Federal Register / Vol. 65, No. 225 / Tuesday, November 21, 2000 / Notices 69945

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

[HCFA–1151–N]

Medicare Program; Ambulance

Services Demonstration

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice.

SUMMARY: This notice announces the

Ambulance Services demonstration,

which will determine the quality and

cost effectiveness of reimbursing

ambulance services paid for by

Medicare under Part B through a

monthly capitated payment

arrangement. The Secretary of Health

and Human Services is required under

the Balanced Budget Act of 1997 to

establish up to three demonstration

projects by entering into contracts with

units of local governments that furnish

or arrange for furnishing ambulance

services in their jurisdictions. The

demonstration will determine whether

providing a capitated payment and

flexibility to participating units of local

governments will enable them to meet

local needs more effectively while

reducing Medicare expenditures for

ambulance services.

DATES: Proposals will be considered if

we receive them at the appropriate

address, as provided below, no later

than 5 p.m. on March 21, 2001.

ADDRESSES: Mail written proposals (1

unbound original and 10 copies) to the

following address: Department of Health

and Human Services, Health Care

Financing Administration, Attention:

Kathy Headen, Room C4–17–27, 7500

Security Boulevard, Baltimore, MD

21244–1850.

Applications must be typed for clarity

and should not exceed 40 doublespaced pages, exclusive of the executive

summary, resumes, forms, and

documentation supporting the cost

proposal. Please refer to file code

HCFA–1151–N on the proposal.

FOR FURTHER INFORMATION CONTACT:

Kathy Headen, (410) 786–6865

(kheaden@hcfa.gov.).

SUPPLEMENTARY INFORMATION:

I. Background and Legislative

Authority

The Secretary of Health and Human

Services is required under section 4532

of the Balanced Budget Act of 1997

(BBA) to establish up to three

demonstration projects by entering into

contracts with units of local

governments that furnish or arrange for

furnishing ambulance services in their

jurisdictions. The contract must cover at

least 80 percent of the persons residing

within the unit of local governments

who are enrolled in Medicare Part B

(excluding persons enrolled in a

Medicare+Choice plan). Payment under

a contract to a local government will

replace the amount that would

otherwise be paid for ambulance

services for individuals residing in the

area. The Secretary and the unit of local

government may include in the contract

those other terms the parties consider

appropriate, including: (1) Covering

individuals residing in additional units

of local government, (under

arrangements entered into between

these units and the unit of local

government involved); (2) permitting

the unit of local government to transport

individuals to non-hospital providers if

the providers are able to furnish quality

services at a lower cost than hospital

providers; or (3) implementing these

other innovations as the unit of local

government may propose to improve the

quality of ambulance services and

control the costs of the services.

The BBA amended the Act to require

that we pay the unit of local government

a monthly capitation rate for the

ambulance services, instead of the

amount that (in the absence of the

contract) would otherwise be payable

under Part B of Title XVIII of the Social

Security Act (Act) for the services

covered under the contract. Section

4532(e) of the BBA also requires a

formal evaluation of the projects, to

include recommendations to modify the

payment methodology and whether to

extend or expand the demonstration

projects.

Section 225 of the Balanced Budget

Refinement Act (BBRA) of 1999

amended section 4532(b)(2) of the BBA,

the demonstration payment formula, by

authorizing the Secretary to establish a

budget-neutral first-year capitated

payment based on the most current

available data, with payment in

subsequent years adjusted for inflation.

The BBA contemplates that successful

applicants have a comprehensive

administrative structure and will be able

to demonstrate that they have the

capability to contract with vendors, if

necessary, to furnish the services. They

will also be expected to have the

capability to process and adjudicate

claims, establish a monitoring and

performance system to ensure quality of

services, and possess data capabilities to

exchange information with vendors and

us.

II. Current and Proposed Regulations

We published a final rule on January

25, 1999 (64 FR 3637) establishing new

regulation requirements for Medicare

Part B ambulance services that were

effective February 24, 1999. These

regulations revised the vehicle, staffing,

level of service, and billing

requirements for ambulance services.

