Department  of  Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
AMBULANCE  SERVICES  FOR 
MEDICARE  END-STAGE  RENAL 
DISEASE  BENEFICIARIES: 
MEDICAL  NECESSITY  OFFICE  OF  INSPECXOR  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  Semites  (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 Inspedions.  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  Services  (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  efllciency, 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  Reigonal  Inspector  General.  Project 
staff 
REGION  HEADQUARTERS 
Isabelle  Buonocore,  Project  Leader  W. Mark  Krushat,  MPH,  SCD

Nancy Molyneaux,  Lead  Analyst  Barbara  Tedesco,  Mathematical  Statistician

Michael  Hayes,  Intern  Brian  Ritchie,  Program  Analyst

Mark  Delowery,  DO,  Medical  Contractor  Hugh  Hetzer,  Program  Analyst

Lisa Foley,  OIG/Office  of General  Counsel 
For  additional  copies of this report,  please  contact  the Philadelphia  office (215-596-0606).  Department  of  Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENEW 
AMBUIANCE  SERVICES  FOR 
MEDICARE  END-STAGE  RENAL 
DISEASE  BENEFICIARIES: 
MEDICAL  NECESSITY 
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0EI-03-90-02130
  EXECUTIVE  SUMMARY

PURPOSE 
This study  determined  whether  1991  dialysis-related  ambulance  claims  for beneficiaries 
with end-stage  renal  disease  (ESRD)  met  Medicares  Part  B coverage  criteria  for 
medical  necessity. 
BACKGROUND 
The  Medicare  Part  B benefit  for  ambulance  service  has  very  strict  limits.  These  are 
explained  by the  Health  Care  Financing  Administration  (HCFA)  in the  Medicare 
Carriers  Manual,  Section  2120.  The  transport  is not  covered  if it fails to meet  the 
medical  necessity  requiremen~  even  if it meets  other  requirements.  The  Carriers 
Manual  states  that  no payment  maybe  made  in any  case  in which  some  means  of 
transportation  other  than  an ambulance  could  be  utilized  without  endangering  the 
individuals  health,  whether  or not  such  other  transportation  is actually  available. 
Generally,  ambulance  transport  is covered  for patients  whose  condition  requires 
emergency  medical  attention,  or whose  condition  makes  it impossible  to si; and 
requires  transfer  by stretcher. 
A small  number  of ESRD  beneficiaries  are  associated  with  extremely  high ambulance 
payments.  In  1991, there  were  193,883 ESRD  beneficiaries  with  Part  B claims,  of 
whom  only 21 percent  had  ambulance  claims.  The  ambulance  allowances  totalled 
$101 million,  75 percent  of which was for  less than  2 percent  (2,573)  of the 
beneficiaries.  The  high  dollars  for so few people  is related  to use  of ambulances  three 
times  per  week  for  maintenance  dialysis. 
We  conducted  a medical  review  of  1991 dialysis-related  ambulance  claims  to assist 
HCFA  in its continuing  efforts  to assess  coverage  and  payment  policies.  The  universe 
for this study was the  16 carriers  with the  highest  Part  B ambulance  allowances.  They 
represented  87 percent  of total  Part  B ambulance  allowances  for ESRD  beneficiaries 
($85 million  out  of $101 million).  The  claims  were  selected  in a two-stage  cluster 
design.  First  we selected  8 carriers  from  the  16 in our  universe,  and  then  we selected 
35 random  claims  from  each  of the  8 carriers.  The  medical  review  was conducted  by a 
team  of medical  professionals  from  Federal  Occupational  Health  (FOH),  a division  of 
the  Public  Health  Service.  The  FOH  has  conducted  other  medical  reviews  for various 
Federal  agencies  including  HCFA.  We also  analyzed  data  from  HCF~  carriers, 
ambulance  providers,  dialysis facilities,  and  the  American  Ambulance  Association. 
FINDINGS 
Seventy percent  of didjwir-related ambuihnce  clabm  acnx  16 caniem with the highest 
albwances  did not meet Medicarek  covemge *b  for  rnedd  necessity.  7%4ne 
ckzims reprewnt $4% rndh~ 
1  W%iikcaniem had  systems to iien~  clabm  that did not meet Medicare guidehq 
medically unnecessary claims were paid 
Results  of systems  carriers  used  to identify  inappropriate  claims  were  not  clear.

Carriers  may have  been  misled  to believe  claims  were  medically  necessary  when

providers  used  key phrases  on claim forms  to give the  appearance  that

transport  was medically  necessary.

Carriers  do not  routinely  include  ambulance  transports  for beneficiaries  with

ESRD  in their  post-payment  reviews.

Since  1991, three  carriers  have  adopted  new systems  to identify  inappropriate

claims.

RECOMMENDATIONS 
After  we informally  alerted  HCFA  to our  preliminary  findings,  HCFA  took  the 
initiative  to  collect  ESRD  ambulance  coverage  policies  horn  43 carriers.  The  HCFA 
shared  this information  with  us, and  our  review  of it confirmed  our  findings  regarding 
the  eight  carriers  in our  sample.  Therefore  we recommend: 
The HCFA  shouki ensure thd  chns  meet Medicare covemge  @Wines. 
We  suggest  the  following  targeted  options  as ways to  address  the  problems  described 
in this report.  For  carriers  with very high ambulance  allowances: 
.	 Alert  them  that  utilization  of ambulance  service  by ESRD  beneficiaries  is 
highest  for  dialysis-related  transports,  that  these  claims  are  for  a small  number 
of ESRD  beneficiaries,  and  many  of these  claims  are  not  medically  necessary. 
.	 Alert  them  it is possible  to identify,  in a prospective  manner,  those  ESRD 
beneficiaries  with  high potential  for large  expenditures  for  ambulance  services. 
Two methods  for  identitjing  these  beneficiaries  were  described  in the  Office  of 
Inspector  General  report,  Ambulance  Sewices for Medicare  ESRD Benejiciarh 
Payment  l?ractices (OEI  03-90-02131).  One  method  looks  at  the  number  of 
days between  the  first and  second  trip  claimed  during  the  year.  The  second 
looks  at  the  number  of trips  for which  claims were  filed within  a fixed time 
period,  e.g.,  15 days. 
	 Identifj  those  with  methods  which ensure  that  transport  for  ESRD  beneficiaries 
is medically  necessary,  and  advise  other  carriers  of these  methods.  Methods 
that  are  practical  and  cost-effective  will vary  depending  on the  carriers  overall 
volume  and  other  considerations.  For  example,  a carrier  with  a relatively  low 
volume  may  effectively  pre-authorize  ambulance  transport  for  ESRD 
beneficiaries  going  to dialysis.  A carrier  with  high volume  may  prefer  to 
ii  electronically  suspend.  for medical  review,  ESRD-related  ambulance  claims 
when  there  are  more  than  six transports  in a month. 
	 Advise  beneficiaries  of the limited  nature  of the  ambulance  benefit,  and 
encourage  them  to call the earner  if the  supplier  misrepresents  Medicare 
coverage.  Carriers  could send  such a message  to beneficiaries  directly  by mail 
and  through  national  and local senior  citizen  groups  and newspapers. 
	 Advise  ambulance  companies  of Medicares  limited  coverage  of ambulance 
service  and  the  consequences  of submitting  bills for transports  that  are  not 
medically  necessary.  Carriers  could  distribute  notices  to providers  directly  and 
through  national  and local trade  associations. 
	 Advise  dialysis-facility physicians  of the  limits of Medicares  coverage  for 
ambulance  service as they are  often  the  physicians  called  upon  to sign 
certifications  of medicaI  necessity.  Carriers  could  include  this advice  in their 
provider  education  material. 
	 Periodically,  conduct  a medical  necessity  review  of ESRD-related  ambulance 
claims. 
	 Conduct  studies  to determine:  (1) what  percentage  of ESRD  beneficiaries 
being  transported  to dialysis in ambulances  could  use wheelchair  vans  or some 
other  non-emergency  vehicle;  and  (2) whether  dialysis facilities  would  cover  the 
cost of ambulance  sewice,  for ESRD  beneficiaries  who need  it, for an  add-on 
to the  composite  rate  Medicare  pays for dialysis. 
We  also  suggest  that  HCFA  could: 
	 Advise  beneficiaries  of the  limited  coverage  for ambulance  semice  through  T7ze 
Guide to Health I.urance  for People with Medicare. 
  Z7zeMedicare Handbook  already  has a section  which  explains  the  limited 
. 
ambulance  transportation  benefit.  However,  the  section  on fraud  and  abuse 
mentions  ambulance  providers  only indirectly--under  the  umbrella  of health 
care  semice  provider.  Since beneficiaries  may not  connect  the  two, perhaps 
ambulance  transport  could be identified  as an example  of a health  care  sexvice. 
We  have  already  referred  to our Office  of Investigations  all cases that  involve  possible 
fraud.  Details  of our medical  review of claims  are  available  should  HCFA  wish to 
review  these  claims or take  any action. 
. 
...
Ill  COMMENTS  FROM  HCFA 
The  HCFA  concurs  with  our  recommendation  that  they  ensure  that  claims  meet 
Medicare  guidelines.  They  have  listed  steps  they  are  taking  to address  our 
recommendation.  Appendix  C contains  the  full comments. 
iv  TABLE  OF  CONTENTS 
PAGE 
.  --  ..  --

ExH3J-1-lvE  SUMMAKY

INTRODUCTION.  . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 . .  1 
FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 .. 4 
Medically  umecessa~  transports  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 ,.  4 
Carrier  identification  ofinappropriate  claims.  . . . . . . . . . . . . . . . . . . . . . . . . . .
 ,.  5 
RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 10

ENDNOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 12 
APPENDICES

Ambulance  coverage  and  limitations  (MCM  2120,  2125)  . . . . . . . . . . . . . . . . . .
 A-1 
Methodology  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 B-1 
Comments  fiomthe  Health  Care  Financing  Administration  . . . . . . . . . . . . . . .
 c-1  INTRODUCTION 
PURPOSE 
This study  determined  whether  1991 dialysis-related  ambulance  claims  for beneficiaries 
with  end-stage  renal  disease  (ESRD)l  met  Medicares  Part  B coverage  criteria  for 
medical  necessity. 
BACKGROUND 
The  Medicare  Part  B benefit  for ambulance  service  has very  strict  limits.  These  are 
explained  by the  Health  Care  Financing  Administration  (HCFA)  in the  Medicare 
Carriers  Manual  (see  Appendix  A).  The  transport  must  meet  requirements  in the 
areas  of medical  necessity,  destination,  vehicle,  and  crew.  It is not  covered  if it fails to 
meet  the  medical  necessity  requirement,  even  if it meets  the  other  requirements.  The 
Carriers  Manual  states  that  no payment  may be  made  in any case  in which  some 
means  of transportation  other  than  an ambulance  could  be  utilized  without 
endangering  the  individuals  health,  whether  or not  such  other  transportation  is 
actually  available  (section  2120.2.A.).  The  Manual  also  states  that  a person  receiving 
outpatient  dialysis is not  ordinarily  ill enough  to require  an  ambulance  (section 
2120.3 .J.).  Generally,  transport  is covered  for patients  whose  condition  requires 
emergency  medical  attention,  or whose  condition  makes  it impossible  to sit and 
requires  transfer  by stretcher  (section  2125.2). 
The  limited  nature  of coverage  for ambulance  was shown  in a complaint  dismissed  by 
a U.S. District  Court.  The  court  rejected  an  argument  that  when  a physician  finds 
that  other  forms  of transportation  are  contraindicated  there  is a presumption  of 
coverage  for  ambulance  expenses.  The  case  involved  an intermediacy  that  had 
deter&ned  the  ambulance  sexvices were  not  reasonable  and  necessaxy  because  the 
patients  in question  were  able  to ambulate  with  the  aid  of walkers  and  wheelchairs. 
The  provider  argued  that  Medicare  imposed  a responsibility  on physicians  to 
determine  when  other  means  of transportation  are  unsafe.  If physicians  certi&  the 
need  for  ambulance,  the  certifications  should  ensure  payment.  The  court  said 
physician  certification  was only one  of several  conditions  of coverage  under  Part  B and 
that  the  Secretary  had  a continuing  obligation  to review  the  patients  condition  and 
need  for an  ambulance.2 
A small  number  of ESRD  beneficiaries  are  associated  with  extremely  high  ambulance 
payments.  In  1991, there  were  193,883 ESRD  beneficiaries  with Part  B claims,  of 
whom  only 21 percent  had  ambulance  claims.  The  ambulance  allowances  totalled 
$101 million,  of which  75 percent  was for less than  2 percent  of the  beneficiaries 
(2,573).  The  high  dollars  for so few people  is related  to use  of ambulances  three 
times  per  week  for  maintenance  dialysis.3 
1
 Ambulance  providers  submit  claims  on behalf  on the  beneficiaries  they  transport. 
Maintenance  dialysis transports  account  for a high volume  of sefices  by a small 
number  of providers.  In  1991, only 4 percent4  of all ambulance  providers  receiving 
Part  B payments  (215 out  of 5,228) had  72 percent  or $73 million  of the  total 
allowances  for ESRD  beneficiaries. 
Medicare  carriers  process  all types  of Part  B claims.  They  have  a variety  of systems  to 
identi@  inappropriate  claims in both  pre-payment  and  post-payment  stages  of 
operations.  In the  pre-payment  stage,  for example,  claims  may  be  suspended  for 
additional  development  that  could  lead  to paying  or denying  the  claim.  Providers  have 
the  right  to appeal  a carriers  decision  to deny  payment.  On  the  post-payment  side, 
carriers  review  samples  of claims  more  closely, and  might  even  conduct  medical 
reviews.  Claims  for post-payment  reviews  are  usually  selected  on  a priority  basis  from 
particular  provider  groups  that  represent  high  expenditures  or aberrant  billing. 
Other  Office  of Inspector  General  (OIG)  reports,  issued  within  the  last  10 years, 
indicated  that  ambulance  policies  were  vulnerable  to abuse,  and  a Medicare  consultant 
with  the  American  Ambulance  Association  indicated  that  many  of the  dialysis-related 
transports  may  not  meet  Medicare  guidelines  for medical  necessity. 
This  is the  first  national  study to retrospectively  examine  the  medical  necessity  of 
randomly  selected  ambulance  claims  for beneficiaries  with  ESRD.  We  conducted  a 
medical  review  of dialysis-related  claims and  examined  carrier  policies  and  procedures 
for identifying  claims  for medically  unnecessary  transports.  Our  objective  is to  assist 
HCFA  in its efforts  to assess coverage  and  payment  policies  for  ambulance  semice. 
SCOPE AND METHODOLOGY 
This  report  is focused  on transports  of ESRD  beneficiaries  to and  from  dialysis 
facilities.  It is based  on calendar  year  1991 data  from  HCF&  Medicare  carriers, 
ambulance  company  representatives,  and  dialysis facility  nurses  and  physicians.  We 
collected  the  data  from  November  1992 through  December  1993. 
To  determine  the  availability  of data  and  to  clar@  issues,  we met  with  representatives 
of HCF~  a Medicare  carrieq  the  American  Ambulance  Association,  and  dialysis 
facilities.  We  also  reviewed  ambulance  studies  conducted  within  the  Department 
(1983-1993)  and  ambulance-related  Management  Information  Reports  (1988-1993)  by 
the  OIGS Office  of Investigations. 
To  review  ambulance  claims  for ESRD  beneficiaries,  we selected  a sample  of carriers 
and  claims  using  a two-stage  cluster  design.  Total  Part  B ambulance  allowances  for 
ESRD  beneficiaries  were  $101 million.  Of that  amoun~  $85.3 million  represents  16 
carriers  whose  allowances  were  the  highest.  From  those  top  16 carriers,  we randomly 
selected  8.  We  then  chose  a simple  random  sample  of 35 claims  from  each  of the  8 
carriers  for  a total  of 280 claims.  Of the  280 sampled  claims,  180 were  dialysis-related. 
2
 Our  findings  regarding  the  dialysis-related  claims  are  projected  from  the  8 sampled 
carriers  to the  universe  of 16 carriers. 
A medical  team,  headed  by a physician  from  Federal  Occupational  Health  (FOH),  a 
division  of the  Public  Health  Semite,  determined  whether  the  dialysis-related  claims 
met  Medicare  guidelines  for medical  necessity.  The  FOH  has  conducted  other 
medical  reviews  for various  Federal  agencies  including  HCFA.  The  medical  team  did 
not  review  claims  that  were  not  related  to dialysis  (62 out  of 280) or for which  data 
was inaccessible  (38 out  of 280). 
Methodology  details  regarding  sampling,  data  collection,  and  analyses  are  in Appendix 
B.  The  confidence  levels  regarding  estimates  in this  report  are  also in Appendix  B. 
This  study was conducted  in accordance  with  the  Quality  Standark  for Inspections 
issued  by the  Presidents  Council  on Integrity  and  Efficiency. 
3
 FINDINGS

SEVENTY PERCENT  OF TIUWSPORIS INVOLVING DIALYSIS DID NOT 
MEET MEDICARES  GUIDELINES  FOR MEDICAL NECESSITY.  THESE 
CLAIMS REPRESENT  AN ESTIMATED  $44 MILLION. 
While  ESRD  beneficiaries  used  ambulance  semice  in a variety  of circumstances, 
approximately  67 percent  of the  claims in our  universe  involved  transports  to  or from 
dialysis.  Our  universe  was  16 carriers  with the  highest  ESRD  ambulance  allowances. 
Of the  dialysis-related  transports,  70 percent  did not  meet  coverage  guidelines  for 
medical  necessity.  They  represent  an estimated  $44 million  in ambulance  allowances. 
The  percentages  of medically  umecessary  dialysis-related  ambulance  trips  for  each  of 
the  8 sampled  carriers  were  23, 48, 50, 70, 81, 81, 85, and  91 percent  (as shown  in 
Table  5, page  B-6). 
Our  medical  review  had  three  possible  outcomes.  The  claims  either  did not  meet 
Medicare  guidelines  (70 percent),  did meet  guidelines  (29 percent),  or conflicting  data 
prevented  a determination  (1 percent).  By conflicting  dat~  we mean  that  a claim 
folder  had  data  which  contradicted  other  data  in the  same  folder. 
Beneficiaries  can  obtain  immediate  ambulance  service  in emergency  situations.  In 
non-emergency  situations  (e.g., transport  for routine  dialysis)  they  can  schedule  service 
in advance  of the  transport  date.  Virtually  all (99 percent)  of the  dkdysis-related 
transports  in our  sample  were  scheduled.  According  to  ambulance  company 
respondents,  nearly  all of the  beneficiaries  (97 percent)  associated  with  these  claims 
were  transported  by the  company  on a regular  basis:  three  times  per  week  was the 
average.  (See  tables  on pages  B-4 and  B-5 for confidence  intervals  of percentages  in 
this paragraph.) 
Bene@u&s  could have used other forms of transp~tiom 
Claims  did not  meet  Medicare  guidelines  because  on the  date  of ambulance  service 
beneficiaries  did not  have  conditions  that  contraindicated  use  of another  type  of 
transport.  Of the  claims  that  were  medically  necessaq,  beneficiaries  had  conditions 
including-but  not  limited  to--dementi~  contractures,  hypotension  after  dialysis, spinal 
cord  compression,  and  severe  obesity.  Beneficiaries  associated  with  claims  that  did not 
meet  medical  necessity  guidelines  did not  have  these  kinds  of conditions. 
In addition  to not  having  medical  conditions  requiring  an ambulance,  almost  two-thirds 
of the  beneficiaries  (63 percent)  were  clearly  not  bed-confined.  The  claim  folders 
contained  evidence  that  28 percent  of the  claims were  for ambulatory  patients  and  35 
percent  were  for beneficiaries  in wheelchairs  on the  date  of ambukmce  service,  as 
obsemed  by dialysis facility  staff  (see  Table  6 on page  B-6 for confidence  intervals). 
4
 A beneficiarys  use  of a wheelchair  or ability  to walk  did not  automatically  mean  the 
claim  did not  meet  Medicare  guidelines.  There  were  cases  where  beneficiaries  were 
ambulatory  or wheelchair  capable  but  had  other  destabilizing  conditions,  such  as low 
blood  pressure  after  dialysis that  may have  required  monitoring,  and  therefore  an 
ambulance  was justified. 
Claim  folders  reviewed  by our medical  team  contained  data  about  the  patients 
medical  history,  diagnoses,  and  ambulatory  status.  According  to Medicare  guidelines, 
a diagnosis  of ESRD  is not  sufficient  explanation  to warrant  an  ambulance.  The 
reviewers  evaluated  the  accumulated  data  and  determined  that  claims  did not  meet 
Medicare  guidelines  if there  was no medical  condition  that  confined  the  patient  to bed 
and/or  made  travel  by other  than  an ambulance  unsafe.  Bed-confined  was  a 
commonly  used  phrase  on claim forms  but  data  regarding  the  claims  did not  support 
it. 
WHILE  CARRIERS  HAD  SYSTEMS  TO  IDENTIFY  CLAIMS  THAT  DID  NOT 
MEET  MEDICARE  GUIDELINES,  MEDICALLY  UNNECESSARY  CLAIMS 
WERE  PAID. 
Reds  of syW??m CLU7i??Sused to ihtijj  ikl!I@fl&  CkZ&LS Wt?lt?mt  CklK 
Carriers  in our  sample  were  using automated  screens,  certifications  of medical 
necessity,  and  specialized  processing  units  through  1991 to identi&  and  prevent 
inappropriate  claims.  Regardless  of the  type  of system  use~  six carriers  could  not  say 
how many  inappropriate  claims had  been  identified  in  1991 or the  total  dollar  amount 
they  represented.  The  carriers  either  did not  have  mechanisms  or procedures  to 
capture  that  information,  were  not  equipped  to sort  information  about  ambulance 
trips  for ESRD  beneficiaries  from  aggregated  claims  dat~  or the  information  was 
extremely  time-consuming  and  labor  intensive  to produce. 
Two  carriers  did give us the  number  of inappropriate  claims  they  identified  in  1991 
and  the  dollar  amount  associated  with those  claims.  However,  even  these  carriers  did 
not  say whether  the  figures  were  related  to ambulance  claims  for ESRD  beneficiaries 
or whether  they  related  directly  to the  use  of a particular  system  for  identifying 
inappropriate  claims. 
Automated  screens  had  different  functions  and  were  used  inconsistently  by most  of the 
carriers  that  had  them.  In  1991, three  carriers  had  screens.  The  first  of these  three 
had  a screen  which  suspended  all ambulance  claims  for  ESRD  beneficiaries.  The 
second  suspended  any claims for non-emergency  transports,  and  the  third  suspended 
claims  when  there  were  more  than  six transports  for  the  same  beneficiary  within  30 
days.  One  of these  three  carriers  said its screen  is on whenever  the  HCFA  mandated 
workload  permits.  For  example,  its screen  was on in  1991, off for  part  of  1992  and 
back  on in  1993.  A fourth  carrier  had  screens  for ambulance  claims,  operating  until 
late  1990, which  identified  transports  for ESRD  beneficiaries  and  repe&ive  bfig. 
The  ambulance  screens  were  deactivated  with HCFAS  knowledge  so that  the  carrier 
5  could  screen  other  types  of Medicare  claims.  This  carrier  said the  ambulance  screens 
saved  an average  of $291,000 per  month. 
Two carriers  required  certifications  of medical  necessitv  for non-emergency  transports 
to dialysis.  Certifications  have  a variety  of formats.  Some,  for example,  are  checklists 
printed  by the  ambulance  company  while  others  are  letters  to carriers  on dialysis 
facility stationery.  What  they  have  in common  is the  signature  of a physician  or other 
medical  provider  and  statements  indicating  that  the  patient  needs  an  ambulance. 
Two carriers  had  claims  urocessin~  units  s~ecializiruz in ambulance  claims.  These 
carriers  felt that  specialized  processors  become  familiar  with  the  beneficiaries  and  can 
spot  irregularities  or cloning.  Cloning  is the  process  of using  a claim  that  has been 
paid  as a model  for filling out  subsequent  claims  regardless  of whether  the 
circumstances  of the  transports  were  the  same.  One  of the  two carriers  said if the 
processors  believe  a beneficia~  is not  bed-confine~  even  though  the  claim  says so, 
they will call someone  to verify the  patients  condition.  Since  most  of their 
beneficiaries  are  in nursing  homes,  a call to the  nursing  home  settles  the  question. 
Nursing  homes  have,  at times,  contradicted  what  was  on the  claim  form. 
While  we did not  perform  cause  and  effect  analyses,  the  carrier  with  the  lowest 
percentage  (23)  of medically  unnecessary  claims  was  the  only one with  a screen  to 
suspend  ambulance  bills if there  were  more  than  six transports  for the  same 
beneficiary  in one  month.  The  carrier  with  the  lowest  percentage  of dialysis-related 
transports  was the  only one  with  a screen  to suspend  all claims  for  ESRD 
beneficiaries.  (The  distribution,  by carrier,  of claims  that  did not  meet  Medicare 
guidelines  is on page  B-6.) 
Cimiim may have been rnirkd  to beileve cti  were medicdy  necewtwy when pmvidem 
wed  key phrum  on cilim fom.s  to give the appearance thattmmpoti  was medica@ 
?lemWuy. 
If statements  providers  use to fill out  the  claim  form  fit Medicare  guidelines,  the  claim 
will be  paid.  AU carriers  said  they  consider  provider  statements  on the  claim  form 
regarding  patient  condition  and  diagnosis  proof  that  transport  is medically  necessary. 
One  carrier,  for  example,  cotisiders  a transport  medically  necessary  if the  claim  says 
the  patient  has  ESRD  and  is bed-confined.  Other  carriers  said  claims  appear  to be 
medically  necessary  depending  on the  description  of the  patients  medical  condition. 
Four  of the  eight  carriers  said  they  do not  verify  the  providers  claim-form  statements. 
Two others  consider  certifications  of medical  necessity  a verification  of claim 
statements.  The  two remaining  carriers  believe  its processors  know  the  beneficiaries 
well enough  to spot  irregularities  in claims,  and  they  may make  telephone  calls to 
veri&  unusual  data. 
While  providers  need  Medicare  coverage  information  if they  are  to submit  claims  for 
covered  service,  some  may be  using  key phrases  directly  horn  the  Medicare  Carriers 
6  Mmualto  ensure  pa~entregardless  of the  beneficia~'s  condition.  Most  carriers 
advise  providers  of the  Medicare  requirements  for medical  necessity  through  periodic 
newsletters  or special  notices.  One  carrier  said  it refrains  horn  giving out  wording 
from  the  Carriers  Manual.  This  carrier  advises  ambulance  crew members  to  describe 
on the  trip  report  exactly  what  they  see when  they  pick  up  a patient.  Information 
horn  the  trip  report  can  then  be  transferred  to the  claim  form.  Providers,  however, 
can  learn  the  phrases  in the  Carriers  Manual  tlom  trade  associations  as weil  as from 
carriers. 
In  1991, a carrier  conducted  a special  ambulance  project  because  providers  had  been 
submitting  claims  without  sufficient  data.  A significant  number  of ambulance  claims 
were  denied  that  year  because  they were  incomplete.  The  special  effort  to get 
thorough  information  on ambulance  claims has resulted  in cleaner  claims,  according  to 
the  carrier.  But  the  carrier  is also aware  that  this could  mean  they  taught  the 
ambulance  providers  the  right  things  to say to get  paid.  A fraud  investigator  with  this 
carrier  said  the  need  for ambulance  sexvice to dialysis is rare,  but  the  claim  form  can 
fool the  claims  processor  and  fraud  investigator  alike. 
While  carriers  rely on providers  claim form  statements,  there  is no guarantee  that  the 
statements  are  truthful.  One  carrier  described  a claim  that  met  medical  necessity 
guidelines  for  an ambulance  because  the  provider  listed  the  patients  multiple  medical 
conditions.  After  the  claim was paid,  the  beneficiary  called  to complain  that  the 
provider,  which  was certified  for basic and  advanced  life support  ambulances,  had 
transported  the  beneficiary  in a wheelchair  van.  Without  the  complain?  the  providers 
statements  would  not  have  been  questioned  and  payment  for  a false  claim  would  not 
have  been  detected. 
Various  respondents  expressed  the  opinion  that  once  in  a while  evexyone--patients, 
doctors,  nurses,  social  workers,  and  ambulance  providers--will  bend  a stow  to  fit 
Medicare  requirements  for convenience  or for a needy  patient.  Beneficiaries  may use 
ambulance  transport  for reasons  that  are  financial,  logistical,  or for lack  of an 
alternative.  Patients  may be ambulatory  or wheelchair  capable  but  may  not  be  able  to 
afford  the  cost  of a taxi or wheelchair  van  service,  especially  if they  have  to travel  long 
distances.  Some  patients  may be  so debilitated  that  they  cannot  lift their  own weight 
and  require  two people  to make  the  transfer  to a chair  safely,  or once  in a wheelchair 
they  cannot  get  down  a flight  of stairs.  These  situations  are  not  covered  under 
Medicare  guidelines. 
Pat-payment  reviinvsby carriersh  not routhdy  include ambuhnce  traqxms  for 
bemjkhrk  with ESRD. 
Carriers  do not  routinely  target  ambulance  claims  for  post-payment  reviews.  Most

