Medicare Program; Coverage of Ambulance Services and Vehicle and Staff Requirements

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 409, 410, and 424

[HCFA-1813-FC]

RIN 0938-AH13

Medicare Program; Coverage of Ambulance Services and Vehicle and

Staff Requirements

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Final rule with comment period.

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SUMMARY: This final rule with comment period revises and updates

Medicare policy concerning ambulance services. It identifies

destinations to which ambulance services are covered, establishes

requirements for the vehicles and staff used to furnish ambulance

services, and clarifies coverage of nonemergency ambulance services for

Medicare beneficiaries. This rule also implements section 4531(c) of

the Balanced Budget Act of 1997 concerning Medicare coverage for

paramedic interecept services in rural communities.

DATES: Effective Date: These regulations are effective on February 24,

1999. Comment Period: We will consider comments concerning Medicare

coverage for paramedic intercept services in rural areas if we receive

the comments at the appropriate address, as provided below, no later

than 5 p.m. on March 26, 1999.

ADDRESSES: Mail written comments (an original and three copies) to the

following address:

Health Care Financing Administration, Department of Health and Human

Services, Attention: HCFA-1813-FC P.O. Box 7517, Baltimore, MD 21207-

0517.

If you prefer, you may deliver your written comments (an original

and three copies) to one of the following addresses:

Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW,

Washington, DC 20201, or

Room C5-14-03, Central Building, 7500 Security Boulevard, Baltimore, MD

21244-1850.

Comments may also be submitted electronically to the following e-

mail address: [email protected] For e-mail comment procedures, see

the beginning of SUPPLEMENTARY INFORMATION. For further information on

ordering copies of the Federal Register containing this document and on

electronic access, see the beginning of SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Robert Niemann, (410) 786-4569 for

issues relating to payment for Paramedic Intercept Services. Margot

Blige, (410) 786-4642 for all other issues.

SUPPLEMENTARY INFORMATION:

E-mail, Comments, Availability of Copies, and Electronic Access

E-mail comments must include the full name, postal address, and

affiliation (if applicable) of the sender and must be submitted to the

referenced address to be considered. All comments must be incorporated

in the e-mail message because we may not be able to access attachments.

Because of staffing and resource limitations, we cannot accept

comments by facsimile (FAX) transmission. In commenting, please refer

to file code HCFA-1813-FC. Comments received timely will be available

for public inspection as they are received, generally beginning

approximately 3 weeks after publication of a document, in Room 443-G of

the Department's offices at 200 Independence Avenue, SW., Washington,

DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.

(phone: (202) 690-7890).

Copies: To order copies of the Federal Register containing this

document, send your request to: New Orders, Superintendent of

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date of the issue requested and enclose a check or money order payable

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calling the order desk at (202) 512-1800 or by faxing to (202) 512-

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This Federal Register document is also available from the Federal

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contact the GPO Access User Support Team by sending Internet e-mail to

[email protected]; by faxing to (202) 512-1262; or by calling

(202) 512-1530 between 7 a.m. and 5 p.m. Eastern time, Monday through

Friday, except for Federal holidays.

I. Background

A. Statutory Coverage of Ambulance Services

Under section 1861(s)(7) of the Social Security Act (the Act),

Medicare Part B (Supplementary 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. The

House Ways and Means Committee and Senate Finance Committee Reports

that accompanied the 1965 Social Security Amendments suggest that the

Congress intended that (1) the ambulance benefit cover transportation

services only if other means of transportation are contraindicated by

the beneficiary's

[[Page 3638]]

medical condition, and (2) 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

S. Rep. No. 404, 89th Cong., 1st Sess., Pt I, 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.

B. Current Medicare Regulations for Ambulance Services

Our regulations relating to ambulance services are located at 42

CFR Part 410, subpart B. Section 410.10(i) lists ambulance services as

one of the covered medical and other health services under Medicare

Part B. Ambulance services are subject to basic conditions and

limitations set forth at Sec. 410.12 and to specific conditions and

limitations included at Sec. 410.40.

II. Provisions of the Proposed Regulations

On June 17, 1997, we published a proposed rule in the Federal

Register at 62 FR 32715 that would revise and update our ambulance

regulations at Sec. 410.40. Specifically, we proposed to provide

coverage of ambulance services only if the supplier meets the proposed

applicable vehicle, staff, and billing and reporting requirements and

proposed medical necessity and origin and destination requirements. We

also proposed to cover ambulance services in the United States at

either the basic life support (BLS) or advanced life support (ALS)

level of services. Under the proposed rule, we would base coverage on a

beneficiary's medical condition as described by the International

Classification of Diseases, 9th revision, Clinical Modification (ICD-9-

CM) diagnosis codes; these codes would be used to bill for ambulance

services. In addition, we proposed an exception to the ALS/BLS

distinction for certain non-Metropolitan Statistical Areas.

We also proposed to provide for the coverage of nonemergency

transportation, including but not limited to transportation for an end-

stage renal disease (ESRD) beneficiary, if the ambulance supplier

obtains a written physician's order certifying that the beneficiary be

transported in an ambulance because other means of transportation are

contraindicated.

Finally, we proposed to allow coverage of ambulance services for

ESRD beneficiaries to the nearest treatment facility rather than to the

nearest hospital-based facility.

III. The Balanced Budget Act of 1997

On August 5, 1997, after we had issued the ambulance services

proposed rule, the Balanced Budget Act of 1997 (the BBA), Public Law

105-33, was enacted. Section 4531(b) of the BBA adds a new section

1834(l) to the Act, which provides for the establishment of a fee

schedule for payment of ambulance services effective January 1, 2000.

In addition, section 1834(l)(1) of the Act requires that the fee

schedule be developed through a negotiated rulemaking process. Section

1834(l)(20(B) of the Act provides that, in establishing the fee

schedule, the Secretary must establish definitions for ambulance

services that link payments to the types of services furnished.

As noted above, one of the provisions of the June 17, 1997 proposed

rule would have defined ambulance services as either ALS or BLS

services and linked the Medicare payment to the type of service (ALS or

BLS) required by the beneficiary's condition. Under section 1834(l) of

the Act, this type of service definition and resulting payment is

required to be a part of the negotiated rulemaking. Therefore, we are

deferring any final action on those provisions of the proposed rule. We

will reopen the discussion of the definition of ambulance services and

the appropriate payment as a part of the negotiated rulemaking process.

We note, however, that our current policy, as stated in section 5116 of

the Medicare Carriers Manual (MCM), which provides for the payment of

two separate reasonable charge rates for ambulance services, one for

BLS level of ambulance service and one for ALS level of service,

remains applicable. In general, the ALS reasonable charge may be used

as a basis for payment when an ALS level of ambulance service is

provided. However, as stated in MCM section 5116.1, there may be

instances when the supplier exhibits a pattern of uneconomical care

such as repeated use of ALS ambulances in situations in which it should

have known that the less expensive BLS ambulance was available and that

its use would have been medically appropriate. While we allow higher

payments for the ALS services, the carrier is responsible for

evaluating the appropriate level of service for each claim.

In addition to providing for a fee schedule for ambulance services,

section 4531(c) of the BBA authorizes the Secretary to include coverage

of ALS services provided by a paramedic intercept service provider in a

rural area if certain conditions are met. We are implementing this

provision in this final rule with comment period. We discuss, in

detail, this provision and the changes to the regulations necessary to

implement it, in section V of this preamble.

IV. Analysis of, and Responses to, Public Comments

In response to our proposed regulation published on June 17, 1997,

we received 2,270 comments from ambulance service suppliers, emergency

medical service personnel, ambulance associations, health care

providers, Medicare contractors, and private citizens. As noted above,

because we are not proceeding in this final rule with the proposed

provisions related to basing coverage and payment of ambulance service

on the level of medically necessary services, we are not responding to

the comments we received concerning that proposal, including the use of

ICD-9-CM diagnosis codes to determine medical necessity and the

proposed exception to this policy for ALS services furnished in areas

that are not part of a Metropolitan Statistical Area. We not that the

vast majority of the comments concerned the definition of services as

ALS or BLS. The remaining comments and our responses are set forth

below.

A. Medicare Coverage of Ambulance Services--Basic Rule

In the proposed rule, we clarified in Sec. 410.40(a) the

circumstances under which an ambulance service is paid under Medicare

Part B as opposed to Medicare Part A. We received one comment on this

proposal.

Comment: A supplier commented that the proposed regulations are

unclear on two points. First, they do not indicate the point at which

Part A begins to cover transportation services and whether those

services provided before admission to the hospital are covered under

that Part or only those provided during the patient's hospital stay.

Second, the proposed regulations seem to indicate that if a patient's

stay in the hospital is covered by Part A, the ambulance service

provided before admission and at discharge would be part of the Part A

payment and could not be billed under Part B. If this is true, the

commenter believed that this is a change in policy that would destroy

many Part B ambulance services and be detrimental to hospitals.

