13. 2015 INFLATION UPDATE
• On August 29, 2014, CMS issued
Transmittal 3057, which contained the
Ambulance Inflation Factor (AIF) for
CY 2015
AIF = CPI-U – MFP
CPI-U = 2.1%
MFP = 0.7%
AIF = 1.4%
14. TEMPORARYADJUSTMENTS
• On April 2, 2014, the President signed the
Protecting Access to Medicare Act of 2014
• Extension of temporary adjustments through
March 31, 2015
– 2% urban
– 3% rural
– “super rural” bonus
• Does not provide for a suspension of 2%
“sequester”!!!
15. PERMANENT REDUCTION
FOR DIALYSIS SERVICES
• American Taxpayer Relief Act of 2012
mandated a permanent 10% reduction in
Medicare’s payment for BLS non-emergency
ambulance transports to/from dialysis
• Transmittal 2703 (May 10, 2013)
– Reduction will be applied to any claim
submitted:
• A0428
• “G” or “J” modifier as either the origin or destination
16. FUTURE OF DIALYSIS
• Future Congressional Action
– Further reductions to Fee Schedule Payments
• Nothing currently proposed for 2014
– Cap on number of covered ambulance trips
• Per patient per year
• Similar to physical therapy caps
– Possible expansion of dialysis payment bundle
– “Safe harbors” to induce dialysis facilities to transport
their own patients
• Increase in Enforcement Activity
17. PART B PAYMENT
DATA RELEASE
• On April 9, 2014, CMS released the
Medicare Provider Utilization
– Sortable database of FFS payments by individual
physician, ambulance supplier and other health
care suppliers
– http://projects.wsj.com/medicarebilling/?mod=medicarein
– A.A.A. Press Release and Talking Points
• See handouts
20. MEDPAC REPORT
Key Findings:
• In 2011, Medicare paid $5.3 billion for ambulance services
• 3 temporary adjustments for ground ambulanced accounted for
$192 million
• 2 permanent adjustments accounted for $220 million
• 50% increase for rural miles 1 – 17
• 50% increase for rural air ambulance
• Ambulance volume increased by 10% from 2007 to 2011
• Most of increase in volume was from increase in BLS-NE
• Dialysis in particular
• Increase centered in urban areas
• Number of ambulance providers has grown steadily since 2007
21.
22. MEDPAC REPORT
Conclusions:
• Current adjustments for ground ambulance are not
good indicators of transports with relatively high
costs
• i.e., high costs with low volumes
• Medicare beneficiaries are not experiencing access
to care problems
23. MEDPAC REPORT
Recommendations:
• Permit expiration of current temporary
adjustments
• Decrease rate for BLS non-emergencies (5.7%)
• Increase base rates for ALS, ALS-2, SCT and BLS-E (2.8%)
• Restructure existing adjustment for rural ground miles 1 –
17
• Better target isolated, low volume providers
• Implement new national claims processing edits
• Better define medical necessity
requirement
25. OIG REPORT ON UTILIZATION
• Between 2002 – 2011:
– 69% increase in Part B ambulance transports
– 34% increase in number of beneficiaries requiring
ambulance transport
– 26% increase in number of ambulance suppliers
• ~ 100% increase in number of BLS-NE suppliers
– 269% increase in dialysis transports
• 85% increase in number of ESRD patients transported by
ambulance
– 829% increase in transports to partial
hospitalization programs
26. OIG STUDY ON APPEALS
• The First Level of Medicare Appeals Process, 2008
– 2012: Volumes, Outcomes, and Timeliness
• October 2013
• MACs processed 2.9 million redeterminations in
2012
– 33% increase over 2008
– 233,941 appeals for ambulance
• 3% increase over 2008
• 51% of Part B appeals were favorable to providers
– 43% for ambulance claims
27. PROPOSED RULE RE: CMPS
• May 12, 2014 Proposed Rule
• Expands OIG’s authority to impose civil monetary
penalties for certain misconduct
– $15,000 per day for failure to grant timely access
to records in connection with an audit or
investigation
– $10,000 per day for each day an overpayment is
not returned following the 60th day after it has
been “identified”
28. PROPOSED RULE RE:
EXCLUSIONS
• May 9, 2014 Proposed Rule
• Revises OIG’s exclusion authority to incorporate
ACA changes
– Would give OIG right to exclude individuals
convicted for obstructing an audit or investigation
– Expands OIG’s authority to exclude individuals
for failing to supply certain payment data to CMS
– Would give OIG right to exclude individuals that
knowingly make false statements in connection
with the submission of an enrollment application
29. OIG GUIDANCE ON EXCLUSIONS
• On May 8, 2013
• Updated Special Advisory Bulletin on Effect of Exclusion
from Participation in Federal Health Programs
• Reiterates existing guidance on consequences of employing
an excluded individual
– Prohibition would extend to those not involved directly in patient care
• Management and billing
• Driving an ambulance
• Ambulance dispatch services
• Referring physician or individual signing PCS form
30. EXCLUSION TESTING
• Employees
– IG recommends testing employees once a month
• Referring Sources
– Repetitive Patients v. Non-Repetitive Patients
• Vendors
– Contractual commitment to do testing on employees of
vendor that service your accounts
– Indemnity?
