Medicare Program: Ambulance Fee Schedule; Intent To Form Negotiated Rulemaking Committee

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 405

[HCFA-1002-NOI]

RIN 0938-AI72

Medicare Program: Ambulance Fee Schedule; Intent To Form

Negotiated Rulemaking Committee

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

ACTION: Notice of Intent to form negotiated rulemaking committee and

notice of meeting

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SUMMARY: Section 4531(b) of the Balanced Budget Act (BBA) of 1997

requires that the Secretary establish a fee schedule for the payment of

ambulance services under the Medicare program by negotiated rulemaking.

We are required to establish a Negotiated Rulemaking Committee under

the Federal Advisory Committee Act (FACA). The Committee's purpose will

be to negotiate this fee schedule for ambulance services. The Committee

will consist of representatives of interests that are likely to be

significantly affected by the proposed rule. The Committee will be

assisted by a neutral facilitator.

This notice announces our intent to establish a Negotiated

Rulemaking Committee and outlines the scope of issues to be negotiated

by the Committee as specified by section 4531(b)(2) of the BBA. We

request public comment on whether we have properly identified the key

issues to be negotiated by the committee as well as the interests that

will be affected by those issues.

DATES: Comments: Comments and requests for representation or for

membership on the Committee will be considered if we receive them at

the appropriate address provided below, no later than 5 p.m. on

February 22, 1999.

Meetings: The first meeting will be held at Turf Valley Hotel in

Ellicott City, Maryland at 9 a.m. on February 22, 23, and 24, 1999

(410) 465-1500.

ADDRESSES: Mail written comments and requests for representation or for

membership on the Committee, or nominations of another person for

membership on the Committee (1 original and 3 copies) to the following

address: Health Care Financing Administration, Department of Health and

Human Services, Attention: HCFA-1002-NOI, P.O. Box 7517, Baltimore, MD

21207-5187.

If you prefer, you may deliver your written comments, applications,

or nominations (1 original and 3 copies) to one of the following

addresses:

Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue,

SW, Washington, DC 20201; or Room C5-09-26, 7500 Security Boulevard,

Baltimore, MD 21244-1850.

FOR FURTHER INFORMATION CONTACT:

Bob Niemann (410) 786-4569 or Margot Blige (410) 786-4642 for general

issues related to ambulance services.

Lynn Sylvester (202) 606-9140 or Elayne Tempel (207) 780-3408,

Conveners.

SUPPLEMENTARY INFORMATION:

Comments, Procedures, Availability of Copies, and Electronic Access

Because of staffing and resource limitations, we cannot accept

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

to file code HCFA-1002-NOI. 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 445-G of

the Department's offices at 300 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

Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date

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

the Superintendent of Documents, or enclose your Visa or Master Card

number and expiration date. Credit card orders can also be placed by

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

2250. The cost for each copy is $8. As an alternative, you can view and

photocopy the Federal Register document at most libraries designated as

Federal Depository Libraries and at many other public and academic

libraries throughout the country that receive the Federal Register.

This Federal Register document is also available from the Federal

Register online database through GPO Access, a service of the U.S.

Government Printing Office. Free public access is available on a Wide

Area Information Server (WAIS) through the Internet and via

asynchronous dial-in. Internet users can access the database by using

the World Wide Web; the Superintendent of Document home page address is

http://www.access.gpo.gov/su__docs/, by using local WAIS client

software, or by telnet to swais.access.gpo.gov, then log in as guest

(no password required). Dial-in users should use communications

software and modem to call (202) 512-1661; type swais, then log in as

guest (no password required).

I. Balanced Budget Act of 1997

Section 4531(b)(2) of the Balanced Budget Act of 1997 (BBA), Public

Law 105-33, added a new section 1834(l) to the Social Security Act (the

Act). Section 1834(l) of the Act mandates implementation, by January 1,

2000, of a national fee schedule for payment of ambulance services

furnished under Medicare Part B. The fee schedule is to be established

through negotiated rulemaking. Section 4531(b)(2) also provides that in

establishing such fee schedule, the Secretary will--

Establish mechanisms to control increases in expenditures

for ambulance services under Part B of the program;

Establish definitions for ambulance services that link

payments to the type of services furnished;

Consider appropriate regional and operational differences;

Consider adjustments to payment rates to account for

inflation and other relevant factors; and

Phase in the fee schedule in an efficient and fair manner.