Response: The proposed revisions to the regulations were made

merely to clarify and restate current policy on the scope of benefits

under Parts A and B of Medicare, not to make any change in policy. To

explain the policy in this area, we must distinguish between

[[Page 3639]]

ambulance services, which are covered under Part B, and transportation

services, which are covered under Part A. The movement of a beneficiary

from his or her home, an accident scene, or any other point of origin

to the nearest hospital, critical care access hospital (CAH) (formally

known as a rural primary care hospital (RPCH)), or skilled nursing

facility (SNF) that is capable of furnishing the required level and

type of care for the beneficiary's illness or injury is covered,

assuming medical necessity and other coverage criteria are met, only

under Part B as an ambulance service. No Part A coverage is available

because, at the time the beneficiary is transported, he or she is not

an inpatient of any provider paid under Part A of the program. The

transfer of a beneficiary from one provider to another (for example,

from an acute care hospital to a long-term care hospital or to an SNF)

is also not covered as a Part A provider service because, at the time

the person is in transit, he or she is not a patient of either

provider. This service may be covered under Part B.

However, once a beneficiary has been admitted to a hospital, CAH,or

SNF, it may be necessary to transport the beneficiary to another

hospital or other site for specialized care. In this instance, the

specialized services are furnished under arrangements made by the

hospital, CAH, or SNF. Following that treatment, the beneficiary is

returned to the hospital, CAH, or SNF to complete the inpatient stay.

This movement of the beneficiary is considered ``patient

transportation'' and is covered as an inpatient hospital or CAH service

under Part A of the program and as an SNF service when the SNF is

furnishing it as a covered SNF service, and Part A payment is made for

that service. Because the service is covered and payable as a

beneficiary transportation service under Part A, the service cannot be

classified and paid for as an ambulance service under Part B. This is

not a change from current policy, but has been the policy since the

inception of the Medicare program. In order to more clearly indicate

that ambulance services are covered under Part A when the beneficiary

is an inpatient of a hospital or CAH, we have revised the regulations

at Sec. 409.10 to include this service as a covered inpatient hospital

or CAH service. We have also revised Sec. 409.20 to include it as a SNF

covered service.

We note that, as provided in Secs. 412.2(c)(5)(iii)(B) and

413.40(c)(2)(iii)(B), ambulance services are specifically excluded from

the preadmission payment window provisions applicable to hospital

inpatient services. That is, ambulance services furnished during the 3

days before the day of a beneficiary's admission to a hospital (or 1

day for hospitals excluded from the prospective payment system) may be

paid under Part B and are not considered inpatient hospital services.

B. Medical Necessity

Under current regulations, Medicare covers transportation provided

by an ambulance if the beneficiary must be transported by an ambulance

because other means of transportation are contraindicated. In the June

1997 proposed rule (62 FR 32719), we proposed that if a beneficiary is

``bed-confined,'' other means of transportation would be presumed to be

contraindicated. We also proposed that ``bed-confined'' would be

defined as the inability to--

Get up from bed without assistance;

Ambulate; and

Sit in a chair, including a wheelchair.

We noted that we used this term synonymously with the terms

``bedridden'' or ``stretcher-bound.'' However, it is not synonymous

with ``bed rest'' or ``nonambulatory.''

In addition, nonemergency transportation would be covered only if,

before furnishing the service, the ambulance supplier obtained a

physician's written order certifying that the beneficiary must be

transported in an ambulance because other means of transportation are

contraindicated (Sec. 410.40(c)(2)). The physician's order must be

dated no more than 60 days before the date the service is furnished. We

received several comments on these proposed policies.

Comment: A Medicare carrier and a national renal association

supported the definition of bed-confined as proposed. They believed

that the definition ensures that ambulance services will be provided

only to those individuals with the greatest need and the most severe

physical limitations.

Response: We agree with the commenters. Our purpose in developing

this definition was to identify as eligible for covered ambulance

services only those individuals who are not able to be up and out of

bed under any condition and cannot tolerate other methods of

transportation.

Comment: Three commenters stated that the definition of ``bed-

confined'' as proposed is too restrictive and that the policy

eliminates transportation for many individuals who would ``in reality

have no other way of obtaining medical care.''

Response: It is important to note that the Medicare law contains no

provisions for ``transportation,'' but rather provides for coverage of

ambulance services. Section 1861(s)(7) of the Act allows Medicare

coverage of ambulance services only when the use of other methods of

transportation is contraindicated by the beneficiary's condition. The

regulations reflect the intent expressed in the House Ways and Means

Committee and Senate Finance Committee reports on H.R. 6675, the 1965

Social Security Amendments (H. Rep. No. 213 at page 36 and S. Rep. No.

404 at page 43) that ambulance transportation be covered only if ``* *

* normal transportation would endanger the health of the patient * *

*'' Therefore, a patient whose condition permits transport in any type

of vehicle other than an ambulance would not qualify for ambulance

services under Medicare Part B.

Comment: Seven ambulance suppliers stated that all factors relating

to the beneficiary's condition should be considered in evaluating if a

beneficiary has met the medical necessity criteria for ambulance

service. That is, bed-confinement should not be the sole criterion used

in determining medical necessity because it is only one factor. The

commenters suggested that suppliers should provide documentation on why

the beneficiary is bed-confined.

Response: It is always the responsibility of the ambulance supplier

to furnish complete and accurate documentation to demonstrate that the

ambulance service being furnished meets the medical necessity criteria.

The fact that a definition of bed-confined has been adopted does not

suggest that bed-confinement is the sole determinant of medical

necessity nor does it relieve the supplier of his or her responsibility

to submit adequate information supporting the reason for a bed-

confinement determination.

Comment: Three ambulance suppliers disagreed that the proposed bed-

confined definition should be synonymous with ``stretcher-bound.'' They

suggested that ``stretcher-bound'' refers to the beneficiary being

secured to the stretcher and not specifically to the condition of the

beneficiary. They asked that we clarify that stretcher-bound is not a

synonym for ``bed-confined.''

Response: We agree with the commenters and will not use the term

``stretcher-bound'' in describing the medical condition of the

beneficiary. We proposed a definition of ``bed-confined'' as a part of

our proposal to use ICD-9-CM medical condition codes. The ICD-9-CM list

set forth in the

[[Page 3640]]

proposed rule included the diagnosis code V49.8, Other Specified

Problems Influencing Health Status. We added a definition of bed-

confined which could be used in conjunction with this code. As noted

above, we are not including the proposed medical necessity provision

based on ICD-9-CM codes in this final rule. However, as a result of

comments, as well as past questions, we have specified certain criteria

that must be met in order for ambulance services to be covered. In

accordance with Sec. 410.40(d), nonemergency ambulance transportation

would be covered if the beneficiary is unable to get up from bed

without assistance.

Comment: One ambulance supplier commented that the proposed

definition will cause undue hardship for the beneficiary, family,

physician, and ambulance supplier because some beneficiaries are able

to sit in a wheelchair for brief periods of time, but cannot tolerate a

wheelchair for the period of time required for transport. Under the

proposed definition, ambulance transportation furnished to

beneficiaries such as these would not be covered.

Response: If there are circumstances associated with the

beneficiary's condition that warrant the need for ambulance

transportation, the documentation submitted on behalf of that

beneficiary should reflect the condition and support the need for the

services. That documentation will then be considered by the carrier in

processing the claim.

Comment: Several ambulance suppliers and a national ambulance

association commented that the proposed definition of ``bed-confined''

is too narrow and that most beneficiaries who can ``technically sit in

a chair or wheelchair momentarily'' or be ``restrained'' to a chair or

wheelchair would not meet the definition and would therefore be denied

ambulance services. They also expressed the belief that the definition

should be based on the condition of the beneficiary at the time of

transport rather than any period before or after the transport. One of

the commenters suggested that it is not safe to transport someone in a

wheelchair who must be restrained in order to travel. To ensure that

the definition allows those beneficiaries who are bed-confined to

receive ambulance benefits, commenters suggested the following

revisions for the definition of ``bed-confined'':

Add the phrase ``without assistance'' to the second and

third criteria of the proposed definition.

Add the phrase ``* * * the inability to ride in a moving

vehicle without being restrained to that chair'' to the last criterion.

Revise the third criterion to read ``* * * the inability

to sit for an extended period of time in a chair or wheelchair, without

restraint.''

The phrase ``without assistance'' should be removed from

the first criterion and the ``and'' be replaced with ``or'' so that if

any one of the criteria is met, the beneficiary would be determined to

be ``bed-confined.''

Response: In developing the proposed definition, it was our intent

to describe clearly individuals who are completely confined to bed and

unable to tolerate any activity out of bed. We recognize that it is

standard and accepted medical practice in both hospitals and nursing

homes to take steps to ensure that beneficiaries are up and out of bed

as often as their condition permits. Such beneficiaries are not bed-

confined. It is incumbent upon health care professionals responsible

for the care of individual beneficiaries to determine what is safe for

those beneficiaries. If it is determined that it is unsafe for a

particular beneficiary to be unmonitored during transport, then the

documentation submitted for that particular transport should support

the need for ambulance transportation. That documentation will be

considered by the carrier in processing the claim.

We considered whether it would be appropriate to include a time-

frame with respect to the ``bed-confined'' definition. That is, adding

a phrase such as `'for more than 10 minutes'' to the various criteria.

