-- -- -------- of -- ---

OFFICE OF 

INSPECTOR GENERAL 

FEBRUARY 1998 

OEI-09-95-00410 
EXECUTIVE SUMMAR Y

PURPOSE 

To provide baseline data about the ambulance industry and determine how State and local 

ordinances affect the delivery of ambulance services. 

BACKGROUND 

According to Section 1861(s)(7) of Social Security Act, Medicare pays for medically 

necessary ambulance services when other forms of transportation would endanger the 

beneficiary’s health. Ambulance suppliers provide two distinct levels of service--advanced 

life support and basic life support. The major distinctions between the levels are the types 

of vehicles and the skills of the personnel and the services they render. 

The Health Care Financing Administration (HCFA) is considering proposed Medicare 

regulations that would base reimbursement for ambulance services on the patient’s 

condition rather than the type of vehicle and personnel used. The final rule may include a 

special waiver for suppliers in non-Metropolitan Statistical Areas who would be hurt 

financially if they use only advanced life support ambulances. The HCFA may consider 

several options and may include a special waiver only if HCFA is convinced through 

overwhelming information of the need for the waiver. 

We decided to examine the effect and need for a special waiver based on Metropolitan 

Statistical Areas and non-Metropolitan Statistical Areas. In addition, we developed 

baseline information on the number of ambulance suppliers, vehicles, and personnel 

nationwide. We conducted in-person and telephone interviews with 53 State Emergency 

Medical Services Directors for the 50 States, the District of Columbia, the Commonwealth 

of Puerto Rico, and the U.S. Virgin Islands. Using a structured discussion guide, we 

(1) identified State, county, and municipal mandates that require specific levels of 

ambulance services and (2) obtained baseline data on the number of suppliers, licensed 

vehicles, and certified personnel operating within the States in 1995 and 1996. We 

analyzed the 1995 universe of Medicare ambulance claims to determine the distribution of 

allowed claims by Metropolitan Statistical Areas and non-Metropolitan Statistical Areas 

for the 53 States. We also reviewed financial analyst reports on the ambulance industry. 

FINDINGS 

Medicare ambulance costs and services are skyrocketing 

Between 1987 and 1995, Medicare allowances increased 229.1 percent from $602 million 

to almost $2.0 billion. More than four out of five Medicare ambulance services are 

provided in Metropolitan Statistical Areas. In 1995, this translated to about 6 million of 

the 7.5 million services rendered in Metropolitan Statistical Areas. 

1 
Ambulance service is a growth industry controlled by a few major corporations 

The Emergency Medical Services Directors in 41 of the 53 States noted that three large 

corporations are buying out small private ambulance companies in their States. The three 

major corporations--Laidlaw, American Medical Response, and Rural/Metro--are located 

in all 41 primary and shared State markets. By the end of 1996, these three corporations 

owned at least 20 percent of the national private ambulance market. 

All States regulate ambulance services; however, less than half mandate levels of service 

and only one requires advanced life support 

All States have administrative codes and regulations that set standards for ambulance 

services. The codes and regulations set requirements for licensure, certification, and 

recertification of ambulance suppliers, vehicles, and personnel to operate within the 

States. Nationally, 21 of the 53 States legislatively mandate a minimum level of 

ambulance services. Of these, Hawaii is the only State that requires advanced life support 

services. Approximately 11 percent of localities also mandate ambulance services, and 

another 11 percent of localities contract for ambulance services using general tax 

revenues. 

Only two States use Metropolitan Statistical Areas to designate ambulance service areas 

Of the 53 States, 5 1 (or 96.2 percent) do not define their ambulance service areas as 

Metropolitan Statistical Area and non-Metropolitan Statistical Area. The significance is 

that HCFA may consider a waiver exception in the proposed ambulance regulations based 

on a Metropolitan Statistical Area/non-Metropolitan Statistical Area designation. If the 

waiver exception is based on this designation and all non-Metropolitan Statistical Area 

suppliers qualified for waivers, HCFA would continue to allow at least $185.7 million 

annually in advanced life support reimbursement. Furthermore, a portion of the current 

$134.0 million in basic life support allowed services may be billed and allowed at the 

higher advanced life support level assuming suppliers with waivers converted their 

programs to provide advanced life support services only. 

RECOMMENDATION 

Previous Office of Inspector General studies have recommended that HCFA base 

reimbursement on the patient’s condition rather than the type of vehicle and personnel 

used. We continue to support this recommendation. In addition, HCFA should: 

re-evaluate its proposal to use the Metropolitan Statistical Area/non-Metropolitan 

Statistical Area designation as the basis for granting waivers when determining a 

waiver policy in its final rule on ambulance coverage. 

ii 
AGENCY COMMENTS 

We received comments on the draft report from the Assistant Secretary for Management 

and Budget (ASMB) and HCFA. The HCFA concurred with the general findings and 

recommendation of our draft report. Since we released the draft report, HCFA published 

the Notice of Proposed Rulemaking for Medicare ambulance services on June 18, 1997. 

The proposal includes two options for a waiver provision for suppliers in 

non-Metropolitan Statistical Area designations. 

Both HCFA and ASMB stated that HCFA had not yet decided which option, if any, it 

would use to grant waivers. Based on these agency comments, we modified the 

recommendation on the Metropolitan Statistical Area/non-Metropolitan Statistical Area by 

making an explicit reference to proposed rule. We also made changes based on 

 technical comments. 

The full text of each agency’s comments appears in appendix D. 

111 
TABLE OF CONTENT S

PAGE

EXECUTIVE SUMMARY 

INTRODUCTION ........................................ . 1 

FINDINGS ............................................. . 7 

�  Medicare ambulance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

�  Growth industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 

�  State standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

�  Metropolitan Statistical Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

AGENCYCOMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

APPENDICES 

A: Emergency Medical Services Training Requirements for Ambulance Personnel . . A-l 

B: Number of Ambulance Suppliers, Vehicles, and Personnel 

for 1995 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-l 

C: Breakdown of 1995 Ambulance Services and Allowed Amounts by 

and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-l 

D: Agency Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-l 
INTRODUCTIO N

PURPOSE 

To provide baseline data about the ambulance industry and determine how State and local 

ordinances affect the delivery of ambulance services. 

BACKGROUND 

Coverage and payment for ambulance services under Medicare depend on a variety of 

factors including the patient’s medical condition, the equipment used to transport the 

patient, and the types of personnel rendering services. To help explain these factors, we 

have included the following scenario. 

John Blue, age 72, gets up early one Saturday morning to mow the lawn. 

He has not been feeling well the last few days and dreads the yard work. 

He starts the mower, however, and begins to mow. After making the first 

pass over the lawn, he feels a terrible pressure in his chest, as if someone 

kicked him. He leaves the mower running and sits down on the lawn. By 

now, he is pale and is sweating profusely. He then clutches his chest, his 

vision goes black, and he falls to the ground. 

