million  over  5 years)  by changing  its payment  method  for  ambulance 
transports.  Since  current  coding  and  payment  practices  make  it impossible  to precisely 
identiq  the  ambulance  allowances  for ESRD  beneficiaries  going to  dialysis, the  savings 
are  based  on approximate  calculations.  The  calculations  for these  savings  are  shown 
in Appendix  E. 
8
 RECOMMENDATIONS

CODING  SYSTEM 
In light  of our  findings,  we recommend  that  HCFA  take  the  following  steps  to  ensure 
greater  accuracy  in monitoring  and  analysis  of Medicare-covered  ambulance  sexvices. 
  Establish  a code  for scheduled  transports. 
  Require  uniform  use  of national  ambulance  codes. 
The  HCFA  may need  to revise  or elaborate  on the  current  definitions  of 
national  ambulance  codes  so that  the  distinctions  among  codes  are  clear  to 
billers  and  payers  alike.  A specific  type  of ambulance  service  should  be 
represented  by one  code  only.  Carriers  should  be  notified  that  sexvices should 
be  billed  under  the  appropriate  code,  as newly defined,  in order  to be 
reimbursed. 
PAYMENT  SYSTEM 
In light  of the  predictable  nature  of scheduled  transport  for  dialysis, we offer  several 
optional  strategies  which would  better  ensure  fair  payment  for services  rendered  and 
would  save  Medicare  funds.  While  these  options  will require  start-up  costs  and,  in 
some  cases,  legislation,  we believe  Medicare  could  save between  $11.4 to $34.1 million 
annually  ($57 to  $170.5 million  over  5 years).  Since  current  coding  and  payment 
practices  make  it impossible  to precisely  identify  the  ambulance  allowances  for  ESRD 
beneficiaries  going  to dialysis, the  savings are  based  on approximate  calculations.  The 
calculations  for  these  savings are  shown in Appendix  E. 
The  HCFA  may  consider  combining  two or more  of the  following  strategies  and 
establishing  demonstration  projects  in particular  geographic  areas.  The  probability 
models  described  in appendix  D could  be  used  in implementing  some  of these 
strategies. 
.	 Establish  a payment  schedule  for ambulance  transport  to maintenance  dialysis, 
and  set  the  fee  lower  than  what  is paid  for unscheduled,  emergenq  transports. 
To  establish  the  payment  amount,  HCFA  might  consider  using Project  HOPEs 
data  on the  lower  costs of scheduled  transports  or assess the  practices  of other 
payers  (e.g.,  Veterans  Administration). 
.	 Negotiate  preferred  provider  agreements  with  ambulance  companies  to provide 
scheduled  transportation  for ESRD  beneficiaries.  The  ambulance  company 
would  be  given  a set payment  and  would  have  a predictable  volume  of 
scheduled  transports. 
9    Undertake  competitive  bidding  to establish  a price  for scheduled  transports  for 
ESRD  beneficiaries  or to select  companies  who  agree  to provide  such  services. 
Thecompetitive  bidding  might remodeled  after  the  1993 HCFAlegislative 
proposal  for  oxygen and  other  durable  medical  equipment. 
  Establish  a rebate  program  for companies  that  routinely  transport  ESRD 
beneficiaries.  Such  a program  might  be  modeled  on the  Medicaid  rebate 
program  for prescription  drugs.  Theadvantage  ofarebate  program  is that  it 
does  notrequire  front-end  administration.  Forexample,  HCFAwould  establish 
a base  rebate  amount  and  if the  ambulance  company  provided  the  service  it 
would  pay Medicare  the  rebate.  If the  company  did not  provide  the  service,  it 
would  not  have  to pay the  rebate. 
  Provide  an add-on  to the  composite  rate  Medicare  pays  dialysis facilities  to 
cover  the  cost  of transporting  beneficiaries  and  allow  the  facility  to negotiate 
agreements  with  ambulance  companies.  The  model  for  this is the  Medicare 
hospital  payment  mechanism.  By bundling  an  add-on  for transportation, 
Medicare  would  be  encouraging  the  use  of the  most  cost-effective  mode  of 
transportation.  The  dialysis facility, which  is in an  excellent  position  to 
determine  whether  a patient  requires  an ambulance,  would  have  a financial 
interest  in arranging  for the  most  economical  means  of transport.  However, 
given the  small  number  of ESRD  beneficiaries  using  ambulances,  it maybe 
difficult  to set  add-on  rates  for all facilities. 
We  are  continuing  our work  to determine  whether  payments  for  1991 Part  B 
ambulance  transportation  for ESRD  beneficiaries  met  Medicare  coverage  guidelines. 
We believe  such  information  will also help  HCFA  in its continuing  efforts  to assess  its 
payment  policies  for this semice. 
COMMENTS  FROM  HCFA 
The  HCFA  commented  on the  draft  of this report.  They  concur  with  our 
recommendation  to make  coding  changes,  and  they  concur  with  the  intent  of our 
recommendation  to ensure  fairer  payment  for services  rendered.  The  HCFA  is 
exploring  the  feasibility  of revising  the  coding  system  and  is engaged  in a 
comprehensive  effort  to improve  overall  coverage  and  payment  policies...including 
those  involving  payment  for non-emergency  transport  services.  The  full text  of this 
agencys comments  are  in Appendix  F. 
10
 ENDNOTES