Because of the difficulty associated with obtaining accurate

information related to how long an individual may have been out of bed

as well as the difficulty associated with efforts to substantiate such

information, we determined that it would be inappropriate to employ the

use of absolute terms if we did not intend to identify a means by which

a time factor could be measured.

We do not believe it is necessary to make the proposed revisions on

the basis that the proposed definition encompasses the variations

requested by the commenters. We will however, revise the definition to

clarify that all three components must be met in order for the patient

to meet the requirements of the definition of ``bed-confined''.

Comment: A national ambulance association stated that because we

did not define ``emergency'' and ``nonemergency'' in the proposed rule,

ambulance suppliers will not know when physician certification is

needed. The association does, however, support the need for physician

certification, in 60-day intervals, for repetitive transports. They

recommended the following definition for repetitive patients:

``Multiple scheduled treatments (for example, dialysis or radiation

therapy treatments) for the same diagnosis that requires ambulance

transportation over an extended period of time.''

Response: The applicable definition that we use to define emergency

services is the definition set forth in section 1861(v)(1)(K)(ii) of

the act, which defines the term ``bona fide emergency services.'' This

definition provides that an emergency service is one that is provided

after the sudden onset of a medical condition manifesting itself by

acute sysmptoms of sufficient severity such that the absence of

immediate medical attention could reasonably be expected to result in

placing the beneficiary's health in serious jeopardy; serious

impairment to bodily functions; or serious dysfunction of any bodily

organ or part. Any ambulance transportation service that does not meet

these criteria would be a nonemergency service. This would include all

scheduled transports (regardless of origin and destination), as well as

transports to SNFs or to the beneficiary's residence. Medically

necessary transports to and from dialysis facilities are scheduled and,

therefore, are nonemergency ambulance services.

Comment: Four ambulance suppliers commended that the physician

certification requirement should not apply to beneficiaries who reside

at home or in facilities where they are not directly under the care of

a physician.

Response: We agree that suppliers may often be unable to obtain the

appropriate physician certificate for these patients for a unscheduled

transport. We will revise the final regulations to provide that the

physician certification will be required for these beneficiaries for

scheduled, repetitive transports and scheduled, nonrepetitive

transports because we can assume that beneficiaries who are scheduled

for medical appointments are under a physician's care. In addition, for

beneficiaries who reside in a facility and are under a physician's

care, there should be little difficulty in obtaining the certificate

for unscheduled transports. For nonemergency, unscheduled

transportation of beneficiaries residing at home or in facilities were

they are not under the direct care of a physician, the physician

certification requirement will not apply.

Comment: Several commenters, including an Emergency Medical

Services (EMS) Director, stated that nonscheduled, nonemergency

transports

[[Page 3641]]

should be judged on their medical necessity and therefore exempt from

the bed-confined requirement and that, to avoid unnecessary delays, it

would be appropriate to obtain the physician certification with 48

hours after the ambulance service was furnished. The commenters do

support use of a physician certification for those patients needing

repetitive transports to receive specialized services.

Response: After considering the arguments and observations made by

commenters, we concluded that we should proceed with our proposal to

require physician certification for all nonemergency transports, both

scheduled and unscheduled, except for the revisions discussed in the

previous response to comments concerning beneficiaries who are not

living in a facility directly under a physician's care. Nonemergency

ambulance service is a Medicare service furnished to a beneficiary for

whom a physician is responsible; therefore, the physician is

responsible for the medical necessity determination. The physician

certification requirement will help to ensure that the claims submitted

for ambulance services are reasonable and necessary, because other

methods of transportation are contraindicated. We believe that this

requirement will help to avoid Medicare payment for unnecessary

ambulance services that are not medically necessary even though they

may be desirable to beneficiaries. However, we agree with the

commenters that, to avoid unnecessary delays, for unscheduled

transports, the required documentation can be obtained within 48 hours

after the ambulance transportation service has been furnished. That is,

it is not necessary that the ambulance suppliers have the physician

certification in hand prior to furnishing the service. While it is

reasonable to expect that an ambulance supplier could obtain

pretransport physician certification for routine, scheduled trips, it

is less reasonable to impose such a requirement on unscheduled

transports. Therefore, we have revised the final regulations to reflect

this change.

Comment: Two ambulance suppliers commented that physicians are

unaware of the coverage requirements for ambulance services and that

their decisions to request ambulance services may be based on ``family

preference or the inability to safely transport the beneficiary by

other means rather than on the medical necessity requirement imposed by

Medicare.''

Response: Section 1861(s)(7) of the Act allows for Medicare

coverage of ambulance services only when the use of other methods of

transportation is contraindicated by the beneficiary's condition. If

the ability to safely transport the beneficiary, given the

beneficiary's condition, is at issue, then the supplier may obtain from

the physician the necessary documentation supporting the reason for the

transportation. If the decision to use ambulance services is based on

the convenience of the beneficiary, the beneficiary's family, the

beneficiary's physician, or some other element of personal preference,

Medicare coverage is not available.

To facilitate awareness of the Medicare rules as they relate to the

ambulance service benefit, ambulance suppliers may need to educate the

physician (or the physician's staff members) when making arrangements

for the ambulance transportation of a beneficiary. Suppliers may wish

to furnish an explanation of applicable medical necessity requirements

as well as requirements for physician certification and to explain that

the certification statement should indicate that the ambulance services

being requested by the attending physician are medically necessary.

C. Origins and Destinations

In the proposed rule, we added a provision that allowed coverage of

round-trip ambulance transportation for an ESRD beneficiary living at

home to the nearest treatment facility capable of furnishing the

necessary dialysis service regardless of whether the dialysis facility

is located at a hospital. We currently cover the ambulance services

only if the beneficiary is transported to a hospital-based facility for

dialysis.

Comment: Several commenters, including a consortium of EMS

Directors, renal associations, and dialysis facilities, believed that

the proposed change concerning transportation to the nearest dialysis

facility is not in the best interest of the beneficiary and that it

will have an impact on the continuity of beneficiary care. That is,

beneficiaries who have been receiving dialysis at the nearest hospital-

based treatment facility may now be forced to go to another, closer

nonhospital treatment facility. The commenters recommended that we

allow for transport to the nearest facility where there is an

``existing, established beneficiary care relationship'' and the

facility has an ``available bed.''

Response: While we were developing the proposed regulation,

concerns were raised by representatives of the renal community that the

current policy was detrimental to beneficiaries with ESRD because it

forced some of them to travel great distances to a hospital for

dialysis when the same services were available closer to their homes.

In response to these concerns, we proposed to allow coverage of

ambulance services to the nearest appropriate dialysis facility. This

policy is consistent with our general ambulance policy, set forth in

section 2120.3.F of the MCM, for emergency services which, in general,

limits payment for otherwise covered ambulance transportation services

to the nearest facility capable of furnishing care.

If the closest dialysis facility is not able to perform the type of

treatment the beneficiary requires or is unable to accommodate the

beneficiary for another reason, for example, lack of capacity, then

Medicare will pay for the beneficiary to be transported to the more

distant facility. It is, of course, the prerogative of the beneficiary

to choose the facility where he or she wishes to be treated. If the

beneficiary decides to be transported to a facility farther away, and

it is determined that the nearer facility was capable of providing the

required type and level of care, Medicare payment for the ambulance

service is limited to the amount that would have been paid to transport

the beneficiary to the nearest appropriate dialysis facility.

Comment: Three ambulance suppliers commented that we should

consider paying for other forms of transportation for ESRD

beneficiaries.

Response: As noted above, the only transportation service covered

by Medicare is that set forth at section 1861(s)(7) of the Act. That

section allows Medicare coverage for ambulance services only when the

use of other methods of transportation are contraindicated by the

beneficiary's condition. We believe Congress made a distinction between

``transportation by ambulance'' and ``normal transportation.'' We

believe Congress intended, by this distinction that Medicare coverage

be limited to ambulance services for beneficiaries who could not reach

care any other way. Thus, a beneficiary whose condition permits

transfer in any vehicle other than ambulance would not qualify for

Medicare Part B payment.

Comment: A State ambulance association and a hospital-based

ambulance provider commented that the proposed change for ESRD

beneficiaries will increase the number of transports and the incidence

of fraud and abuse.

Response: The proposed change in the policy for ESRD beneficiaries

does not expand the coverage of transportation for these beneficiaries;

it merely changes the allowable destinations for dialysis

[[Page 3642]]

treatment. We concluded the transporting ESRD beneficiaries from their

residence to the nearest appropriate dialysis facility to receive

medically necessary dialysis services could result in a cost savings to

the Medicare program through the substitution of shorter trips for

unnecessarily long trips and, in some cases, ambulance trips to distant

hospital-based facilities to obtain dialysis. This modification,

coupled with the 60-day physician certification requirement for

nonemergency, scheduled ambulance transports and the medical necessity

determination, provides limitations that should prevent inappropriate

coverage of ambulance services furnished to ESRD beneficiaries.