31. OIG ADVISORY OPINIONS
• Billing Waivers & Waiver of Coinsurance
– Opinion 13-17 – IG permitted a municipal ambulance service
to use tax revenues to cover out-of-pocket expenses due fro
non-residents
– Opinion 13-14 – IG permitted the waives coinsurance and
deductibles due from residents for EMS provided by a county
EMS agency and several volunteer rescue squads.
– Opinion 13-11 – IG permitted a BLS ambulance supplier to
accept payment from the town for cost-sharing amounts due
from residents. The private ambulance service also agreed to
waive cost-sharing amounts when responding under mutual-aid
– Opinion 13-08 – IG permitted a fire protection district to NOT
bill residents or their insurance
• Expansion of existing line of opinions that permitted taxpayer-supported entities
to bill only to the extent of a resident’s insurance
32. OIG ADVISORY OPINIONS
• Reimbursement for Dispatch
– Opinion 13-05 – IG permitted a municipality to require
the winner of an RFP for 911 services to reimburse the
municipality for a portion of dispatch costs
• County Health District
– Opinion 13-04 – IG permitted a County Health District to
provide non-emergency ambulance services, which would
include the provision of transports to/from County health
facilities
33. OIG ADVISORY OPINIONS
• Opinion 13-18
– RFP asked bidders to provide:
• Free ambulance transports to City employees
• Free AEDs and other equipment
• Free EMS training
• 20% discount on ambulance transports to uninsured seniors
• Replenishment of supplies used by City first-responders
– OIG took issues with the proposal to provide free or
below-market equipment to the City, and therefore refused
to sign off on the arrangement as a whole
35. 2015 PROPOSED RULE
• July 11, 2014
• Technical changes to reflect extensions of temporary
adjustments through March 31, 2015
• 2% Urban
• 3% Rural
• “Super Rural” Bonus
• Proposal to adopt recent OMB modifications to Rural-
Urban Commuting Area (RUCA)
– CMS estimates
• 122 zip codes go from Urban to Rural
• 100 zip codes would go from Rural to Urban
• No impact on super rural
– AAA estimates
• 1,500 zip codes go from Rural to Urban
37. AMBULANCE ‘BACK
BILLING’
• CMS proposing to limit effective date
of Medicare billing privileges to later
of:
–Date enrollment application is filed
–Date you begin providing services at new
practice location
38. REVOCATION OF
BILLING PRIVILEGES
• CMS proposing to expand its authority
to revoke billing privileges for
providers that have engaged in “a
pattern or practice” of abusive billing
– Including high percentage of claim denials
39. LIMIT ON USE OF
CORRECTIVE ACTION PLANS
• CMS proposing to limit the use of Corrective
Action Plans (CAPs) to minor issues of non-compliance
– e.g., failure to timely file revalidation
• CMS indicated that failure to disclose a “Practice
Location” would not be eligible for CAP
– Would require you to appeal
40. PATIENT SIGNATURE
REQUIREMENT
• July 11, 2014
• Transmittal 2984
• CMS removed the requirement that you must
capture the address of anyone signing on the
patient’s behalf
• The AAA had requested this change over 2
years ago
41. SNF RECOUPMENTS
• In 2013, CMS issued a transmittal
instructing RACs to recoup ambulance
transports between two SNFs
– Indicated by use of Discharge Status Code
“03” on the SNFs claim
–Effective April 7, 2014
42. ICD-10 CODES
• Implementation delay until October 1,
2015
• ICD-9 Codes: ~ 17,000
• ICD-10 Codes: ~ 150,000
If you want to laugh:
http://www.youtube.com/user/findacode
43. ICD-10 CODES
• AAA has published an ICD-10
crosswalk for the current CMS
Medicare Condition Code List
• See handout
44. MEDICARE REVALIDATION
• CMS is continuing its efforts to require all existing Medicare
providers and suppliers to “revalidate” their Medicare
enrollment information
– Original target date: March 2013
– Extension: March 2015
–2014 Enrollment Fee: $542
• Medicare contractors given discretion on when to revalidate
various provider groups
• Failure to revalidate can result in 1 year ban on participation
in Medicare!!