Across the street, Jane Smith is returning from her morning jog and sees 

Mr. Blue collapse. Jane runs across the street and quickly senses that her 

neighbor may be in cardiac arrest. She calls 911 for help from her cellular 

telephone, gives the information to the dispatcher, and starts 

cardiopulmonary resuscitation (CPR) . 

The dispatcher sends emergency medical services teams. Within 2 minutes, 

the first responders, who are volunteer fire fighters, arrive. They begin 

two-person CPR. Within another 2 minutes, paramedics arrive by 

ambulance. They quickly evaluate Mr. Blue’s condition and apply an 

automatic defibrillator to electrically stimulate the heart. Mr. Blue now has 

a pulse and is being ventilated with supplemental oxygen. The paramedics 

administer medication and start an intravenous drip. The paramedics then 

transport Mr. Blue to Central Hospital. Within minutes of his collapse, 

Mr. Blue is on his way to the hospital. 

We will use this scenario to illustrate Medicare coverage and reimbursement for 

emergency ambulance services in this report. 

‘Scenario adapted from Bryan Bledsoe, Robert Porter, and Bruce Shade, Paramedic 

Emergency Care, 3rd edition, 1997, p. 18. 

1 
Medicare Coverage of Ambulance Services 

Medicare pays for medically necessary ambulance services, according to

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

transportation is contraindicated by the individual’s condition, but only to the extent

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

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

the beneficiary’s health. Medicare does not cover other forms of transportation, such as a

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

services. In the scenario, other forms of transportation may have endangered Mr. Blue’s

condition.

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

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

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

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

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

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

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

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

hospital in an ambulance.

Levels of Ambulance Service 

Ambulance suppliers provide two distinct levels of service, advanced life support (ALS) 

and basic life support (BLS). In order to be considered ALS, the ambulance must be 

equipped with specialized equipment and medications such as defibrillators and 

pulmonary/cardiac monitors. The specialized equipment may be permanently mounted or 

portable in nature. The ALS vehicles also maintain radio-telephone contact with 

physicians or hospitals. 

A more important distinction between ALS and BLS is the personnel who staff the 

ambulance. In most States, BLS services are rendered by basic and intermediate 

emergency medical technicians and the more intensive ALS services are rendered 

by paramedic The ALS services may include: 

administering intravenous medications, 

defibrillating the patient, and 

performing other advanced life support services, such as electrocardiogram 

monitoring and airway monitoring. 

 will refer to ambulance companies, services, and providers as “ambulance suppliers.” 

2 
Currently, ambulance reimbursement is based on the type of ambulance and personnel 

used (ALS or BLS) and the service status (emergency or non-emergency). In the 

scenario, the ambulance supplier would bill Medicare for emergency ALS services. 

Growth of State Emergency Medical Services Systems 

The emergency medical services (EMS) system emerged only in the past 30 years. Prior 

to the late local fire departments provided most EMS. Fire fighters often had 

minimal training in emergency procedures, airway management, or other lifesaving 

techniques. The emphasis was on rapid transportation; the prevailing belief was that 

care began in the hospital emergency room. Rescue techniques, personnel training, and 

equipment were rudimentary. 

The federal government allocated funds for EMS after publication of a major study on 

prehospital emergency medical care. In 1966, the National Academy of Science/National 

Research Council published Accidental Death and Disability: The Neglected Disease of 

Modern Society. The report suggested developing EMS systems, training prehospital 

emergency care providers, and upgrading ambulances and their equipment. This led to 

the enactment of the National Highway Safety Act of 1966 that compelled States to develop 

EMS systems or lose highway funding. The Emergency Medical Services Act of 1973 

funded the development of regional EMS systems. Since 1981, the Consolidated Omnibus 

Budget Reconciliation Act eliminated all federal funding for EMS except block grants. 

The Departments of Transportation and Health and Human Services administer these 

grants. 

The EMS system is marked by increased technology and upgraded professional standards 

for regulating and licensing ambulance vehicles and for training and certifying ambulance 

 However, regional differences may exist in the frequency and sophistication 

of prehospital care. 

Licensing Vehicles and Certifying Personnel in States 

The State EMS Directors oversee (1) inspecting and licensing and (2) testing 

and certifying emergency medical personnel’ within the States. The organizational 

structure of these offices varies considerably throughout the country. Some offices are 

located in the State’s Public Health Department or Department of Health and Human 

Services, while others are in the Department of Public Safety. A few States have an 

independent board that proposes regulations and reports directly to the Governor’s office. 

All State EMS Directors set administrative policies and procedures for vehicle and 

 pp. 5 and 20. 

 will refer to registering or permitting ambulance vehicles as “licensing vehicles.” 

 will refer to credentialing, registering, or licensing EMS personnel as “certifying 

personnel. 

3 
personnel standards. The chart below describes the major EMS personnel who provide 

prehospital medical care to patients. 

KEY PLAYERS IN PREHOSPITAL EMERGENCY MEDICAL CARE 

A first responder is a police officer, fire fighter, or lay person who has received 

basic emergency medical training such as CPR and basic airway management in an 

approved first responder program. This person’s role is to stabilize the patient until 

the EMT or paramedic arrives. First responders usually do not transport patients. 

The following personnel do transport patients: 

A basic EMT is currently certified through the U.S. Department of Transportation 

National Standard Curriculum for basic The person is competent in CPR, 

airway management, hemorrhage control, fracture stabilization, emergency 

childbirth, basic extrication (disentanglement), communications, and use of a 

pneumatic anti-shock garment. 

An intermediate EMT is a person who has all the basic EMT skills and is competent 

in limited advanced life support care (typically intravenous therapy and advanced 

airway management). 

A paramedic EMT is a person with the highest level of training for prehospital 

providers. The person has all the basic and intermediate EMT skills and is trained in 

advanced patient assessment, trauma management, pharmacology, cardiology, and 

other medical emergencies. Paramedics should successfully complete Advanced 

Cardiac Life Support and Pediatric Advanced Life Support courses as offered by the 

American Heart Association. 

Several States certify various combinations of EMT levels with airway and/or cardiac 

management, defibrillation, and intravenous therapy. 

The HCFA requires at least two trained personnel in the ambulance, one of whom must 

have first aid training. As shown in the scenario, prehospital emergency care services are 

rendered by various levels of personnel, from first responders to paramedics. The 

U.S. Department of Transportation has developed standardized curricula for initial training 

and recertification of first responders and all three levels of The initial training 

includes classroom lectures, practical skills laboratory work, and hospital clinical 

experience. At the advanced levels, training may include a supervised field internship. 

Continuing education includes refresher courses and periodic in-service skills training. 

