30358 Federal Register / Vol. 71, No. 102 / Friday, May 26, 2006 / Proposed Rules 

from February 1978 to May 1980, the 

site operated a secondary lead smelting 

business. It is the lead smelting 

operations that resulted in the majority 

of the environmental impact at the Site. 

In 1986, GEPD conducted a site 

inspection and found approximately 

5,000 cubic yards of slag material and 

32,000 gallons of wastewater in an 

inactive impoundment, in addition to 

elevated concentrations of lead and 

cadmium in site waste piles and in the 

soil. 

EPA proposed the site for inclusion 

on the NPL in June 1988, finalizing the 

site’s listing in February 1990. 

In March 1990, under the direction of 

the EPA, an Interim Waste Removal was 

implemented to remove the slag pile, 

contaminated soil and debris, 

wastewater, and impoundment 

sediment from the site; in all, a total of 

8,380 tons of solid material was 

disposed of off-site, in addition to 485, 

360 pounds of liquid waste and a small 

amount of reclaimed coke. 

Based on Cedartown Industries, Inc. 

records and other information, GEPD 

and EPA identified a number of 

potentially responsible parties (PRPs). 

In 1990, the Cedartown Industries, Inc. 

PRP Group entered into an 

Administrative Order of Consent with 

EPA. This Order required the 

Cedartown Industries, Inc. PRP Group to 

conduct a Remedial Investigation and 

Feasibility Study (RI/FS) at the site. The 

RI/FS was conducted from 1990 to 1993. 

The purpose of the RI is to identify the 

nature and extent of contamination, 

whereas the purpose of the FS is to 

identify the options available to 

remediate this contamination. 

The RI documented inorganic 

contamination in soil and groundwater. 

After reviewing the results of the RI/FS, 

EPA issued a Record of Decision (ROD) 

on May 7, 1993. The selected remedy 

called for the excavation and onsite 

treatment of impacted soils by 

stabilization/solidification, with onsite 

disposal. Soils with lead levels above 

500 milligrams per kilogram were 

excavated; these soils were then treated 

until four treatment standards were met, 

as detailed in the ROD. In addition, the 

ROD also called for monitoring of the 

groundwater beneath the site, with a 

contingency remedy to be invoked at 

EPA’s discretion, as necessary. 

On May 24, 1994, a Consent Decree 

was negotiated between EPA and the 

Cedartown Industries, Inc. PRP Group, 

for the performance of the Remedial 

Design and the Remedial Action. 

The Remedial Action was 

implemented in 1996, with a total of 

11,555 cubic yards of soils excavated 

and treated. The final inspection was 

conducted at the site on August 8, 1996, 

with representatives present from EPA, 

EPA’s oversight contractor, GEPD, the 

supervising contractor, and the 

remediation contractor, and the 

property owner. This inspection 

indicated that components of the 

remedy had been constructed in 

accordance with the ROD and the 

remedial design, with two outstanding 

items identified: Proper establishment 

of the vegetative ground cover (i.e., 

grass) and stormwater accumulation. 

Plans were made to address these two 

items and a certificate of construction 

completion was submitted to EPA in 

September 1996, with EPA approval in 

March 1997. Long term groundwater 

monitoring was implemented in 

September 1996 with quarterly 

monitoring through 1998, followed by 

semi-annual monitoring beginning in 

1999. The contingent groundwater 

remedy was not invoked at this site; the 

latest sampling performed in 2005 

showed no results above groundwater 

standards. 

In September 2001, EPA finalized a 

Five Year Review for this site, which 

included a site walk-through inspection. 

The only deficiency noted during the 

Five Year Review was the lack of a 

comprehensive deed restriction, which 

has since been addressed. The Five Year 

Review concluded that the remedy is 

functioning as intended and is 

protective of human health and the 

environment. 

EPA, with the concurrence of the 

GEPD, has determined that all 

appropriate actions at the Cedartown 

Industries, Inc. site have been 

completed, and no further remedial 

action is necessary. Therefore, EPA is 

proposing deletion of the Site from the 

NPL. 

Editorial Note: This document was 

received in the Office of the Federal Register 

May 19, 2006. 

Dated: February 22, 2006. 

J.I. Palmer, Jr., 

Regional Administrator, Region 4. 

[FR Doc. E6–7928 Filed 5–25–06; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 414 

[CMS–1317–P] 

RIN 0938–AO11 

Medicare Program; Revisions to the 

Payment Policies of Ambulance 

Services Under the Fee Schedule for 

Ambulance Services 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: We are proposing to set forth 

changes to the fee schedule for payment 

of ambulance services by adopting 

revised geographic designations for 

urban and rural areas as set forth in 

Office of Management and Budget’s 

(OMB) Core-Based Statistical Areas 

(CBSAs) standard. We propose to 

remove the definition of Goldsmith 

modification and reference the most 

recent version of Goldsmith 

modification in the definition of rural 

area. In addition, we propose to add the 

definition of urban area as defined by 

OMB and revise our definitions of 

emergency response, rural area, and 

specialty care transport (SCT). 