45. MEDICARE REVALIDATION
• List of all providers that have been asked to
revalidate, arranged by calendar quarter
• CMS Website:
– http://www.cms.gov/Medicare/Provider-Enrollment-and-
Certification/MedicareProviderSupEnroll/Revalidationshtml
46. ALJ DELAYS
• November 2013 – Office of Medicare
Hearings and Appeals (OMHA) announces
substantial delay in assignment of new cases
to ALS
– 24 months for new case assignments
– 6+ months for hearings to be held
– Up to 3 years before a decision should be
expected!!
47. ALJ PILOT PROJECT –
SETTLEMENT CONFERENCES
• On July 7, 2014, OMHA announced a new
mediation program designed to reduce the ALJ
backlog
– Settlement Conference Facilitation (SCF)
• Eligibility requirements
– 20 or more claims at issue
– $100,000 or less at issue
– Beneficiary must not have been determined to be
liable for
48. ALJ PILOT PROJECT –
STATISTICAL SAMPLING
• Project for appeals involving large numbers of
claims
• ALJ will review a sample of appealed claims,
and extrapolate against larger universe of
appealed claims
• Eligibility requirements
– 250 or more claims at issue
– No request for Settlement Conference
– Beneficiary must not have been determined to be
liable for
49. MEDICARE ADVANTAGE
PLANS
• CMS announced that it is suspending the
“Payment Dispute Resolution Process”
as of February 1, 2014
– Used to resolve situations where MA plan
pays the claim, but at the incorrect rate
– Lack of funding
50. A.A.A. MEDICAID
RATE SURVEY
• In March 2014, the A.A.A. completed a
survey of the current Medicaid rates in
all 50 states
– Includes information the payment of Medicare
crossovers
– See handout
51. V.A. MILLENNIUM BILL
• V.A.’s payment for emergency
ambulance services is contingent on V.A.
paying for veteran’s care at hospital ED
– Patient’s with Part A Medicare, but not Part
B
– Must bill veteran
52. AIR AMBULANCE
• On April 21, 2014, the FAA announced
delay in implementation of new
helicopter ambulance safety standards
– Impacts certain operating rules
– New compliance date is April 22, 2015
– Does not impact new requirements for terrain
awareness and warning systems or flight data
monitoring systems
• April 22, 2017/2018 implementation dates
55. The Scope of the Problem
• CMS estimated that Medicare lost
more than $24 billion on fraud and
abuse in FY 2009
– Roughly 7.5% of total payments
• Other experts place the number at as
high as $70 billion per year!!
56. Funding for
Anti-Fraud Measures
• ACA allocated an additional $250 million to
fund additional audits
• New provisions that allow Medicare
contractors to use recoupments to fund
further anti-fraud activities
– Allow process to become self-sustaining!!
57. • Away:
Shift in Focus
– Random post-payment audits
– So-called “Pay and Chase”
• Towards:
– Use of data analysis to identify systemic
issues
– Use of prepayment reviews
58. EMS Areas of Focus
1. ALS emergency
transports
2. Hospital Discharges
3. Dialysis
59. The City of Dallas
• Investigation into overutilization of ALS
emergency
– $2.5 million settlement
– Debate as to whether overbilling was fault of City or its
billing agent
• 12 neighboring cities paid $1.2 million to settle
similar charges
– Same billing agent
60. •September 2008, a whistleblower suit is
filed alleging town was overbilling ALS
emergency
–95% of transports billed ALS emergency
•Town settles for $4.5 million
–Based on advice of lawyers, who indicated
potential liability could reach $100+ million
•Town sues lawyers for malpractice
–They allege actual overpayment was only
$108,000
Clinton, Iowa
61. NORIDIAN HEALTHCARE
SOLUTIONS
• July 30, 2014 letter to provide community
• Purportedly to educate on common errors
• Issues:
1. PCS Form – “simply checking boxes or
listing medical conditions/diagnosis is
inappropriate”
2. SCT – “Critical illness/injury is defined
as….a patient who is experiencing an acute
life-threatening episode”
62. NORIDIAN HEALTHCARE
SOLUTIONS
•Targeted prepayment reviews
throughout its service areas
•California
•Utah
•Northern Marianas Islands
63. OIG REPORT ON UTILIZATION
• Between 2002 – 2011:
– 269% increase in dialysis
transports
• 85% increase in number of ESRD patients
transported by ambulance
65. Case Study: Texas Dialysis
“In 2007, Medicare paid $38 million per
year to Texas ambulance suppliers related to
excess services per beneficiary, compared to
services per beneficiary in the remainder of
the U.S. Audit findings…show that much
of the excess is not justifiable based on
the patients’ conditions.”