earners  use  their  post-payment  resources  to review  other  types  of claims  that

represent  higher  Medicare  expenditures.  One  carrier  that  did an  ambulance

utilization  review  in  1991 found  15 cases  representing  over  $3 million  in overpayments.

Unless  carriers  target  ambulance  providers  for special  post-payment  audits  or target

7  ambulance  claims  for medical  reviews,  inappropriate  ambulance  claims  for ESRD 
beneficiaries  can  slip through  the  system. 
It appears  that  carriers  do not  review  ambulance  claims  for  ESRD  beneficiaries  for 
two major  reasons:  either  payments  for ambulance  transports  are  far  less than 
payments  for other  services,  or carriers  do not  have  a system  for isolating  and 
examining  ESRD-related  ambulance  claims. 
In the  post-payment  stage,  beneficiary  complaints  have  helped  five carriers  discover 
inappropriate  ambulance  claims.  As mentioned  previously,  complaints  from 
beneficiaries  have  revealed  that  providers  will sometimes  transport  the  beneficiary  in a 
non-emergency  vehicle  and  charge  Medicare  for  an  ambulance. 
Other  mechanisms  that  help  carriers  identify  inappropriate  claims  include  quality 
assurance  audits  of staffs workload.  One  carrier,  for  example,  audits  5 percent  of the 
workload  weekly,  while  another  carrier  audits  400 claims  per  month.  However,  unless 
the  workload  is strictly  ambulance  claims,  there  is little  likelihood  that  ambulance 
claims  for ESRD  beneficiaries  will surface  in significant  numbers.  Carrier  respondents 
who  mentioned  workload  audits  did not  specify what  an  audit  entails  and  whether  the 
medical  necessity  issue is examined. 
Seven  carriers  were  of the  opinion  that  more  post-payment  reviews  would  help  in the 
identification  of inappropriate  payments  of ambulance  transports  for  ESRD 
beneficiaries.  Without  post-payment  reviews,  medically  umecessary  claims  can go 
unnoticed,  and  the  magnitude  of the  problem  will be  unknown.  The  one  carrier  that 
did not  suggest  additional  post-payment  reviews  had  recently  established  a system  of 
pre-approving  transports. 
Five  carriers  think  focused  medical  reviews,  known  as FMRs,  should  be  used  for 
ambulance  services.  The  FMRs  are  a new type  of post-payment  review  required  by 
HCFA  In this type  of review  local  data  about  a particular  semice  is compared  with 
national  data.  However,  because  other  services  have  priority,  carriers  do not 
anticipate  doing  FMRs  on ambulance  service  in the  near  future.  Carriers  said  they 
will need  more  funding  to increase  the  number  of any type  of post-payment  reviews. 
Since 1991, three caniem have adopted new systems to Lient@j inappyniute  ckizhm 
When  we conducted  interviews  in May of 1993, three  out  of eight  sampled  carriers 
described  changes  to the  systems  they  had  used  in  1991.  Of the  three  carriers,  one 
began  using automated  screens  in  1992 to suspend  claims  for manual  review  if the 
transport  was within  30 days of an ESRD  procedure;  and  a second  carrier  expected  to 
have  a specialized  processing  unit  by the  summer  of 1993. 
The  third  carrier  adopted  a system  that  was unique  among  all carriers  in the  sample. 
In  1993  it began  to pre-approve  transport  to dialysis  for  ESRD  beneficiaries. 
According  to this  carrier,  the  HCFA  regional  office  had  alerted  them  to abuses  in the 
8  area  of transports  to  dialysis.  As a result,  in  1992, the  carrier  stopped  all payments  on 
these  types  of claims.  It followed  with a sumey  of the  medical  necessity  for transport 
of ESRD  beneficiaries.  Telephone  calls to beneficiaries  revealed  that  some  were  truly 
in need  of transfer  by stretcher  while  others  rode  to dialysis in mini vans  or the  front 
seat  of pick  up trucks.  As a result  of the  survey,  ambulance  providers  are  now 
required  to  get a medical  necessity  letter  from  the  beneficiarys  treating  physician  and 
forward  it to the  carrier.  Medical  necessity  letters  are  to include  the  patients  medical 
history,  diagnosis,  current  condition,  and  reasons  patients  might  be bed-confined.  The 
letters  are  reviewed  by the  carriers  medical  director  who  decides  whether  the 
beneficiarys  transport  to dialysis is medically  necessary.  Thereafter,  claims  for that 
beneficiary  are  checked  against  a pre-approval  list. 
Of the  three  carriers  who  described  systems  established  after  1991, the  one  with  an 
automated  screen  identified  over  1000 inappropriate  claims  in  1992.  The  two other 
carriers  did not  say they  had  a procedure  to account  for  outcomes  of the  system. 
9
 RECOMMENDATIONS