We also propose to discontinue the 

annual review of the conversion factor 

(CF) and of air ambulance rates. We 

would continue to monitor payment and 

billing data on an ongoing basis and 

make adjustments to the CF and to air 

ambulance rates as appropriate to reflect 

any significant changes in these data. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on July 25, 2006. 

ADDRESSES: In commenting, please refer 

to file code CMS–1317–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (no duplicates, please): 

1. Electronically. You may submit 

electronic comments on specific issues 

in this proposed regulation to http:// 

www.cms.hhs.gov/eRulemaking. Click 

on the link ‘‘Submit electronic 

comments on CMS regulations with an 

open comment period.’’ (Attachments 

should be in Microsoft Word, 

WordPerfect, or Excel; however, we 

prefer Microsoft Word.) 

2. By regular mail. You may mail 

written comments (one original and two 

copies) to the following address ONLY: 


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Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–1317–

P, P.O. Box 8017, Baltimore, MD 21244–

8017. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments (one 

original and two copies) to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–1317–P, Mail Stop C4–26–05, 

7500 Security Boulevard, Baltimore, MD 

21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786–

7197 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

(Because access to the interior of the 

HHH Building is not readily available to 

persons without Federal Government 

identification, commenters are 

encouraged to leave their comments in 

the CMS drop slots located in the main 

lobby of the building. A stamp-in clock 

is available for persons wishing to retain 

a proof of filing by stamping in and 

retaining an extra copy of the comments 

being filed.) 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Anne Tayloe, (410) 786–4546. 

SUPPLEMENTARY INFORMATION: 

Submitting Public Comments: We 

welcome comments from the public on 

all issues set forth in this rule to assist 

us in fully considering issues and 

developing policies. You can assist us 

by referencing the file code CMS–1317–

P and the specific ‘‘issue identifier’’ that 

precedes the section on which you 

choose to comment. 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. CMS posts all comments 

received before the close of the 

comment period on its public Web site 

as soon as possible after they have been 

received. Comments received timely 

will be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

Under the ambulance fee schedule, 

the Medicare program pays for 

transportation services for Medicare 

beneficiaries when other means of 

transportation are contraindicated. 

Ambulance services are classified into 

different levels of ground (including 

water) and air ambulance services based 

on the medically necessary treatment 

provided during transport. These 

services include the following levels of 

service: 

• For Ground—

++ Basic Life Support (BLS) 

++ Advanced Life Support, Level 1 

(ALS1) 

++ Advanced Life Support, Level 2 

(ALS2) 

++ Specialty Care Transport (SCT) 

++ Paramedic ALS Intercept (PI) 

• For Air—

++ Fixed Wing Air Ambulance (FW) 

++ Rotary Wing Air Ambulance (RW) 

A. History of Medicare Ambulance 

Services 

1. Statutory Coverage of Ambulance 

Services 

Under sections 1834(l) and 1861(s)(7) 

of the Social Security Act (the Act), 

Medicare Part B (Supplemental Medical 

Insurance) covers and pays for 

ambulance services, to the extent 

prescribed in regulations, when the use 

of other methods of transportation 

would be contraindicated by the 

beneficiary’s medical condition. 

The House Ways and Means 

Committee and Senate Finance 

Committee Reports that accompanied 

the 1965 Social Security Amendments 

suggest that the Congress intended 

that—

• The ambulance benefit cover 

transportation services only if other 

means of transportation are 

contraindicated by the beneficiary’s 

medical condition; and 

• Only ambulance service to local 

facilities be covered unless necessary 

services are not available locally, in 

which case, transportation to the nearest 

facility furnishing those services is 

covered (H.R. Rep. No. 213, 89th Cong., 

1st Sess. 37 and Rep. No. 404, 89th 

Cong., 1st Sess. Pt 1, 43 (1965)). 

The reports indicate that 

transportation may also be provided 

from one hospital to another, to the 

beneficiary’s home, or to an extended 

care facility. 

2. Medicare Regulations for Ambulance 

Services 

Our regulations relating to ambulance 

services are set forth at 42 CFR part 410, 

subpart B and 42 CFR part 414, subpart 

H. Section 410.10(i) lists ambulance 

services as one of the covered medical 

and other health services under 

Medicare Part B. Therefore, ambulance 

services are subject to basic conditions 

and limitations set forth at § 410.12 and 

to specific conditions and limitations 

included at § 410.40. Part 414, subpart 

H, describes how payment is made for 

ambulance services covered by 

Medicare. 

The national fee schedule for 

ambulance services is being phased in 

over a 5-year transition period 

beginning April 1, 2002. (See § 414.615). 

