I 

108TH CONGRESS 

2D SESSION H. R. 5415 

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

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

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

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 19, 2004 

Mr. REYNOLDS (for himself, Mr. ALLEN, Mr. PICKERING, and Mr. RAMSTAD) 

introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and 

Means, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

payments to Medicare ambulance suppliers of the full 

cost or furnishing such services, to provide payments 

to rural ambulance providers and suppliers to account 

for the cost of serving areas with low population density, 

and for other purposes. 

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

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

3 Payment Reform and Rural Equity Act of 2004’’. 

4 SEC. 2. AMBULANCE PAYMENT RATES. 

5 (a) PAYMENT RATES.—Section 1834(l)(3) of the So6 cial Security Act (42 U.S.C. 1395m(l)(3)) is amended to 

7 read as follows: 

8 ‘‘(3) PAYMENT RATES.—Subject to any adjust9 ment under subparagraph (B) and paragraph (13) 

10 and the full payment of a national mileage rate pur11 suant to paragraph (2)(E), the Secretary shall mod12 ify the fee schedule established under paragraph (1) 

13 as follows: 

14 ‘‘(A) PAYMENT RATES IN 2006.— 

15 ‘‘(i) GROUND AMBULANCE SERV16 ICES.—In the case of ground ambulance 

17 services furnished under this part in 2006, 

18 the Secretary shall set the payment rates 

19 under the fee schedule for such services at 

20 a rate based on the average costs (as de21 termined by the Secretary on the basis of 

22 the most recent and reliable information 

23 available) incurred by full cost ambulance 

24 suppliers in providing nonemergency basic 

25 life support ambulance services covered 

26 under this title, with adjustments to the 
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1 rates for other ground ambulance service 

2 levels to be determined based on the rule 

3 established under paragraph (1). For the 

4 purposes of the preceding sentence, the 

5 term ‘full cost ambulance supplier’ means 

6 a supplier for which volunteers or other 

7 unpaid staff comprise less than 20 percent 

8 of the supplier’s total staff and which re9 ceives less than 20 percent of space and 

10 other capital assets free of charge. 

11 ‘‘(ii) OTHER AMBULANCE SERVICES.— 

12 In the case of ambulance services not de13 scribed in subclause (i) that are furnished 

14 under this part in 2006, the Secretary 

15 shall set the payment rates under the fee 

16 schedule for such services based on the 

17 rule established under paragraph (1). 

18 ‘‘(B) PAYMENT RATES IN SUBSEQUENT

19 YEARS FOR ALL AMBULANCE SERVICES.—In the 

20 case of any ambulance service furnished under 

21 this part in 2007 or any subsequent year, the 

22 Secretary shall set the payment rates under the 

23 fee schedule for such service at amounts equal 

24 to the payment rate under the fee schedule for 

25 that service furnished during the previous year, 
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1 increased by the percentage increase in the 

2 Consumer Price Index for all urban consumers 

3 (United States city average) for the 12-month 

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

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

6 of the Medicare, Medicaid, and SCHIP Benefits Improve7 ment and Protection Act of 2000 (114 Stat. 2763A–487), 

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

9 554, is repealed. 

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

11 take effect on January 1, 2006, and shall apply to pay12 ments for ambulance services furnished on or after such 

13 date. 

14 SEC. 3. IMPROVEMENT IN PAYMENTS TO RETAIN EMER15 GENCY AND OTHER CAPACITY FOR AMBU16 LANCES IN RURAL AREAS. 

17 (a) IN GENERAL.—Section 1834(l) of the Social Se18 curity Act (42 U.S.C. 1395m(l)), as amended by section 

19 415(a) of the Medicare Prescription Drug, Modernization, 

20 and Improvement Act of 2003, is amended by adding at 

21 the end the following new paragraph: 

22 ‘‘(15) ADDITIONAL PAYMENTS FOR PROVIDERS

23 FURNISHING AMBULANCES SERVICES IN RURAL

24 AREAS.— 
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1 ‘‘(A) IN GENERAL.—In the case of ground 

2 ambulance services furnished on or after Janu3 ary 1, 2006, for which the transportation origi4 nates in a rural area (as determined under sub5 paragraph (B)), the Secretary shall provide for 

6 a percent increase in the base rate of the fee 

7 schedule for a trip identified under this sub8 section. 

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

10 The Secretary, in consultation with the Office 

11 of Rural Health Policy, shall use the Rural12 Urban Commuting Areas (RUCA) coding sys13 tem, adopted by that Office, to designate rural 

14 areas for the purposes of this paragraph. A 

15 rural area is any area in RUCA level 2 through 

16 10 and any unclassified area. 