Because  such  a high percentage  of Part  B dialysis-related  ambulance  claims  for  ESRD 
beneficiaries  did not  meet  Medicares  medical  necessity  guidelines,  we  alerted  HCFA 
to our  preliminary  findings  in an informal  briefing  in February  1994.  In response, 
HCFA  took  the  initiative  to contact  43 Medicare  carriers  and  collect  their  ESRD 
ambulance  coverage  policies,  which  it then  shared  with  us.  Our  review  of the 
information  indicates  that  systems  used  by the  eight  carriers  in our  sample  have  not 
changed  since  we collected  our  data  in 1993.  We  therefore  recommend: 
%  HCFA should ensurethutchins  meet Midicare coverageguideli.rux 
We  suggest  the  following  targeted  options  as ways to  address  the  problems  described 
in this report.  For  carriers  with very high ambulance  allowances: 
Alert  them  that  utilization  of ambulance  senrice  by ESRD  beneficiaries  is 
highest  for  dialysis-related  transports,  that  these  claims  are  for  a small  number 
of ESRD  beneficiaries,  and  many  of these  claims  are  not  medically  necessaq. 
Alert  them  it is possible  to identify,  in a prospective  manner,  those  ESRD 
beneficiaries  with  high potential  for large  expenditures  for  ambulance  semices. 
Two methods  for identifying  these  beneficiaries  were  described  in the  Office  of 
Inspector  General  report,  Ambulance  Setvices for Medicare  ESRD  Benejkiati: 
Payment  Practices  (OEI  03-90-02131).  One  method  looks  at  the  number  of 
days between  the  first and  second  trip  claimed  during  the  year.  The  second 
looks  at  the  number  of trips  for which  claims  were  filed  within  a fixed  time 
period,  e.g.,  15 days. 
Identi&  those  with methods  which ensure  that  transport  for  ESRD  beneficiaries 
is medically  necessary,  and  advise  other  carriers  of these  methods.  Methods 
that  are  practical  and  cost-effective  will vary  depending  on  the  carriers  overall 
volume  and  other  considerations.  For  example,  a Carner  with  a relatively  low 
volume  may  effectively. pre-authorize  ambulance  transport  for  ESRD 
beneficiaries  going to dialysis.  A carrier  with  high volume  may  prefer  to 
electronically  suspend,  for medical  review,  ESRD-related  ambulance  claims 
when  there  are  more  than  six transports  in a month. 
Advise  beneficiaries  of the  limited  nature  of the  ambulance  benefit  and 
encourage  them  to call the  carrier  if the  supplier  misrepresents  Medicare 
coverage.  Carriers  could  send  such a message  to beneficiaries  directly  by mail 
and  through  national  and  local senior  citizen  groups  and  newspapers. 
Advise  ambulance  companies  of Medicares  limited  coverage  of ambulance 
service  and  the  consequences  of submitting  bills for transports  that  are  not 
10
 medically  necessary.  Carriers  could  distribute  notices  to  providers  directly  and 
through  national  and  local  trade  associations. 
	 Advise  dialysis-facility physicians of the  limits of Medicares  coverage  for 
ambulance  service  as they are  often  the  physicians  called upon  to sign 
certifications  of medical  necessity.  Carriers  could  include  this advice  in their 
provider  education  material. 
	 Periodically,  conduct  a medical  necessity  review  of ESRD-related  ambulance 
claims. 
	 Conduct  studies  to determine:  (1) what  percentage  of ESRD  beneficiaries 
being  transported  to dialysis in ambulances  could use wheelchair  vans  or some 
other  non-emergency  vehicle;  and  (2) whether  dialysis facilities would  cover  the 
cost of ambulance  service,  for ESRD  beneficiaries  who need  it, for an  add-on 
to the  composite  rate  Medicare  pays for dialysis. 
We  also  suggest  that  HCFA  could: 
	 Advise  beneficiaries  of the limited  coverage  for ambulance  semice  through  7he 
Guide  to Health Insurance for People wi~hMedicare. 
	 Z7zeMedicare Handbook  already  has a section  which explains  the  limited 
ambulance  transportation  benefit.  However,  the  section  on fraud  and  abuse 
mentions  ambulance  providers  only indirectly-under  the  umbrella  of health 
care  service  provider.  Since beneficiaries  may not connect  the  two, perhaps 
ambulance  transport  could be identified  as an example  of a health  care  semice. 
We  have  already  referred  to  our  Office  of Investigations  all cases  that  involve  possible 
fraud.  Details  of our  medical  review  of claims  are  available  should  HCFA  wish  to 
review  these  claims  or  take  any  action. 
COMMENTS FROM HCFA 
The  HCFA  concurs  with our recommendation  that  they ensure  that  claims meet 
Medicare  guidelines.  They  have  listed steps  they are  taking  to address  our 
recommendation.  Appendix  C contains  the  full comments. 
11
 ENDNOTES

1.	 Persons  with  ESRD  are  entitled  to Medicare  under  1972 amendments  to the 
Social  Security  Act. 
2.	 American  Ambulance  Service of Penn.ylvaniay Inc. v. Su/Iivan as summarized  in 
Medicare  and Medicaid  Guide  (Chicago,  IL  Commerce  Clearing  House,  1991), 
paragraphs  3,148.56  and  39,250. 
3.	 Office  of Inspector  General,  Ambulance  Services for Medicare  End-Stage Renal 
Dtiease  Beneficiaries:  Payment  Practices, 0EI-03-90-02131  (Washington,  D.C.: 
U.S. Department  of Health  and  Human  Services,  1994). 
4.	 This percentage  could  be  lower  if, as is often  the  case,  ambulance  companies 
have  more  than  one  provider  identification  number. 
12
 APPENDIX  A

MEDICARE  CARRIERS  MANUAL 
AMBULANCE COVERAGE  AND LIMITATIONS 
Section  2120.  Ambulance  Sexvice ..................................A-2 
Section  2125.  Coverage  guidelines  for  claims ............A-lO 
A-1
 .- 
-75  C3tTERAGE id~ LxITATIOI?S 
:Lzo.1

2120.  ..!ULM{CESERVICE

Reimbursmeenc  may be made for expenses incurred for ambulance senice

provided the conditions specified in the fclliowingsubsections are mer.

(See $5 4115 and 2125 concerning instructions for  processing anulance 
semice  claims.)

2129.1  Vehicle  and  Crew Requirements 
A.  Eu3 VehicLe--- Ihe  vehicle must be a  specially  designed  and  equipped

auzomocnle  or  other  vehicle  (in some areas  of the United  Stit8a  this

might  be  a  boat  or  plane)  for  transporting  the  eick  or  injured.  It  must

have  customary  patient  care  equipuent  including  a  atrcmcher,  clean

li.mens,  first  aid  suppUes,  oxygen  equipnent,  and  it  must  also  have  such

other  safety  and  lifesaving  equipaent  as  is  required  by  State  or  local

authorities.

B.  The Crsw=--lhe  ambulance  crew  muat  consist  of  at  leaat  *  members.

Ihos-embere  charged  uith  the  care  or  hamdMng  of  th9  P8fieIMSU5t

include one individual  uith  adequate  first  aid  training,  i.e.,  trainimg

at  least  equivalent  to  that  provided  by  the  standard  and  advanced  Red

Cross  first  aid  courses.  Training  eqtivslent~  to  tie  standard  and

advanced  Red  Cross  first  aid  training  courses  includes  ambuhnce  eetice

training  and  experience  acquired  unmilitary  sertice,  mxcceseful

caupletion  by  the  individual  of  a  cmqxirable  first  aid  course  furnished

by  or  under  the  sponaorsbip  of  state  or  local  authorities,  an SdU0at10na2

institution,  a  fire  department,  a  hospi~,  a  professional  0rgSdZStACZ2.

or  other  such  qualified  organization.  On-the-job  training  involving  the

administration  of  first  aid  under  the  supm+sion  of  or  ticonjumctlon

with  trained  first  aid  personnel  for  a  period  of  tie  sufficient  to  assure

tie  trainees  proficiency  in handling the  wide  range  of  patient  care

sertices  that may have  to  be  performed  by  a  qualified  attendant  can

also  be considered  as  ltequivalent  training.N

c.	 Verification of Canpliance---In determining  whether  the  vehi.clea 
and person?oi o: eacn  supplier meet all  of  the  above  requirements~ 
carriers  may accept  the  supp~erlg  stitement (absent  information  to  the 
contrary)  that  its  vehicles  and  ~rsoxlnel  meet  all  of  the  requirmemts 
if (1) the stitau~t  descfibes  the  firgt  aid,  safety,  and  otlier  mt?!lt 
care  items  with  which  the  veticles  are  equipped,  (2)  the  statemmt  ahoWS 
the  extent  of first  aid  trai~ng  acquired  by  the  personnel  assigned  ti 
those  vehicles,  (3)  the  s~~ellt  con~ina  tie  suppliers  agre~~t  tO 
nOtify  the  carrier  of  any  ch~e  in  operation  which  could  affect  the 
coverage  of  MS  ambd.ante  soryj.ces,  and (L)  the  information  protided 
indicatee  that  the  requirements  are  met.  TIW setemwntmuat  be  accaed 
bydocumentary  evidence  tit  the  ~~nce  has  me  eqtip~t  required  by 
State  ad  local  authorities.  mcumen-ry  etidence  could  include  a  utter 
Rev.  L79 ,  477  2-75 
[A-21
 COVERACAENDLIMITATIONS  i2-75 
fran  such  authorities,  a copy  of  a  IAcense,  penmt,  certificaw,  etc. , 
issued  by  the  authorities.  l%e statement  and  aupportmg  documentation 
would  be  kept  on file  by the  carrier. 
Uben a aupptier does  not  sutmit  such a  s-tement  or  ~memr  there  is  a 
question  about  a  suppfier  E canpliance  with  any  of tie a~~  requirements 
for  vehich  and  crew  (ticiuding  suppliers  who have  cccwietid  the  statement), 
earners  should  take  a~ropriate  action  inckiing  ~ mere  necessary,  on-cite 
inspection  of  tie  vehicles  end  verification  of  the  q~cationa  of 
personnel  to  detexmine  whether  the  ambulance  eermce  q~fies  for 
reimbursement  under  Hedicare.  Since  the  requirements  dmctibed  above 
for coverage  of  ambdance  se-coo  are  applicable  to  tie  o~nU  operation 
of  tha  ambulance  wpplier~  e  service,  it is not  raqUlrOd  tht  illfOxmetion 
xwgardlng  permnnd  and  vehicles  be obtained  on  an  ixldi?idul  trip  baais. 
D.  Ambulance  of  Protiders  of  Semrices. --TIM Part  A Intmnmiiary  Is 
reaponaihb  for  the  proceaelng  oi  ctin  for  ambulance  *-cc  furnlehed 
b  PS*Cimq  h-dtib~  s~led  n-i=  fac~ities  =d  h~e  h=lth 
agencies end haa the reaponsibUlty  to  detexwdne  the  caapUance  of 
providar~  e  amhuMnca  end  creu.  Slate  prctider  amimlance  eemces  furnished 
M=er  arr~  tam with  euppliers can be covered  CIXQT If  the  euwlier 
-te  W  abve  reqairmenta,  th  PM% A Intemedlary  may aek  *O  Ca~er 
*  identify  tboao  aqpliers  who meet  t&e  requirements. 
&  .--Ae  mentioned  abova,  tha  amklance  must  have 
cnatazery  patient  care  equi~t  and first  aid  aupp~es.  Renaable  devices 
~:
and  equipient  smob as  backboards,  neckboerda  and  irtfUtable  leg  and am 
aplinte  are  ccnaidered  part of  the  general  smbu&nce  sefice  and  wxd.d 
be  included  in  the  charge  for  tie  trip.  on the  otlier  lmnd,  a  separate 
reaaonahle  charge  baaed  on actual  quantities  used  may be  reco~zed  for 
nonreusable  item  and disposable  mtppues  such as  oxygen,  gauze  and 
dreesinga  required  in  tho  cam  of  the  patient during  MS  trip. 
2120.2  Nacesaity  and  Reasonableness.  -.~  be  conred,  ambulance  sefice 
mat  be medicaily  neceeeery  and remscnable. 
AD  b-mity  for  the  Serrice.--?4edical  neceaeity  is  established  uben 
W@ patlmt~  a  caditicn  iS  such  that  US.  of  any  other  method  of  tranaportati= 
i8  contraindicated.  In  any  caae,  b  tia  sme  me- of  tramaportation 
other  thamanaak&nOe  could  b  utilized  without  endangering  the  indivldd.8 
hadth,  whethe~  or  not  8- oar  t~rtatioxt  ia  actually  available,  no 
~~ant  =7  bO made for  ambulance  eervice. 
k  ti8UCXd2kM86  of  the  Ambulance Trip. --A  claim  may  be  denied  on 
we  ground  that theuso  of  ambulance  ee~ce  uau  unreaaoneble  in  the 
treabnent  of  the  Ilheaa  or  injury  involved  (5  23G3;  GOtwithstandin~ 
thO  fact  th8t  tn.  pe~antt  a  co~~~  ~  ~VO c ~tr~~catad  tha 
uae  of  other  meene  of  transportation.  Tha carfier  ehould  use  discretion 
uhen  appl@ig  tbia  pxhciple.  It  is  expected  that generally  its 
app~CatiOn  ui~  ~  ~~d  ~  those  i~~ea  ~e~  a  ~~er  or 
prmrider  repeatmlly  d~~stratea  a  ~t~m  of  ~econ~ca~  practice 
- tO  those  mtid~l  C~~a  ~e~  tie  ~ceas  coat  iS  large. 
A 
2-76  Rev.  179 ,  ~77  .. 
[A-31
 10-83  ~C)VE~A~E  .+Nil  LIMIIATIONS  2120.3 
2120.3  The  Destination---- AS a  generai  ruie,  only  10CSJ trans~rtation  bY amb~nce  :s 
ccvered.  ITIis mans  that  the  patient  must  have  bee~msported  to  a hOSpltal Or a skilled 
nursing  home  ss  defined  in  5  2125  item  3(a)  whose  locality  (See  paragraph  E  below) 
encompasses  the  place  where  the  ambulance  transportation  Of  the  PtItlent  began  and 
which wo~d ordin~fiy  be expected  to have the appropriate  facilities  for  the  treatment  of 
the  injury  or  iiine=  invoived.  In  exceptional  situations  where  the  ambulam 
transportation  originates  beyond  the  locality  of  the  in.StitUtlOn  [0  Which  the  benefiC:
was  transported,  full  payment  may  be  made  for  such  services  ON  if  the  evidence  clearq 
establishes  that  such  lnstltu~lon  1s  the  nearest  one  With  aDWODriate  facilities  (See  F 
Mow).  I%e institution  to  which  a  patient  is  transported  need  not  be  a  oarticipati~ 
institution  but  mm  meet  at  le~t  the  retirements  of  1861(e)(l)  or  186 l(j)( 1) of  the  Act. 
(See  S 2100.3 A ~d  B for  an  explanation  of these  requirements.)  A ddm  for  ambulance 
service  to a ~ticipting  hospi~  or siciiled nursing  facility  should  not  be denied  on the 
Wo~dS  that  there  is a nearer  nonparticipating  institution  having  ap~opriate  facilities. 
(See  C below for destination  exceptions.) 
A.  institution  to  Benefickv%  Home.-Ambulance  servi- from  an institution  to the 
beneficiary% borne is covereci when  the  home  is within  the  hdity  Of SUCiliILStitUtiOnor 
where  the  bmwcisr~s  home  is  outside  of  the  iocality  of  ~~  i~itution  *  the 
k3titUtiOn9 in relation  to the home,  is the nearest  one with apprOp*te  fac~ties. 
B.  Institution  to  Institution.+ccaaionally,  the  instituthl  tO WhiCh  the  patient  is 
initially  taken  is found to have  ~ade~te  facilities  to  provide  the  required  care  and the 
@tient  k  then  transported  to  a second  institution  having  a~rkte  faCtitieS.  In such 
cases,  trwp~ation  by  amb~ce  to  ~UI  institutions  would  be  covered  provided  the  (.