1.	 The  earners  that  were  excluded  had  a combined  allowed  amount  of $3,792,639 
(Maryland  - $1,897,209;  Railroad  Retirement  Board  - $1,895,430).  Therefore, 
the  total  allowed  amount  for all carriers  was $101,175,828. 
2.	 Al11988B-MAD  data  is basedon  10national  ambulance  codes.  These  include 
the  8 codes  listed  in Appendix  A. 
3.	 This  percentage  could  be  lower  if, as is often  the  case,  ambulance  companies 
have  more  than  one  provider  identification  number. 
4.  Project  HOPE,  A Studv  of Pavm ents  For  Ambulance  Services  Under  Medicare, 
p. 7-3 and  p. 7-11, as appended  to a report  to Congress,  Studv  of Pavrnent  of 
Ambulance  Services  by Donna  E. Shalala,  Secretary,  Department  of Health  and 
Human  Semites  (Washington,  DC.  U.S. Department  of Health  and  Human 
Services,  1993). 
5.	 Physician  Payment  Review  Commission,  Annual  Report  to  Corwress,  p. 2 
(Washington,  DC:  Physician  Payment  Review  Commission,  1992). 
6.  Project  HOPE,  p. 7-10. 
7.  Ibid, pp.  7-7 and  7-8. 
11
 APPENDIX  A

DEFINITIONS  OF  NATIONAL  AMBULANCE  CODES 
The  Health  Care  Financing  Administration  defines  national  ambulance  codes. 
Although  most  ambulance  allowances  are  associated  with the  eight  codes  below, 
carriers  va~  in both  the  number  of codes  they  cover  and  how they  use  each  code.  f% 
shown  below,  the  eight  codes  include  both  emergency  and  non-emergency  transports. 
Base  Charge  Codes 
AOO1O	 Ambulance  service,  basic  life support,  base  rate,  emergency  transport, 
one  way. 
A0220	 Ambulance  service,  advanced  life support,  base  rate,  all inclusive 
services,  emergen~  transport,  one way. 
A0223	 Ambulance  service,  advanced  life support,  base  rate,  where  non-reusable 
advanced  life support  supplies  are  billed  separately,  emergency 
transport,  one way. 
A0150  Non-emergency  transportation,  ambulance,  base  rate,  one  way. 
A0222  Ambulance  setice,  return  trip,  transport. 
Mileage  Chanze  Codes

AO020  Ambulance  sewice,  basic  life support,  per  mile,  transport,  one  way.

A0221  Ambulance  service,  advanced  life support,  per  mile,  transport,  one  way.

Miscellaneous  Code

A0999  Unlisted  ambulance  service.