The regulations also revised the medical

necessity requirements to include a

national definition of the term bedconfined, established a new requirement

that the beneficiary’s attending

physician furnish a written order

certifying the medical necessity of nonemergency ambulance transports, and

implemented section 4531(c) of the BBA

concerning Medicare coverage for

paramedic intercept services in rural

communities.

Section 4531 of the BBA requires the

Secretary to set interim payment

reductions for ambulance services for

fiscal years 1998 and 1999, as well as

the portion of fiscal year 2000 that

precedes January 1, 2000. The BBA also

requires the Secretary to establish a fee

schedule for ambulance services

through negotiated rulemaking. We

published a proposed rule for the new

fee schedule in the Federal Register on

September 12, 2000 (65 FR 55100).

Applicants should be familiar with the

proposed changes as they formulate

their proposal.

III. Purpose of Demonstration

We want to determine whether

providing a capitated payment and

flexibility to participating units of local

government will enable them to meet

local needs more effectively while

reducing Medicare expenditures for

ambulance services. In particular, this

demonstration will test whether

freedom to select and monitor suppliers

and establish prices will help control

Medicare costs. Section 4532 of the BBA

authorizes demonstrations to change the

way in which the Medicare program

purchases ambulance services in a

geographic area. Instead of paying

individual suppliers directly on a feefor-service basis, the statute permits a

local government entity to receive

capitated payments from us and to

establish an ambulance system designed

for the local area. Under the

demonstration, the applicant could

operate the entire system itself, contract

with suppliers to furnish services, or

use a combination of the two means to

deliver care. The local unit of

government could establish its own fee

schedule rather than using the Medicare

fee schedule, request that potential

suppliers bid on the service, or pay

69946 Federal Register / Vol. 65, No. 225 / Tuesday, November 21, 2000 / Notices

suppliers on a capitated basis. The local

unit of government could select all

willing suppliers or use a limited

number of suppliers and use savings

from efficiencies to provide added

services.

The demonstration offers the selected

units of government a great deal of

flexibility, as long as the government

entity establishes a delivery system that

ensures access to care and quality

services under a budget neutral

capitated payment rate.

We will select up to three units of

local government, using a competitive

application process. A qualifying unit of

local government is defined as a city,

county, or incorporated town. A

demonstration project can only exclude

beneficiaries enrolled in Medicare Part

B who reside within the unit if

geographic features make coverage

impractical for a specified area. In such

case, up to 20 percent of the unit’s Part

B enrollees may be excluded.

An independent panel will review

proposals. Areas that will be examined

include: Statement of the Problem;

Organizational Capability; Service

Delivery, Operations, and Quality

Assurance; Payment Methodology and

Implementation.

IV. Final Selection

The final selection of up to three

demonstration projects will be made by

our Administrator from among the most

highly qualified applicants. The

Administrator will make the selection

giving greater emphasis to proposals

that have strong evidence of service

delivery, operations, and quality

assurance; the implementation plan;

organizational capability; and payment

methodology. The operational protocols

for the payment system, coverage

process, eligibility determination, and

claims payment must be approved by us

prior to implementation. We reserve the

right to conduct site visits to the

awardees’ location prior to making

awards. An independent contractor,

selected and funded by us, will design

and conduct an evaluation of the

demonstration after its conclusion. The

awardee will be required to cooperate

with the contractor conducting the

evaluation.

Authority: Section 4532 of the Balanced

Budget Act of 1997, (Pub. L. 105–33); and

Section 225 of the Balanced Budget

Refinement Act of 1999, (Pub. L. 106–113).

(Catalog of Federal Domestic Assistance

Program No. 93.779, Health Care Financing

Research, Demonstrations and Evaluations)

Dated: October 17, 2000.

Michael M. Hash,

Acting Administrator, Health Care Financing

Administration.

[FR Doc. 00–29755 Filed 11–20–00; 8:45 am]

BILLING CODE 4120–01–U

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

[HCFA–1157–N]

Medicare Program; December 12, 2000,

Meeting of the Competitive Pricing

Advisory Committee

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice of meeting.