Most States use U.S Department of Transportation curricula to train and certify their 

 pp. 28-29. 
ambulance personnel. The other States enhance these basic curricula with more 

requirements. (The requirements for initial training, continuing education, and 

recertification for EMT personnel are described in appendix A.) 

Ambulance Industry Consolidation 

Until recently, the $7 billion ambulance industry was very Most ambulance 

suppliers were fire department rescue squads and other public agencies, many operating 

with only one ambulance. The remaining suppliers were private companies, primarily 

small “Mom and Pop” firms.’ Several years ago, several large suppliers started 

acquiring competitors. After years of “consolidation, these suppliers have emerged with 

a substantial share of the national ambulance market. 

Proposed Changes for Medicare Coverage of Ambulance Services 

The HCFA is considering proposed regulations to revise Medicare guidelines for 

ambulance services. Under current HCFA regulations, the type of vehicle and EMS 

personnel who render medically necessary services determine whether the supplier 

receives BLS or ALS reimbursement. In the scenario, paramedics treated the patient, 

transported him to the hospital in an ALS vehicle, and subsequently the ambulance 

supplier submitted a Medicare claim for ALS reimbursement. Under proposed 

regulations, HCFA may consider reimbursing suppliers based on the patient’s condition 

rather than the type of vehicle and personnel used. The final rule may include a waiver 

for suppliers outside Metropolitan Statistical Areas who might be hurt financially 

if they use only ALS ambulances. The HCFA may consider several options and may 

include a special waiver only if HCFA is convinced through overwhelming information of 

the need for the waiver. 

METHODOLOGY 

We decided to examine the effect and need for a special waiver based on Metropolitan 

Statistical Areas and non-Metropolitan Statistical Areas. In addition, we developed 

baseline information on the number of ambulance suppliers, vehicles, and personnel 

nationwide. We conducted in-person or telephone interviews in November and 

December 1996 with 53 State EMS Directors including the 50 States, the District of 

Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands. (We will 

refer to the 53 States and territories collectively as States.) We excluded the Pacific 

“‘Ambulance Chasing,” Time Magazine, December 9, 1996, p. 58. 

 Companies Adapt to Market, Modern Healthcare, May 27, 1996, p. 40. 

 Magazine, op. cit. 

5 
Island Trust Territories because of the small number of services rendered during 1995. 

Using a structured discussion guide, we: 

identified State, county, and municipal legislative mandates that require specific 

levels of ambulance services; 

identified the responsibilities of the EMS office for inspecting and licensing 

ambulance vehicles and training and certifying ambulance personnel; 

obtained data on the number of ambulance suppliers currently operating within 

each State; 

obtained data on the number of ambulance vehicles licensed in 1995 and 1996 by 

type of vehicle; and 

obtained data on the number of personnel certified in 1995 and 1996. 

We analyzed the 1995 universe of ambulance claims to determine the distribution of 

allowed claims by and for the 53 EMS States. We also reviewed 

financial analyst reports and articles on the ambulance industry. 

This report is the first in a series on Medicare ambulance services prepared by the Office 

of Inspector General. 

6
FINDING S

MEDICARE AMBULANCE COSTS AND SERVICES ARE SKYROCKETING 

The cost of Medicare ambulance services has skyrocketed over an period. Between 

1987 and 1995, Medicare allowances increased from $602 million to almost $2.0 billion. 

The graphic below shows the 229.1 percent increase. 

2. 1 $ 

1. 8 

1987 1994 1995 

Year 

The number of ambulance personnel, vehicles, and services provided also is increasing 

dramatically. According to the States, between 1995 and 1996, licensed vehicles 

increased from approximately 28,000 to more than 45,000 (60.7 percent increase) and 

certified ambulance personnel increased from approximately 427,000 to nearly 7 15,000 

(67.4 percent increase). (See appendix B for further detail.) According to HCFA, the 

number of services increased from 7.2 million in 1994 to 7.4 million in 1995. 

More than four out of five Medicare ambulance services are provided in In 1995, 

this translated to about 6 million of the 7.5 million services rendered in These 

services represented about $1.6 billion of Medicare payments. Almost half of the services 

 define an ambulance “service” as a one-way or round-trip ambulance service provided on 

a single date by a supplier. 

7 
in are BLS services. The table below shows the breakdown of national 

expenditures by type of service for and 

1995 National Expenditures for Ambulance Services 

Category/Type of Service 

Cannot determine 

ALS or BLS 

SUBTOTAL 

Virgin Islands (not categorized into MSA/non-MSA) 

Zip code outside United States, 

Puerto Rico, and Virgin Islands 

Cannot determine location of zip 

code 

TOTALS 

19.1 17.3 

230 0.0 $66,423 0.0 

101 0.0 $33,604 0.0 

7,883 0.1 0.1 

100.0 100.0 

AMBULANCE SERVICE IS A GROWTH INDUSTRY CONTROLLED BY A FEW 

MAJOR CORPORATIONS 

Beginning in 1991, several large ambulance suppliers started consolidating the industry by 

acquiring competitors, large and small. By the end of 1996, three major suppliers had 

emerged with at least 20 percent of the national private ambulance market. American 

Medical Response (AMR), after absorbing 75 competitors in 4 years, now operates in 

“The total amounts and percents may not exactly equal the sums of individual amounts and 

percents because of rounding. 

8 
28 States with annual revenues of more than $500 million. a subsidiary of the 

Toronto-based Inc., grew ten-fold into at least a $500 million operation in 

23 States. Rural/Metro, operating in 14 States, increased its revenues 46 percent to 

$250 million. In January 1997, announced that it will purchase AMR and 

merge it with estimates that it then will have about 14 percent of the 

U. S . ambulance market. 

The EMS Directors in 41 of the 53 States (or 77.4 percent) noted that three large 

corporations are buying out small private ambulance companies in their States. The three 

major corporations--Laidlaw, AMR, and Rural/Metro--are located in all 41 primary and 

shared State markets. Many factors are combining to favor consolidation and to insure the 

growth of the ambulance industry and the costs of ambulance services: 

The aging of the U.S. population is likely to increase the total number of 

ambulance services per year, both emergency and non-emergency. 

Rapidly advancing technology and skills are expanding the range of procedures that 

can be performed by ambulance personnel, thereby increasing the average revenue 

per service. 

Privatization of municipal emergency response and fire protection services may 

increase as cities and towns contract with ambulance suppliers. Financial analysts 

expect this to overcome a counter “reverse privatization” trend where municipal 

fire departments take over emergency services in addition to providing first 

response. 

Increasingly, volunteer municipal rescue squads, which have been providing 

essentially free ambulance services, will bill Medicare and other third party 

insurers for their costs. 

Growing economies of scale for regionally dominant ambulance suppliers will take 

market share from smaller firms. These economies are a result of the minimum 

staffing and response time requirements for EMS services and the cost of 

purchasing and maintaining a fleet of ambulances and dispatching operations. By 

combining contiguous operations, a larger player is able to consolidate dispatching 

and eliminate duplicate ambulance units. 

