I 
109TH CONGRESS 
1ST SESSION H. R. 2014 
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 ac-
count for the cost of serving areas with low population density, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 28, 2005 
Mr. REYNOLDS (for himself, Mr. ALLEN, Mr. PICKERING, Mr. OBERSTAR, Mr. 
TAYLOR of Mississippi, Mr. DICKS, Mr. REYES, Mr. PAYNE, Mr. MCNUL-
TY, Mr. HINCHEY, Mr. PLATTS, Mr. KOLBE, Mr. MCHUGH, Mr. 
BOUSTANY, Mr. KILDEE, Mr. DAVIS of Alabama, Mr. RENZI, and Mr. 
HOLDEN) introduced the following bill; which was referred to the Com-
mittee 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medicare Ambulance 
Payment Reform and Rural Equity Act of 2005’’. 
SEC. 2. AMBULANCE PAYMENT RATES. 
(a) PAYMENT RATES.—Section 1834(l)(3) of the So-
cial Security Act (42 U.S.C. 1395m(l)(3)) is amended to 
read as follows: 
‘‘(3) PAYMENT RATES.—Subject to any adjust-
ment under subparagraph (B) and paragraph (13) 
and the full payment of a national mileage rate pur-
suant to paragraph (2)(E), the Secretary shall mod-
ify the fee schedule established under paragraph (1) 
as follows: 
‘‘(A) PAYMENT RATES IN 2006.— 
‘‘(i) 
GROUND
AMBULANCE
SERV-
ICES.—In the case of ground ambulance 
services furnished under this part in 2006, 
the Secretary shall set the payment rates 
under the fee schedule for such services at 
a rate based on the average costs (as de-
termined by the Secretary on the basis of 
the most recent and reliable information 
available) incurred by full cost ambulance 
suppliers in providing nonemergency basic 
life support ambulance services covered 
under this title, with adjustments to the
rates for other ground ambulance service 
levels to be determined based on the rule 
established under paragraph (1). For the 
purposes of the preceding sentence, the 
term ‘full cost ambulance supplier’ means 
a supplier for which volunteers or other 
unpaid staff comprise less than 20 percent 
of the supplier’s total staff and which re-
ceives less than 20 percent of space and 
other capital assets free of charge. 
‘‘(ii) OTHER AMBULANCE SERVICES.— 
In the case of ambulance services not de-
scribed in subclause (i) that are furnished 
under this part in 2006, the Secretary 
shall set the payment rates under the fee 
schedule for such services based on the 
rule established under paragraph (1). 
‘‘(B) PAYMENT
RATES
IN
SUBSEQUENT 
YEARS FOR ALL AMBULANCE SERVICES.—In the 
case of any ambulance service furnished under 
this part in 2007 or any subsequent year, the 
Secretary shall set the payment rates under the 
fee schedule for such service at amounts equal 
to the payment rate under the fee schedule for 
that service furnished during the previous year,
increased by the percentage increase in the 
Consumer Price Index for all urban consumers 
(United States city average) for the 12-month 
period ending with June of the previous year.’’. 
(b) CONFORMING AMENDMENT.—(1) Section 221(c) 
of the Medicare, Medicaid, and SCHIP Benefits Improve-
ment and Protection Act of 2000 (114 Stat. 2763A–487), 
as enacted into law by section 1(a)(6) of Public Law 106– 
554, is repealed. 
(2) The amendment made by paragraph (1) shall 
take effect on January 1, 2006, and shall apply to pay-
ments for ambulance services furnished on or after such 
date. 
SEC. 3. IMPROVEMENT IN PAYMENTS TO RETAIN EMER-
GENCY AND OTHER CAPACITY FOR AMBU-
LANCES IN RURAL AREAS. 
(a) IN GENERAL.—Section 1834(l) of the Social Se-
curity Act (42 U.S.C. 1395m(l)) is amended by adding 
at the end the following new paragraph: 
‘‘(15) ADDITIONAL PAYMENTS FOR PROVIDERS 
FURNISHING
AMBULANCES
SERVICES
IN
RURAL 
AREAS.— 
‘‘(A) IN GENERAL.—In the case of ground 
ambulance services furnished on or after Janu-
ary 1, 2006, for which the transportation origi-
nates in a rural area (as determined under sub-
paragraph (B)), the Secretary shall provide for 
a percent increase in the base rate of the fee 
schedule for a trip identified under this sub-
section. 
‘‘(B) IDENTIFICATION OF RURAL AREAS.— 
The Secretary, in consultation with the Office 
of Rural Health Policy, shall use the Rural- 
Urban Commuting Areas (RUCA) coding sys-
tem, adopted by that Office, to designate rural 
areas for the purposes of this paragraph. A 
rural area is any area in RUCA level 2 through 
10 and any unclassified area. 