II. Negotiated Rulemaking Process

Section 1834(l)(1) of the Act provides that these negotiations take

place within the framework of the Negotiated Rulemaking Act of 1990

(Public Law 101-648, 5 U.S.C. 561-570). Under the Negotiated Rulemaking

Act, the head of an agency generally must consider whether--

[[Page 3475]]

There is a need for a rule;

There are a limited number of identifiable interests that

will be significantly affected by the rule;

There is a reasonable likelihood that a committee can be

convened with a balanced representation of persons who--

Can adequately represent the interests identified; and

Are willing to negotiate in good faith to reach a

consensus on the proposed rule;

There is a reasonable likelihood that a committee will

reach a consensus on the proposed rule within a fixed period of time;

The negotiated rulemaking procedure will not unreasonably

delay the notice of proposed rulemaking and the issuance of a final

rule;

The agency has adequate resources and is willing to commit

such resources, including technical assistance, to the committee; and

The agency, to the maximum extent possible consistent with

the legal obligations of the agency, will use the consensus of the

committee with respect to the proposed rule as the basis for the rule

proposed by the agency for notice and comment.

We note that the Congress has determined that the above conditions

have been met and has mandated that the negotiated rulemaking process

is appropriate.

Negotiations are conducted by a committee chartered under the

Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2). The committee

includes an agency representative and is assisted by a neutral

facilitator. The goal of the Committee is to reach consensus on the

language or issues involved in a rule. If consensus is reached, it is

used as the basis of the agency's proposal. The process does not affect

otherwise applicable procedural requirements of the FACA, the

Administrative Procedure Act, and other statutes.

The Negotiated Rulemaking Act permits (but does not require) an

agency to use the services of an impartial convener to assist the

agency in identifying interests that will be significantly affected by

the proposed rule, including residents of rural areas, and in

conducting discussions with persons representing the identified

interests to ascertain whether the establishment of a negotiated

rulemaking committee is feasible and appropriate in the particular

rulemaking. At the agency's request, the convener also ascertains the

names of persons who are willing and qualified to represent interests

that will be significantly affected by the rule. The agency may also

ask the convener to recommend a process for the negotiations. The

convener submits a written report, which is available to the public.

Pursuant to this procedure authorized by the Negotiated Rulemaking Act,

Lynn Sylvester and Elayne Temple of the Federal Mediation and

Conciliation Service (FMCS) will act as conveners for the negotiated

rulemaking on the ambulance fee schedule. Over the last several months,

they have interviewed a wide range of organizations that were

identified as having a possible interest in this negotiated rulemaking.

They submitted a report to HCFA based on those convening interviews,

which serves as a basis for this notice. The report lists the proposed

representatives on the Committee. The convening report is a public

document and is available upon request from the HCFA contacts listed

above.

III. Interaction With the Proposed Rule Published on June 17, 1997

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

Register to revise and update the Medicare ambulance regulations at 42

CFR 410.40 (62 FR 32715). Specifically, we proposed to base Medicare

payment on the level of service required to treat the beneficiary's

condition; to clarify and revise policy on coverage of nonemergency

ambulance services; and to set national vehicle, staff, and billing and

reporting requirements. As noted above, section 1834(l)(2) of the Act

provides, in part, that in establishing the ambulance fee schedule, the

Secretary will establish definitions for ambulance services that link

payments to the types of services provided. One of the provisions of

the June 17, 1997 proposed rule would have defined ambulance services

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

services and linked Medicare payment to the type of service required by

the beneficiary's condition. We received an extremely large number of

comments on this issue and, in general, commenters were very concerned

about our proposal. In light of that concern, and because service

definition is a required element of the negotiated rulemaking, we have

decided not to proceed with a final rule on the definition of ALS and

BLS services. We will include this issue as a matter for the

negotiating committee.