Increasing the need for non-emergency interfacility ambulance services will result 

from managed care plans discharging their members from hospitals sooner into less 

expensive alternative care sites. 

 on market share are based on financial analyst reports about the ambulance 

industry copyrighted by The Investext Group 1996; State EMS Directors reported State coverage 

by consolidators. 

 New York Times, January 7, 1997, p. C-2. 

9 
Increasing use of non-emergency or scheduled ambulance service, especially 

among large ambulance corporations, will continue. Only 11 States license other 

health care vehicles, such as wheelchair vans. In other States, these vehicles are 

licensed by the same agencies that inspect and license taxicabs. Although these 

11 States licensed 4,158 wheelchair vans and other vehicles in 1996, these vehicles 

represent only about 9.2 percent of all licensed patient transportation vehicles. 

The map and chart on the next page show the State EMS Directors’ responses about the 

extent of ambulance corporations nationwide. 

10
National Ambulance Transportation Corporations 

and their 41 Primary and Shared State Markets 

 AMR only 

AMR and other 

Other 

iz None 

With the merger of AMR and the new AMR (AMR, MEDTRANS, and 

will have a major presence in 19 STATES and operate in 16 other STATES. RURAL/METRO will 

maintain a presence in 2 STATES and operate in 12 other STATES, including 10 with AMR. 

2 STATES have corporations other than AMR and RURAL/METRO, and 12 STATES have no known 

corporations. 
ALL STATES REGULATE AMBULANCE SERVICES; HOWEVER, LESS THAN 

HALF MANDATE LEVELS OF SERVICE AND ONLY ONE REQUIRES 

ADVANCED LIFE SUPPORT 

All States have administrative codes and regulations that set standards for ambulance 

services. The codes and regulations set requirements for licensure, certification, and 

recertification of ambulance suppliers, vehicles, and personnel to operate within the 

States. Four States require ambulance suppliers to apply for a certificate of need and 

appear at a hearing to justify the need for their services. Suppliers can operate within 

these States only after receiving the certificate of need. 

Nationally, 21 of the 53 States legislatively mandate a minimum level of ambulance 

services. Of these, Hawaii is the only State that requires ALS services. The other 

20 States require “at least” BLS services. Often the mandates are described as minimum 

levels of trained personnel who attend patients. For example, to provide BLS services, 

most States require at least two personnel in the vehicle, with one EMT (basic or 

intermediate) in the back with the patient. The remaining 32 of the 53 States do not 

legislatively mandate a minimum level of ambulance services. 

Approximately 11 percent of localities mandate minimum standards for ambulance 

services. Throughout our interviews, respondents emphasized that almost all localities 

voluntarily exceed the minimum State standards by providing BLS and ALS services. As 

an example, an EMS Director mentioned, “Though we do not have a State law mandating 

any level of ambulance services, ALS services are available to 98 percent of our 

population. 

Another 11 percent of localities contract for ambulance services using general tax 

revenues. State EMS Directors noted that a locality may solicit bids for BLS and ALS 

services and use tax revenues to finance the contracts. Of the localities with contracts, 

about 44 percent contract for BLS services and 40 percent contract for ALS services. 

ONLY TWO STATES USE METROPOLITAN STATISTICAL AREAS TO 

DESIGNATE AMBULANCE SERVICE AREAS 

Of the 53 States, 5 1 (or 96.2 percent) do not define their ambulance service areas as MSA 

and non-MSA. The State EMS Directors define the service areas by (1) counties, 

(2) naturally-occurring population densities, or (3) suppliers’ areas of coverage when they 

initially apply to provide services. 

The significance is that HCFA may consider a waiver exception in the proposed 

ambulance regulations based on an MSA/non-MSA designation. A waiver may allow 

non-MSA suppliers to demonstrate financial hardships resulting from lower BLS 

reimbursement because they operate with ALS vehicles and personnel only. Some State 

EMS Directors believe that most non-MSA suppliers in their States would apply for a 

waiver. For example, one Director believes that most of his 275 suppliers would apply 

for waivers. 

12
If HCFA considers and includes a waiver exception in any proposed ambulance 

regulations, this exception may have a financial impact on Medicare reimbursement. The 

table on page 8 shows that HCFA allowed about $342.8 million (or 17.3 percent) in 

 for ambulance services nationally in 1995. The breakdown was about 

$185.7 million for ALS services and $134.0 million for BLS services (we cannot 

determine the exact level for about $23.1 million of services). If the waiver 

exception is based on an MSA or non-MSA designation and all non-MSA suppliers 

qualified for waivers, HCFA would continue to allow at least $185.7 million annually in 

ALS reimbursement. Furthermore, a portion of the current BLS allowed services may be 

billed and allowed at the higher ALS level assuming suppliers with waivers converted 

their programs to provide ALS services only. 

13
RECOMMENDATIO N

Previous Office of Inspector General studies have recommended that HCFA base 

reimbursement on the patient’s condition rather than the type of vehicle and personnel 

used. We continue to support this recommendation. In addition, HCFA should: 

re-evaluate its proposal to use the Metropolitan Statistical Area/non-Metropolitan 

Statistical Area designation as the basis for granting waivers when determining a 

waiver policy in its final rule on ambulance coverage. 

We have included national and State baseline ambulance data in appendices B and C for 

HCFA’s information and analysis. 

AGENCY COMMENTS 

We received comments on the draft report from the Assistant Secretary for Management 

and Budget (ASMB) and HCFA. The HCFA concurred with the general findings and 

recommendation of our draft report. Since we released the draft report, HCFA published 

the Notice of Proposed Rulemaking for Medicare ambulance services on June 18, 1997. 

The proposal includes two options for a waiver provision for suppliers in 

non-Metropolitan Statistical Area designations. 

Both HCFA and ASMB stated that HCFA had not yet decided which option, if any, it 

would use to grant waivers. Based on these agency comments, we modified the 

recommendation on the Metropolitan Statistical Area/non-Metropolitan Statistical Area by 

making an explicit reference to HCFA’s proposed rule. We also made changes based on 

HCFA’s technical comments. 

The full text of each agency’s comments appears in appendix D. 

14
APPENDIX A

EMERGENCY MEDICAL SERVICES TRAINING REQUIREMENTS 

FOR AMBULANCE PERSONNEL 

Since the the National Highway Traffic Safety Administration of the 

U.S. Department of Transportation (DOT) has provided National Standardized Curricula 

for prehospital EMS personnel. Most States have incorporated these DOT standards into 

their certification requirements for emergency medical technicians All curricula 

allow students to gain the knowledge, skills, and attitude necessary to be a competent, 

productive, and valuable member of the EMS team. Courses are designed to instruct 

students to serve as a vital link in the chain of the health care team. Training includes all 

skills necessary for to provide emergency medical care at the BLS or ALS level 

with an ambulance or other specialized service. All States require continuing education 

and recertification for EMS personnel at all levels. Specific courses and refresher skills 

vary among States. 