In accordance with section 414 of the 

Medicare Prescription Drug, 

Improvement and Modernization Act of 

2003 (MMA) (Pub. L. 108–173), we 

added new § 414.617 which specifies 

that for ambulance services furnished 

during the period July 1, 2004 through 

December 31, 2009, the ground 

ambulance base rate is subject to a floor 

amount, which is determined by 

establishing nine fee schedules based on 

each of the nine census divisions, and 

using the same methodology as was 

used to establish the national fee 

schedule. If the regional fee schedule 

methodology for a given census division 

results in an amount that is lower than 

or equal to the national ground base 

rate, then it is not used, and the national 

fee schedule amount applies for all 

providers and suppliers in the census 

division. If the regional fee schedule 

methodology for a given census division 

results in an amount that is greater than 

the national ground base rate, then the 

fee schedule portion of the base rate for 

that census division is equal to a blend 

of the national rate and the regional rate. 

For CY 2006, this blend would be 40 

percent regional ground base rate and 60 

percent national ground base rate. As of 

January 1, 2006, the total payment 

amount for air ambulance providers and 

suppliers will be based on 100 percent 

of the national ambulance fee schedule, 

while the total payment amount for 

ground ambulance providers and 


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suppliers will be based on either 100 

percent of the national ambulance fee 

schedule or 60 percent of the national 

ambulance fee schedule and 40 percent 

of the regional ambulance fee schedule. 

II. Provisions of the Proposed Rule 

In this proposed rule, we would set 

forth changes to the fee schedule for 

payment of ambulance services by 

adopting revised geographic 

designations for urban and rural areas as 

set forth in OMB’s Core-Based Statistical 

Areas (CBSAs) standard. We propose to 

remove the definition of Goldsmith 

modification and reference the most 

recent version of Goldsmith 

modification in the definition of rural 

area. In addition, we propose to add the 

definition of urban area already defined 

by OMB. 

We are also proposing to revise the 

definition of specialty care transport 

(SCT) to clarify that a hospital is the 

only appropriate origin and destination 

point for this level of care. 

In addition, we are proposing to 

discontinue our annual review of the CF 

and of air ambulance rates because we 

have not identified any significant 

differences from those assumptions in 

the 4 years since the implementation of 

the fee schedule. We would continue to 

monitor payment and billing data on an 

ongoing basis and make adjustments to 

the CF and to air ambulance rates as 

appropriate to reflect any significant 

changes in these data. 

Finally, we are proposing to revise 

our current definition of emergency 

response to specify the conditions that 

warrant payment for immediate 

response. 

A. Adoption of New Geographic 

Standards for the Ambulance Fee 

Schedule 

Historically, the Medicare ambulance 

fee schedule has used the same 

geographic area designations as the 

acute care hospital inpatient prospective 

payment system (IPPS) and other 

Medicare payment systems to take into 

account appropriate urban and rural 

differences. While this promotes 

consistency across the Medicare 

program, it also provides a consistent 

and objective national definition for 

payment purposes and utilizes 

geographic area designations that more 

realistically reflect rural and urban 

populations, resulting in more accurate 

payments for ambulance services. 

As a result, we are proposing to adopt 

OMB’s CBSA-based geographic area 

designations to more accurately identify 

urban and rural areas for ambulance fee 

schedule payment purposes. We also 

propose to update the Goldsmith 

standard, consistent with the provisions 

of section 1834(l), to more accurately 

determine rural census tracts within 

metropolitan areas. 

These changes would affect whether 

certain areas are recognized as rural or 

urban. The distinction between urban 

and rural is important for ambulance 

payment purposes because ambulance 

payments are based on the point of pickup for the transport, and the point of 

pick-up for urban and rural transport is 

paid differently. Of particular 

significance to the ambulance fee 

schedule, the changes would affect 

whether or not certain areas are eligible 

for certain rural bonus payments under 

the ambulance fee schedule. For 

example, the changes would affect 

whether or not certain areas are 

recognized as what we refer to as 

‘‘Super Rural Bonus’’ areas established 

by section 414(c) of the MMA and set 

forth in section 1834(l)(12) of the Act. 

That section specifies that, for services 

furnished during the period July 1, 2004 

through December 31, 2009, the 

payment amount for the ground 

ambulance base rate is increased by a 

‘‘percent increase’’ (Super Rural Bonus) 

where the ambulance transport 

originates in a rural area (which 

includes Goldsmith areas) that we 

determine to be in the lowest 25th 

percentile of all rural populations 

arrayed by population density. 

1. Core-Based Statistical Areas 

(CBSAs)—Revised Office of 

Management and Budget (OMB) 

Metropolitan Area Definitions 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘CBSAs-REVISED OMB 

METROPOLITAN AREA 

DEFINITIONS’’ at the beginning of your 

comments.] 