We note that section 1834(1)(3) of the Act provides that, in

establishing the fee schedule, the Secretary must ensure that the

aggregate payment amount made for ambulance services in calendar year

(CY) 2000 does not exceed the aggregate payment amount that would have

been made absent the fee schedule. Although we are foregoing final

agency action on the ALS/BLS definition proposal and including the

issue as a part of the negotiations, we believe that the savings that

would have been realized through implementation of that policy should

not be lost to the Medicare program. We have estimated that $65 million

would have been realized if the ALS/BLS proposal had been published as

a final rule. Therefore, we intend to set the spending target for CY

2000 (the first year that the fee schedule will be in effect) $65

million lower than budget neutrality to reflect these savings. We

intend to proceed with a final rule for those provisions of the June

17, 1997 proposed rule that are unrelated to the ALS/BLS issue. In

addition, that rule will implement the provisions of section 4531(c) of

the BBA, which authorizes the Secretary to include, under certain

specified conditions, ALS services provided by a paramedic intercept

service in a rural area as a covered ambulance service.

IV. Subject and Scope of the Rule

A. General

Currently, the Medicare program pays for ambulance services on a

reasonable cost basis when they are provided by a hospital, skilled

nursing facility, or home health agency and on a reasonable charge

basis when provided by an outside supplier. Section 4531(b)(1) of the

BBA requires that ambulance services covered under the Medicare program

be paid based on the lower of the actual charge or the fee schedule

amount. The fee schedule is limited in that payments may not exceed

what would have been paid if the fee schedule were not put into effect.

As discussed above, we intend to set spending for the first year at $65

million less than budget neutrality.

The effective date for the fee schedule is January 1, 2000, but the

Secretary has the authority under section 1834(l)(2)(E) of the Act to

provide for a phase-in period. In addition, section 1834(l)(2) requires

that in developing the fee schedule the Secretary:

Establish mechanisms to control increases in expenditures

for ambulance services under Part B of the program;

Establish definitions for ambulance services that link

payments to the type of services furnished;

Consider appropriate regional and operational differences;

and

Consider adjustments to payment rates to account for

inflation and other relevant factors.

[[Page 3476]]

While we recognize that it is difficult to predict the end product

of negotiated rulemaking on the ambulance fee schedule, we anticipate

that the proposed rule resulting from negotiations will include a

specific recommended schedule of relative values for ambulance

services, any adjustments or add-on amounts for particular types of

services, and possibly a mechanism for controlling expenditures and a

phase-in schedule. While section 1834(l)(2)(D) of the Act requires that

we include an inflation adjustment in the considerations, section

1834(l)(3)of the Act prescribes the inflation factor to be used for

future years. Therefore, we are not including the inflation factor as

part of the negotiation process. Medicare billing data will be

available for use in the negotiations and we will share that

information with Committee participants.

B. Issues and Questions To Be Resolved

Issues that we anticipate being resolved are outlined below. We

also invite public comment on other issues not identified that may be

within the scope of this rule.

We believe the issues to be the following:

1. The type of services furnished. That is, how services are

grouped for payment purposes and the minimum services that must be

furnished in order to meet the definition of each payment group. For

example, what is an ALS versus BLS service? How many gradations of

service are required? For example, should there be three levels of

care: BLS, ALS and critical care transport? What are the relative

values of each level of care and what are the projected utilizations of

each?

2. Definition(s) of type of provider and how that affects the

payment rate. For example, should volunteer, municipal and private

ambulance services be treated differently?

3. Definition(s) of appropriate regional differences and how they

affect the payment rate. For example, the use of a geographic wage

adjustment.

4. Definition(s) of appropriate operational differences and how

they affect the payment rate. For example:

--ALS versus BLS;

--Ground versus air;

--Fixed wing versus helicopter;

--Hospital-based versus independent;

--For-profit versus volunteer;

--Rural versus urban; or

--Isolated essential ambulance source (that is, only one ambulance

source in a given geographical area)

5. Whether mileage should be paid separately from the base rate,

and if so, what components of the ambulance service should be included

in the base rate and what should be included in mileage.

6. Phase-in methodology of the fee schedule from the existing

payment method, both method and time period.

7. Mechanism to control expenditures, for example, a volume

performance measure such as the number of trips per beneficiary or the

ratio of ALS to BLS that is used to adjust the conversion factor for

the following year.

C. Issues That Are Outside the Scope of This Negotiation

Based on the convening report, several issues were identified that

we have determined are outside the scope of this rule. The following is

a list of some, although not necessarily all, of the issues that we

have determined are outside the scope of this negotiation.

