II 

109TH CONGRESS 

1ST SESSION S. 1109 

To amend title XVIII of the Social Security Act to provide payments to 

Medicare ambulance suppliers of the full cost of furnishing such services, 

to provide payments to rural ambulance providers and suppliers to account for the cost of serving areas with low population density, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 24, 2005 

Mr. LOTT (for himself, Mr. DAYTON, Mr. SESSIONS, Mr. SCHUMER, Mr. JEFFORDS, Mr. HARKIN, and Mr. LEAHY) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to provide 

payments to Medicare ambulance suppliers of the full 

cost of furnishing such services, to provide payments 

to rural ambulance providers and suppliers to account 

for the cost of serving areas with low population density, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare Ambulance 

5 Payment Reform and Rural Equity Act of 2005’’. 
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1 SEC. 2. AMBULANCE PAYMENT RATES. 

2 (a) PAYMENT RATES.—Section 1834(l)(3) of the So3 cial Security Act (42 U.S.C. 1395m(l)(3)) is amended to 

4 read as follows: 

5 ‘‘(3) PAYMENT RATES.—Subject to any adjust6 ment under subparagraph (B) and paragraph (13) 

7 and the full payment of a national mileage rate pur8 suant to paragraph (2)(E), the Secretary shall mod9 ify the fee schedule established under paragraph (1) 

10 as follows: 

11 ‘‘(A) PAYMENT RATES IN 2006.— 

12 ‘‘(i) GROUND AMBULANCE SERV13 ICES.—In the case of ground ambulance 

14 services furnished under this part in 2006, 

15 the Secretary shall set the payment rates 

16 under the fee schedule for such services at 

17 a rate based on the average costs (as de18 termined by the Secretary on the basis of 

19 the most recent and reliable information 

20 available) incurred by full cost ambulance 

21 suppliers in providing nonemergency basic 

22 life support ambulance services covered 

23 under this title, with adjustments to the 

24 rates for other ground ambulance service 

25 levels to be determined based on the rule 

26 established under paragraph (1). For the 
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1 purposes of the preceding sentence, the 

2 term ‘full cost ambulance supplier’ means 

3 a supplier for which volunteers or other 

4 unpaid staff comprise less than 20 percent 

5 of the supplier’s total staff and which re6 ceives less than 20 percent of space and 

7 other capital assets free of charge. 

8 ‘‘(ii) OTHER AMBULANCE SERVICES.— 

9 In the case of ambulance services not de10 scribed in subclause (i) that are furnished 

11 under this part in 2006, the Secretary 

12 shall set the payment rates under the fee 

13 schedule for such services based on the 

14 rule established under paragraph (1). 

15 ‘‘(B) PAYMENT RATES IN SUBSEQUENT

16 YEARS FOR ALL AMBULANCE SERVICES.—In the 

17 case of any ambulance service furnished under 

18 this part in 2007 or any subsequent year, the 

19 Secretary shall set the payment rates under the 

20 fee schedule for such service at amounts equal 

21 to the payment rate under the fee schedule for 

22 that service furnished during the previous year, 

23 increased by the percentage increase in the 

24 Consumer Price Index for all urban consumers 
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1 (United States city average) for the 12-month 

2 period ending with June of the previous year.’’. 

3 (b) CONFORMING AMENDMENT.—(1) Section 221(c) 

4 of the Medicare, Medicaid, and SCHIP Benefits Improve5 ment and Protection Act of 2000 (114 Stat. 2763A–487), 

6 as enacted into law by section 1(a)(6) of Public Law 106– 

7 554, is repealed. 

8 (2) The amendment made by paragraph (1) shall 

9 take effect on January 1, 2006, and shall apply to pay10 ments for ambulance services furnished on or after such 

11 date. 

12 SEC. 3. IMPROVEMENT IN PAYMENTS TO RETAIN EMER13 GENCY AND OTHER CAPACITY FOR AMBU14 LANCES IN RURAL AREAS. 

15 (a) IN GENERAL.—Section 1834(l) of the Social Se16 curity Act (42 U.S.C. 1395m(l)) is amended by adding 

17 at the end the following new paragraph: 

18 ‘‘(15) ADDITIONAL PAYMENTS FOR PROVIDERS

19 FURNISHING AMBULANCE SERVICES IN RURAL

20 AREAS.— 

21 ‘‘(A) IN GENERAL.—In the case of ground 

22 ambulance services furnished on or after Janu23 ary 1, 2006, for which the transportation origi24 nates in a rural area (as determined under sub25 paragraph (B)), the Secretary shall provide for 
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1 a percent increase in the base rate of the fee 

2 schedule for a trip identified under this sub3 section. 

4 ‘‘(B) IDENTIFICATION OF RURAL AREAS.— 

5 The Secretary, in consultation with the Office 

6 of Rural Health Policy, shall use the Rural7 Urban Commuting Areas (RUCA) coding sys8 tem, adopted by that Office, to designate rural 

9 areas for the purposes of this paragraph. A 

10 rural area is any area in RUCA level 2 through 

11 10 and any unclassified area. 