In the February 27, 2002 final rule (67 

FR 9100), we stated that we could not 

easily adopt and implement, within the 

timeframe necessary to implement the 

fee schedule, a methodology for 

recognizing geographic population 

density disparities other than MSA/ 

nonMSA. We also stated that we would 

consider alternative methodologies that 

may more appropriately address 

payment to isolated, low-volume rural 

ambulance providers and suppliers at a 

later date. The application of any rural 

adjustment is determined by the 

geographic location of the beneficiary at 

the time he or she is placed on board the 

ambulance. We are now proposing to 

adopt OMB’s revised geographic area 

designations for urban and rural areas to 

address payment to those isolated, lowvolume rural providers and suppliers. 

Prior to the 2000 decennial census, 

geographic areas were consistently 

defined by OMB as Metropolitan 

Statistical Areas (MSAs) with an MSA 

being defined as an urban area and 

anything outside an MSA being defined 

as a rural area. In addition, for purposes 

of ambulance policy, we recognized the 

1990 update of Goldsmith areas 

(generally, rural census tracts within 

counties that covered large tracts of land 

with one predominant urban area only) 

as rural areas (65 FR 55077 through 

55100). In the fall of 1998, OMB 

chartered the Metropolitan Area 

Standards Review Committee to 

examine the Metropolitan Area (MA) 

standards and develop 

recommendations for possible changes 

to those standards. Three notices related 

to the review of the standards were 

published on the following dates in the 

Federal Register, providing an 

opportunity for public comment on the 

recommendations of the Committee: 

December 21, 1998 (63 FR 70525 

through 70561); October 20, 1999 (64 FR 

56627 through 56644); and August 22, 

2000 (65 FR 51059 through 51077). 

In the December 27, 2000, Federal 

Register (65 FR 82227 through 82238), 

OMB announced its new standards. In 

that notice, OMB defines a CBSA, 

beginning in 2003, as ‘‘a geographic 

entity associated with at least one core 

of 10,000 or more population, plus 

adjacent territory that has a high degree 

of social and economic integration with 

the core as measured by commuting 

ties.’’ CBSAs are conceptually areas that 

contain a recognized population 

nucleus and adjacent communities that 

have a high degree of integration with 

that nucleus. The purpose of the new 

OMB standards is to provide nationally 

consistent definitions for collecting, 

tabulating, and publishing Federal 

statistics for a set of geographic areas. 

The OMB standards designate and 

define two categories of CBSAs—

Metropolitan Statistical Areas (MSAs) 

and Micropolitan Statistical Areas. (65 

FR 82227 through 82238) According to 

OMB, MSAs are based on urbanized 

areas of 50,000 or more population and 

Micropolitan Statistical Areas (referred 

to in this discussion as Micropolitan 

Areas) are based on urban clusters of at 

least 10,000 population but less than 

50,000 population. Counties that do not 

fall within CBSAs are deemed ‘‘Outside 

CBSAs.’’

Under the ambulance fee schedule, 

MSAs would continue to be recognized 

as urban areas and all other areas 

outside MSAs (including Micropolitan 

areas, areas ‘‘outside CBSAs’’, and areas 

that meet the updated definition of the 

Goldsmith Modification) would be 


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recognized as rural areas. As noted 

previously, these designations are 

important because under the ambulance 

fee schedule, Medicare transports are 

designated either urban or rural based 

on the pick-up point of the transport. 

The new OMB definitions recognize 

49 new MSAs and 565 new 

Micropolitan Areas, and extensively 

revise the composition of many of the 

existing MSAs. There are 1,090 counties 

in MSAs under the new definitions 

(previously, there were 848 counties in 

MSAs). Of these 1,090 counties, 737 are 

in the same MSA as they were prior to 

the changes, 65 are in a different MSA, 

and 288 were not previously designated 

to any MSA. 

There are 674 counties in 

Micropolitan Areas. Of these, 41 were 

previously in an MSA, while 633 were 

not previously designated to an MSA. 

There are five counties that previously 

were designated to an MSA, but are no 

longer designated to either an MSA or 

a new Micropolitan Area (Carter 

County, Kentucky; St. James Parish, 

Louisiana; Kane County, Utah; 

Culpepper County, Virginia; and King 

George County, Virginia). 

The adoption of CBSA-based 

geographic area designations would 

mean that ambulance providers and 

suppliers that pick up Medicare 

beneficiaries in areas that would be 

outside of MSAs (but are currently 

within MSA areas) may experience 

increases in payment, while those 

ambulance providers and suppliers that 

pick up Medicare beneficiaries in areas 

that would be within MSA areas (but are 

currently outside of MSAs) may 

experience decreases in payment. 

The use of updated geographical areas 

would mean the recognition of new 

urban and rural boundaries based on the 

population migration that occurred over 

a 10-year period, between 1990 and 

2000. In general, it is expected that 

ambulance providers and suppliers in 

22 States may experience payment 

increases and ambulance providers and 

suppliers in 40 States may experience 

payment decreases as a result of 

population shifts recognized by OMB’s 

CBSA-based geographic area 

designations. 