1. Program policies with respect to the coverage, as distinguished

from payment, of ambulance services. For example, the definition of

``bed-ridden'' and ``medically necessary,'' physician certification for

the use of ambulance, coverage of paramedic intercept services, and

ambulance waiting time (which is not covered by Medicare).

2. The aggregate amount of Trust Fund dollars available for payment

during the first year. This amount will be based on the amount the

program would have paid in the year 2000 absent the fee schedule,

reduced by the $65 million dollar savings that would have been realized

through publication of a final rule on the ALS/BLS definition.

3. The way items and services are grouped in terms of the Billing

Codes used to bill Medicare.

4. The base year, which will be the latest year for which complete

HCFA ambulance claims data exist.

5. Local or State ordinances requiring certain ambulance staffing

or all ALS ambulance.

6. The choice of an appropriate coding system to implement the fee

schedule; section 1834(l)(7) of the Act gives HCFA the authority to

specify the coding system.

V. Affected Interests and Potential Participants

In addition to our participation on the Committee, the Conveners

have proposed and we agree to accept representatives from the following

organizations as negotiation participants:

American Health Care Association (AHCA).

American Ambulance Association (AAA).

Association of Air Medical Services (AAMS).

International Association of Fire Chiefs (IAFC).

International Association of Fire Fighters (IAFF).

National Association of State Emergency Medical Services

Directors (NASEMSD).

American Hospital Association (AHA).

National Volunteer Fire Council (NVFC).

In addition to this list, we note that we have requested that the

American College of Emergency Physicians (ACEP) and the National

Association of EMS Physicians (NAEMSP) form a coalition and send one

representative to be a negotiation participant. We invite public

comment on this list of Committee participants.

We note that Medicare contractors, which are those entities that

adjudicate claims in local regions, will provide technical information

to the negotiator representing HCFA. Since we consider the contractors

to be agents of HCFA, we believe that they are most efficiently and

effectively utilized in this manner rather than as negotiators in the

process.

This document gives notice of this process to other potential

participants and affords them the opportunity to request that they be

considered for membership on the Committee. Persons who will be

significantly affected by this rule may apply for or nominate another

person for membership on the Committee to represent such interests by

submitting comments on this notice. Any application or nomination must

include:

The name of the applicant or nominee and a description of

the interests such person represents;

Evidence that the applicant or nominee is authorized to

represent parties related to the interests the person proposes to

represent;

A written commitment that the applicant or nominee will

actively participate in the negotiations in good faith; and

The reasons that the applicant or nominee believes its

interests are sufficiently different from the persons or entities

listed above so that those interested would not be adequately

represented on the Committee as currently proposed.

Individuals representing the proposed organizations and health

industry sectors should have practical experience, be recognized in

their particular community, have the ability to engage in negotiations

that lead to consensus, and be able to fully represent the views of the

interests they represent.

[[Page 3477]]

We reserve the right to refuse representatives who do not possess these

characteristics. Given the limited time frame for the development of

this rule, we expect that the negotiations will be intensive.

Representatives must be prepared and committed to fully participate in

the negotiations in an attempt to reach consensus on the issues

discussed.

The intent in establishing the Committee is that all interests are

represented, not necessarily all parties. We believe the proposed list

of participants represents all interests associated with adoption of a

national fee schedule for ambulance services. In determining whether a

party had a significant interest and was represented, we considered

groups who have and will continue to actively represent the main

interest groups. Lastly, while we are obligated to ensure that all

interests that are significantly affected are adequately represented,

it is critical to the Committee's success that it be kept to a

manageable size, particularly because of the short time frame in which

the Committee must complete its task.

Groups or individuals who wish to apply for a seat on the Committee

should respond to this notice and provide the detailed information

described above.

VI. Schedule for the Negotiations

We have set a deadline of 5-6 months beginning with the date of the

first meeting for the negotiated rulemaking Committee to complete work

on the proposed rule. We anticipate 4 or 5 additional meetings, to be

scheduled by the Committee, with the final meeting no later than the

end of June 1999. The first meeting of the Committee is scheduled for

February 22, 23, and 24, 1999 at the Turf Valley Hotel in Ellicott

City, Maryland beginning at 9 a.m. The purpose of this meeting is to

discuss in detail how the negotiations will proceed, the schedule for

subsequent meetings, and how the Committee will function. The Committee

will agree to ground rules for Committee operations, will determine how

best to address the principal issues, and, if time permits, will begin

to address those issues.

