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 OIG’S 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 OIG’S 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 INSPECI’IONS 

The OIG’S 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 

ss~wct$.b
 +@%
 *+4 

g JUNE GIBBS BROWN

s Inspector General

u. 

‘6 

%+$, -g AUGUST 1994 

— 0EI-03-90-02130 %za >
EXECUTIVE SUMMARY


PURPOSE 

This study determined whether 1991 dialysis-related ambulance claims for beneficiaries 

with end-stage renal disease (ESRD) met Medicare’s 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 

individual’s 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 carrier’s 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 Medicare’s 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 Medicare’s 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Medically umecessa~ transports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Carrier identification ofinappropriate claims. . . . . . . . . . . . . . . . . . . . . . . . . . .


RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


ENDNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


APPENDICES


Ambulance coverage and limitations (MCM 2120, 2125) . . . . . . . . . . . . . . . . . .


Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Comments fiomthe Health Care Financing Administration . . . . . . . . . . . . . . .


. . 1 

. . 4 

,. 4 

,. 5 

10


12 

A-1 

B-1 

c-1 
INTRODUCTION 

PURPOSE 

This study determined whether 1991 dialysis-related ambulance claims for beneficiaries 

with end-stage renal disease (ESRD)l met Medicare’s 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 individual’s 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 patient’s 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 carrier’s 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 OIG’S 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 President’s Council on Integrity and Efficiency. 

3

FINDINGS


SEVENTY PERCENT OF TIUWSPOR’I’S INVOLVING DIALYSIS DID NOT 

MEET MEDICARE’S 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 beneficiary’s 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 patient’s 

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 HCFA’S 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 patient’s 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 patient’s 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 patient’s 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 provider’s 

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 staff’s 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 beneficiary’s 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 carrier’s medical director who decides whether the 

beneficiary’s 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 Medicare’s 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 ensure thut chins meet Midicare coverage guideli.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 carrier’s 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 Medicare’s 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 Medicare’s 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 trainee’s 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 supplier’s 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 

bydocumen’tary 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

COVERACEANDLIMITATIONS 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. 

2-76 Rev. 179 , ~77 A .. 

[A-31

10-83 ~C)VE~A~E .+Nil LIMI’I’ATIONS ‘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 ~tient’s 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

for a hos~it~ or ~rtici~ting s~~ed 

nonhospitai &eatment fac~ty, i.e., a 

necessary diagnostic ~d/or thera~utlc 

available at the instituti~ where tie 

services.-+ound-trip ambulance service is covered 

n~~ facifity in~tient to the nearest hos~itai or 

cfic, therapy center of physician’s OffiCe tO obtti 

se~lceg (~ch ISSa CT scan or cobalt therapy) nOt 

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 ‘l’he camier shouki not mqu- transfer of 

hoqital @Mm,s to RIIIOtherhoqitd 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 f’urrt~ 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@ eaWiCExamohx 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 

r -. ..—..... —. 

the 100alcommunity ho~ital) is cavered 

F. A te mointies.-me ,.* ——,,,-,——

————— AL-. AL- term wqpropmte lacmrl=* “ IT=UUSUK UIU 

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 U’Ie 

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 

does not have ~m~~ ~~t~~ 

admbim WOW permit a ~@q ~t 

For examplq the nearest t@emdoeb 

law preohdee admission of no~iden~ 

2-78 

doea not ~t a findirqg that a ckmr inStiMiOIi 

Mwayer, a ~ impediment barring a p8thl’ltk 

tie M-n du not have ‘~iate facilitie&” 

ho@ai may be in another State and that State9 

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 patient’s 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 Phvsicisn’s 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 patient’s 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 hospital’s 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 

faciiity’s 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. 

r2120.4 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 if0 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 COX’IditiOn couid 

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 apg’O@lte fa~~= ~ 

L


-bed in subsection i). 