In addition to requirements summarized below, DOT also has curricula for EMS 

dispatchers and emergency vehicle operators. 

FIRST RESPONDERS 

The first responder is the first individual who arrives at the scene regardless of the 

individual’s certification. It is the goal of the DOT First Responder: National Standard 

Curriculum to provide students with the core knowledge, skills, and attitudes to a 

limited amount of equipment to perform initial assessment and intervention, and assist 

other EMS providers. The DOT course provides an introduction to these concepts and 

an orientation to the specific systems and services with which the first responder will be 

affiliated. This level of provider is not intended to be utilized as the minimum staffing for 

an ambulance. Enrichment programs and continuing education help fulfill other specific 

needs for first responder training. 

Twenty-two States report that they currently certify first responders or have plans to do so 

shortly. 

BASIC EMT 

The core curriculum is presented within a 1 lo-hour training program. The basic EMT 

works with other health care professionals to deliver professional prehospital emergency 

medical care. After successfully completing the program, the student is capable of 

performing the following functions at the minimum entry level: 

Recognize the nature and seriousness of the patient’s condition or extent of injuries 

to assess requirements for emergency medical care; 

A - l 
Administer appropriate emergency medical care based on assessment findings of 

the patient’s condition; 

Lift, move, position, and otherwise handle the patient to minimize discomfort and 

prevent further injury; and, 

Perform safely and effectively the expectations of the job description. 

Twenty-four States require the basic DOT course, 12 States require 120 hours, 

and the remaining 17 States require more than 120 hours of training. 

INTERMEDIATE EMT 

The intermediate EMT course includes basic EMT skills and training in specific medical 

management skills. These skills include the use of 12-lead electrocardiogram machines, 

airway management by endotracheal intubation and defibrillating life-threatening 

arrhythmias, plus the provision of certain intravenous medications. 

The intermediate EMT training requirements vary widely. Ten States do not certify this 

EMT level. For the other 43 States, additional training ranges from 27 to 300 hours. 

PARAMEDIC EMT 

As the highest-trained prehospital emergency care person in the EMS system, the 

paramedic concentrates on the care and well-being of the patient. Paramedics must 

complete from 500 to more than 1,800 hours of training beyond the other EMT levels. 

Paramedics must complete training in advanced medical techniques, such as 

transcutaneous cardiac pacing, drug therapy, chest decompression, gastric tube placement, 

and the administration of a large range of medications. 

Minimum training requirements for paramedics vary substantially from State to State. 

Thirty-two States require less than 900 hours, 16 States require between 900 and 

1,400 hours, and 5 States do not specify the minimum hours. 

A - 2
APPENDIX B

NUMBER OF AMBULANCE SUPPLIERS, VEHICLES, AND PERSONNEL 

FOR 1995 AND 1996 

During the interviews with EMS Directors, we obtained data on the number of services, 

licensed ambulance vehicles by type, and the number of ambulance personnel by type of 

certification. While most States had some data available, many do not have computerized 

databases and keep cumulative counts of services, vehicles, and personnel only. 

PLEASE NOTE: 

For States with available data, EMS Directors stated that 18,523 ambulance suppliers 

operate in the 53 States as of December 1996. 

For the number of licensed ambulance vehicles: 

10 of the 53 States (18.9 percent) did not have statistics available for 1995. 

4 of the 53 States (7.5 percent) did not have statistics available for 1996. 

5 of the 53 States (9.4 percent) did not have statistics available for both years. 

For the number of certified ambulance personnel, many States could not provide separate 

statistics for both years. They did, however, provide cumulative statistics for 1996. 

The percents of vehicles and personnel may not total 100.0 percent due to rounding. 

B - l 
LICENSED AMBULANCE VEHICLES

VEHICLE TYPE 

1995 1996 

Vehicles Percent Vehicles Percent 

ALS-only vehicle 9,284 33.4 14,773 32.6 

BLS-only vehicle 7,337 26.4 10,580 23.4 

vehicle 7,266 26.1 12,363 27.3 

Rescue vehicle I 548 I 2.0 I 918 I 2.0 

Fire trucks I 974 I 3.5 I 1,925 I 4.3 

Air ambulances 

(fixed wing and rotor) 

Water/Marine 

ambulances 

286 1.0 570 1.3 

6 0.02 6 0.01 

Wheelchair vans 

Other health care 

vehicles 

807 2.9 954 2.1 

1,305 4.7 3,204 7.1 

TOTALS I 27,813 I 100.0 I 45,293 I 100.0 

CERTIFIED AMBULANCE PERSONNEL 

PERSONNEL TYPE 

*NOTE: These statistics include the cardiac technician and other advanced level personnel 

between the basic and paramedic levels. 
APPENDIX 

BREAKDOWN OF 1995 AMBULANCE SERVICES AND ALLOWED AMOUNTS 

BY AND 

The following tables display the number of services and allowed amounts for 1995 Medicare 

ambulance services, broken out by Metropolitan Statistical Area (MSA) and type of service, 

for each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and 

the U.S. Virgin Islands. In these tables, the total amounts and percents may not exactly 

equal the sums of individual amounts and percents because of rounding. We defined a 

“service” as a one-way or round-trip ambulance service provided on a single date by a single 

supplier. 

ALABAMA 

Category/Type of Service 

Cannot 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

47,894 29.7 31.8 

161,069 100.0 100.0 

C - l 
ALASKA

Cannot determine 

ALS or BLS 

ARIZONA 

non-MSA Cannot determine 

ALS or BLS 

SUBTOTAL 8,926 14.4 20.5 

TOTALS 62,178 100.0 100.0 

c - 2 
- ARKANSAS 

Category/Type of Service 

MSA 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Category/Type of Service 