A-1
 APPENDIX  B

CARRIERS  INTERVIEWED 
The  eight  carriers  below  made  up our  carrier  sample  from  which  our  claim  sample 
was drawn. 
We  conducted  structured  interviews  with  each  carrier. 
Blue  Shield  of California 
Chico,  CA 
Blue  Cross  and  Blue  Shield  of Florida 
Jacksonville,  FL 
Blue  Cross  and  Blue  Shield  of Kentucky 
Lexington,  KY 
Massachusetts  Blue Shield  (for Massachusetts) 
Boston,  MA 
Blue  Cross  and  Blue  Shield  of Michigan 
Detroit,  MI 
Empire  Blue  Cross  and  Blue  Shield  (for  New  York  City and  environs) 
Crompond,  NY 
Pennsylvania  Blue  Shield  (for Pennsylvania) 
Camp  Hill, PA 
Blue  Cross-Blue  Shield  of Texas 
Dallas,  TX 
B-1  APPENDIX  C

COMPARISON  OF  1991 AND  1988 CARRIERS  WITH  BENEFICIARIES 
ACCOUNTING  FOR  ALLOWANCES  OVER  $10,000 
1991

carrier  Total  Total  Carrk$  Total  Total 
Empire Blue  408  $13,987,615
 Massachusetts Blue
 132  $4,302,419 
Cross/BlueShield
 Shield (MA)

(NYC area)

Nationwide
 151  3,229,400 
Pennsylvania
 Ohio

Blue Shield (PA)

Pennsylvania
 121  2,618,380 
Massachusetts  214  8,120,773
 Blue Shield [PA)

Blue Shield (MA)

*Empire Blue
 105  2,151,463 
Arkansas  213  I  6,188,347
 Cross/BlueShield

Blue Shield (LA)
 (NYC area)

Travelers
 Arkansas
 74  1,582,462 
Connecticut  %==
 Blue Shield (IA)

Nationwide  I  174  I 4,267,011  Travelers
 64  1,569,767 
Ohio  Connecticut

Texas  128  3,213,977  Pennsylvania
 63  1,260,118 
Blue Shield  v Blue Shield (NJ)

Alabama  Occidental
 54  1,056,789 
Blue Shield  California

Pennsylvania  Texas
 41  976,043 
Blue Shield (NJ)  Blue Shield

Kentucky  I  91  I  2,0~103  Aetna
 46  898,085 
Blue Shield 
Illinois
 42  867,031 
Blue Shield

MichiganBlue
 42  75~03 
Shield

Florida
 37  729,870 
Blue Shield

Maryland
 38  713,053 
Blue Shield

All Railroad Board
 21  536,379 
Travelers
 22  485,354 
Virginia

~ 
JDTAL  $68&2#58
 17)TAL
 1.053  S23.728916 
In 1988, thecarriers nome was Blue Cross/Blue St
 tier New York 
c-1  APPENDIX  D