70. Case Study: Puerto Rico
“FCSO quickly identified an extreme data anomaly
related to non-emergency ambulance services
provided in Puerto Rico and the U.S. Virgin
Islands. More specifically, our analysis of paid
claims data for procedure code A0428 – ambulance
service, basic life support, non-emergency
transport (BLS), revealed that utilization in Puerto
Rico for this procedure code was over 1,000
percent higher than the rest of the United
States.”
71. Case Study: Puerto Rico
“Data analysis also revealed that 95 percent of
non-emergency ambulance utilization in
Puerto Rico involved repetitive transportation of
dialysis patients to/from their dialysis facilities
as compared to less than 5 percent in Florida.
Although dialysis patients may have multiple
health issues, the vast majority can safely and
routinely travel by means other than an
ambulance.”
72. Putting That In Perspective…
• 2008 Medicare Payment Data:
– Puerto Rico
• ~620,000 Medicare beneficiaries
• 407,000 dialysis transports
– CA, FL and NY combined
• ~11 million Medicare beneficiaries
• 356,000 dialysis transports
74. The City of Brotherly
Love
• Medicare Strike Team has been actively
investigating ambulance services
― Focus on dialysis
― Numerous indictments
― Sept. 27, 2013 – Philly couple charged with $4.4
million fraud involving medically unnecessary
services and payment of kickbacks
― April 23, 2013 – 7 individual charged with
conspiracy to commit $3.6 million health care
fraud
75. Recent Fraud Convictions
• Texas – owners of a Rio Valley ambulance service and a
billing agency indicted for submitting approximately 1,500
false claims for dialysis patients
• Texas – owner of a Houston-based ambulance service
convicted of $2.4 million fraud involving false claims for
dialysis
• Los Angeles – owners of LA ambulance service plead
guilty to $13 million fraud involving dialysis patients
• Indiana – general manager of a ambulance service pleads
guilty to complex fraud involving falsified trip reports for
dialysis transports
76. Harris County, Texas
•Rep. Kevin Brady (R – TX 8th) has called for
hearings on Medicare ambulance fraud in
Houston
– Fallout from Houston Chronicle articles
•2009 Medicare Payment Data
– $62 million spent on ambulance in Houston
– $7 million spent on ambulance in NYC
77. Harris County, Texas
•Sen. Orrin Hatch (R – UT)
•Sen. Charles Grassley (R – IA)
•February 2, 2012 letter to HHS Secretary
Sebelius
– Asking for steps CMS is taking to curb ambulance
abuses in Houston
– Focus on dialysis
– Asking specifically why CMS has not imposed a
temporary moratorium on new enrollments
78. TEMPORARYMORATORIUM ON
NEW ENROLLMENTS
• On July 26, 2012, CMS announced a temporary
moratorium on enrollment of new ground ambulance
suppliers in Houston and surrounding counties
• Response to wide-spread fraud and abuse
• Key findings:
– 26 counties in US with more than 200,000 Medicare beneficiaries
• On average, there is less than 1 ambulance supplier for every 10,000
Medicare beneficiaries in these counties
• 9.5 ambulance supplier per 10,000 Medicare beneficiaries in Harris
County, Texas (Houston)
• 275 active ambulance suppliers in Harris County
– Two-thirds have not been billing continuously since 2008
79. TEMPORARYMORATORIUM ON
NEW ENROLLMENTS
• On February 4, 2014, CMS announced that it was
extending the moratorium on new ambulance
enrollments in Houston metropolitan area for
another 6 months
– Through June 30, 2014
• New temporary moratorium on enrollment of new
ambulance suppliers for Philadelphia
metropolitan area
• Further extended through December 31, 2014
80. PRIOR AUTHORIZATION
DEMONSTRATION PROJECT
• On May 22, 2014, CMS announced that it was
implementing a prior authorization process for
dialysis transports in 3 states
– New Jersey
– Pennsylvania
– South Carolina
• Prior authorization required for claims to be
paid
– Alternative is 100% prepayment review
81. PROTECTING INTEGRITY IN
MEDICARE ACT OF 2014
• Proposes to expand dialysis prior
authorization project nationwide
– 2015
• MAC Jurisdiction L (DC, DE, MD)
• MAC Jurisdiction 11 (NC, VA, WV)
– 2017
• Rest of the nation
82.
83. Brian Werfel, Esq.
A.A.A. Medicare Consultant
631-265-5650
bwerfel@aol.com