SUMMARY: In accordance with section

10(a) of the Federal Advisory Committee

Act, this notice announces a meeting of

the Competitive Pricing Advisory

Committee (the CPAC) on December 12,

2000. The Balanced Budget Act of 1997

(BBA) requires the Secretary of the

Department of Health and Human

Services (the Secretary) to establish a

demonstration project under which

payments to Medicare+Choice

organizations in designated areas are

determined in accordance with a

competitive pricing methodology. The

BBA requires the Secretary to create the

CPAC to make recommendations on

demonstration area designation and

appropriate research designs for the

project. The CPAC meetings are open to

the public.

DATES: The meeting is scheduled for

December 12, 2000, from 9 a.m. until 12

noon, e.s.t.

ADDRESSES: The meeting will be held at

the Marriott Wardman Park Hotel, 2660

Woodley Road N.W., Washington, D.C.

20008.

FOR FURTHER INFORMATION CONTACT:

Sharon Arnold, Ph.D., Executive

Director, Competitive Pricing Advisory

Committee, Health Care Financing

Administration, 7500 Security

Boulevard C4–14–17, Baltimore,

Maryland 21244–1850, (410) 786–6451.

Please refer to the HCFA Advisory

Committees Information Line (1–877–

449–5659 toll free) /(410–786–9379

local) or the Internet (http://www/

hcfa.gov/fac) for additional information

and updates on committee activities.

SUPPLEMENTARY INFORMATION: Section

4011 of the Balanced Budget Act of 1997

(BBA), Public Law 105–33, requires the

Secretary of the Department of Health

and Human Services (the Secretary) to

establish a demonstration project under

which payments to Medicare+Choice

organizations in designated areas are

determined in accordance with a

competitive pricing methodology.

Section 4012(a) of the BBA requires the

Secretary to appoint a Competitive

Pricing Advisory Committee (the CPAC)

to meet periodically and make

recommendations to the Secretary

concerning the designation of areas for

inclusion in the project and appropriate

research design for implementing the

project. The CPAC has previously met

on May 7, 1998, June 24 and 25, 1998,

September 23 and 24, 1998, October 28,

1998, January 6, 1999, May 13, 1999,

July 22, 1999, September 16, 1999,

October 29, 1999, January 12, 2000, and

May 23, 2000.

The CPAC consists of 15 individuals

who are independent actuaries; experts

in competitive pricing and the

administration of the Federal Employees

Health Benefit Program; and

representatives of health plans, insurers,

employers, unions, and beneficiaries.

The CPAC members are: James Cubbin,

Executive Director, General Motors

Health Care Initiative; Robert Berenson,

M.D., Director, Center for Health Plans

and Providers, HCFA; John Bertko,

Actuary Principal, Humana Inc.; David

Durenberger, Vice President, Public

Policy Partners; Gary Goldstein, M.D.,

Chief Medical Officer-Health Plans,

Humana Inc.; Samuel Havens,

Healthcare Consultant; Margaret Jordan,

Executive Vice President, Texas Health

Resources; Chip Kahn, President, The

Health Insurance Association of

America; Cleve Killingsworth, President

and CEO, Health Alliance Plan; Nancy

Kichak, Director, Office of Actuaries,

Office of Personnel Management; Len

Nichols, Principal Research Associate,

The Urban Institute; Robert Reischauer,

President, The Urban Institute; John

Rother, Director, Legislation and Public

Policy, American Association of Retired

Persons; Andrew Stern, President,

Service Employees International Union,

AFL–CIO; and Jay Wolfson, Director,

The Florida Information Center,

University of South Florida. The

Chairperson is James Cubbin and the

Co-Chairperson is Robert Berenson,

M.D. In accordance with section

4012(a)(5)of the BBA, the CPAC will

terminate on December 31, 2004.

The agenda for the December 12,

2000, meeting will include a continuing

discussion on the components of a

Report to Congress being prepared by

the CPAC. Section 533 of the Medicare,

Medicaid, and State Child Health

Insurance Program (SCHIP) Balanced

Budget Refinement Act of 1999, Public

Law 106–113, revised section 4011 of