PROSPE~  IDENTIFICATION  OF  HIGH-VOLUME  AMBULANCE  USERS 
AMONG  END-STAGE  RENAL  DISEASE  BENEFICIARIES 
According  to data  in the  Common  Working  File,  $101,175,829  was allowed  in  1991 for 
ambulance  transportation  of 44,141 ESRD  beneficiaries.  (Of  the  44,141 claims 
submitted  40,920 were  allowed).  Nationwide,  17 percent  of the  ESRD  beneficiaries 
receiving  ambulance  services  accounted  for 75 percent  of the  total  dollars  allowed  for 
these  services.  These  2,573 beneficiaries  had  an average  of over  $29,000  allowed  for 
ambulance  semices. 
An  appropriate  case  management  scheme  could  identify  high-volume  ambulance  users. 
However,  in order  to introduce  such  a scheme,  we must  first identify  ESRD 
beneficiaries  for whom  ambulance  services  are  expected  to reach  pre-determined 
expenditure  levels.  Two methods  that  could  identify  these  beneficiaries  are  outlined 
below.  Both  involve  reviewing  the  claims  for each  beneficiary  according  to date  of 
service  and  aggregating  all claims with the  same  date  of service  as one  trip. 
The  first method  looks  at the  number  of days between  the  first  and  the  second  trip 
claimed  during  the year.  For  those  beneficiaries  falling within  defined  categories,  the 
total  allowed  amounts  for the  whole  year  are  summed.  The  second  method  looks  at 
the  number  of ambulance  trips  for which  claims were  filed wthin  a fixed  time  period. 
For  this exercise,  we have  used  a 15-day period. 
Table  I presents  the  outcome  analysis  using the  first method  based  on  the  number  of 
days between  the  first and  second  trip.  First,  we grouped  those  ESRD  beneficiaries 
using  3 -day intervals  between  the  first and  second  trip  (a second  trip  within  3 days of 
the  first, within  6 days, within  9 days, and  on  to  30 days.  Then  we summed  the 
so  Up 
total  allowed  amounts  for  all ESRD  beneficiaries  within  each  category. 
The  results  of this analysis  reveal  that  those  ESRD  beneficiaries  with  a second 
ambulance  trip  within  3 days of the  first accounted  for  66 percent  of the  total  amount 
allowed  for  ambulance  trips  by ESRD  beneficiaries.  Over  70 percent  of the  2,573 
beneficiaries  with  over  $10,000 in allowed  amounts  for  1991 had  a second  trip  within  3 
days of the  first. 
Table  II presents  a breakdown  of the  44,141 beneficiaries  by the  number  of 
ambulance  trips  within  a  15 day period  from  their  first  trip  of the  year.  Those 
beneficiaries  with seven  trips  within  15 days of their  first trip  accounted  for  over  44 
percent  of the  total  amount  allowed  in 1991 and  those  with  seven  or more  trips,  over 
50 percent  of the  allowed  amounts. 
D-1
 The  results  presented  here  demonstrate  that  it is possible  to identi~,  in a prospective 
manner,  those  ESRD  beneficiaries  with  high potential  for large  expenditures  for 
ambulance  services.  We have  not  considered  beneficiary  demographic  variables  in this 
analysis.  Further  research  would  help  to delineate  the  predictive  power  of these  and 
other  factors,  test  other  methods,  and  potentially  reduce  the  number  of false  positives 
that  occur  in our  models. 
Table  I 
TOTAL  ALLOWED  AMOUNTS  BY CATEGORY  OF  NUMBER  OF  DAYS 
BETWEEN  THE  FIRST  AND  SECOND  TRIP  IN ONE  YEAR 
Number  of Days to  Number  of  Total  1991 Allowed  Percent  of 
Second  TriD  Benes  Amount  Total 
One  Trip  22,424  $4,011,244  4.0% 
3 Days  5,417  $66,517,097  65.8% 
6 Days  1,421  $6,358,670  6.39Z0 
9 Days  1,168  $3,537,683  3.5% 
12 Days  904  $2,050,833  2.0% 
15 Days  849  $1,779,624  1.8% 
18 Days  640  $1,115,348  1.1% 
21 Days  622  $1,353,194  1.3% 
24 Days  524  $1,067,824  1.1% 
27 Days  464  $647,446  0.6% 
30 Days  470  $966,737  Lo% 
30+  Days  9,238  $11,770,133  11.6% 
Total  44,141  $101,175,833 
D-2  Table  II

TOTAL  ALLOWED  AMOUNTS  BY NUMBER  OF  TRIPS  WITHIN  15 DAYS

Number  of  Total  1991  Percent 
Trips  within  Number  of  Allowed  Amounts  of  Cum 
15 Days  of First  Benes  Total  Percen 
1  34,623  $21,423,586  21.17%  21.2% 
2  4,619  $6,884,944  6.80%  28.0% 
3  1,003  $3,752,379  3.71%  31.7% 
4  513  $3,602,807  3.56%  35.2% 
5  569  $7,218,580  7.13%  42.4% 
6  486  $6,658,750  6.58%  49.0% 
7  1,980  $44,720,031  44.20%  93.2% 
8  261  $5,335,791  5.27%  98.4% 
9  57  $1,054,543  1.04%  99.5% 
10  14  $245,418  0.24%  99.7% 
11  7  $115,645  0.11%  99.8% 
12  7  $137,670  0.14%  100.0% 
13  1  $25,550  0.03%  100.0% 
14  0  0.00%  100.0% 
15  1  $138  0.00%  100.0% 
Total  44.141  $101.175.832 
D-3
 APPENDIX  E