We believe that updating the MSA 

definition to conform with OMB’s 

CBSA-based geographic area 

designations, coupled with updating the 

Goldsmith Modification (that is, using 

the current Rural Urban Commuting 

Areas version, as discussed in Section 2 

of this proposed rule), would more 

accurately reflect the contemporary 

urban and rural nature of areas across 

the country for ambulance payment 

purposes and cause ambulance fee 

schedule payments to become more 

accurate. 

As of October 1, 2004, the IPPS 

adopted OMB’s revised metropolitan 

area definitions to identify ‘‘urban 

areas’’ for payment purposes. Under the 

IPPS, MSAs are considered urban areas 

and Micropolitan Areas and areas 

‘‘Outside CBSAs’’ are considered rural 

areas (§ 412.64(b). We are proposing to 

adopt similar CBSA-based designations 

of ‘‘urban area’’ and ‘‘rural area’’ under 

the ambulance fee schedule for the 

reasons discussed. Therefore, we 

propose to revise § 414.605 to include a 

definition of urban area and to reflect 

OMB’s revised CBSA-based geographic 

area designations in our definition of 

rural area. 

2. Updated Goldsmith Modification—

Rural Urban Commuting Areas (RUCAs) 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘RUCAs’’ at the beginning of 

your comments.] 

The Goldsmith Modification evolved 

from an outreach grant program 

sponsored by the Office of Rural Health 

Policy of the Health Resources and 

Services Administration (HRSA). This 

program was created to establish an 

operational definition of rural 

populations lacking easy access to 

health services in Large Area 

Metropolitan Counties (LAMCs). Dr. 

Harold F. Goldsmith and his associates 

created a methodology for identifying 

rural census tracts located within a large 

metropolitan county of at least 1,225 

square miles. Using a combination of 

data on population density and 

commuting patterns, census tracts were 

identified as being so isolated by 

distance or physical features that they 

were more rural than urban in character. 

The original Goldsmith Modification 

was developed using data from the 1980 

census. In order to more accurately 

reflect current demographic and 

geographic characteristics of the nation, 

HRSA’s Office of Rural Health Policy, in 

partnership with the Department of 

Agriculture’s Economic Research 

Service and the University of 

Washington, developed an update to the 

Goldsmith modification designated as 

Rural-Urban Commuting Area Codes 

(RUCAs) (69 FR 47518 through 47519). 

Rather than being limited to LAMCs, 

RUCAs use urbanization, population 

density, and daily commuting data to 

categorize every census tract in the 

country. RUCAs are used to identify 

rural census tracts in all metropolitan 

counties. Section 1834(l) of the Act 

requires that we include the most recent 

modification of the Goldsmith 

Modification to determine rural census 

tracts within MSAs. Therefore, we 

propose to remove the definition of 

‘‘Goldsmith modification’’ at § 414.605 

and incorporate a reference to the most 

current version of the Goldsmith 

modification in the definition of ‘‘rural 

area.’’

B. Specialty Care Transport (SCT) 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘SPECIALTY CARE 

TRANSPORT’’ at the beginning of your 

comments.] 

On February 27, 2002, we published 

a final rule with comment period in the 

Federal Register (67 FR 9100) entitled 

‘‘Fee Schedule for Payment of 

Ambulance Services and Revisions to 

the Physician Certification 

Requirements for Coverage of 

Nonemergency Ambulance Services’’

that implemented the ambulance fee 

schedule. In that final rule, we defined 

SCT in § 414.605 as the ‘‘interfacility 

transportation of a critically injured or 

ill beneficiary by a ground ambulance 

vehicle, including medically necessary 

supplies and services, at a level of 

service beyond the scope of the EMT 

[(Emergency Medical Technician)]—

Paramedic. SCT is necessary when a 

beneficiary’s condition requires ongoing 

care that must be furnished by one or 

more health professionals in an 

appropriate specialty area, for example, 

nursing, emergency medicine, 

respiratory care, cardiovascular care, or 

a paramedic with additional training.’’

Additionally, ambulance vehicle staff 

are to be certified as emergency medical 

technicians and legally authorized to 

operate all lifesaving and life-sustaining 

equipment that are on board the vehicle. 

(§ 410.41(b)(1)) Typically, a SCT level of 

care occurs when the patient, who is 

already receiving a high level of care in 

the transferring acute care hospital, 

requires a level of care that the 

transferring hospital is not able to 

provide. 

We implemented the SCT level of 

payment for hospital-to-hospital ground 

ambulance transports upon 

implementation of the ambulance fee 

schedule on April 1, 2002 and we 

defined SCT at § 414.605. The definition 

of SCT in § 414.605 refers to 

‘‘interfacility transportation.’’ We based 

our payment for SCT-level ground 

ambulance transports on hospital-tohospital ambulance transportation data. 