‘‘(C) TIERING
OF
RURAL
AREAS.—The 
Secretary shall designate 4 tiers of rural areas, 
using a zip code population-based methodology 
generated by the RUCA coding system, as fol-
lows: 
‘‘(i) TIER 1.—A rural area that is a 
high metropolitan commuting area, in 
which 30 percent or more of the com-
muting flow is to an urban area, as des-
ignated by the Bureau of the Census 
(RUCA level 2).
‘‘(ii) TIER 2.—A rural area that is a 
low metropolitan commuting area, in which 
less than 30 percent of the commuting flow 
is to an urban area or to a large town, as 
designated by the Bureau of the Census 
(RUCA levels 3–6). 
‘‘(iii) TIER 3.—A rural area that is a 
small town core, as designated by the Bu-
reau of the Census, in which no significant 
portion of the commuting flow is to an 
area of population greater than 10,000 
people (RUCA levels 7–9). 
‘‘(iv) TIER 4.—A rural area in which 
there is no dominant commuting flow 
(RUCA level 10) and any unclassified area. 
The Secretary shall consult with the Office of 
Rural Health Policy not less often than every 2 
years to update the designation of rural areas 
in accordance with any changes that are made 
to the RUCA system. 
‘‘(D) PAYMENT ADJUSTMENTS FOR TRIPS 
IN RURAL AREAS.—The Secretary shall adjust 
the payment rate under this section for ambu-
lance trips that originate in each of the tiers es-
tablished in subparagraph (C). The adjustment
shall be a percentage increase in the base pay-
ment rate as follows: 
‘‘(i) TIER 1.—5.5 percent. 
‘‘(ii) TIER 2.—11 percent. 
‘‘(iii) TIER 3.—16.5 percent. 
‘‘(iv) TIER 4.—22 percent.’’. 
(b) REVIEW OF PAYMENTS FOR RURAL AMBULANCE 
SERVICES AND REPORT TO CONGRESS.— 
(1) REVIEW.—Not later than July 1, 2008, the 
Secretary of Health and Human Services shall re-
view the system for adjusting payments for rural 
ambulance services under section 1834(l)(15) of the 
Social Security Act (42 U.S.C. 1395m(l)(15)), as 
added by subsection (a), to determine the adequacy 
and appropriateness of such adjustments. In con-
ducting such review the Secretary shall consult with 
providers and suppliers affected by such adjustments 
and with representatives of the ambulance industry 
generally to determine— 
(A) whether such adjustments adequately 
cover the additional costs incurred in serving 
areas of low population density; and 
(B) whether the tiered structure for mak-
ing such adjustments appropriately reflects the
difference in costs of providing services in dif-
ferent types of rural areas. 
(2) REPORT.—Not later than January 1, 2009, 
the Secretary shall submit to Congress a report set-
ting forth the results of such review and any rec-
ommendations for revision to the systems for adjust-
ing payments for ambulance services in rural areas. 
(c) 
CONFORMING
AMENDMENTS.—(1) 
Section 
1834(l) of the Social Security Act (42 U.S.C. 1395m(l)), 
as amended by subsection (a), is further amended by add-
ing at the end the following new paragraph: 
‘‘(16) DESIGNATION
OF
RURAL
AREAS
FOR 
MILEAGE PAYMENT PURPOSES.—In establishing any 
differential in the amount of payment for mileage 
between rural and urban areas in the fee schedule 
established under paragraph (1), the Secretary shall 
identify rural areas in the same manner as provided 
in paragraph (15)(B).’’. 
(2) Section 1834(l)(12)(A) of the Social Security Act 
(42 U.S.C. 1395m(l)(12)(A)) is amended by striking 
‘‘January 1, 2010’’ and inserting ‘‘January 1, 2006’’. 
(3) Section 1834(l)(13)(A)(i) of the Social Security 
Act (42 U.S.C. 1395m(l)(13)(A)(i)) is amended by insert-
ing ‘‘(or in the case of such services furnished in 2006,
in a rural area identified by the Secretary under para-
graph (15)(B))’’ after ‘‘such paragraph’’. 
SEC. 4. USE OF MEDICAL CONDITIONS FOR CODING AMBU-
LANCE SERVICES. 
Section 1834(l)(7) of the Social Security Act (42 
U.S.C. 1395m(l)(7)) is amended to read as follows: 
‘‘(7) CODING SYSTEM.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
in accordance with section 1173(c)(1)(B) and 
not later than January 1, 2006, establish a 
mandatory system or systems for the coding of 
claims for ambulance services for which pay-
ment is made under this subsection, including a 
code set specifying the medical condition of the 
individual who is transported and the level of 
service that is appropriate for the transpor-
tation of an individual with that medical condi-
tion. 
‘‘(B) MEDICAL CONDITIONS.—The code set 
established under subparagraph (A) shall take 
into account the list of medical conditions devel-
oped in the course of the negotiated rulemaking 
process conducted under paragraph (1).’’. 
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