institution  to WhiCII  the  ~tient  is  tM@  truferred  is determined  to  be the  nearest  one 
with appropriate  fac~ti~.  ~  these  CRSeS,tr~wrtation  from  such second  im=on  to 
the  ~tients  home  could  be  covered  if  the  home  is  within  the  10*tY  served  by that 
institution,  or by the first  ~titution  to whi&  tie  patient  was tIlken. 
r
C.  Round-Triu  for  Specialized services.-+ound-trip  ambulance  service  is  covered 
for a hos~it~  or ~rtici~ting  s~~ed  n~~  facifity  in~tient  to  the  nearest  hos~itai  or 
nonhospitai  &eatment  fac~ty,  i.e.,  a cfic,  therapy  center  of  physicians  OffiCe tO obtti 
necessary  diagnostic  ~d/or  thera~utlc  se~lceg  (~ch  ISSa  CT  scan  or  cobalt  therapy)  nOt 
available  at the instituti~  where  tie  benefici~y  is ~  inpatient.  (See 54168.) 
Rev.  !O04  2-77 
[A-41  21203 (Cont.)  COVERAC3EAND LIMITATIONS  ! O-83 
rbrri~  wiii monitor this by perfofmim3 a Priodic  pos~ym~t  review  wi~  Wpropriate 
madicai  staff  auMance  to  determine  whether the. frequen~  Of ~ch  a~-e  services 
for a ~icum  petienq  together  with  the  medical  conditio%  ind~cat~  ~ere  is  anotier 
preferred  medical  course  of  treatmenL  lhe camier  shouki  not  mqu- transfer  of 
hoqital  @Mm,s  to RIIIOthehroqitd  capable  of  providhg  tie  wWired  *rv~e  but  *CUM 
deny  mch  ambulance  service  claims  in the future.  For @tien@ in SNFS~  thOSRrdd~ 
at  home  the  attendirg  physician  *CUM  be  asked  to  furrt~  additionti  information 
supporting  the  need  for  ambulance  service  nlative  to  the  option  of  admksion  to  a 
I_treat  ment facility. 
D.  Partial  PaymenL-Where  ambukwe  service  exceeds  tie  Umits  defined  in  A,  B 
and C abov*  refer  to W12S item M  fce instructions  on partial  eaymen~ 
E.  boali~o-ltte  term  %oajity- wtth  reqwet  to ambulance  service  means  the 
senrice  area  ~  the  institution  from  which  individuals  nmmally  come  or  are 
eqted  to come  for h~ital  or 8kiUed nurS@  eaWiC-
Examohx  Mr. A ~omes  iIl at  home  amj _  ambulance  service  to  the  hqitd 
~- communily  in whioh  he  Wee  has a 35 bed hoqiti  TWOkuge  metrOPciitan 
ho@als  are  &oated  ~rne  dbtame  from  Mr. A% community  but  th8Y  regtdariy  pmn?ide 
hoqital  tied  m the 00mnunity9  residenw  me  community  fs within  the  WcaMyN of 
the  metropolitan  hO@W  and  -t  ambulance  service  to  either  of these  (ss  weil as  to 
the 1-00al.com mun.ity .ho~ita..l.). .is c avere.d    ,.* ,,,-,

r 
F.  A  te  mointies.-me  term  wqpropmte  lacmrl=*   IT=  UUSAUL-.  K  AUL- IU 
blatftutkym  ~  @quiP@ to provide UN!needed hoqital  or dcilkl  nursixq ~  for 
the  illn~  or injury  Invoked.  In the  case of R hoqi~  it deo  means that  a phgsioian  or a 
physioian  apeeiaiist  @ availabb  to  provide  the  n~  cam  required  to  treat  the 
patiant~  corditiom  However,  the  fact  that  a prthuiu  physician  does  ce does  not have 
staff  privileges  in a hoqital  is not a consideration  in determin@  whether  the hoqital  has 
approprkte  facilities.  ITIw amb~e  service to a mom distant  hoqitai  solely to tWd  a 
patient  of  the  ~rv~e  of  a  specific  physician  or physician  specialist  does  not  make  UIe 
lIo@al  in which the physich  tMR staff  priyilegeg  the  nmst  ho@al  with  Spp?OpriLM? 
L facilities. 
l%e  fact  that  a  more  dMant  institution  is  better  quipped,  either  q@~tive&  ~ 
quantitatively,  to care  fcc the ~tient  doea not ~t  a findirqg that  a ckmr  inStiMiOIi 
does  not have  ~m~~  ~~t~~  Mwayer,  a ~  impediment  barring  a  p8thlltk 
admbim  WOW permit a ~@q  ~t  tie  M-n  du  not  have  ~iate  facilitie& 
For examplq  the nearest  t@emdoeb  ho@ai  may be in another  State  and  that  State9 
law  preohdee  admission of no~iden~ 
2-78  Rev.  1004 
[A-51
 9fj-9n  COVERAGE AND LIM~ATIONS  2120.3(ConK.j 
EXMIPLE:  .Mr. A becomes  U  at  home  end  reqwes  amb~ce  servi~  m  the  hospital. 
The hospltais  servicing  the commuxutv  in  Winch  he  l.iv~  are  Capable  oi 
promding  general  hoqxtai  care.  However. .Mr.A req~es  Immediate  kidney 
dialyms  and  the  needed  equpment  K not  ava~ble,  in ~Y  of  th=e  hospmls. 
The  semnce  area  of  the  nearest  hospital  M-g  dl~~~  eq~Pment  does not 
eneompsss  the  patients  home.  Yevertheiess,  ti  this  case,  ambulance 
service  beyond  the  locality  to  the  hospiti  With  the  equipment  is  covered 
since  it is the  nearest  one with  appropriate  facilities. 
G.  Ambulance  Service  to Phvsicisns  Office. -?hese  trips  are  covered  only under  the 
following  circumstances: 
o  The  trips  meet  the criteria  of S2120.3C, or 
o  while  &ansporting  a  patient  to  a  hospiti.  the  am~~ce  St~PS  at  a 
physician%	 office  because  of  a  patients  dire  need  for  professional  attention,  and 
immediately  thereafter,  the amb~ce  continues  to the  hospital. 
H.  TYansoortation  Reouested  bv  Home  Health  Asencv.-Where  a  home  heaith 
agency finds It neeessery  to  have  a beneilcisry  transported  by ambulance  to a hospital  or 
skilled  ntmmng  facility  to  obtain  home  health  services  not  otherw~e  aveikble  to  the 
individua&  the  trip  is covered  as a Part  B service  oniy if  the  above  coverage  requirements 
are met.  Such &snsportation  is not covered es a home heaith  servtce. 
L  Covermze  of  Ambulance  Service  Furnished  Deeeased  Beneficierv.-An  individual 
iS c~d~ed  to  have .exp~ed  ss  of  the  tune  he  xs pronounced  dead  by  a  person  who  is 
legally  authorized  to m&e  such  a  pronouncement,  usually  a physician.  -Thirefore,  M the 
beneficiary  was  pronounced  dead  by a iegaily  authorized  individud  before  the  ambldance 
was tailed,  no  program  payment  is  made.  Where  the  beneficiary  was pronounced  dead 
after  the  ambulance  was  called  but  before  pickup,  the  service  to  the  point  of  pickup  is 
COVered.  If  otherwise  covered  ambulsnce  services  were  furnished  to  a beneficiary  who 
was  pronounced  dead  whfle  e~oute  to  or  upon  ~riv~  at  the  destination,  the  entire 
ambulance services  are covered. 
J.  Ambulance  Tr~oort.atjon  to  Rend  Di~~is  Facilitv  Located  on  Premtses  Of 
Hosoltal.-A  rem  ci@ysLs iac~ty  may ~  apwov~  to  participate  m  the  en~tage  renzu 
disease  rxozram  as  a oart  of  a hosmtai  or  es  a nonprovtder.  Where the  factitv  ~  been 
SPpSOV~u-a  part  of k hoqxtai,  it meets  the  desti&tion  requirements  of an kstitutlon. 
Even where  the facility  hss -n  approv~  u  a nonpro~der,  it may be determmed  to  meet 
the  destination  requirements  for  pmpoaes  of  ~buiance  service  coverage  und- the 
following circumstances: 
Rev.  1350  2-78.1 
[A-61
 2120.3  (Cont.)  COVERAGE  AND LIhlITATIONS  06-90 
o  The facility  is iocated  on or adjacent  to  the  Premis=  of a hospital; 
o  The  facility  furnishes  services  to  patients  of  the  h~iti  e.g.,  on  an 
outpauent  or emergency  basis,  even  though  the  facility  is Prim~fiY  ~  oPer&tion  to  furnish 
dialysis  services  to its  own patients;  and 
There  is an ongoing professional  relationship  between  the two facfities.  For 
example,  ~he hospital  and  the  facility  have  an agreement  that  pro~des  for  physician  staff 
of  the  factity  to abide  by the  bylaws  and regulations  of  the  hospitals  medlcd  staff. 
Do  not  reopen  or  change  a  prior  determination  that  the  facMtY  iS a  nonprovider  for 
approvsJ  purpos=,  even  though  it  is  found  to  be  sufficiently  re~ted  to  tie  hoapitaL to 
meet  the destination  requirement  for ambulance  service  cove!raget ti~  th~e  has been a 
significant  change  in  the  relationship  between  the  hospit81  ~d  the  factity  since  the 
faciiitys  certification. 
A  beneficiary  receiving  maintenance  dialysis  on  an  outpatient  b=k  & not  ordinarily  ill 
enough to requxre ambulance  transportation  for dialysis  treatment.  This is so whether  the 
facility  IS an  independent  enterpmse  or part  of a hospital  Thu% if a eiaim for ambulance 
serviees  furrushed  to  a  maintenance  dialysis  patient  does  not  show  that  the  patient% 
caxiition  requires  ambulance  services,  disallow  it.  However,  if  the  doctunentation 
submitted  with  the  claim  shows  that  ambulance  services  is  requirtd,  determine  whether 
the  facility  meets  the  destination  requirements  under  the  ambadance  serviee  benefit 
described. 
r
2120.4  Air  Ambuliince  Serviees.+edicaily  appropriate  air  ambulance  tr_t&tion  is a 
covered  servms  regarcikss  of  the  State  or  region  in  which  it  is  rendered.  However, 
approve  dims  only  if  the  beneficiary%  medicai  condition  is such  that  transportation  by 
either  basic or advanced  life  suppcrt  land ambulance  is not  app@Me. 
A.  Covemre  Requirements.-Air  ambulance  transportation  services,  either  by means 
of a helicopter  or iixed wmg ucra.ft,  may be determined  to be covered  oniy if-
0  The  vehicle  end  crew  requirements  des~~  in 52120.1  are  meu 
o The  beneficiary%  medical  condition  rec@ed  immediate  and rapid  ambulance 
transportation  that could not have -n  ~ovjded  by bd  ambulance;  and elth= 
T?Aepoint  of pi- is inaccessible  by land vehicle  (this COXIditiOconuid 
be  met  in  Hawa@  AIasjq  and  in  otha  remote  LX sparsdy  popdated  areas  Of the 
cmtinentai  United States),  or 
Gred  disma  tX other OLIUkkS  (for  example,  h-w  ~flic)  =e 
bvoived  in getting the patient to  the  nearest  hospital  with  apgO@lte  fa~~=  ~ 
-bed  in subsection  i). 
L

