MEDICARE NEWS
FOR IMMEDIATE RELEASE
CMS Public Affairs Office
June 30, 2004

 MEDICARE BOOSTS PAYMENTS FOR AMBULANCE SERVICES:
Includes "Super-Rural" Bonus

The Centers for Medicare & Medicaid Services (CMS) today issued an interim final rule with comment period that will increase Medicare payments to ambulance services by $840 million between July 2004 and December 31, 2009.  The rule, which implements the ambulance provisions contained in Section 414 of the Medicare Prescription Drug, Improvement  and Modernization Act of 2003 ("Medicare Modernization Act" or "MMA"),  will benefit both hospital-based providers and freestanding suppliers of ground ambulance services to Medicare beneficiaries.

The MMA provisions offer temporary additional funding to ambulance services as they transition to a national fee schedule that went into effect on April 1, 2002.  Prior to the fee schedule, ambulances operated by providers - hospitals, skilled nursing facilities, and home health agencies   were paid on a reasonable cost basis, while freestanding ambulance services were paid reasonable charges.

 "The increases we are implementing today will help to ensure that all beneficiaries continue to have access to medically necessary ground ambulance services," said CMS Administrator Mark B. McClellan, M.D., Ph.D.

 All ground ambulance services will benefit from the new rule, which provides urban ambulance services with a 1 percent increase in payments, while rural ambulances will receive a 2 percent increase.  This increase applies to services furnished between July 1, 2004 and December 31, 2006.  In addition, for services rendered between July 1, 2004 and December 31, 2008, both urban and rural ambulances will receive a 25 percent increase in their mileage rates for all miles greater than the 50th mile while carrying a beneficiary.

 The interim final rule also contains a provision designed specifically to ease the transition to the national fee schedule.  CMS is establishing nine regions for the purposes of the fee schedule.  For each region, CMS will establish a floor amount for the ground ambulance base rate.  This floor will not result in decreased payment rates for any area of the country, but for ambulances in the five regions that would have been paid at lower rates in the absence of the floor, the regional fee schedule will increase payments by as much as 38.6 percent.

 This provision will be effective for services furnished between July 1, 2004 and December 31, 2009.

 Finally, the interim final rule implements a "super-rural bonus," that expressly benefits the most rural areas for services furnished between July 1, 2004 and December 31, 2009.  This bonus will increase the base rate by 22.6 percent where the ambulance transport originates in a rural

area determined by the Secretary to be in the lowest 25th percentile of all rural populations arrayed by population density.

 "This new rule improves payments for all ground ambulance services, and it's especially important for ensuring the continued viability of ambulance services in rural areas as they make the transition to the national fee schedule," said McClellan.

 The temporary payment provisions do not apply to air ambulance services, which are also paid under the national ambulance fee schedule.

 The interim final rule with comment period will be published in the July 1 Federal Register and will become effective immediately. Comments will be accepted until August 30 and a final rule responding to those comments will be published at a later date.

 Note: More information can be found on the CMS Website, at www.cms.hhs.gov/suppliers/ambulance.