MSA 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

t 

-

-

t 

-

Services 

Number Percent 

37,577 45.9 

36,159 44.1 

739 0.9 

CALIFORNIA 

Services 

553,863 96.2 

14,045 2.4 

1,872 0.3 

40.6 

$707,472 2.4 

$229,112 0.8 

43.7 

49.5 

5.7 

Medicare Allowed Amount 

Amount Percent 

45.8 

42.7 

6.3 

94.7 

1.0 

0.8 

c - 3 
COLORADO

Category/Type of Service 

ALS 

BLS 

MSA Cannot determine ALS or BLS 

SUBTOTAL 

ALS 

BLS 

non-MSA Cannot determine ALS or BLS 

SUBTOTAL 

TOTALS 

Services 

Number Percent 

22,162 44.3 

17,058 34.1 

2,438 4.9 

41,658 83.3 

4,234 8.5 

3,694 7.4 

414 0.8 

8,342 16.7 

50,000 100.0 

CONNECTICUT 

Medicare Allowed Amount 

Amount Percent 

48.6 

28.2 

6.8 

83.6 

9.7 

$835,641 5.6 

$173,425 1.2 

16.4 

100.0 

Category/Type of Service 

Services Medicare Allowed Amount 

Number Percent Amount Percent 

Cannot determine 

Cannot determine ALS or BLS 

SUBTOTAL 

TOTALS 

c - 4 
DELAWARE

Category/Type of Service 

Cannot determine 

ALS or BLS 

DISTRICT OF COLUMBIA 

Category/Type of Service 

Medicare 

Cannot determine 

ALS or BLS 

SUBTOTAL 0 0.0 $0 0.0 

TOTALS 18,568 100.0 100.0 

C - 5
- FLORIDA 

MSA 

Category/Type of Service 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

t 

-

Services 

Number Percent 

Medicare Allowed Amount 

Amount Percent 

2.0 

383,830 93.6 1 93.7 

8,208 2.0 

611 0.1 

1 6.3 

100.0 

- GEORGIA 

Category/Type of Service 

MSA 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

E 

t 

-

Services 

Number Percent 

149,345 69.0 

36,594 16.9 

27,973 12.9 

Medicare Allowed Amount 

Amount Percent 

33.5 

30.0 

4.6 

68.2 

18.9 

11.1 

C - 6
HAWAII

Services Medicare Allowed Amount 

Amount Percent 

41.0 

$228,011 8.7 

$50,582 1.9 

51.6 

$484,911 18.4 

$693,336 26.4 

Category/Type of Service Number Percent -

6,357 1 58.3 

834 7.6 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

MSA 

80 0.7 

7,271 66.7 

2,875 1 26.4 

340 1 3.1 

non-MSA 

418 3.8 

3.633 1 33.3 

10,904 TOTALS I 100.0

IDAHO 

Services Medicare Allowed Amount 

Amount Percent Category/Type of Service Number Percent 

ALS 2,310 1 15.5 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

3.091 20.7 

0 130 1 9

5,531 37.1 

MSA $41,682 1.5 

II 

I 35.3 11 

2,627 1 17.6 

6,306 42.3 

non-MSA $122,636 4.3 

II 460 3.1 

9,393 62.9 

TOTALS 14,924 1 100.0

. 

c - 7 
ILLINOIS

Category/Type of Service 

MSA 

-

-

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

MSA 

Category/Type of Service 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Services 

Number Percent 

L 

22,207 5.7 

318,997 81.3 

15,715 4.0 

53,848 13.7 

INDIANA 

Services 

94,311 73.0 

11,520 8.9 

22,678 17.6 

Medicare Allowed Amount 

I 

Amount Percent 

24.7 

51.9 

I 

83.5 

I 

1.3 

II 

1 16.5 11 

100.0 II 

Medicare Allowed Amount 

Amount Percent 

32.3 

39.5 

$484,387 2.1 

73.8 

11.4 

13.8 

; 

C - 8
IOWA

Category/Type of Service 

Cannot determine 

KANSAS 

Category/Type of Service 

Medicare 

Cannot determine ALS or BLS 1,668 2.8 $644,920 4.4 

SUBTOTAL 29,573 49.6 46.7 

TOTALS 59,608 100.0 100.0 

c - 9 
KENTUCKY

Category/Type of Service 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

85,533 50.3 52.9 

170,198 100.0 100.0 

LOUISIANA 

Category/Type of Service 

ALS 

BLS 

MSA Cannot determine ALS or BLS 

SUBTOTAL 

ALS 

BLS 

non-MSA Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Services Medicare Allowed Amount 

Number Percent Amount Percent 

49,309 35.2 39.5 

48,418 34.6 26.5 

5,703 4.1 5.7 

103,430 73.9 71.7 

20,593 14.7 18.3 

14,327 10.2 8.1 

1,554 1.1 $884,974 1.9 

36,474 26.1 28.3 

139,904 100.0 100.0 

c - 10
MAINE

Category/Type of Service 

Services Medicare Allowed Amount 

Number Percent Amount Percent 

MSA 

ALS 9,700 21.1 22.6 

BLS 15,398 33.5 26.5 

Cannot determine ALS or BLS 1,193 2.6 $396,832 3.3 

SUBTOTAL 26,291 57.1 52.3 

non-MSA 

ALS 6,905 15.0 20.2 

BLS 11,245 24.4 22.8 

Cannot determine ALS or BLS 1,584 3.4 $576,818 4.7 

SUBTOTAL 19,734 42.9 47.7 

TOTALS 46,025 100.0 100.0 

MARYLAND

Category/Type of Service 

Cannot determine 

Cannot determine ALS or BLS 

SUBTOTAL 

TOTALS 

262 0.2 $50,464 0.1 

11,732 7.5 7.1 

157,464 100.0 100.0 

c- 11
MASSACHUSETTS

Category/Type of Service 

MSA 

-

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Category/Type of Service 

MSA 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Services 

358,838 99.8 

55 0.0 

532 0.1 

MICHIGAN 

Services 

250,170 86.9 

18,950 6.6 

Medicare Allowed Amount 

Amount Percent 

17.8 

79.4 

2.6 

99.8 

$196,227 0.1 

$79,913 0.1 

Medicare Allowed Amount II 

Amount Percent 

45.0 

36.8 11 

I 3.2 II 

1 84.9 11 

1 9.9 II 

4.3 II 

0.9 $617,463 1 1

1 15.1 

100.0 II 
- MINNESOTA 

MSA 

Category/Type of Service 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Category/Type of Service 