As we stated in the preamble to the 

February 27, 2002 final rule (67 FR 

9100), the SCT level of care includes the 

situation where a beneficiary is taken by 

ground ambulance from the hospital to 

an air ambulance and then from the air 

ambulance to the final destination 


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hospital. Also, we stated in the 

preamble for both the September 12, 

2000 (65 FR 55077) proposed rule and 

the February 27, 2002 (67 FR 9108) final 

rule, that SCT is a level of interhospital 

service. However, transfer to or from a 

type of facility other than a hospital (for 

example, skilled nursing facility or 

nursing home) is not SCT. 

Subsequent to the implementation of 

the ambulance fee schedule, we 

clarified our definition of SCT as 

hospital-to-hospital transport in a 

Program Memorandum to Medicare 

contractors, which was issued on 

September 27, 2002. (Program 

Memorandum Intermediaries/Carriers, 

Transmittal AB–02–130—Change 

Request 2295, September 27, 2002) That 

document and subsequent questions 

and answers related to the definition of 

SCT were made available to the public 

on the CMS Medicare ambulance policy 

Web site. 

In addition, we clarified our 

definition of SCT in the Medicare 

Benefit Policy Manual, Chapter 10- 

Ambulance Services, in which we stated 

that SCT is regarded as a highly-skilled 

level of care of a critically injured or ill 

patient during transfer from one 

hospital to another. We have also 

clarified our policy in Ambulance Open 

Door Forums, conference calls, and oral 

and paper communication written in 

response to questions posed by 

individuals and groups representing the 

ambulance industry. 

Despite our previous attempts to 

clarify the scope of SCT transport we 

nonetheless continue to receive 

questions. For this reason, we are 

proposing to revise the definition of 

‘‘specialty care transport’’ at § 414.605 

to read ‘‘hospital-to-hospital’’ transport 

as opposed to ‘‘interfacility’’

transportation. We believe this change 

would make it absolutely clear that a 

hospital is the only appropriate origin 

and destination point for the SCT level 

of care. Since this clarification would 

only conform the regulation text to our 

current policy on this issue, there would 

be no change in policy; there would be 

no additional cost to the Medicare 

program, its contractors or ambulance 

providers and suppliers. 

C. Recalibration of the Ambulance Fee 

Schedule Conversion Factor 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘RECALIBRATION OF THE 

AMBULANCE FEE SCHEDULE’’ at the 

beginning of your comments.] 

In the February 27, 2002 final rule 

with comment period, (67 FR 9102 and 

9103), we indicated that we would 

adjust the conversion factor (CF) if 

actual experience under the fee 

schedule was significantly different 

from the assumptions used to determine 

the initial CF and air ambulance rates. 

We said specifically that we would 

monitor payment data and evaluate 

whether the assumptions used were 

accurate. 

We have continued to review our 

assumptions annually to determine 

whether or not a conversion factor 

adjustment is warranted. We examined 

the effects of the relative volumes of the 

different levels of ambulance services 

(service mix) and the extent of low 

billing charges to determine whether we 

should adjust the CF to reflect actual 

practices. In the 4 years since the 

implementation of the ambulance fee 

schedule, no significant differences 

from our original assumptions have 

emerged. We have observed only 

insignificant differences, and, to date, 

no adjustments in any one year have 

been warranted. It is for this reason, we 

believe it is appropriate to discontinue 

our annual review of the original 

conversion factor assumptions. We also 

believe that the formal annual review of 

air ambulance rates should be 

discontinued as we propose to monitor 

all ambulance rates and make 

adjustments on an ‘‘as-needed’’ basis. 

We would continue to monitor payment 

and billing data on an ongoing basis 

and, if actual practices under the fee 

schedule differ significantly from any of 

our assumptions, we would adjust the 

CF and air ambulance rate 

appropriately. The ambulance industry 

has available multiple venues for 

notifying CMS of potential issues. These 

are the ambulance fee schedule open 

door forums, and telephone calls to 

CMS-designated personnel. As an 

additional safeguard, CMS generally 

conducts a review of ambulance data 

each year in preparation for issuing the 

Ambulance Inflation Factor (AIF). 

Therefore, we propose to revise the 

annual review requirement at 

§ 414.610(g) to indicate that we will 

adjust the CF and air ambulance rates 

when appropriate to take into account 

actual practices under the fee schedule 

when these differ significantly from 

assumptions we use to calculate the CF 

and air ambulance rates. 

D. Hospital-to-Hospital Ambulance 

Service—Emergency Response 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘EMERGENCY RESPONSE’’ at 

the beginning of your comments.] 

In § 414.605, we define ‘‘emergency 

response’’ of an ambulance service to 

mean ‘‘responding immediately at the 

BLS [(Basic Life Support)] or ALS1 

[(Advanced Life Support Level 1)] level 

of service to a 911 call or the equivalent 

in areas without a 911 call system. An 

immediate response is one in which the 

ambulance entity begins as quickly as 

possible to take the steps necessary to 

respond to the call.’’ In our February 27, 

2002 final rule (67 FR 9100) defining 

‘‘emergency response’’, we stated that 

the additional payment for emergency 

response is for the additional overhead 

cost of maintaining the resources 

required to respond immediately to a 

call and not for the cost of furnishing a 

certain level of service to the 

beneficiary. 