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 iciary’s conciltion M such that the time needed to transport a MneficiUY by land, or 

the instabilityof transportation by land, poses a threat to the bene~ici~Y~ survival or 

seriousiy endangers the beneficiary’s 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 

Wouid take 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 LIMITA’TIQNS 06-?0 ~ 

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, rthat 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, physician’s 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 

L

mC!diC8iappropmateness for the air embulsnce service. All claims for air afnbuiance 

~ces are to be reviewed by your medical staff. c 

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 documentation 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 carrier’s 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 trutaent 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 before 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 

exietencc of the circwstexsceo listed beiowx 

(i) 

(M 

(iiA) 

( iv) 

2-80 

P8tleat’8 Condttion 

wasid not ordimrily 

require movemmt by 

stretcher or 

Tho Individual WCS 

riot �dmitted � s � 

hoepital inpatient 

(e%cepc in accident 

cee8e)o or 

The aabulance wee 

used solely becmuo 

other uuae of trensportacion were 

uaevailable, or 

The indivdud mereiy 

needed asaistsuce in 

getting from hia roa 

or home co a vehicle. 

~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 

below. (S 2120.3) 

(a) From patient% residence 

(or other place where 

need arose) to hospital 

or skilled nursing home. 

pickup and detktion. 

(a) (i) 

(ii) 

Condition met if 

trip began within the 

institution service 

area as shown in the. 

carrier% locality guida 

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 facilitiRefer to supervisor 

for determtition. 

Rev. 1004 2-81 

[A-121

2125( ~nt.) COVERAGE AND LIMITATIONS 10-83 

(c)	 Hospital to hospital 

or skilled nursing home 

toskilled nursing home. 

(d)	 From a hospital or skilled 

nursing home to patients 

residence. 

(e)	 Round trip for ho~ital 

or participating skilled 

nursing facility 

inpatients to the nearest 

ho@ital or nonhospital 

treatment facility 

(c) Condition met if the discharging institution was 

not an appropriate faciiity 

and the admitting institution 

was the nearest one with 

appropriate facilities. 

(d) (i) 

(ii) 

Condition met if patient% 

residence is within the 

institution% service area es 

tiown in the carrier% 

locality guide. 

Condition met where the 

patient’s residence is 

outside the institution% 

samice area if the 

institution was the neamW 

one with appropriate 

facilities. Refer to 

supervisor for determination 

(e)	 ~ndition met if the medically 

nece=xy diagnostic or 

thenqxmtic service required by 

the patient% condition is not 

available at the institution 

where the benefickry is an 

inpatient. 

NOTE: Ambulance service to a @ysician’s office or a @ysician+ticted clinic is 

@ 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]


I 

L 
‘)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. 

-. 1391 2-83 

[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 HCFA’S 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 

OIG’S 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 physician’s 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 facility’s 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 facilitv’s head nurse and the beneficiary’s treatirw u hvsician. These 

respondents used written medical records and memory to answer questions about the 

beneficiary’s 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 twothirds (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 team’s 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. 

De temindom 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 patient’s 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 bedconfined. 

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 

Percentage 95% Confidence Interval 

I 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 

Ilia@ia TIanaports 

Met Guidelines 

Did not meet 

guidelines 

Could not determine 

(conflicting data) 

Non-LXa@ia 

Tranaporta 

unknown”” 

Totats 

* Dollar amounts in millions 

Estimated 95% Conf Estimated 95% CQnf. 

Pereent Interval for Allowed Interval for 

percents Amount * amounts 

67.1 61.5 

19.3 10.8-27.8 16.2 6.2-26.2 

46.9 33.6-60.1 44.4 32.6-56.1 

.9 0-22 .9 0-2.5 

18.0 10.8-25.2 13.6 5.3-22.0 

14.9 6.7-23.1 10.2 3.5-16.9 

100.0 85.3 

** Data inaccessible for these claims 

Table 4. 

DISTRIBUTIONOF CLAIMS 

BY DETERMINATIONOF MEDICAL NECESXW 

FOR DL4LYSIS-RELATEDTRANSPORTS 

Dialysis Tramqmrta


Met guidelines


Did not meet guidelines


CouId not determine 

Sample Estimated 

size Dereent 

180 

56 28.8 

122 69.9 

2 1.3 

95% Confidence 

Intetval for Percent 

16.0-41.6 

56.0-83.8 

0-3.2 

B-5

Table 5. 

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 BED—CONFINED 

[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 t’or 

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 Medicare’s 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 report’s 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 other’s 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 Medicare’s 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 providerspecific 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 provider’s 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	 HCFA’S 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]