Therefore, we anticipate that this revision to the Medicare ambulance

services policy will not result in an increased number of transports or

an increase in the incidence of fraud and abuse.

Comment: Three ambulance suppliers commented that, in order to

decrease the burden on local emergency rooms and to provide most cost-

effective service, HCFA should consider expanding the allowable

destinations for ambulances transportation to include physician's

offices, urgent care facilities, and freestanding radiological

facilities. In support of this recommendation, one supplier indicated

that the Omnibus Reconciliation Act of 1980 (Public Law 96-499)

specifically covered ambulance transportation to freestanding

radiological facilities.

Response: Although we proposed to allow ESRD beneficiaries residing

at home to receive medically necessary ambulance transportation to the

nearest appropriate dialysis facility, even if that facility is not

hospital-based, we are not proposing to extend ambulance coverage for

transport to other facilities or for other populations of

beneficiaries. In making our decision to expand the destination sites

for ESRD beneficiaries, we considered the fact that many beneficiaries

who are confined to home may have a broader range of needs on a routine

basis, such as visits to the physician, for which they might wish to

have ambulance transportation could be available. However, an expansion

of this type would be difficult to monitor to ensure that the ambulance

services benefit was being used only for medically necessary

transportation where all other means of transportation were

unacceptable. Without built-in limitations (for example, routinely

requiring the use of physician certifications) and extensive rules for

determining when the need for medical services justifies coverage of

ambulance transportation, the ambulance services benefit could easily

become a benefit for general transportation services, which would be

inconsistent with Congressional intent and program history.

It is also important to note that, generally, Medicare does not

provide coverage for ambulance transportation to a physician's office,

for example, transportation to a physician's office for a follow-up

visit with an attending physician. There are two exceptions to this

rule. First, under Medicare Part A, we cover ambulance transportation

of hospital or SNF inpatients to the nearest appropriate treatment

facility including a physician's office to obtain medically necessary

diagnostic or therapeutic services not available at the institution

where the beneficiary is an inpatient. This exception may be applied

only if the services cannot reasonably be brought to the beneficiary or

the cost of transporting the beneficiary is less than the cost of

bringing the services to the beneficiary. Second, if while transporting

a beneficiary to a hospital, the ambulance stops at a physician's

office because of the beneficiary's dire need for professional

attention, and, immediately thereafter, the ambulance continues to the

hospital, Medicare coverage may be available.

The House Report of the Committee on the Budget that accompanied

Public Law 96-499 did recommend that we consider including coverage of

round-trip ambulance transportation for beneficiaries in SNFs or

confined to their homes to obtain medically necessary radiological

services furnished in a nonhospital setting. However, the suggestion to

provide coverage for round-trip ambulance transportation services to

freestanding radiological facilities was not included in the final

provisions of the law.

D. Requirements for Ambulance Suppliers

1. Vehicles

We proposed that any vehicle used as an ambulance must be designed

and equipped to respond to medical emergencies and, in nonemergency

situations, be capable of transporting beneficiaries with acute medical

conditions. The vehicle must also comply with all applicable State and

local laws governing the licensing and certification of an emergency

medical transportation vehicle. In addition, we proposed that, at a

minimum, the ambulance must contain a stretcher, linens, emergency

medical supplies, oxygen equipment, and other lifesaving emergency

medical equipment and be equipped with emergency warning lights,

sirens, and two-way telecommunications.

Comment: Several ambulance suppliers commented that requiring

``two-way telecommunications'' is unnecessary, cost prohibitive, and

not practical for rural areas. One commenter suggested that the

requirement be revised to state, ``* * * be equipped with

telecommunications equipment as required by State or local law, to

include, at a minimum, one two-way voice radio or wireless telephone.''

Response: We agree that the commenter's alternative will satisfy

our needs for safety and efficiency. We have decided, therefore, that

we will adopt the commenter's suggestion.

Comment: Three ambulance suppliers commented that the reference to

``lifesaving equipment'' is vague. One commenter suggested that we

specifically enumerate the ALS equipment required.

Response: It is our intent to defer to State or local requirements

where vehicle equipment and personnel certification requirements are

concerned. In addition, a review of the proposal reflects an

inadvertent omission of the phrase ``* * * as required by State or

local law''; therefore, Sec. 410.41(a) will be revised accordingly.

2. Vehicle Staff

We proposed staffing requirements at both the BLS and ALS level of

service. As proposed, a BLS vehicle would have to be staffed by at

least two persons, each trained to provide first aid and certified as

an emergency medical technician-basic (EMT-B) by the State or local

authority where the services are furnished and legally authorized to

operate all lifesaving equipment on board the vehicle.

An ALS vehicle would need to include at least two persons: one

person trained to provide basic first aid at the EMT-B level and one

person trained and certified as a paramedic or emergency medical

technician-advance (EMT-A) who is also trained and certified to perform

one or more ALS services. The EMT-A or paramedic would have had to be

certified by the State in which the services are furnished and legally

authorized to operate all lifesaving equipment on board the vehicle.

Comment: Several ambulance suppliers commented that the proposed

staffing requirements are contrary to existing State standards and the

proposed requirement that a BLS ambulance be staffed with two EMTs

[[Page 3643]]

would have a detrimental effect on volunteer companies. The commenters

recommended that we revise the staffing requirements to defer to State

or local requirements for ambulance staffing. Many comments pointed out

that the State EMS offices set the minimum staffing level requirements.

Response: We agree with the commenters that it is sufficient for

Medicare purposes if the BLS vehicle staffing meets the State and local

laws. Based on a review of the comments, we acknowledge that a

requirement for a minimum of two EMTs, as proposed, has the potential

of placing considerable burden on volunteer ambulance services and may

possibly lead to the elimination of such services, particularly in

rural areas. We will revise the regulations accordingly.

Comment: Three suppliers requested that we define the following

terms: EMT-A, EMT-B, and paramedic.

Response: Based on comments received in response to the proposed

regulation, we acknowledge that the terms EMT-A and EMT-B are no longer

used by the EMS industry; thus, we are deleting reference to EMT-A and

EMT-B. We will, however, maintain our proposed requirement that if an

ALS staff member is authorized, under State or local laws, to operate

as an ALS crew member, then the EMT must be certified to perform one or

more ALS services. The term ``paramedic'' is defined by State and local

laws.

3. Billing and Reporting Requirements

In the proposed rule, we stated that we would require ambulance

suppliers to use the HCFA Common Procedure Coding System (HCPCS) codes

to describe the origin and destination of ambulance trips. We also

proposed that, at the carrier's request, a supplier would complete and

submit an ambulance supplier form established by HCFA and provide the

carrier with documentation of the supplier's compliance with State and

local emergency vehicle and staff licensure and certification

requirements. In addition, suppliers would be required to provide any

information requested by the carrier for purposes of documenting the

ambulance supplier's compliance with the regulations and to support

claims processing.

Comment: A majority of the commenters objected to the proposed

billing and reporting requirements on the ground that they are unfunded

mandates that are burdensome and in excess of the informational updates

required at the State or local level. They also believe that the

carriers should not be allowed unlimited access to records, many of

which are protected under other Federal laws and regulations.

Response: Current Medicare instructions (section 2120.1 of the MCM)

require ambulance suppliers to submit a statement and other documentary

evidence that their vehicles and personnel meet all of the requirements

set by State or local authorities. The guideline specifies that, in

addition to the submission of documentary evidence, the statement

should describe the equipment and beneficiary care items with which the

vehicles are equipped, the extent of first-aid training acquired by

personnel staffing those vehicles and the supplier's agreement to

notify the carrier of any changes in operation that would affect the

coverage of the supplier's ambulance services. Our intent in proposing

that suppliers complete a HCFA-developed Ambulance Supplier Form was to

promote consistency in the collection of this already-required

information as well as make it easier for suppliers by providing them

with a preprinted form to complete.

Current guidelines also specify that when the required information

is not submitted or whenever there is a question about the supplier's

compliance with the requirements, the carrier should take appropriate

action. The appropriate action may include conducting an on-site visit

as well as requesting additional information. We disagree with

commenters that the proposed requirement allow unlimited access to

protected records. This requirement formalizes, in a consistent format,

an informational requirement that has been in effect for several years.

Based on comments, we will revise the final regulations to clarify

that, upon carriers' request, suppliers will be required to submit

additional information and documentation as it relates to vehicle and

personnel operations. That is, suppliers will not be required to

automatically submit information and documentation for each new vehicle

that is purchased or crew member that is hired.

Comment: Several suppliers stated that verification of compliance

information should be obtained from State databases and not directly

from the ambulance supplier.

Response: To coordinate the transfer of information between various

State computer systems and the systems used by our Medicare contractors

could present administrative problems for the State as well as the

carrier. We would also need to take into consideration system

capabilities, compatibility, and the potential cost to the State,

carrier, HCFA, and the supplier. We are not requiring the submission of

documentation that is inconsistent with information suppliers are

already required to report to the State or local authority. This

provision requires suppliers to complete the standardized Ambulance

Supplier Form and to photocopy documentation already in their

possession.