The current ‘‘emergency response’’

definition has created confusion for 

those transports that originate at a 

hospital emergency department and the 

ambulance is transporting the 

beneficiary to an emergency department 

at another hospital for either admittance 

or treatment. For example, in most of 

these cases, the beneficiary must be 

stabilized prior to the transport. 

Therefore, the need to maintain a state 

of readiness to respond immediately to 

an urgent call, warranting a higher 

emergency response payment, does not 

appear to be applicable to these 

situations. 

Another example occurs when the 

ambulance is owned by the originating 

hospital. We stated in a Program 

Memorandum to the Medicare 

contractors (Transmittal AB–02–130, 

Change Request 2295, September 27, 

2002) that upon receipt of a call for 

ambulance services, the dispatcher 

makes the determination of whether the 

call constitutes an ‘‘emergency 

response’’. When the ambulance service 

is already readily available at the 

originating hospital, an emergency call 

may not be necessary, much less 

through a dispatcher for a 911 service. 

While we recognize that there may be 

instances when an emergency response 

payment is warranted for a transport 

between two hospital emergency 

departments, we believe that payment 

based on readiness to respond 

immediately is not justified 100 percent 

of the time. For this reason, we believe 

our current definition of ‘‘emergency 

response’’ needs to be revised to reflect 

only circumstances where payment for 

immediate response is truly warranted. 

Therefore, we are proposing to revise 

the definition of ‘‘emergency response’’

as follows: 

‘‘Emergency response’’ means that an 

ambulance entity—

• Maintains readiness to respond to 

urgent calls at the BLS or ALS1 level of 

service; and 

• Responds immediately at the BLS 

or ALS1 level of service to 911 calls, the 


cprice-sewell on PROD1PC66 with PROPOSALS
Federal Register / Vol. 71, No. 102 / Friday, May 26, 2006 / Proposed Rules 30363 

equivalent in areas without a 911 call 

system or radio calls within a hospital 

system when the ambulance entity is 

owned and operated by the hospital. 

III. Collection of Information 

Requirements 

This document does not impose 

information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995. 

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

V. Regulatory Impact 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘REGULATORY IMPACT’’ at 

the beginning of your comments.] 

A. Overall Impact 

We have examined the impacts of this 

proposed rule as required by Executive 

Order 12866 (September 1993, 

Regulatory Planning and Review), the 

Regulatory Flexibility Act (RFA) 

(September 19, 1980, Pub. L. 96–354), 

section 1102(b) of the Social Security 

Act, the Unfunded Mandates Reform 

Act of 1995 (Pub. L. 104–4), and 

Executive Order 13132. 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). A regulatory impact 

analysis (RIA) must be prepared for 

major rules with economically 

significant effects ($100 million or more 

in any 1 year). Using CY 2004 data, we 

estimate that any urban to rural 

population shifts reflected in the new 

proposed geographic designations could 

potentially result in an initial decrease 

in Medicare payments for all ambulance 

providers and suppliers of 

approximately $4.6 million. However, 

this estimate assumes that the same 

number of ambulance trips would 

originate from the same pick-up points 

as were reported in CY 2004, an 

unlikely scenario where urban and rural 

populations are shifting. We expect the 

initial change in geographic 

designations to have little, if any, 

overall effect on ambulance payments 

(See Section B, Anticipated Effects). 

This proposed rule does not reach the 

economic threshold and thus is not 

considered a major rule. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of $6 million to 29 million in any 1 year. 

Individuals and States are not included 

in the definition of a small entity. We 

are not preparing an analysis for the 

RFA because we have determined that 

this rule will not have a significant 

economic impact on a substantial 

number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 603 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Metropolitan Statistical Area and has 

fewer than 100 beds and is located 

outside of a Metropolitan Statistical 

Area or in a rural census tract within a 

Metropolitan Statistical Area as 

determined under the most recent 

version of the Goldsmith modification. 

We are not preparing an analysis for 

section 1102(b) of the Act because we 

have determined that this rule will not 

have a significant impact on the 

operations of a substantial number of 

small rural hospitals since small rural 

hospitals generally do not own and 

operate ambulance services. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

That threshold level is currently 

approximately $120 million. This rule 

will have no consequential effect on 

State, local, or tribal governments or on 

the private sector. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation does not impose 

any costs on State or local governments, 

the requirements of E.O. 13132 are not 

applicable. 

B. Anticipated Effects 

As noted in Section A, Overall 

Impact, we estimate, using CY 2004 

data, that adopting CBSA-based urban 

and rural designations could potentially 

result in an initial decrease in Medicare 

payments for ambulance providers and 

suppliers of approximately $4.6 million. 