2-78.2  Rev.  1350  16-afl  COVERAGE  AND LIMITATIONS  2120.4 (Cont.) 
B.  hledica.i  Amrooriateness.  :Medical appropriateness  is  onlY  -tablished  when  the 
benef iciarys  conciltion  M such  that  the  time  needed  to  transport  a MneficiUY  by land,  or 
the instabilitoyf  transportation  by  land,  poses  a  threat  to  the  bene~ici~Y~  survival  or 
seriousiy  endangers  the beneficiarys  heaith.  Following  s  an  advisorY  Mt  of e=mpl- of 
cases  for which  air  ambulance  could  be justified.  The iist  is not  inci=ive  of ti  situations 
that  justify  air  transportation,  nor  is  it  intended  to  justify  air  manspormtion  in all 
locales  in the  circumstances  listed. 
o  Lnhacramd  bleeding  - recpring  neurosurglcai  intervention; 
o  Cardiogenic shock; 
o  Burns requiring  treatment  in a Burn Center; 
o  Conditions requiring  treatment  in a Hyperbaric  Oxygen  Unit; 
o  Multiple severe  injuries;  or 
o  Life-threatening  trauma. 
C.  Time  Needed  for  Land  l%nsoort..-lliffering  Statewide  Emergency  Medieai 
Services  (EMS)systems determtne  the amount and level of bamc and adv~- life  suppxt 
land  transportation  avaiiable.  However,  there  are  very  limited  emergeney  c==  where 
IaIKItransportation  is available  but  the  time  required to tr~t  the  patient  by land as 
~  to air  endangers  the  beneficiary%  life  or heaith. As a  general  guideline,  when it 
Wouidtake  a land  ambulance  30-80  minutes  or more to  transport  an  em mcv  patient* 
, -. 
cauader  air transportation  appropriate. 
(
 : 
D.  Appropriate  Facility.-It  is required  that  the  beneficiary  be  transported  to the 
nearest  hospital  with  appropriate  facilities  for  treatment.    The  term  appropriate 
facilities  refers  to  units  or  components  of  a  hospital  that  are  capable  of  providing  the 
required  leveJ  and type  of care  for the patient% flhss  and that  have  available  the  type of 
physician  or  physician  specialist  needed  to  treat  the  beneficiary%  c(XKiitiOn.  h 
determining  whether  a  particular  hospital  has  appropriate  f acfities,  take  into  account 
whether  there  are  beds  or a specialized  ceatm~t  unit immediately  available  and  whether 
the  necessary  physicians  and other  reievant  medical  personnei  are  available  in the  hospital 
at  the  time  the  patient  is  being  transported.  ~  fact  that  a  more  distfint  hospital  is 
bett~  equipped  does  not  in and  of  itself  w~r~t  a finding  that  a  ciosff  hospital  does  not 
have  appropriate  facilities.  Such  a  finding  is  warranted,  however,  if  the  beneficiary% 
*tiOn  requira  a higher levai  of trauma  -e  or OthW spaciaiized  service  available  Ody 
at the m=e  distant hospitaL  ~ 
*VO  1350  2-78.3  2120.4  (Cont.)  COVERAGE  AND  LIMITATIQNS  06-?0 
r ~ 
E.  Hosoital  to HosDitd  Transoort.-Air  ambulance  transprt  ~  covered  for  transfer 
of a patient  !rom  one nospltai  to another  if  the  medicai  appropriateness  =it=~  Me  met,
that  is,  transportation  by ground  ambuiance  wouid  ends.ng- the  beneiic~y~  heath  and 
the  transferring  hospital  does not  have  adequate  facilities  to Provide tie  m~c~  services 
needed  by the  patient.  Exampies  of  such  services  imiude  bun  uni*t  mdtic  me  units, 
and  bauma  units.  A patient  transported  from  one hospital  to ~ofi~  h~i~  is  cOVered 
ody  if  the  hospital  to which  the  patient  is @ansferred  is the neuest  one with appropriate 
facilities.  Coverage  is not  avaiiable  for  transport  from  a hOSplti  ~able  of  trut@  the 
patient  beeause  the  patient  and/or  his  or  her  family  prefers  a  specific  hospital  or 
physician. 
F.  Special  Coverage  Rule.-Air  ambulance  services  are  not  COVUed  fOr transport  to 
a facility  that  is not an acute  care  hospit&  such  as a nursing  fttctity,  physicians office  or 
a beneficiary% home. 
G.  SPecial  Payment  Limitations.-If  a  determination  is  made  t~t  transport  by 
ambtxlance  was ne~y,  but  w  amo~~  service  wouid  have  sufficed,  payment  for 
the air ambulance  service  k baaed on the amount  payable  for land trlLnspcWt,if ks  COStiy. 
If the  air  transport  was xnedidly  appropriate  (that  is, land  tr~*tion  was 
contraindicated  and  the beneficiary  required  air  transport  to  a  h06Pi@?  but  tie 
beneficiary  could  have  been  treated  at  a nearer  hospital  then  the  one  to  v/hich  he or she 
was transported,  the air tr~~rt  payment  K Mited  to the rate  for the distance  from the 
point of pickup to that nearer  hospital. 
IL  Documentation.+btain  adequate  documentation  of  the  determtiti~  of 
LmC!diC8iappropmateness  for  the  air  embulsnce  service.  All  claims  for  air  afnbuiance  c 
~ces  are  to be reviewed by your medical  staff. 
2-78.4  Rev.  1350 
[A-9}
 7-78 
COVERAGE AND L,IlfITATIONS 
2125 
2125.  ~VEU  GUIDELINESFOR AM8ULJUUZSERVICE ~ 
Relmburmmenc  may  be  made  for  expenees  incurred  by    patient  for 
abuiance  aemrlce  provided  condicione  1,  2,  and  3  in  the  left-hand 
coiwn  have  been  met.  The right-hand  column  indicstee  the  documen
tation  needed  co  tstablish  that  the  condition  &aa  been  met. 
Condittoris  Reviev  Action 
1.	 Patient  wee  transported  by  1.  Ambulance  supplier  la  listed  in 
ea   pproved  supplier  of  the  carriers  table  of   pproved 
tiamca  service.  ambulance  compeniee.  (5  2120.lC) 