VII. Formation of the Negotiating Committee

A. Procedure for Establishing an Advisory Committee

As a general rule, an agency of the Federal Government is required

to comply with the requirements of FACA when it establishes or uses a

group that includes non-Federal members as a source of advice. Under

FACA, an advisory committee begins negotiations only after it is

chartered. This process is underway.

B. Participants

The number of participants in the group is estimated to be 10 and

should not exceed 15 participants. A number larger than this could make

it difficult to conduct effective negotiations within the time frame

required by the statute. One purpose of this notice is to determine

whether the proposed rule would significantly affect interests not

adequately represented by the proposed participants. We do not believe

that each potentially affected organization or individual must

necessarily have its own representative. However, each interest must be

adequately represented. Moreover, the group as a whole should reflect a

proper balance or mix of interests.

C. Requests for Representation

If, in response to this notice, an additional individual or

representative of an interest requests membership or representation on

the Committee, we will determine, in consultation with the conveners,

whether that individual or representative should be added to the

Committee. We will make that decision based on whether the individual

or interest--

Would be significantly affected by the rule, and

Is already adequately represented in the negotiating

group.

D. Establishing the Committee

After reviewing any comments on this Notice and any requests,

applications or nominations for representation, we will take the final

steps to form the Committee.

VIII. Negotiation Procedures

The following procedures and guidelines will apply to the

Committee, unless they are modified as a result of comments received on

this notice or during the negotiating process.

A. Facilitators

We will use neutral facilitators to conduct the negotiations. The

facilitators will not be involved with the substantive development or

enforcement of the regulation. The facilitators' role will be to--

Chair negotiating sessions in an impartial manner;

Help the negotiation process run smoothly;

Help participants define issues and reach consensus; and

Manage the keeping of the Committee's minutes and records.

Lynn Sylvester and Elayne Tempel of the Federal Mediation and

Conciliation Service (FMCS) will serve as facilitators.

B. Good Faith Negotiations

Participants must be willing to negotiate in good faith and be

authorized to do so. We believe this may best be accomplished by

selecting senior officials as participants. We believe senior officials

are best suited to represent the interests and viewpoints of their

organizations. This applies to us as well, and we are designating Nancy

Edwards, Deputy Director of the Division of Acute Care, in our Center

for Health Plans and Providers, to represent us.

C. Administrative Support

We will supply logistical, administrative, and management support.

We will provide technical support to the Committee in gathering and

analyzing additional data or information as needed.

D. Meetings

Meetings will be held in the Baltimore/Washington area. Unless

announced otherwise, meetings are open to the public.

E. Committee Procedures

Under the general guidance and direction of the facilitators, and

subject to any applicable legal requirements, the members will

establish the detailed procedures for Committee meetings that they

consider most appropriate.

F. Defining Consensus

The goal of the negotiating process is consensus. Under the

Negotiated Rulemaking Act, consensus generally means that each interest

concurs in the result unless the term is defined otherwise by the

Committee. We expect the participants to fashion their working

definition of this term.

G. Failure of Advisory Committee To Reach Consensus

If the Committee fails to reach consensus, the Committee may

transmit a report specifying any areas on which consensus was reached

and may include in the report any information, recommendations, or

other materials that it considers appropriate. Additionally, any

Committee member may include such information in an addendum to a

report.

If any Committee member withdraws, the remaining Committee members

will evaluate whether the Committee should continue.

[[Page 3478]]

H. Record of Meetings

In accordance with FACA's requirements, minutes of all committee

meetings will be kept. The minutes will be placed in the public

rulemaking record and Internet site on our home page.

I. Other Information

In accordance with the provisions of Executive Order 12866 this

notice was reviewed by the Office of Management and Budget.

Authority: Section 1834(l)(1) of the Social Security Act (42

U.S.C. 1395m).

(Catalog of Federal Domestic Assistance Program No. 93.774,

Medicare--Supplementary Medical Insurance Program)

Dated: December 17, 1998.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing Administration.

Dated: December 23, 1998.

Donna E. Shalala,

Secretary.

[FR Doc. 99-1615 Filed 1-21-99; 8:45 am]

BILLING CODE 4120-01-P