MSA Cannot determine 

ALS or BLS 

SUBTOTAL 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

t 

-

-

t 

-

Services 

Number Percent 

33,804 64.3 

5,669 10.8 

11,984 22.8 

MISSISSIPPI 

Services 

36,158 48.8 

18,177 24.5 

18,544 25.0 

Medicare Allowed Amount 

$850,768 I 

5.5 

1 65.0 11 

17.2 

14.0 

$590,803 3.8 

35.0 

100.0 II 

$13.513.552 56.6 11 

1 58.7 

1 27.9 11 

1 11.5 11 

1.9 $459,441 / 1

1 41.3 

1 100.0 II 

c - 13
MISSOURI

Category/Type of Service 

ALS 

BLS 

MSA Cannot determine ALS or BLS 

SUBTOTAL 

ALS 

BLS 

non-MSA Cannot determine ALS or BLS 

SUBTOTAL 

TOTALS 

Services Medicare Allowed Amount 

Number Percent Amount Percent 

58,306 42.8 49.8 

34,106 25.1 19.7 

2,089 1.5 $899,727 2.4 

94,501 69.4 71.9 

30,755 22.6 22.2 

9,408 6.9 4.6 

1,445 1.1 $495,693 1.3 

41,608 30.6 28.1 

136,109 100.0 100.0 

MONTANA 

Category/Type of Service 

Cannot determine 

Cannot determine ALS or BLS 

SUBTOTAL 

TOTALS 

918 7.6 $334,007 11.2 

8,832 73.3 70.6 

12,047 100.0 100.0 

c - 14
NEBRASKA

Category/Type of Service 

NEVADA 

non-MSA Cannot determine 

ALS or BLS 

112 0.6 $138,071 1.8 

SUBTOTAL 2,666 13.2 $998,073 13.3 

TOTALS 20,257 100.0 100.0 

c - 15
NEW HAMPSHIRE

Category/Type of Service 

Services Medicare Allowed Amount 

Number Percent Amount Percent 

MSA 

ALS 5,714 18.3 23.3 

BLS 14,860 47.5 41.2 

Cannot determine ALS or BLS 933 3.0 $325,645 4.0 

SUBTOTAL 21,507 68.7 68.5 

non-MSA 

ALS 2,916 9.3 $909,306 11.1 

BLS 6,531 20.9 19.0 

Cannot determine ALS or BLS 351 1.1 $119,091 1.4 

SUBTOTAL 9,798 31.3 31.5 

TOTALS 31,305 100.0 100.0 

NEW JERSEY

Category/Type of Service 

Cannot determine ALS or BLS 

SUBTOTAL 

TOTALS 

0 0.0 $0 0.0 

0 0.0 $0 0.0 

236,896 100.0 100.0 

C - 16
NEW MEXICO

Category/Type of Service 

Cannot determine 

ALS or BLS 

NEW YORK

non-MSA Cannot determine ALS or BLS 1,176 0.2 $529,448 0.4 

SUBTOTAL 31,201 6.0 6.5 

TOTALS 522,924 100.0 100.0 

c - 17
NORTH CAROLINA

Category/Type of Service 

Cannot determine 

NORTHDAKOTA 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

8,084 68.1 62.9 

11,879 100.0 100.0 

c - 18
Category/Type of Service 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

65,699 17.0 12.9 

387,460 100.0 100.0 

OKLAHOMA 

Category/Type of Service 

ALS 

BLS 

MSA Cannot determine ALS or BLS 

SUBTOTAL 

ALS 

BLS 

non-MSA Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Services Medicare Allowed Amount 

Number Percent Amount Percent 

30,114 36.8 45.5 

9,060 11.1 6.6 

4,679 5.7 7.2 

43,853 53.6 59.3 

19,667 24.0 29.3 

16,745 20.5 8.9 

1,587 1.9 $655,936 2.5 

37,999 46.4 40.7 

81,852 100.0 100.0 

c - 19
OREGON

Category/Type of Service 

MSA 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Services 

Number Percent 

27,578 66.7 

9,454 22.9 

280 0.7 

Medicare Allowed Amount 

Amount Percent 

60.2 

6.8 

$173,276 0.9 

67.9 

26.1 

$148,001 0.8 

PENNSYLVANIA

Category/Type of Service 

MSA 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

Amount Percent 

27.2 

59.2 11 

2.0 II 

88.4 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

1 4.1 II 

0.3 $537,124 / 1

11.6 

TOTALS 664,507 100.0 1 100.0 II 

Services Medicare Allowed Amount II 

c - 20
PUERTO RICO - -

Category/Type of Service 

MSA 

-

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Category/Type of Service 

MSA 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

-

-

Services 

Number Percent 

46,154 91.3 

50 0.1 

4,346 8.6 

RHODE ISLAND 

Services 

Number Percent 

44,675 100.0 

0 0.0 

0 0.0 

f 

-

-

t 

-

Medicare Allowed Amount 

Amount Percent 

$64,483 0.7 

89.6 

$43,348 0.4 

90.6 

$16,943 0.2 

$12,077 0.1 

Medicare Allowed Amount II 

Amount Percent 

23.4 

74.9 11 

$187,016 I 1.6 II 

100.0 II 

 I II 

 I II 

1 

1 100.0 II 

c - 21
SOUTH CAROLINA

Category/Type of Service 

Cannot determine 

SOUTH DAKOTA 

non-MSA Cannot determine 

ALS or BLS 

215 1.5 $55,517 2.3 

SUBTOTAL 11,432 79.0 81.0 

TOTALS 14,468 100.0 100.0 

c - 22
TENNESSEE

Category/Type of Service 

TEXAS 

non-MSA Cannot determine ALS or BLS 5,935 1.4 2.3 

SUBTOTAL 87,151 20.0 20.4 

TOTALS 435,893 100.0 100.0 

C - 23
UTAH

Category/Type of Service 

VERMONT

Cannot determine 

ALS or BLS 

SUBTOTAL 11,495 74.5 75.4 

TOTALS 15,429 100.0 100.0 

C - 24
VIRGIN ISLANDS

Type of service 

ALS 

BLS 

Cannot determine ALS or 

BLS 

Services Medicare Allowed Amount 

Number Percent Amount Percent 

30 13.0 $8,329 12.5 

198 86.1 $53,034 79.8 

2 0.9 $5,060 7.6 

TOTALS 230 100.0 $66,423 100.0 

This table combines the MSA and non-MSA data, because the Virgin Islands have not been 

categorized into MSA and non-MSA areas. 

VIRGINIA 

Category/Type of Service 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

30,772 27.3 29.9 

112,810 100.0 100.0 

c - 25 
WASHINGTON

Category/Type of Service 

MSA 

-

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Services 

Number Percent 

65,397 77.8 

9,329 11.1 

8,692 10.3 

Medicare Allowed Amount 

Amount Percent 

34.1 

39.3 

$644,412 2.5 

75.9 

14.5 

; 

WEST VIRGINIA

Category/Type of Service 

MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

1 17.1 11 

1 18.8 11 

$249,986 

37.3 11 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

17.213 1 16.6 

61,798 59.5 62.7 11 

TOTALS 103,834 100.0 100.0 11 

non-MSA 

Services 

Number I Percent 

C - 26
WISCONSIN

Category/Type of Service 

MSA 

-

I I 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

MSA 

Category/Type of Service 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

non-MSA 

ALS 

BLS 

Cannot determine 

ALS or BLS 

SUBTOTAL 

TOTALS 

Services 

86,640 76.0 

5,538 4.9 

19,770 17.4 

WYOMING 

Services 

Number Percent 

1,517 27.0 

2,148 38.2 

1,838 32.7 

Medicare Allowed Amount 

Amount Percent 

$163,440 11.6 

$153,452 10.9 

$46,695 3.3 

$363,587 25.9 

$658,828 46.9 

$339,937 24.2 

21.4 

48.9 

8.3 

78.6 

7.3 

11.3 

$703,751 

Jl 

C - 27
APPENDIX D

AGENCY COMMENTS 

The full text of comments received from the Health Care Financing Administration and the 

Office of the Assistant Secretary for Management and Budget follows. 