2.	 The  patient  vaa  uffering  2.  (a)  Presw  the  requirement 
frmms  iUnaes  or  inju~  vas  mec  if  file   hovs  the 
vhich  contraindicated  patient: 
traneportatioa  by  other 
~.  (s  212a*zN  (i)  Wee craneported  la  an 
emergency situatioac 
e.g.,  aa   remit  of 
an accident,  injury, 
or  acute  U2nem.  or 
(ii)	 Needed  to  be  restrained. 
or 
(Iii)  Wae unconscious  or  in  ( 
shock,  or 
(lV)  Required  oxygeu  or 
other  emergency  trut-
aent  On thd  W- tO  hi.e 
destination,  or 
(v)  Had  to  remain  immobile 
becauee  of  a  fracture 
that  had  not  been   et 
or  the  pomsib~llty  of 
  fracture,  or 
(vi)  Sustained  an  acute 
 troke  or  myocardial 
infarction,  or 
(vii)  Wee ~eriencing 
severe  hemorrhage,  or 
(viii)  Waa bed confined  be-
fore  ad  after  the 
eabulance  trip,  or 
(ix)  Cauld  be moved  oniy 
by   trencher. 
Rev.  3-672 
2-79  5 (Cent.  )  COVERAGEANDLIMITATIONS  7-78 
(b)	 In  ths   bsence  of  any  of 
the  conditlonm  liaced  La 
(s)  shove  additional 
dOCU=@-tioU  shouid  be 
obtained  to establish 
medical  need  where  the 
evidence  indicates  the 
the  circw
exietencc  of 
stexsceo  listed  beiowx 
(i)  P8tleat8  Condttion 
wasid  not  ordimrily 
require  movemmt  by 
stretcher  or 
(M  Tho  Individual  WCS 
riot   dmitted   s   
hoepital  inpatient 
(e%cepc in  accident 
cee8e)o  or 
(iiA)  The  aabulance  wee 
used  solely  becmuo 
other uuae  of  trens
portacion  were 
uaevailable,  or 
( iv)  The indivdud  mereiy 
needed asaistsuce  in 
getting  from  hia  roa 
or  home  co  a  vehicle. 
2-80  ~ev.  3-672 
[A-II]
 10-83  COVZR.4GE  AND  LIMITATIONS  2125( tinL) 
(c)  Where  the  information 
indicates  a situation  not 
Listed in Z(a) or 2(b) 
above!  refer  the  case  to 
your  supervisor. 
3.  The  patient  was  transported  3.  Claims  should  show points  of 
from  and  to  points  listed  pickup  and detktion. 
below.  (S 2120.3) 
(a)  From  patient%  residence  (a)  (i)  Condition  met if 
(or other place where  trip  began  within the 
need  arose)  to hospital  institution  service 
or  skilled  nursing home.  area  as shown in the. 
carrier%  locality  guida 
(ii)  Condition  met where 
the  trip  began outside the 
institution%  service  area 
if the  institution  wee the 
nearest  one with 
q~mkte  facilitiw 
Refer  to supewisor 
for determination. 
NOTE:	 A  patient%  residence  is  the  p~e  whe~  he  makes  h~  hOme  d  dw@lk 
Permmently,  or  for  an extended  period  of  tinm  A Stilled  numifx home  is one 
which is listed  in the  Directory  of M~icai  Facilities  as a participating  SlfForas 
an institution  which meets  section  1861(j)(l)  of  the  law. 
Nom:	 A  claim  for  ambulance  service  to  a  participating  hospital  or  *illed  nurs~ 
facility  should  not  be  denied  on  the  grcx!nds  that  there  ~  a  n-r 
nonparticipating  institution  having appropria~  facilities. 
(b)  Skilled nursing home  to a  (b)  (i)  Condition  met if pickup 
hospital  or hoqital  to a  point  is within the 
skilled  nursing hom~  semrice area  of the 
destination  as shown in the 
camier~  locaiitY @d* 
(ii)  Condition met wham the 
Ptiw  point  is outside 
the  service  area of the 
destination  if the 
destination  instituti~  was 
the  nearest  one with 
appropriate  faciliti-
Refer  to supervisor 
for determtition. 
Rev.  1004  2-81 
[A-121
 2125( ~nt.)  COVERAGE AND LIMITATIONS  10-83 
(c)	 Hospital  to hospital  (c)  Condition  met  if the  dis
or skilled  nursing  home  charging  institution  was 
toskilled nursing  home.  not an appropriate  faciiity 
and the admitting  institution 
was the  nearest  one  with 
appropriate  facilities. 
(d)	 From a hospital or skilled  (d)  (i)  Condition  met if patient% 
nursing home to patients  residence  is within the 
residence.  institution% service  area es 
tiown  in the carrier% 
locality  guide. 
(ii)  Condition  met where the 
patients  residence  is 
outside the  institution% 
samice  area  if the 
institution  was the neamW 
one with appropriate 
facilities.  Refer  to 
supervisor  for  determination 
I 
(e)	 Round trip  for ho~ital  (e)	 ~ndition  met  if the medically 
or participating  skilled  nece=xy  diagnostic  or 
nursing facility  thenqxmtic  service  required by 
inpatients  to the nearest  the patient% condition  is not 
ho@ital  or nonhospital  available  at the institution 
treatment  facility  where the benefickry  is an 
inpatient. 
NOTE:  Ambulance service  to a @ysicians office or a @ysician+ticted  clinic  is 
L  @  covered  (See 5 2120.3G  where  a stop  is made  at  a phwicimk  of fke 
enroute  to a hospital  and  2120.3  C for addt  ionai  exceptions.) 
4.	 Ambulance  sewices  involving  ho~ital  admissions  in  Canada  or  Metico  ~  ~e~ 
(SS 2312 ff.) if the following conditions are  met: 
(s)  The foreign  hc@italization  has been determined  to be cove~;  ati 
(b)	 The ambulance service  meets  the  coverage  requtiments  sat  forth  in  S5  2120-
2120.3.  U the foreign hospitalization  has been determined  to *  c~~  on we 
~k  Of  emergency  services  (S  2312.2A) the  necessity  requirement  (~ 2120.2)
ati  the destination  reqdrernent  (s  2120.3) are considered  met. 
2-82  Rev. 1004 
[A-13]
 )5-9!  cOVE=GE  hill LIFfITATICXS  2130 
5.  Hake  Dartial navment  f== othewLae  covered  *ulance  se=lce  which 
exceeded  limits  defines  Ln ~tem ~.  ~clatis supervisors  are to m-e  ail  par~lal 
uavmenr  cietermlnat~ons. }  3ase  c.ie payment  on  c?.e amount  payable  had  the 
~a;ienc  been transported:  (1)  from the pickup  point  tO the  nearest  appropriate 
facility,  or  (2) from the  nearest  appropriate  facility  to  hLs/her  residence 
where  he/she  is being  returned  home from a di~tant  institution.  (See S5215.2.)

2130. 
2-83 
-.  1391 
[A-14]

..,..,:.  APPENDIX  B

METHODOMIGY 
SAMPLING 
We selected  a sample  of  ambulance  claims  for  ESRD  beneficiaries  as follows: 
	 Using  the  Medicare  Status  Code,  we identified  all ESRD  beneficiaries  with 
1991 Part  B claims  in HCFAS Common  Working  File  (CWF). 
o	 Then  all 1991 CWF  ambulance  claims were  selected  for these  beneficiaries 
based  on eight  national  ambulance  codes  (base  rate  codes  AOO1O,A0220, 
A0223, A0150,  and  A0222;  mileage  codes  AO020 and  A0221,  and  a 
miscellaneous  code  A0999). 
	 The  ambulance  claims  were  then  summarized  by Part  B carrier,  and we arrayed 
the  56 jurisdictions  of all 36 earners  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).  The  total  allowed  amounts  for all earners 
was $101,175,828.  Without  Maryland  and  Railroad  the  total  was $97,383,189. 
From  the  remaining  54 carrier  jurisdictions,  we identified  the  top  16, 
representing  87 percent  of the  total  ESRD  ambulance  allowances  for  1991 or 
$85.3 of $97.3 million. 
	 We employed  a two-stage  Rao-Hartly-Cochran  sampling  technique  to randomly 
select  eight  carriers  from  the  top  16 and  35 ESRD  ambulance  claims within 
each  carrier  for  a total  of 280 claims.  At the  first  stage,  we used  random 
numbers  to group  the  top  16 carriers  into  eight  groups.  This  produced  eight 
groups  of two carriers  from  which we selected  a carrier  with  probability 
proportional  to  size.  Size was measured  by the  number  of claims  corresponding 
to the  eight  ambuiance  codes  given above.  The  eight  carriers  selected  for the 
sample  were  California  Blue  Shield,  Florida  Blue  Shield,  Kentucky  Blue  Shield, 
Massachusetts  B1ue Shield,  Michigan  B1ue Shieid,  New  York  [Empire]  Blue 
Shield,  Pennsylvania  Blue  Shield,  and  Texas  Blue  Shield. 
	 We selected  a simple  random  sample  of 35 ESRD  ambulance  claims for each 
of 8 sample  carriers  for a total  of 280 claims  representing  277 beneficiaries. 
Of the  280 sampled  claims,  180 transports  were  dialysis-related,  62 were  non-dialysis 
(e.g., hospital  emergency  room),  and  38 were  unknown  (the  ambulance  providers 
associated  with these  38 claims  were  either  out  of business  or under  review  by the 
OIGS Office  of Investigations). 
B-1
 DATA  COLLECllION 
We  collected  information  about  claims  in our  sample  from  a number  of sources. 
These  included  Medicare  carriers,  ambulance  providers,  dialysis facilities  and 
physicians. 
We  conducted  structured  interviews  with  each  of the  sample  carriers  regarding

coverage  policy,  claims  processing,  identification  of non-covered  transports,  detection

of  overpayments,  and  provider  education.  We  provided  carriers  with  the  interview

questions  in  advance.  The  carriers  sent  us  documents  to  support  their  interview

responses  and  copies  of the  sample  claims  with  any  supplementary  documentation.

An  example  of supplementary  documentation  is a physicians  statement  that  the

ambulance  trip  was  medically  necessary.  In the  carrier  and  ambulance  industries  these

statements  are  called  certifications  of medical  necessity.