12 ‘‘(C) TIERING OF RURAL AREAS.—The 

13 Secretary shall designate 4 tiers of rural areas, 

14 using a zip code population-based methodology 

15 generated by the RUCA coding system, as fol16 lows: 

17 ‘‘(i) TIER 1.—A rural area that is a 

18 high metropolitan commuting area, in 

19 which 30 percent or more of the com20 muting flow is to an urban area, as des21 ignated by the Bureau of the Census 

22 (RUCA level 2). 

23 ‘‘(ii) TIER 2.—A rural area that is a 

24 low metropolitan commuting area, in which 

25 less than 30 percent of the commuting flow 
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1 is to an urban area or to a large town, as 

2 designated by the Bureau of the Census 

3 (RUCA levels 3–6). 

4 ‘‘(iii) TIER 3.—A rural area that is a 

5 small town core, as designated by the Bu6 reau of the Census, in which no significant 

7 portion of the commuting flow is to an 

8 area of population greater than 10,000 

9 people (RUCA levels 7–9). 

10 ‘‘(iv) TIER 4.—A rural area in which 

11 there is no dominant commuting flow 

12 (RUCA level 10) and any unclassified area. 

13 The Secretary shall consult with the Office of 

14 Rural Health Policy not less often than every 2 

15 years to update the designation of rural areas 

16 in accordance with any changes that are made 

17 to the RUCA system. 

18 ‘‘(D) PAYMENT ADJUSTMENTS FOR TRIPS

19 IN RURAL AREAS.—The Secretary shall adjust 

20 the payment rate under this section for ambu21 lance trips that originate in each of the tiers es22 tablished in subparagraph (C). The adjustment 

23 shall be a percentage increase in the base pay24 ment rate as follows: 

25 ‘‘(i) TIER 1.—5.5 percent. 
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1 ‘‘(ii) TIER 2.—11 percent. 

2 ‘‘(iii) TIER 3.—16.5 percent. 

3 ‘‘(iv) TIER 4.—22 percent.’’. 

4 (b) REVIEW OF PAYMENTS FOR RURAL AMBULANCE

5 SERVICES AND REPORT TO CONGRESS.— 

6 (1) REVIEW.—Not later than July 1, 2008, the 

7 Secretary of Health and Human Services shall re8 view the system for adjusting payments for rural 

9 ambulance services under section 1834(l)(15) of the 

10 Social Security Act (42 U.S.C. 1395m(l)(15)), as 

11 added by subsection (a), to determine the adequacy 

12 and appropriateness of such adjustments. In con13 ducting such review the Secretary shall consult with 

14 providers and suppliers affected by such adjustments 

15 and with representatives of the ambulance industry 

16 generally to determine— 

17 (A) whether such adjustments adequately 

18 cover the additional costs incurred in serving 

19 areas of low population density; and 

20 (B) whether the tiered structure for mak21 ing such adjustments appropriately reflects the 

22 difference in costs of providing services in dif23 ferent types of rural areas. 

24 (2) REPORT.—Not later than January 1, 2009, 

25 the Secretary shall submit to Congress a report set-
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1 ting forth the results of such review and any rec2 ommendations for revision to the systems for adjust3 ing payments for ambulance services in rural areas. 

4 (c) CONFORMING AMENDMENTS.—(1) Section 

5 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)), 

6 as amended by subsection (a), is further amended by add7 ing at the end the following new paragraph: 

8 ‘‘(16) DESIGNATION OF RURAL AREAS FOR

9 MILEAGE PAYMENT PURPOSES.—In establishing any 

10 differential in the amount of payment for mileage 

11 between rural and urban areas in the fee schedule 

12 established under paragraph (1), the Secretary shall 

13 identify rural areas in the same manner as provided 

14 in paragraph (15)(B).’’. 

15 (2) Section 1834(l)(12)(A) of the Social Security Act 

16 (42 U.S.C. 1395m(l)(12)(A)) is amended by striking 

17 ‘‘January 1, 2010’’ and inserting ‘‘January 1, 2006’’. 

18 (3) Section 1834(l)(13)(A)(i) of the Social Security 

19 Act (42 U.S.C. 1395m(l)(13)(A)(i)) is amended by insert20 ing ‘‘(or in the case of such services furnished in 2006, 

21 in a rural area identified by the Secretary under para22 graph (15)(B))’’ after ‘‘such paragraph’’. 
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1 SEC. 4. USE OF MEDICAL CONDITIONS FOR CODING AMBU2 LANCE SERVICES. 

3 Section 1834(l)(7) of the Social Security Act (42 

4 U.S.C. 1395m(l)(7)) is amended to read as follows: 

5 ‘‘(7) CODING SYSTEM.— 

6 ‘‘(A) IN GENERAL.—The Secretary shall, 

7 in accordance with section 1173(c)(1)(B) and 

8 not later than January 1, 2006, establish a 

9 mandatory system or systems for the coding of 

10 claims for ambulance services for which pay11 ment is made under this subsection, including a 

12 code set specifying the medical condition of the 

13 individual who is transported and the level of 

14 service that is appropriate for the transpor15 tation of an individual with that medical condi16 tion. 

17 ‘‘(B) MEDICAL CONDITIONS.—The code set 

18 established under subparagraph (A) shall take 

19 into account the list of medical conditions devel20 oped in the course of the negotiated rulemaking 

21 process conducted under paragraph (1).’’. 

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