D - l 
Comments from the Health Care Financing Administration 

DEPARTMENT OF HEALTH HUMAN SERVICES Health Care 

 C. 

To: June Gibbs Brown 

 General 

SUBJECT: of Inspector General (OIG) Draft Report: “State Ambulance Policies 

and Services,” 

We have reviewed the above-referenced report, which discusses coverage of 

 services and proposes changes to Medicare’s payment policies. The report is 

one of a series of OIG reports concerning Medicare coverage and payment for ambulance 

services. Previous studies conducted recommended that reimbursement be based 

on the patient’s medical condition rather the type of and personnel used in 

providing an ambulance service. As the report indicates, the Care Financing 

Administration (HCFA) proposed this reimbursement change, along with a proposal to 

consider waivers in certain non-Metropolitan Statistical Areas in a Notice of 

Proposed issued in June of 1997. 

As report suggests, and payment for ambulance services under Medicare 

depend on a variety of factors, including the patient’s medical condition, the 

used to transport patient, and the type of personnel rendering services. Medicare pays 

for medically necessary ambulance under section 186 of the Social 

 Act, when “the use of other methods of transportation is by the 

individual’s condition, but only to the provided in regulations.” 

The OIG report explains that Medicare ambulance costs and services (defined as a 

way or round-trip ambulance service provided on a single date) have increased 

 over past eight years. Between 1987 and 1995, Medicare allowances 

increased million to almost billion. The number of ambulance personnel, 

vehicles, and services provided also increased. The determined that more than four 

out of five Medicare ambulance are provided in These alone 

represent about 1.6 billion in Medicare payments. 

D - 2
Page Two 

OIG continues to support its prior recommendation that HCFA base reimbursement for 

ambulance services on the patient’s medical condition rather than the type of 

 used. OIG also recommends that HCFA rc-evaluate the use of the 

MSA designation as a possible basis for waivers to this payment policy. 

HCFA concurs all OIG recommendations. Our detailed are as follows: 

OIG Recommendation 

HCFA should base reimbursement on the patient’s medical condition rather than the type 

of and personnel used. 

HCFA 

We concur. HCFA agrees with the general findings and recommendations suggested in 

this OIG report and is considering how best to and implement them. 

On June 17, 1997. HCFA published in the Federal a Notice of Proposed 

 addressing several of the issues raised by the OIG report about 

 coverage and payment for ambulance The was based on the 

work of convened by which worked with 

representatives the ambulance industry in developing the proposed rule. In addition 

to proposing that payment for ambulance services be based on the medical condition of 

the the NPRM included several other proposals to update and Medicare’s 

ambulance policies, and solicited comments in all of these areas. 

In August 1997, after publication of NPRM, the President signed into law the 

Balanced Budget Act of 1997 (BBA), which included a mandate to develop a 

schedule for ambulance services through negotiated to take by January 

A number of members of subsequently raised concerns about whether 

the proposal the NPRM to base payment on the medical condition would 

 with payment issues to be addressed in the fee schedule regulation and urged 

HCFA to incorporate this proposal into the negotiated mandated by the BBA. 

In addition, HCFA received approximately 2,270 public comments in response to the 

NPRM, and is reviewing those comments. HCFA plans to proceed further 

development of the proposals, including the change payment 

recommended by OIG. However, in view of the BBA and Congressional 

D - 3
Page Three 

concerns, we are how best the proposed policy to base 

reimbursement on patient’s medical condition. 

 Recommendation 

HCFA reevaluate the use of the designation as the basis for 

granting waivers. 

We concur. The main issue addressed by the report is consideration of a 

possible waiver procedure for the proposed new ambulance rule included in the 

which would base ambulance reimbursement levels on medical condition of the 

patient rather than on the type of and personnel used. 

In discussions about this proposal, some representatives of the 

industry voiced concerns that this policy could have a negative impact on a supplier’s 

 to serve communities with small populations. Some representatives argued that, in 

areas where it is not economical to operate both basic life support (BLS) ambulances and 

advanced support (ALS) ambulances, the policy cause some suppliers to go out 

 discussions led to solicit comments in the 

interested on the need for an exception to the proposed and the areas and 

type of suppliers to which such an exception might apply. The NPRM specifically 

described two options being considered if an exception were determined to be warranted. 

one of which (identified as the option) would have been available only in 

MSA areas. However, it is important to note that HCFA has not decided to 

adopt an at aud if so, whether waivers should be based on a non-MSA 

designation. HCFA specifically invited comments (which were due on August 18.1997) 

on other waiver options not included iu the and is reviewing those comments. 

Technical 

baram& This short entitled 

Consolidation” seems incomplete. While it tells us what the industry looked “until 

recently,” it does not say how the industry has consolidated, as the title implies (e.g., 

what it looks now). 

D - 4
Page Four 

The report concludes that, if a waiver were to be based on a non-MSA 13:

designation, “HCFA would continue to allow at least $185.7 million in 

According to data, this is the amount 

 in 1995 for ALS in The conclusion appears to assume that 

every non-MSA would for a waiver. In proposed waiver option 

includes other that must be met in addition to location in a non-MSA the 

 must be the sole supplier in the area and must provide vehicles and 

staff). data suggest that many provide both ALS and 

 assumes if a waiver based on were to be adopted, 

all would convert their programs to to the waiver criteria If so, this 

assumption should be made clear. 

D - 5
Comments from the Assistant Secretary for Management and Budget 

DEPARTMENT OF HEALTH HUMAN SERVICES Office of the 

M 1997 

Washington. 

MEMORANDUM TO: June Gibbs Brown 

Inspector General 

FROM: John J. Callahan 

Assistant Secretary f 

SUBJECT: Concur with Comment: OIG Draft Report, “State 

Ambulance Policies and Services 

The wording of recommendation in this report implies that HCFA has finalized a decision to 

use designations as the basis for granting waivers to its proposed ambulance 

coverage policy. 

In fact, HCFA is only proposing this waiver option in regulation. The regulation will also propose 

an alternative waiver option and will seek public comment on both options, as well as any other 

options commenters might suggest. 

OIG should change the language in its report to clarify that: 1) HCFA has not finalized a decision 

on granting waivers, 2) using MSA and non-MSA designations in granting waivers is only one of 

two options being considered in its ambulance regulations, and 3) commenters will be asked to 

react to the two alternatives and suggest additional options. 

OIG may also want to consider changing the wording of its recommendation to say: 

. “When determining a waiver policy in its final rule on ambulance coverage, HCFA should 

re-evaluate its proposal to use Metropolitan Statistical Area/non-Metropolitan Statistical 

Area designations as the basis for granting waivers.” 

A Y - 7 

D - 6