The  certifications  of medical  necessity  were  either  ambulance  company  forms  that 
were  completed  and  signed  by a physician  or they were  letters  written  by dialysis 
facility  physicians  on the  facilitys letterhead.  Most  of the  certifications  in our  sample 
were  signed  by physicians.  A few were  signed  by nurses,  and  one  was  signed  by a 
social  worker. 
We  collected  data  from  the  ambulance  uroviders  associated  with  our  sample  claims. 
These  respondents  answered  a questionnaire  about  the  claim  and  provided  us with 
documentation  of the  transport,  including,  but  not  limited  to, its origin  and  destination, 
whether  it was scheduled  in advance,  and whether  it was round  trip  or one-way. 
Ambulance  company  respondents  also sent  us certifications  of medical  necessity  if they 
had  them.  We  did on-site  interviews  with  16 companies  in 3 States.  We  received  a 
questiomaire  for each  of the  180 dialysis-related  claims.  A total  of 242 questiomaires 
were  returned  out  of 280 mailed. 
For  transports  that  involved  dialysis (180), we sent  almost  identical  questionnaires  to 
the  dialvsis facilitvs head  nurse  and  the  beneficiarys  treatirw  u hvsician.  These 
respondents  used  written  medical  records  and  memory  to answer  questions  about  the 
beneficiarys  medical  condition  and  ambulatory  status  on the  date  of ambulance 
semice.  While  the  response rate  for  dialysis facilities  was  100 percen~  it was  only 55 
percent  for physicians.  However,  in most  cases,  the  physicians  we wrote  to were 
associated  with  the  dialysis facility.  Even  when  physicians  did not  return  a 
questiomaire  their  progress  notes  or discharge  summaries  were  sent  to  us by the 
dialysis facility  nurses  as supporting  documents  for the  dialysis facility  questionnaire. 
MEDICAL  REVIEW 
We  contracted  with Federal  Occupational  Health  (FOH),  a division  of the  Public 
Health  Semite  for a medical  team  to review  the  dialysis-related  claims  in our  sample. 
The  FOH  has  conducted  other  medical  reviews  for various  Federal  agencies  including 
HCFA.  A physician,  board  certified  in Family  Medicine,  served  as team  leader, 
B-2  reviewer,  and  liaison  with the  OIG.  The  three  other  reviewers  were  registered  nurses 
with  over  22 years  combined  experience  in critical  care. 
We  focused  the  medical  review  on  dialysis-related  claims  since  these  transports 
account  for  very  high  annual  ambulance  bills  and  since  they  represented  almost  two-
thirds  (180  out  of 280)  of our  sample.  If a transport  was  round  trip,  only one  leg of 
the  trip  was reviewed  by the  contractor.  The  leg was chosen  according  to the 
assignment  of random  numbers  (1 or 2) to each  round  trip.  Claims  involving  a 
medical  service  other  than  dialysis, e.g., hospital  emergency  room,  were  not  part  of the 
medical  review. 
The  medical  team  used  the  documents  we collected  from  various  respondents  to 
determine  whether  the  claims met  Medicare  coverage  guidelines.  Prior  to mailing  the 
dialysis facility  and  physician  questionnaires,  the  medical  teams  leader  helped  the  OIG 
design  the  instruments  so that  sufficient  data  would  be  collected  for determining 
medical  necessity.  If claims met  the  Medicare  guidelines  they were  determined 
medically  necessaqq  if they did not,  they were  determined  medically  unnecessary.  In 
cases  where  claims  had  conflicting  data,  no  determination  was made. 
Docummts  for M&al  Review 
We  sent  the  medical  team  a folder  of documents  for  each  of the  180 dialysis-related 
claims.  The  folders  contained:  claim  forms,  ambulance  providers  trip  reports, 
dialysis facility  questionnaires  and,  when  available,  certifications  of medical  necessity 
and  physician  questionnaires.  The  documents  in the  claim  folders  that  made  a 
determination  possible  most  frequently  were  those  provided  by dialysis facilities. 
A majority  of the  dialysis facility questionnaires  had  supporting  documents  such  as 
progress  notes,  flow sheets,  and  discharge  summaries.  The  physicians  sent  fewer 
supporting  documents  with their  questionnaires,  and  usually  they were  identical  to the 
ones  attached  to the  facility questionnaire. 
Detemindom  of iUedica/Reviewer 
Our  medical  reviewers  sought  evidence  that  a patient  had  a medical  condition  on the 
date  of ambulance  service  that  made  travel  by other  than  an  ambulance  unsafe. 
According  to Medicare  guidelines,  a diagnosis  of ESRD  is not  sufficient  explanation  to 
warrant  an  ambulance.  Documents  reviewed  by the  medical  team  contained  data 
about  the  patients  medical  history,  diagnoses,  and  ambulatory  status.  The  reviewers 
evaluated  the  accumulated  data  and  determined  that  claims  did not  meet  Medicare 
guidelines  if there  was no medical  condition  that  confined  the  patient  to bed  and/or 
made  travel  by any means  other  than  ambulance  unsafe.  They  also used  evidence  that 
the  patient  could  walk or use a wheelchair  to  determine  the  patient  was not  bed-
confined. 
B-3
 ANALYSIS OF  NON-MEDICAL  DATA 
Information  not  of a medical  nature  was analyzed  by OIG  program  analysts.  This 
included  responses  from  the  ambulance  providers  and  carriers  in our  sample. 
Based  on responses  from  ambulance  providers,  we determined  three  things:  1) 
whether  each  transport  was  dialysis-related  or involved  an  origin  and  destination  other 
than  dialysis;  2) whether  dialysis-related  transports  were  scheduled  or not;  and 
3) whether  beneficiaries  who  had  scheduled  transports  were  also transported  by the 
ambulance  provider  on a regular  basis.  We received  173 responses  to our  question 
concerning  scheduled  transports  and  173 responses  to  our  question  about  beneficiaries 
who were  transported  regularly.  Percentages  of scheduled  and  regular  transports  were 
calculated  based  on the  number  of responses  only. 
Based  on the  carrier  interviews  and  their  supporting  documents  we determined  their 
pre-payment  and  post-payment  systems  for identifying  inappropriate  claims.  We 
determined  what  systems  were  used  in 1991 and  whether  new  systems had  been 
established  since  then.  We  attempted  to ascertain  the  effect  of these  systems  on the 
number  of inappropriate  claims  identified  and  the  dollar  amounts  they  represented. 
However,  because  most  of the  carriers  did not  have  this information  we could  not 
assess which  systems  were  the  most  effective.  Carrier respondents  did tell us what 
methods  they  thought would  be  effective  in preventing  inappropriate  payments  of 
ambulance  transports  for ESRD  beneficiaries. 
We used  carrier  responses  in two other  ways.  First  we were  able  to determine  how 
claims processors  decided  a claim was medically  necessary  and  whether  information  on 
the  claim  form  is verified.  Second,  we determined  how carriers  educate  ambulance 
providers  about  coverage  and  filling out  claim  forms. 
ESTIMATES  AND  CONFIDENCE  INTERVAIS 
The  statistics  presented  in the  report  represent  our  best  estimates  and  were  weighted 
based  on the  Rao-Hartly-Cochran  method.  We  also  computed  95 percent  confidence 
intervals  for  each  of the  estimates. 
Table 1. 
PERCENTAGE OF DIALYSIS-RELATEDCLAIMS 
THAT WERE SCHEDULED 
I
Percentage  95%  Confidence  Interval 
I 
II98.6  I 96.5-99.9  II 
B-4
 Table 2 
PERCENTAGEOF DIALYSIS-RELATEDTRANSPORIXi 
THAT WERE REGULAR (3 XPERWEEK) 
a 
Percentage  95%  Confidence  Intemai 
96.8  94.4-99.1 
Table 3. 
DISTRIBUTION  AND ALLOWED AMOUNTS  OF CLATMS 
BY TYPE OF TR4NSPORT 
FOR ALL 2S0 SAMPLED CIAIhfS 
Estimated  95% Conf  Estimated  95% CQnf. 
Pereent  Interval for  Allowed  Interval for 
percents  Amount *  amounts 
Ilia@ia TIanaports  67.1  61.5 
Met Guidelines  19.3  10.8-27.8  16.2  6.2-26.2 
Did not meet  46.9  33.6-60.1  44.4  32.6-56.1 
guidelines 
Could not determine  .9  0-22  .9  0-2.5 
(conflicting  data) 
Non-LXa@ia  18.0  10.8-25.2  13.6  5.3-22.0 
Tranaporta 
unknown  14.9  6.7-23.1  10.2  3.5-16.9 
Totats  100.0  85.3 
*  Dollar amounts in millions 
** Data inaccessible for these claims 
Table 4. 
DISTRIBUTIONOF CLAIMS 
BY DETERMINATIONOF MEDICAL NECESXW 
FOR DL4LYSIS-RELATEDTRANSPORTS 
Sample  Estimated  95% Confidence 
size  Dereent  Intetval for Percent 
DialysisTramqmrta
 180 
Met guidelines
 56  28.8  16.0-41.6 
Did not meet guidelines
 122  69.9  56.0-83.8 
CouId not determine  2  1.3  0-3.2 
B-5
 Table5. 
DISTRIBUTION  OF DIALYSIS-RELATED  CLAIMS 
THAT DID NOT MEEI MEDICARE  GUIDEIJNES 
BY CARRIER 
Carner  Sample  Sample  C1airns  Percent  of  9570 Conildence 
Dialysis- Not  Meeting  Claims  Not  Internal  for percent 
Related  Guidelines  Meeting 
Claims  Guidelines 
A  26  6  23.1  11.5-34.7 
B  25  12  48.0  33.9-62.1 
c  8  4  50.0  25.2-74.8 
D  20  14  70.0  55.6-84.4 
E  16  13  81.3  67.6-94.0 
F  32  26  81.3  71.6-91.0 
G  20  17  85.0  73.8-96.2 
H  33  30  90.9  83.9-97.9 
Table 6. 
PERCENTAGE  OF BENEFICIARIES 
THAT WERE  NOT BEDCONFINED 
[OUT OF CLAIMS THAT WERE  NOT IvlEDICAUY  NECESSARY) 
Percentage  95%  Confidence  Interval 
Ambulatory  .28.23  16.23-40.23 
In wheelchairs  35.31  27.55-43.07 
Total  I 6354  ] 52-92-74.16  II 
B-6
 APPENDIX  C 
COMMENTS  FROM  THE  HEALTH  CARE  FINANCING  ADMINISTRATION 
c-1  .. 
,,,!,,,  Health  care 
. 
..  /  DEPART.%IENTOF HEALTH & HUMAN SERVICES  F,nancmg  Admmlstratton 
: 
---
->  J$c 
,*, Memorandum 
+,
>.,,~  ,, 
j~  28 ~ 
Date 
@

Bruce  C. Vlad 
W@
From 
Administrator 
%

Sublect Office  of Inspector  General  (OIG)  Draft  Report:  Ambulance  Semites  tor 
Medicare  Erid-Stage  Renal  Disease  Beneficiaries:  Medical  Necessity, 
(OEI-03-90-02130) 
To 
June  Gibbs  Brown 
Inspector  General 
We  reviewed  the  subject  draft  report  which  looked  at  1991 dialysis-related 
ambulance  claims  to determine  if Medicares  Part  B coverage  criteria  for medical 
necessity  were  met. 
The  Health  Care  Financing  Administration  (HCFA)  concurs  with  the  OIG 
recommendation  to ensure  that  claims  meet  Medicare  coverage  guidelines. 
Attached  are  the  actions  HCFA  has taken  in this  regard. 
Thank  you for  the  opportunity  to review  and  comment  on  this  report.  Please 
advise  us if you would  like to discuss our  position  on  the  reports  recommendation 
at your  earliest  convenience. 
Attachment 
[C-2]
 Comments  of  the  Health  Care  Financinp  Administition  (HCFA) 
on Office  of Inswctor  General  (OIG)  Draft  Renor& 
Amimiance Services  for Medicare  End-Stage  Rena] Disease  Beneficiaries: 
Medical  Necessitv. [OEI-03-90-02130~ 
OIG Recommendation 
OIG  recommends  that  HCFA  ensure  that claims meet  Medi=re  c~erage  guidelines. 
HCFA Resuonse 
HCFA  concurs  and  has  taken  the  following  actions 
o	 Carrier  Medical  Directors  attend  and participate  in regional  and national 
conferences  where  they have the opportunity  to solicit  input  fkom their 
colleagues  on  policies  such as dialysis-related  ambulance  transpor@  as weil 
as systems techniques  for identi~ng  and reviewing those claims. 
HCFA is developing  a locai medical review policy retrieval  system which 
will provide  carriers  with access to each others policies.  They can use this 
system to gather  information  to change or improve  their  own poiicies. 
o	 Currently,  there  are a number  of ambulance  messages placed  on the 
Explanation  of Medicare  13enefits form when  a beneficiary  receives 
ambulance  services.  These  messages are used  to communicate  ambulance 
coverage to beneficiaries.  One such message reati.  Medicare does not 
pay for this (seMce)  because you couid have traveled  another  way. 
Additional  steps  however, may be needed  to communicate  the coverage 
limitations  for ambuknce  semices to beneficiaries  HCFA will suggest that 
carriers  add coverage  limitations  for ambulance  services to beneficiaries  as 
part of an outreach  topic for the customer  service plans they are 
developing for Fiscal Year  1995. 
0	 HCFA will request  that  the carriers  include in an upcoming  newsletter  a 
reminder  to ambulance  companies of Medicares  limited  coverage of 
ambulance  semice  and the consequences  of submitting  bills for transports 
that are  not medically  necessary. 
o	 Many freestanding  facilities have some type of direct  relationship  to a 
hospital;  and those  physicians may aiready be aware of the Medicare 
[C-3 ]
 Page  2 
regulations  because  of that relationship.  However, in some cases such a 
relationship  does not exist and we will request  that  the carriers  include the 
information  on limits of Medicare  coverage  for end-stage  renal  disease 
(ESRD)  in an upcoming newsletter. 
o HCFA carries out periodic medical  necessity reviews of ESRD-related 
ambulance  claims.  Using available  funding, carriers  review claims data and 
determine  ~  and when, it may be necessary to conduct  intensified medical 
necessity reviews for ESRD  ambulance  claims. 
Since 1991, many of the carriers  have put screens in place or more  claely 
reviewed ESRD ambulance  claims to eliminate  wrongful Medicare 
payments.  The medical  reviews performed  by carriers  focus on provider-
specific problems.  If carrier  data  indicate  a given provider  submits a 
significant  percentage  of incorrect  ESRD  ambulance  claimq  the carrier 
may addre=  the problem  through what is called  comprehensive  medi@ 
in which 100 percent  of the providers ESRD  ambulance  claims are 
reviewed for a certain  period  of time.  In addition,  if carrier  data indicate 
an unusually high dollar volume  of ESRD  ambulance  claims  are being 
submitted  in its service  ar~  it may develop  a screen  to conduct  a 
100 percent  review of all ESRD  ambulance  claims  for as long as is 
necessary to identify and recti@ any aberranck 
o	 HCFA  will add an explanation  of the limited  ambulance  transportation 
benefit  in The Guide  to Health  Insurance  for Peou le With Medicar~. 
o	 HCFAS Office of Research  and Demonstrations  is undertaking  a study 
that will (a) identify the detailed  characteristics  of ESRD  ambulance  use= 
and (b) assess the reasons for, and alternatives  @  ambulance  transport  to 
dialysk 
In addition,  we are  in the  process  of developing  regulations  to  address  several  issues 
raised  by OIG  concerning  coverage  of ambulance  setices. 
[C-4]