Comment: One ambulance supplier commented that the Ambulance

Supplier Form appears to contradict the information provided in the

HCFA-855, Medicare Provider/Supplier Enrollment form. The supplier

questioned whether the State ambulance license will be acceptable in

lieu of vehicle and staffing information required on the HCFA-855

application.

Response: The HCFA-855 is required to be completed by all providers

and suppliers who wish to enroll in the Medicare program (except for

those who are required to enroll through the survey and certification

process). The information being requested on that form is used to

determine eligibility and to make proper payments under the Medicare

program. Attachment 2 of the HCFA-855 Enrollment Application form

indicates that, ``If you are licensed by your State as an Ambulance

Supply Service, you are not required to submit the information on the

supplier form Attachment 2.'' The information that Attachment 2

requires related to vehicle descriptions for each vehicle including

specifying the type of vehicle, license number, and the list of first-

aid, ALS equipment, if applicable, safety and other care items. Even in

instances where a supplier does complete the Ambulance Supplier Form

shown in the attachment, because the service is not licensed by the

State, the company would still be required to submit to the carrier

evidence of recertification. This is the same requirement imposed on

suppliers who are State licensed. The enrollment form instructions

specify that evidence of vehicle and personnel recertification must be

submitted to the carrier on an ongoing basis and that copies of

applicable certificates and licenses should be included. This

instruction guideline is applicable to all ambulance service suppliers.

In conclusion, the proposed billing and reporting requirements,

which require submission of the Ambulance Supplier Form, are not new

requirements. This form is the method by which suppliers will submit

evidence of vehicle and crew recertification. The form was developed to

provide a consistent format for the collection of verification of

compliance

[[Page 3644]]

information currently required by Medicare instructional guidelines.

V. Paramedic Intercept Provisions of the BBA

Paramedic intercept services are ALS services delivered by

paramedics who operate separately from the agency that provides the

ambulance transport. This type of service is most often provided for an

emergency ambulance transport in which a local volunteer ambulance that

can provide only BLS-level service is dispatched to transport a

beneficiary. If the beneficiary needs ALS services, such as EKG

monitoring, chest decompression, or IV therapy, another agency,

typically a hospital or proprietary emergency medical service,

dispatches a paramedic to meet the BLS ambulance at the scene or en

route to the hospital. The ALS paramedics then provide their services

to the beneficiary.

This tiered approach to life-saving may be cost effective in many

areas because most volunteer ambulances do not charge for their

service, and one paramedic service can cover many communities. Under

current policy, Medicare payment may be made for these services only

when the claim is submitted by the ambulance provider (that is, the

actual transporting ambulance unit). Payment cannot be made directly to

the intercept service supplier because there is no benefit category in

the Medicare statute for the intercept service itself. With the limited

exception provided in section 4531(c) of the BBA (discussed below), the

only statutory basis for covering these services is under section

1861(s)(7) of the Act, as an integral part of the ambulance

transportation benefit. In a jurisdiction that prohibits volunteer

ambulances from billing Medicare and other health insurance, the

intercept service cannot be paid for treating a Medicare beneficiary

and is forced to bill the beneficiary for the intercept service.

Section 4531(c) of the BBA provided that the Secretary could

include limited coverage of these intercept services provided in a

rural area; that is, payment may be made directly to the agency

providing the paramedic service. However, the services could be covered

only if they are provided under contract with one or more volunteer

ambulance services and they are medically necessary based on the

condition of the beneficiary receiving the ambulance service. In

addition, the volunteer ambulance service involved must meet all of the

following requirements:

Be certified as qualified to provide ambulance services

for purposes of this provision.

Provide only BLS services at the time of the intercept.

Be prohibited by State law from billing for any service.

Finally, the entity providing the ALS paramedic intercept service must

meet the following requirements:

Be certified as qualified to provide the services under

the Medicare program.

Bill all Recipients who receive ALS paramedic intercept

services from the entity, regardless of whether or not those recipients

are Medicare Beneficiaries.

We are revising Sec. 410.40 to include these provisions. We are

defining rural area in the same way it is defined for purposes of the

Medicare hospital inpatient prospective payment system under section

1886(d)(2)(D) of the Act and in regulations at Sec. 412.62(f). A rural

area is any area outside of a Metropolitan Statistical Area (MSA) or

New England County Metropolitan Area (NECMA) as defined by the Office

of Management and Budget. (Please see Tables 4A and 4B in the final

rule in the July 31, 1998 Federal Register entitled, Health Care

Financing Administration, Medicare Program; Changes to the Hospital

Inpatient Prospective Payment Systems and Fiscal Year 1999 Rates; Final

Rule.)

Although it provided the Secretary with the authority to cover ALS

paramedic intercept services under certain conditions, section 4531(c)

of the BBA did not specify what the payment should be for those

services. We considered three different methods of payment for these

services.

First, we considered paying the full ALS payment rate. We discussed

the issued with several ambulance companies that furnish paramedic

intercept services, that believe that the total cost of providing these

services is virtually the same as that of providing the full ALS

ambulance service. In addition, because these services are furnished in

rural areas, there is a low utilization rate that raises their cost per

service. That is, the paramedic intercept service has the same fixed

costs as ambulance company (i.e., flycar vehicle, life saving

equipment, labor and overhead) but these costs are spread over only 2

or 3 calls per day, whereas the typical ALS ambulance company has 30 to

40 calls per day.

A second option would be to pay for intercept services based on the

difference between the ALS ambulance service rate and the BLS ambulance

service rate. This would Place a value on the intercept service

consistent with the fact that the full ALS service is comprised of two

components: the intercept service and a transport service. The

transport would be valued at the BLS rate and the intercept service

would be valued as the difference between the ALS rate and the BLS

rate.

Finally, we could pay the average salary of a paramedic multiplied

by the average amount of time involved for an intercept service. While

this option would cover the costs associated with the paramedic's

services during an intercept, it would not recognize other costs such

as standby time, the vehicle used by the paramedics, medical equipment

carried on that vehicle, and other overhead expenses.

After examining these options, we believe the best option would be

the second option; that is, pay the difference between the ALS payment

rate and the BLS payment rate. If we were to pay the full ALS rate, we

would be recognizing the intercept service as virtually equivalent to

the full ALS ambulance service. However, the ALS ambulance service is

actually equivalent to a paramedic intercept service plus a transport

service. We do not believe that it is appropriate to price a component

of the ALS service at the same rate as the total ALS service. However,

to pay only the costs of the paramedics' services does not recognize

the additional costs associated with furnishing the BLS service.

We believe the second option balances considerations for access to

care and consistency with current ambulance payment policy. We would be

providing the intercept company with a reasonable payment while not

providing the same amount of payment that we would to an ambulance

company that provides both the transport and the paramedic service. If

we pay the difference between the ALS and BLS rates to the intercept

company, we would be acknowledging the BLS rate that would have been

paid to the volunteer company had it been permitted to bill the program

for the transport.

VI. Provisions of the Final Regulations

Other than the changes made to implement section 4531(c) of the

BBA, those provisions of this final rule that differ from the proposed

rule are as follows:

We are revising Secs. 409.10 and 409.20 to clarify that

ambulance services are covered under Medicare Part A as hospital, CAH,

and SNF inpatient services.

We have revised the medical necessity requirements in

Sec. 410.40(d) to specify when a beneficiary can be determined to be

bed-confined and,

[[Page 3645]]

thus, potentially eligible for ambulance services.

We have revised the physician certification requirements

for nonemergency, unscheduled ambulance services in Sec. 410.40(d). In

cases where a beneficiary requires a nonemergency, unscheduled

ambulance transport, the written physician certificate can be obtained

48 hours after the ambulance transportation has been furnished. We are

also revising the regulations to provide that in situations where

nonemergency, unscheduled ambulance transportation is required for

beneficiaries residing at home (private residence) or in facilities

where they are not under the direct care of a physician, the physician

certification will not be required.

We have revised the provision in Sec. 410.41(a) that

identifies the minimum equipment required on a vehicle used as an

ambulance, to require that a vehicle used as an ambulance must be

equipped with telecommunication equipment as required by State or local

law, to include, at a minimum, one two-way voice radio or wireless

telephone.

We have revised Sec. 410.41(b), which established minimum

vehicle staffing requirements for both the BLS and ALS level of

service. For BLS vehicles, we require that, at a minimum, the staff

must meet staffing requirements established by State or local

authorities. For ALS vehicles, we have revised this provision to delete

reference to EMT-A and EMT-B designations.

VII. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to

provide 60-day notice in the Federal Register and solicit public

comment before a collection of information requirement is submitted to

the Office of Management and Budget (OMB) for review and approval. In

order to fairly evaluate whether an information collection should be

approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act

requires that we solicit comment on the following issues:

Whether the information collection is necessary and useful

to carry out the proper functions of our agency.

The accuracy of our estimate of the information collection

burden.

The quality, utility, and clarity of the information to be

collected.

Recommendations to minimize the information collection

burden on the affected public, including automated collection

techniques.