However, we believe this is not likely to 

be the case. Rather, we believe that the 

overall effect of adopting the CBSAbased geographic definitions would 

result in a redistribution of payments 

from urban to rural areas in some States 

and from rural to urban areas in other 

States. As noted in Section A, in using 

CY 2004 data, we held the number and 

length of ambulance trips and the pickup points constant in order to isolate the 

effect of the adoption of CBSA-based 

geographic areas. We believe this 

constant, for all practical purposes, is 

not likely to occur. We contend that 

with the use of updated geographical 

areas where rural areas are redesignated 

as urban areas, it will be more likely 

than not, that some level of population 

growth has occurred resulting in more 

ambulance trips overall than had 

occurred in CY 2004, even though these 

trips are paid at a lower rate per trip 

(areas designated as rural generally 

receive a higher payment per trip than 

areas designated as urban). 

In contrast, where urban areas are 

redesignated as rural, there will be 

fewer trips than was reported in CY 

2004, but at higher rates. Thus, although 

ambulance suppliers and providers may 

bill fewer rural trips at the higher rate 

or more urban trips at the lower rate, we 

anticipate that the overall payments will 

remain the same. For these reasons, we 

estimate that this proposed rule will 

have no fiscal impact on the Medicare 

program because payments will, in 

effect, be redistributed. 

C. Conclusion 

For these reasons, we are not 

preparing analyses for either the RFA or 

section 1102(b) of the Act because we 

have determined that this rule will not 

have a significant economic impact on 

a substantial number of small entities or 

a significant impact on the operations of 

a substantial number of small rural 

hospitals. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 


cprice-sewell on PROD1PC66 with PROPOSALS
30364 Federal Register / Vol. 71, No. 102 / Friday, May 26, 2006 / Proposed Rules 

List of Subjects 42 CFR Part 414 

Administrative practice and 

procedure, Health facilities, Health 

professions, Kidney diseases, Medicare, 

Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR chapter IV as follows: 

PART 414—PAYMENT FOR PART B 

MEDICAL AND OTHER HEALTH 

SERVICES 

1. The authority citation for Part 414 

continues to read as follows: 

Authority: Secs. 1102, 1871, and 1834(l) of 

the Social Security Act (42 U.S.C. 1302, 

1395hh, and 1395m(l)). 

Subpart H—Fee Schedule for 

Ambulance Services 

2. Section 414.605 is amended by—

A. Removing the definition of 

‘‘Goldsmith modification.’’

B. Revising the definitions of 

‘‘emergency response,’’ ‘‘rural area,’’

and ‘‘specialty care transport (SCT).’’

C. Adding the definition of ‘‘urban 

area’’ in alphabetical order. 

The revisions and addition read as 

follows: 

§ 414.605 Definitions. 

* * * * * 

Emergency response means that an 

ambulance entity—

(1) Maintains readiness to respond to 

urgent calls at the BLS or ALS1 level of 

service; and 

(2) Responds immediately at the BLS 

or ALS1 level of service to 911 calls, the 

equivalent in areas without a 911 call 

system or radio calls within a hospital 

system when the ambulance entity is 

owned and operated by the hospital. 

* * * * * 

Rural area means an area located 

outside an urban area, or a rural census 

tract within a Metropolitan Statistical 

Area as determined under the most 

recent version of the Goldsmith 

modification as determined by the 

Office of Rural Health Policy of the 

Health Resources and Services 

Administration. 

Specialty care transport (SCT) means 

the hospital-to-hospital transportation of 

a critically injured or ill beneficiary by 

a ground ambulance vehicle, including 

medically necessary supplies and 

services, at a level of service beyond the 

scope of the EMT-Paramedic. SCT is 

necessary when a beneficiary’s 

condition requires ongoing care that 

must be furnished by one or more health 

professionals in an appropriate specialty 

area, for example, nursing, emergency 

medicine, respiratory care, 

cardiovascular care, or a paramedic with 

additional training. 

Urban area means a Metropolitan 

Statistical Area, as defined by the 

Executive Office of Management and 

Budget. 

* * * * * 

3. Section 414.610, paragraph (g) is 

revised to read as follows: 

§ 414.610 Basis of payment. 

* * * * * 

(g) Adjustments. The Secretary 

monitors payment and billing data on 

an ongoing basis and adjusts the CF and 

air ambulance rates as appropriate to 

reflect actual practices under the fee 

schedule which are significantly 

different from assumptions used to 

calculate the CF and air ambulance 

rates. These rates are not adjusted solely 

because of changes in the total number 

of ambulance transports. 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program) 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Editorial Note: This was received in the 

Office of the Federal Register on May 19, 

2006. 

Dated: December 7, 2005. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: February 28, 2006. 

Michael O. Leavitt, 

Secretary. 

[FR Doc. E6–7929 Filed 5–25–06; 8:45 am] 

BILLING CODE 4120–01–P 


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