POTENTIAL  SAVINGS  IF A REDUCED  ALLOWANCE  IS USED 
FOR  SCHEDULED  TRANSPORTS  FOR  ESRD  BENEFICIARIES 
Since  current  coding  and  payment  practices  make  it impossible  to precisely  identify  the 
ambulance  allowances  for ESRD  beneficiaries  using  scheduled  ambulance  transports 
to maintenance  dialysis, our  calculations  are  based  on  several  assumptions. 
The  ESRD  Beneficiaries  with $10,000 or more  per  year  are  frequent  users  of 
ambulance  transports,  and  it is highly probably  that  maintenance  dialysis accounts  for 
most  of the  transports.  While  beneficiaries  with less than  $10,000  may  also be 
frequent  users,  we chose  $10,000 as a conservative  cut-off. 
We  recognize  that  some  transports  are  indeed  emergencies  which  cannot  be foreseen 
and  scheduled.  We  have  no way to estimate  this precisely.  However,  a conservative 
estimate  is that  75 percent  are  for scheduled  rather  than  emergency  transports. 
Based  on this  conservative  estimate,  the  third  column  of the  table  shows the  allowed 
amounts  for scheduled  transports  as 75 percent  of the  total  allowed  in  1991. 
The  remaining  columns  show potential  annual  savings  if the  scheduled  transports  were 
reduced  anywhere  from  20 to 60 percent.  Again,  we have  no way of knowing  precisely 
what  savings are  possible.  However,  the  Project  Hope  study  estimated  potential 
savings of 20 to  60 percent.  The  exact  amount  of savings  would  depend  on the 
particular  approach  taken. 
Range of  Total  Approximate  Potential Annual Savings on Scheduled Trips 
Beneficiary  Allowed  Allowancesfor  Baaed on 20 to 60 Pereent Reductions 
Ambulance  in 1991  Scheduled 
Allowances  Transport  20%  30%  40%  50%  60% 
$1o,ooo-
19,999  $14,012479  $10309,359  $2,101,872  $3,152W8  $4,203,744  $5,254,680  $6,305,615 
20,000-
29,999  14,465,638  10,849,228  2,169,846  3,254,768  4,339,691  5,424,614  6,509,537 
30,000-
39,999  13,884,494  10,413,370  2,082,674  3,124,011  4,165,348  5,206,685  6,248,022 
40,000-
49,999  11,763,466  8,822,600  1,764,520  2,646,780  3,529,040  4,411,300  5,293,560 
50,000  21,802,426  16,351,819  3,270,364  4,905346  6,540,728  8,175,910  9,811,091 
TOTAL  75,928,503  56,946,376  11,389,276  17,083,913  22,778,551  28,473,189  34,167,825 
E-1
 APPENDIX  F 
COMMENTS  FROM  THE  HEALTH  CARE  FINANCING  ADMINISTRA~ON 
F-1  kieehh  Cam 
U8PARTMENT  OFHliALm& HUMAN SERVICES  Finaciw  Admmimrmmn 
Memorandum 
wSu  !i=iii~?qY@4

Frum 
mbloet

Offkt  ofIiIaputor Gtmerd DM  R- ~buiancc  Services for A4e#icarc 
EurMtage  Rend  Disease %w~  PaymentPra~  (OE1-03-W-~13 1) 
To 
June Gibbt  Brown 
IqnXmr  Gcrleral 
Wa 
. 
. 
. 
, 
,, 
. 
,, 
..,. 
. 
A&2
 . .  . 
cnts uf theHealth  Care Financj@@nmtraQQu  IHCFA) 
~of  hg@ar  Genera 1KXGl  H  Rcx 
 
a  Establish a de  for 
dldlkd  tmtqmrta 
o  Require  uniform use of national  embulan- oack 
lM  HCFA  may need tQ revise or elabcmte on the current definihm  af national 
~ce  codca ao that the disbdme  emcmgcodes are clear to bilk  and payera

dik  A-~~~buh~hdtibs~ti&medoo@.