Section 410.40 Coverage of Ambulance Services

The information collection requirements in Sec. 410.40 require the

ambulance supplier to obtain written certification from the

beneficiary's attending physician certifying that the medical necessity

requirements of paragraph (d)(1) of this section are met, before

furnishing non-emergency, scheduled ambulance services. The physician's

order must be dated no earlier than 60 days before the date the service

is furnished. And, for nonemergency, unscheduled ambulance services for

a resident of a facility who is under the care of a physician, the

ambulance supplier must obtain the written certification, within 48

hours after the transport, from the beneficiary's attending physician

certifying that the medical necessity requirements of paragraph (d)(1)

of this section are met.

The requirement for the physician's certification does not require

a particular form or format and can be simply a written statement to

describe the beneficiary's condition that supports the need for

ambulance services. Some suppliers have developed their own physician

certification forms. We estimate that a physician's certification could

take, on average, 10 minutes of the physician's time per beneficiary

and, in cases involving repetitive transports, one certificate could be

used by the supplier for a 60-day period. The following chart shows the

potential paperwork burden that may be imposed on physicians by this

final rule.

Estimated Paperwork Burden on Physicians

----------------------------------------------------------------------------------------------------------------

Estimated annual

number of ambulance Estimated total annual

trips per supplier Estimated average burden for all physicians

CFR Section (9,000 suppliers) time in minutes to combined (9,000 x 3,000

requiring complete each certificates per supplier

certification statement (Minutes) x 10 minutes) (Hours)

statements

----------------------------------------------------------------------------------------------------------------

410.40(d)(2) & (3)(i)................... 3,000 10 4,500,000

----------------------------------------------------------------------------------------------------------------

In addition, suppliers will be required to retain all physician

certifications on file and make the certifications available upon

request by the Medicare carrier or intermediary. The burden associated

with this requirement is the time required for the supplier to retain

the physician certification. We estimate that this could take, on

average, 2 minutes to file each physician certification. Given that we

estimate 3,000 certifications per year, the total burden associated

with these requirements is 6,000 minutes or 100 annual hours, per

supplier. The total burden imposed by the requirements of this section

are 4,500,000 hours for all physicians and (9,000 x 100 hours record

keeping) 900,000 hours for suppliers. This paperwork burden requirement

will impact all physicians. We estimate that there are 500,000

physicians. Total burden hours imposed on physicians times $15 (the

estimated hourly cost for an administrative employee to complete the

form, less the attending physician's signature) equals an additional

cost of $67.5 million for physicians and a cost of $9 million for

ambulance suppliers.

Section 410.41 Requirements for ambulance suppliers

This section requires an ambulance supplier to bill for ambulance

services using HCFA-designated procedure codes to describe origin and

destination and indicate on the claims form that the physician

certification is on file and available for review upon request by the

Medicare carrier or intermediary. The burden associated with this

requirement is captured during the completion of the HCFA 1500/1491

common claim file form, approved under OMB number 0938-0008. Therefore,

we are assigning one token-hour of burden for this requirement.

This section also requires, upon a carrier's request, an ambulance

supplier to complete and return the attached Ambulance Supplier Form

and to submit documentation of emergency vehicle and staff licensure

and certification requirements in keeping with State and local laws to

the Medicare carrier.

This requires completion of the Ambulance Supplier Form,

photocopying documentation already required by State or local laws and

in

[[Page 3646]]

the possession of the supplier, and sending those copies, along with

the completed form to the carrier. We will require ambulance suppliers

to complete the Ambulance Supplier Form on an annual basis or in

keeping with licensure or certification requirements established by

State or local laws. It is our understanding that an overwhelming

number of States require ambulance supplier licensure or certification

renewal on an annual basis.

Our decision no to state a specific time frame, for example

requiring annual submission of the documentation, in which ambulance

suppliers will be required to submit the form took into consideration

the potential burden on those suppliers operating in areas with renewal

requirements other than on an annual basis. It is estimated that the

time to complete this form is no more than 32 minutes.

The following chart shows the potential paperwork burden that may

be imposed on ambulance suppliers by this final rule.

Estimated Annual Supplier Reporting Burden

------------------------------------------------------------------------

Estimated Estimated Estimated

no. of average burden annual

CFR Sections ambulance per response burden

suppliers (Minutes) (Hours)

------------------------------------------------------------------------

410.41(c)(2) ambulance

supplier form and

documentation................ 9,000 32 4,530

------------------------------------------------------------------------

We have submitted a copy of this final rule to OMB for its review

of the information collection requirements in Secs. 410.40 and 410.41.

The information collection requirements are not effective until they

have been approved by OMB. A notice will be published in the Federal

Register when approval is obtained.

If you comment on these information collection and record keeping

requirements, or the attached form, please mail copies directly to the

following:

Health Care Financing Administration, Office of Information Services,

Security and Standards Group, Division of HCFA Enterprise Standards,

Room C2-26-17, 7500 Security Boulevard, Baltimore, MD 21244-1850, Attn:

John Burke, HCFA-1813-FC, or

Office of Information and Regulatory Affairs, Office of Management and

Budget, Room 10235, New Executive Office Building, Washington, DC

20503, Attn: Allison Herron Eydt, HCFA Desk Officer

VIII. Regulatory Impact Statement

Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601

through 612), we prepare a regulatory flexibility analysis unless the

Secretary certifies that a rule will not have a significant economic

impact on a substantial number of small entities. For purposes of the

RFA, all suppliers of ambulance services are considered to be small

entities. Individuals, carriers, and States are not considered to be

``small entities.''

In addition, section 1102(b) of the Act requires the Secretary 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 604

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 50 beds.

As illustrated below, the impact of this regulation does not meet

the criteria under Executive Order 12866 to require a regulatory impact

analysis; however, the following information, together with information

provided elsewhere in this preamble, constitutes a voluntary analysis

and meets the requirements of the RFA.

First, this final rule was initiated partly because of the concern

over the rapid increase in the cost to the Medicare program for

furnishing ambulance services to beneficiaries. This rapid increase in

expenditures can be attributed to a variety of causes that include the

following:

High costs for equipment, supplies, and trained personnel

incurred by all ambulance suppliers are passed on to the public.

Provision of nonemergency, scheduled ambulance services to

ESRD beneficiaries for treatment or therapy to hospital-based

facilities that may be farther away from the beneficiary's home than

nonhospital-based facilities offering the same service. These

transports cost the Medicare program more because of the higher mileage

charges.

Erroneous Medicare payment of claims for ambulance

services from suppliers using nonemergency vehicles that transport

beneficiaries whose medical condition is such that transportation in an

ambulance is unnecessary.

Second, we believe the policies contained in this rule will result

in the consequences outlined below:

The requirement that ambulance services be furnished in a

vehicle equipped and staffed to respond to a medical emergency or an

acute care situation will improve the overall quality of services

furnished to beneficiaries and eliminate payment for transportation

services that are furnished in a vehicle not equipped or staffed to

provide ambulance services. This particular aspect of the final rule

may cause some suppliers to have to upgrade their vehicles, equipment

or staff training and certification so that the vehicles meet the

definition of an ambulance. There may be some, however, who may not be

able to upgrade their vehicles or staff. We do not know how many

suppliers this requirement would affect; however, because we believe

the entities that may be affected by this final rule primarily provide

transportation services, such as wheelchair van transportation, we do

not believe the number to be substantial.

The requirement for physicians to certify the need for

scheduled and certain unscheduled, nonemergency ambulance services for

beneficiaries to receive therapy or treatment will ensure that those

beneficiaries receiving the ambulance services actually require that

level of transport.

--This requirement will affect all physicians. We estimate that there

are 500,000 physicians. Total burden hours imposed on physicians times

$15 (the estimated hourly cost for an administrative employee to

complete the form, less the attending physician's signature) equals an

additional cost of $67.5 million for physicians and a cost of $9

million for ambulance suppliers.

--The physician certification provision also affects the suppliers:

The physician certification provision requires, in

situations

[[Page 3647]]

involving scheduled, nonemergency transportation, suppliers to obtain,

from the beneficiary's attending physician, a written physician's order

certifying the need for ambulance transportation. The certification is

renewable every 60 days. Many suppliers currently provide carriers with

similar documentation to certify medical necessity when transporting

beneficiaries with ESRD. In cases where a beneficiary requires a

nonemergency, unscheduled ambulance transport, the supplier must

obtain, from the beneficiary's attending physician, the physician's

written certificate 48 hours after the ambulance transportation has

been furnished.

The billing and reporting provision set forth in

Sec. 410.41(c)(2) requires ambulance suppliers to verify compliance

with State or local licensure and certification requirements. This

provision does not require the submission of information that is

inconsistent with information suppliers provide to State or local

authorities. Suppliers are already required to complete the

standardized HCFA-Ambulance Supplier Form and submit the appropriate

documentary evidence. This provision will require the photocopying of

documentary evidence in the possession of the supplier.

--The provision permitting ESRD beneficiaries to be transported to the

nonhospital-based facilities nearest their home will be more

convenient, since they will no longer have to be transported to

hospital-based facilities that may be farther away. In addition, for

those beneficiaries this is a more cost-effective policy since

regularly transporting beneficiaries farther from their homes is more

costly.