17 ‘‘(C) TIERING OF RURAL AREAS.—The 

18 Secretary shall designate 4 tiers of rural areas, 

19 using a zip code population-based methodology 

20 generated by the RUCA coding system, as fol21 lows: 

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

23 high metropolitan commuting area, in 

24 which 30 percent or more of the com25 muting flow is to an urban area, as des-
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1 ignated by the Bureau of the Census 

2 (RUCA level 2). 

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

4 low metropolitan commuting area, in which 

5 less than 30 percent of the commuting flow 

6 is to an urban area or to a large town, as 

7 designated by the Bureau of the Census 

8 (RUCA levels 3–6). 

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

10 small town core, as designated by the Bu11 reau of the Census, in which no significant 

12 portion of the commuting flow is to an 

13 area of population greater than 10,000 

14 people (RUCA levels 7–9). 

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

16 there is no dominant commuting flow 

17 (RUCA level 10) and any unclassified area. 

18 The Secretary shall consult with the Office of 

19 Rural Health Policy not less often than every 2 

20 years to update the designation of rural areas 

21 in accordance with any changes that are made 

22 to the RUCA system. 

23 ‘‘(D) PAYMENT ADJUSTMENTS FOR TRIPS

24 IN RURAL AREAS.—The Secretary shall adjust 

25 the payment rate under this section for ambu-
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1 lance trips that originate in each of the tiers es2 tablished in subparagraph (C). The adjustment 

3 shall be a percentage increase in the base pay4 ment rate as follows: 

5 ‘‘(i) TIER 1.—5.5 percent. 

6 ‘‘(ii) TIER 2.—11 percent. 

7 ‘‘(iii) TIER 3.—16.5 percent. 

8 ‘‘(iv) TIER 4.—22 percent.’’. 

9 (b) REVIEW OF PAYMENTS FOR RURAL AMBULANCE

10 SERVICES AND REPORT TO CONGRESS.— 

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

12 Secretary of Health and Human Services shall re13 view the system for adjusting payments for rural 

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

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

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

17 and appropriateness of such adjustments. In con18 ducting such review the Secretary shall consult with 

19 providers and suppliers affected by such adjustments 

20 and with representatives of the ambulance industry 

21 generally to determine— 

22 (A) whether such adjustments adequately 

23 cover the additional costs incurred in serving 

24 areas of low population density; and 
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1 (B) whether the tiered structure for mak2 ing such adjustments appropriately reflects the 

3 difference in costs of providing services in dif4 ferent types of rural areas. 

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

6 the Secretary shall submit to Congress a report set7 ting forth the results of such review and any rec8 ommendations for revision to the systems for adjust9 ing payments for ambulance services in rural areas. 

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

11 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)), 

12 as amended by subsection (a), is further amended by add13 ing at the end the following new paragraph: 

14 ‘‘(16) DESIGNATION OF RURAL AREAS FOR

15 MILEAGE PAYMENT PURPOSES.—In establishing any 

16 differential in the amount of payment for mileage 

17 between rural and urban areas in the fee schedule 

18 established under paragraph (1), the Secretary shall 

19 identify rural areas in the same manner as provided 

20 in paragraph (15)(B).’’. 

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

22 (42 U.S.C. 1395m(l)(12)(A)), as added by section 414(c) 

23 of the Medicare Prescription Drug, Modernization, and 

24 Improvement Act of 2003, is amended by striking ‘‘Janu25 ary 1, 2010’’ and inserting ‘‘January 1, 2006’’. 
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1 (3) Section 1834(l)(13)(A)(i) of the Social Security 

2 Act (42 U.S.C. 1395m(l)(13)(A)(i)), as added by section 

3 414(d) of the Medicare Prescription Drug, Modernization, 

4 and Improvement Act of 2003, is amended by striking 

5 ‘‘paragraph (9)’’ and inserting ‘‘paragraph (15)(B)’’. 

6 SEC. 4. USE OF MEDICAL CONDITIONS FOR CODING AMBU7 LANCE SERVICES. 

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

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

10 ‘‘(7) CODING SYSTEM.— 

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

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

13 not later than July 1, 2005, establish a system 

14 or systems for the coding of claims for ambu15 lance services for which payment is made under 

16 this subsection, including a code set specifying 

17 the medical condition of the individual who is 

18 transported and the level of service that is ap19 propriate for the transportation of an individual 

20 with that medical condition. 

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

22 established under subparagraph (A) shall take 

23 into account the list of medical conditions devel-
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1 oped in the course of the negotiated rulemaking 

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

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