Carriem ehouhi be aotifkd  that smviccs dmuld  be bind  under the appropriate +  as

nwiyd&nti  rnatdertobelekbumd

HCFA  comum  We are currcmw explaring the ftasibfity ofrevising  our  coding  qstum

b  ambdance serviceIns t.h
atq~  we lmw b=  working with the American 
~cm  to eneure tha~ to tho extentposaibk  any coding chsnga  we 
~  - -W  ~  the ambulaucs iwhstry.  -. 
CkUSi&CaIrtbh.htg WU ax mwe of the fohwbtg  s@8te u and eeteblishing  . 
niorlpruject$ill pdlxllar  gcographk  areaa- % e probabi~  rnodeb  dtibcd 
. 
.in appendix D oouid be  implementing  come of tbe  stmstegica. 
ueed  in 
, 
o  Establieh a payment sAdoIe  h  ambulancetranspt  to rnaimtmamx 
di8iy&andaottho  feelcJverthanwM  iepaid-foP un9Chedule4 
emeqpmq  traneportL To eetablieh the payment amoux  HCFA might 
~  usiog Rujeot HOPE%data an the lower costs of scheduled 
~  - ~  he  PI--C  d  ok  P8yors (sg.,  US.  Depmnent  of 
v~a  Jl&@ 
.. 
0	 Neguth  pmkrred providerqpemcnrs  wfthambulance compios  to 
prcwide*ednkd  tmuptmion  h  ESRI)  beueficiark  Under this typa  . 
.r. 
.. 
.. 
[F - 3]
 Page 2 
of syman, the mbdanm  cxunpanycould be given a set pawent  for each 
~  in rctnrn for Medicazes buaincas 
a  UBdartakc  competitive  biddiug to est=blhh    ~ h  **kd  frJUWXXTX 
for E3RD beuefkiaries or tn Mm  cnmpanies  who  agree m prtide  such 
~  l%c amtpeuti  bidding rnigltfbe rnockkd afbr the 1993 HCFA 
kgishfve  prqxxal  furoxygenand other hrabk  medical equipment 
o	 Establish a rebate programfor earnpaaks that rmtinely  transportESRD 
kelkiaries.  Under MS type of qete~  ccxrqnmicawhkh reaiw  over a 
certain dcilez Ievd in paymcats might be required  to ~ovide  a rebata 
based on a percentage of tho payments made.  For exampiq companies 
wbieh rcsived  $SO,?MXi)n Med~e  pqmeam  cotdd be required  to rebate 
S percent ($Z500) at the cad of the year. 
0  Provide en add-on to the cumucufte rate hdedicarc Payadialwis f=dhiea  co 
Cmer  t.h  mstoftransporunbg edimm eeand alkivihe  fa&ty  to
negodaliia egreetumte  with ambuhtm  -nies.  TIM ntodeI for this is 
the hiediam  hoepital pllyYlleBmt =hanmm  By bundlfng an add-an for 
tmmpmad~  Medkare would be enoouzegimgdie use uf the nrcmccxn. 
.
eKcethmmodoof~  -rbcdMyeie f*,  w&btirnm 
excdkrn  poeidon to detenttine whether a patient xqrirea  an ambulance, 
mhmafkektmst  timangingfortiem~  --~~m-s 
od trempmL  Hawever, giventb  smail number of ESRD  beneficiaries 
ubg  ambu~~  it maybe dif&ult to aet add-en mtea for 8JItilith. 
. 
H(?FA ~m  witk the intern of tha reeommendaCkr&We mmgnizs  that tbete are a 
number ofvtdneeaMEda  in the *payment  syuem for exnimlanca~  under 
Pert B.  As  -i%  we am amunt!yengaged in 8 Cmllpnehllsnm efh)rt to improve 
overeRRYv6mp esdpaynMntpoiideaf orxlwaneeserwieek 
.  . 
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