For the first time, Medicare payment may be made for

paramedic intercept services that meet the conditions for coverage.

Currently, when these services have been provided to a Medicare

beneficiary, the ALS paramedic intercept company has been free to bill

the beneficiary for the full charge of the intercept service because it

was not a covered service. Now that the service is covered, Medicare

payment will be made to the intercept company, and the beneficiary will

be responsible for only the applicable deductible and coinsurance. This

will benefit both the company and the beneficiary.

The only State that we are aware of in which the conditions

described in section 4531(c) of the BBA exist is New York. After

consultations with the ambulance industry in New York, and examination

of the Medicare program data, we estimate the volume of services that

will be covered under this provision in a year will be between 2,000

and 4,000. A payment allowance of $150.00 per service (the difference

between the average allowance for ALS and the average allowance for BLS

in New York) yields a negligible cost. Because the Medicare Part B

coinsurance and deductible provisions apply, the program payment will

be between $240,000 and $480,000. The remainder of the cost will be the

responsibility of beneficiaries.

Section 202 of the Unfunded Mandates Reform Act of 1995 also

requires that agencies assess anticipated costs and benefits before

issuing any final rule with comment period that may result in an annual

expenditure by State, local or tribal government, in the aggregate, or

by the private sector of $100 million. The final rule with comment

period will not have an effect on the governments mentioned, and

private sector costs will be less than the $100 million threshold. The

physician certification provision requires, in situations involving

scheduled, nonemergency transportation, suppliers to obtain, from the

beneficiary's attending physician, a written physician's order

certifying the need for ambulance transportation. The certification is

renewable every 60 days. Many suppliers currently provide carriers with

similar documentation to certify medical necessity when transporting

beneficiaries with ESRD. In cases where a beneficiary requires a

nonemergency, unscheduled ambulance transport, the supplier must

obtain, from the beneficiary's attending physician, the physician's

written certificate 48 hours after the ambulance transportation has

been furnished.

The billing and reporting provision set forth in Sec. 410.41(c)(2)

requires ambulance suppliers to verify compliance with State or local

licensure and certification requirements. This provision does not

require the submission of information that is inconsistent with

information suppliers provide to State or local authorities. Suppliers

are already required to complete the standardized HCFA-Ambulance

Supplier Form and submit the appropriate documentary evidence. This

provision will require the photocopying of documentary evidence in the

possession of the supplier.

In accordance with the provisions of Executive Order 12866, this

regulation was reviewed by the Office of Management and Budget.

IX. Other Required Information

A. Waiver of Notice of Proposed Rulemaking

This final rule contains a provision relating to ambulance services

that was not included in the proposed rule published on June 17, 1997.

That provision, the limited Medicare coverage of paramedic intercept

services in rural areas, was authorized by section 4531(c) of the BBA.

We ordinarily publish a notice of proposed rulemaking in the Federal

Register to provide a period for public comment before the provisions

of the final rule take effect. However, we may waive that procedure if

we find good cause that prior notice and comment are impracticable,

unnecessary, or contrary to the public interest.

As explained in detail in section V of this preamble, section

4531(c) of the BBA authorizes us to provide coverage of paramedic

intercept services under very limited conditions, which are

specifically stated in the law. Because of the specificity of the law,

we have little discretion in the manner in which we implement this

extension of the ambulance benefit.

This provision was not included in the proposed rule because

publication of the proposed rule predated enactment of the BBA.

Nonetheless, we have received many letters requesting that we implement

the provision as soon as possible. As discussed above, this change will

allow suppliers of paramedic intercept services that meet the statutory

requirements to receive payment for those services. Because those

suppliers are now prohibited from billing Medicare for their services,

Medicare beneficiaries are responsible for paying the full charge for

the services. We believe that it is appropriate to implement this

change as soon as possible to reduce the burden on Medicare

beneficiaries who must pay for these services out-of-pocket. Thus, we

find that, in this case, prior notice and comment would be

impracticable and unnecessary, therefore, we find good cause to waive

proposed rulemaking for the revisions set forth at Sec. 410.40(c) and

to issue these regulations as final. However, we are providing a 60-day

period for public comment, as indicated at the beginning of this rule,

on these changes.

B. Response to Comments

Because of the large number of items of correspondence we normally

receive on Federal Register documents published for comment, we are not

able to acknowledge or respond to them individually. Comments on the

[[Page 3648]]

paramedic intercept provision will be considered if we receive them by

the date specified in the DATES section of this preamble. We will not

consider comments concerning the provisions of this final rule that

were published in the June 17, 1997 proposed rule, whether those

provisions are presented in this final rule as unchanged or have been

revised based on public comment.

List of Subjects

42 CFR Part 409

Health facilities, Medicare.

42 CFR Part 410

Health facilities, Health professions, Kidney diseases,

Laboratories, Medicare, Rural areas, X-rays.

42 CFR Part 424

Emergency medical services, Health facilities, Health professions,

Medicare.

42 CFR Chapter IV is amended as set forth below:

Part 409--HOSPITAL INSURANCE BENEFITS

A. Part 409 is amended as set forth below:

1. The authority citation for part 409 continues to read as

follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42

U.S.C. 1302 and 1395hh).

Sec. 409.10 [Amended]

2. In Sec. 409.10, the following amendments are made:

a. In paragraphs (a)(1) through (a)(5), the semicolon at the end of

each paragraph is removed, and a period is added in its place.

b. In paragraph (a)(6), the words ``services; and'' are removed,

and ``services.'' is added in their place.

c. A new paragraph (a)(8) is added to read as follows:

Sec. 409.10 Included services.

(a) * * *

(8) Transportation services, including transport by ambulance.

* * * * *

Sec. 409.20 [Amended]

3. In Sec. 409.20, the following amendments are made:

a. In paragraph (a), the period at the end of the introductory text

is removed, and a colon is added in its place.

b. In paragraph (a)(1) through (a)(5), the semicolon at the end of

each paragraph is removed, and a period is added in its place.

c. In paragraph (a)(6), ``; and'' is removed, and a period is added

in its place.

d. A new paragraph (a)(8) is added to read as follows:

Sec. 409.20 Coverage of services.

(a) * * *

(8) Transportation services, including transport by ambulance.

* * * * *

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

B. Part 410 is amended as set forth below:

1. The authority citation for part 410 continues to read as

follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42

U.S.C. 1302 and 1395hh).

2. Section 410.40 is revised to read as follows:

Sec. 410.40 Coverage of ambulance services.

(a). Basic rules. Medicare Part B covers ambulance services if the

following conditions are met:

(1) The supplier meets the applicable vehicle, staff, and billing

and reporting requirements of Sec. 410.41 and the service meets the

medical necessity and origin and destination requirements of paragraphs

(d) and (e) of this section.

(2) Medicare Part A payment is not made directly or indirectly for

the services.

(b) Levels of services. Medicare covers ambulance services within

the United States at the following levels of services:

(1) Basic life support (BLS) services.

(2) Advanced life support (ALS) services.

(3) Paramedic ALS intercept services described in paragraph (c) of

this section.

(c) Paramedic ALS intercept services. Paramedic ALS intercept

services must meet the following requirements:

(1) Be furnished in a rural area (as defined in Sec. 412.62(f) of

this chapter).

(2) Be furnished under contract with one or more volunteer

ambulance services that meet the following conditions:

(i) Are certified to furnish ambulance services as required under

Sec. 410.41.

(ii) Furnish services only at the BLS level.

(iii) Be prohibited by State law from billing for any service.

(3) Be furnished by a paramedic ALS intercept supplier that meets

the following conditions:

(i) Is certified to furnish ALS services as required in

Sec. 410.41(b)(2).

(ii) Bills all the recipients who receive ALS intercept services

fro the entity, regardless of whether or not those recipients are

Medicare beneficiaries.

(d) Medical necessity requirements--(1) General rule. Medicare

covers ambulance services only if they are furnished to a beneficiary

whose medical condition is such that other means of transportation

would be contraindicated. For nonemergency ambulance transportation,

the following criteria must be met to ensure that ambulance

transportation is medically necessary:

(i) The beneficiary is unable to get up from bed without

assistance.

(ii) The beneficiary is unable to ambulate.

(iii) The beneficiary is unable to sit in a chair or wheelchair.

(2) Special rule for nonemergency, scheduled ambulance services.

Medicare covers nonemergency, scheduled ambulance services if the

ambulance supplier, before furnishing the service to the beneficiary,

obtains a written order from the beneficiary's attending physician

certifying that the medical necessity requirements of paragraph (d)(1)

of this section are met. the physician's order must be dated no earlier

than 60 days before the date the service is furnished.

(3) Special rule for nonemergency, unscheduled ambulance services.

Medicare covers nonemergency, unscheduled ambulance services under the

following circumstances:

(i) For a resident of a facility who is under the care of a

physician if the ambulance supplier obtains a written order from the

beneficiary's attending physician, within 48 hours after the transport,

certifying that the medical necessity requirements of paragraph (d)(1)

of this section are met.

(ii) For a beneficiary residing at home or in a facility who is not

under the direct care of a physician. A physician certification is not

required.

(e) Origin and destination requirements. Medicare covers the

following ambulance transportation:

(1) From any point of origin to the nearest hospital, CAH, or SNF

that is capable of furnishing the required level and type of care for

the beneficiary's illness or injury. The hospital or CAH must have

available the type of physician or physician specialist needed to treat

the beneficiary's condition.

(2) From a hospital, CAH, or SNF to the beneficiary's home.

(3) From a SNF to the nearest supplier of medically necessary

services not available at the SNF where the beneficiary is a resident,

including the return trip.

(4) For a beneficiary who is receiving renal dialysis for treatment

of ESRD, from the beneficiary's home to the

[[Page 3649]]

nearest facility that furnishes renal dialysis, including the return

trip.

(f) Specific limits on coverage of ambulance services outside the

United States. If services are furnished outside the United States,

Medicare Part B covers ambulance transportation to a foreign hospital

only in conjunction with the beneficiary's admission for medically

necessary inpatient services as specified in subpart H of part 424 of

this chapter.

3. A new Sec. 410.41 is added to read as follows:

Sec. 410.41 Requirements for ambulance suppliers.

(a) Vehicle. A vehicle used as an ambulance must meet the following

requirements:

(1) Be specially designed to respond to medical emergencies or

provide acute medical care to transport the sick and injured and comply

with all State and local laws governing an emergency transportation

vehicle.

(2) Be equipped with emergency warning lights and sirens, as

required by State or local laws

(3) Be equipped with telecommunications equipment as required by

State or local law to include, at a minimum, one two-way voice radio or

wireless telephone.

(4) Be equipped with a stretcher, linens, emergency medical

supplies, oxygen equipment, and other lifesaving emergency medical

equipment as required by State or local laws.

(b) Vehicle staff--(1) BLS vehicles. A vehicle furnishing

ambulance services must be staffed by at least two people, one of whom

must meet the following requirements:

(i) Be certified as an emergency medical technician by the State or

local authority where the services are furnished.

(ii) Be legally authorized to operate all lifesaving and life-

sustaining equipment on board the vehicle.

(2) ALS vehicles. In addition to meeting the vehicle staff

requirements of paragraph (b)(1) of this section, one of the two staff

members must be certified as a paramedic or an emergency medical

technician, by the State or local authority where the services are

being furnished, to perform one or more ALS services.

(c) Billing and reporting requirements. An ambulance supplier must

comply with the following requirements:

(1) Bill for ambulance services using HCFA-designated procedure

codes to describe origin and destination and indicate on claims form

that the physician certification is on file.

(2) Upon a carrier's request, complete and return the ambulance

supplier form designated by HCFA and provide the Medicare carrier with

documentation of compliance with emergency vehicle and staff licensure

and certification requirements in accordance with State and local laws.

(3) Upon a carrier's request, provide additional information and

documentation as required.

PART 424--CONDITIONS FOR MEDICARE PAYMENT

1. The authority citation for part 424 continues to read as

follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42

U.S.C. 1302 and 1395hh).

Sec. 424.124 [Amended]

In Sec. 424.124, paragraph (c)(2) is amended by removing the

reference to ``Sec. 410.140'' and adding in its place the reference to

``Sec. 410.41''.

(Catalog of Federal Domestic Assistance Program No. 93.773,

Medicare--Hospital Insurance; and Program No. 93.774, Medicare--

Supplementary Medical Insurance Program)

Dated: December 10, 1998.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing Administration.

Dated: January 13, 1999.

Donna E. Shalala,

Secretary.

Note: Addendum 1 and Addendum 2 will not appear in the Code of

Federal Regulations.

Addendum 1

NOTE TO: (INSERT NAME OF MEDICARE SUPPLIER)

FROM: (INSERT NAME OF MEDICARE CARRIER)

SUBJECT: Completion of Attached Ambulance Supplier Form

The attached form must be completed by you whenever your State

and Local laws require that you update the licensure of your

vehicles and/or staff. We are also requiring that this form be

completed at the carrier's discretion so that the latest

documentation will be on file with the carrier to make appropriate

claims payment determinations.

The form is self explanatory and, therefore, there are no

program instructions for its completion. We do not expect that it

will take longer than 30 minutes to answer the questions and will

require only another minute or two to copy and attach the

photocopies supporting the response to some of the questions.

If you have any questions about completing this form please

contact us at (fill in the telephone number and or address of the

carrier).

Addendum 2--Ambulance Supplier Form

1. Corporate/Business Name of Ambulance Company:-----------------------

----------------------------------------------------------------------

Trade Name of Ambulance Company:---------------------------------------

----------------------------------------------------------------------

(Exactly as it appears on the vehicle(s))

2. Medicare Provider Number:-------------------------------------------

Federal Tax Identification Number:-------------------------------------

3. License Number(s):--------------------------------------------------

(A copy of the current license/certificate must be submitted with

this form. The effective date and expiration must be stated on the

license/certificate. Program payment will be based these dates.)

4. Physical Address of Ambulance Company Headquarters:-----------------

----------------------------------------------------------------------

Mailing Address (If different):----------------------------------------

----------------------------------------------------------------------

(Post Office Boxes and Drop Boxes are not acceptable as a physical

business address.)

Physical address locations of any substations, other than

Headquarters, where vehicles are garaged (if applicable):

a.---------------------------------------------------------------------

----------------------------------------------------------------------

b.---------------------------------------------------------------------

----------------------------------------------------------------------

(Attach additional sheets if necessary)

What geographic area(s) do you serve?----------------------------------

----------------------------------------------------------------------

5. Business Telephone Number(s): (____)--------------------------------

Fax Machine Number(s): (____)------------------------------------------

(List telephone numbers for all locations. The business telephone

number(s) must be a number where patients or customers can reach you

or register complaints.)

Name of Daily Contact Person:------------------------------------------

----------------------------------------------------------------------

(Please print name, title, and provide a telephone number, if

different from the business telephone number.)

6. Owner's Name(s) and Social Security Number(s):----------------------

----------------------------------------------------------------------

(Identify all individuals and their Social Security Numbers or

entities who have ownership or controlling interest in this company.

Attach additional sheets if necessary.)

7. Indicate the number of vehicles providing each type of

service. Provide a copy of the license/certification documentation

from the State or local regulatory agency for each vehicle:

____ Advanced Life Support

____ Advanced Life Support (Paramedic Intercept Squad Unit)

____ Advanced Life Support (Mobile Intensive Care Unit)

____ Basic Life Support

____ Air Ambulance

Identify all vehicles in your fleet by providing the following

information:

(Attach additional sheets if necessary)

Year Make Model VIN#

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

[[Page 3650]]

-----------------------------------------------------------------------

8. List the name of each crew member and their individual

training (e.g., CPR, first aid, ACLS, etc.) A copy of their

certificate(s) of training must be attached. (Attach additional

sheets if necessary.)

Name:------------------------------------------------------------------

Training:--------------------------------------------------------------

Name:------------------------------------------------------------------

Training:--------------------------------------------------------------

9. Name of Medical Director:-------------------------------------------

----------------------------------------------------------------------

Medical License Number of Medical Director:----------------------------

Telephone Number: (____)-----------------------------------------------

10. Has your company or any owner ever been excluded from

participation in the Medicare or Medicaid program?

Yes ______ No______

If yes, under what corporate/business name(s), trade name(s) and

owner(s), did the exclusion occur?

----------------------------------------------------------------------

----------------------------------------------------------------------

List prior Medicare Identification Number(s):--------------------------

----------------------------------------------------------------------

Provide name(s) and location(s) of prior Carrier(s):

----------------------------------------------------------------------

(If service was provided under the Medicaid program, list the prior

Medicaid Identification Number and the State where the service was

provided.)

11. You agree to notify this office of any change in operation,

ownership, or revocation of licensure. It is also understood that

representatives from the Health Care Financing Administration (HCFA)

and HCFA Medicare contractors may make on-site inspections at any

time.

By signing, I agree to the above statement and verify that I

have reviewed all of the information contained herein, or submitted

separately in support of this verification of compliance form, and

verify that the information is accurate and complete.

Name and Title (please print):-----------------------------------------

----------------------------------------------------------------------

Address:---------------------------------------------------------------

----------------------------------------------------------------------

Signature:-------------------------------------------------------------

Date:------------------------------------------------------------------

According to the Paperwork Reduction Act of 1995, no persons are

required to respond to a collection of information unless it

displays a valid OMB control number. The valid OMB number for this

information collection is 0938-xxxx. The time required to complete

this information collection is estimated to average xx hours (or

minutes) per response, including the time to review instructions,

search existing data resources, gather the data needed, and complete

and review the information collection. If you have any comments

concerning the accuracy of the time estimate(s) or suggestions for

improving this form, please write to: HCFA, 7500 Security Boulevard,

Baltimore, Maryland 21244-1850, Mail Stop N2-14-26 and to the Office

of the Information and Regulatory Affairs, Office of Management and

Budget, Washington, D.C. 20503.

[FR Doc. 99-1547 Filed 1-20-99; 4:15 pm]

BILLING CODE 4120-03-M