Medicare Temporary Payment Adjustments for Ground Ambulance Scheduled to Expire

Medicare Temporary Payment Adjustments for Ground Ambulance Scheduled to Expire

Medicare Part B pays ambulance suppliers and providers for services and mileage under the Ambulance Fee Schedule (AFS). Congress established, through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173), three temporary payment adjustments for ground ambulance transports. These temporary adjustments, among other AFS adjustments, are determined by the zip code where the patient is picked up; every zip code in the United States is eligible for at least one of the three temporary payment adjustments. Since enactment, Congress has modified and extended these adjustments. The current extension expires after December 31, 2017. The House Ways and Means Committee has proposed an agreement for a new five-year extension.

The AFS payment has two components, the service component and the mileage component. The service component payment covers the cost of personnel, equipment, and supplies and reflects the relative intensity of services provided to the patient at each of seven levels of service (referred to as the relative value unit, or RVU) and an adjustment to account for regional differences in costs (referred to as a geographic adjustment factor, or GAF). The mileage component payment covers transport costs and is the product of a single per-mile rate and the number of miles traveled with the patient onboard. The Medicare payment base rates for both the service and mileage components are updated annually by an inflation factor.

The first two temporary payment adjustments increase the Medicare service and mileage payments by 2% for ambulance transports in an urban zip code and 3% in a rural zip code. The third payment adjustment is a 22.6% increase that applies only to the service component payment of transports that originate in qualified rural areas (called super-rural areas)—areas that represent the least densely populated of all rural areas. Ambulance transports that receive the super-rural adjustment also receive the rural adjustment.

If the temporary adjustments expire, the Medicare AFS payment for the service and mileage components beginning January 1, 2018, will be the CY2017 Medicare payment amount before temporary adjustments multiplied by the annual inflation factor.

Figure 1 illustrates the service component of the AFS formula and the effect of the temporary payment adjustments on the most basic level of service, a Basic Life Support (BLS) nonemergency ambulance transport.

Figure 1. Example: Medicare AFS Service Component Payment and Temporary Adjustments

Source: CRS analysis of Medicare Ambulance Fee Schedule Public Use File CY2017.

Notes: Only the effect on the service component, not the mileage component, is reflected in the example since the super-rural adjustment applies only to the service component of the Medicare AFS payment. In this example, the CY2017 base rate is multiplied by an RVU of 1.00 for the most basic level of service, a Basic Life Support nonemergency ambulance transport. The selected CY2017 GAF of 0.931 for this example applies to North Carolina. For ambulance services in super-rural areas, both the super-rural and rural adjustments apply. AFS = Ambulance Fee Schedule; RVU = Relative Value Unit; GAF = Geographic Adjustment Factor.

A transport is eligible for the temporary payment adjustments if the patient point-of-pick-up is an urban, rural, or super-rural zip code. Table 1 illustrates the number of urban, rural, and super-rural zip codes nationally and by state (including the District of Columbia and U.S. territories) in 2017.

Table 1. Number of Urban, Rural, and Super Rural Zip Codes Under Medicare Ambulance Fee Schedule

National/State/DC/U.S. Territory

Urbana

Ruralb

Super-Ruralc

Total

National

23,425

11,683

7,829

42,937

AK

32

25

219

276

AL

481

215

158

854

AR

207

272

246

725

AS (American Samoa)

0

1

0

1

AZ

329

28

212

569

CA

2,174

324

226

2,724

CO

354

33

290

677

CT

395

50

0

445

DC

304

0

0

304

DE

82

17

0

99

FL

1,350

124

42

1,516

FM (Federated States of Micronesia)

0

4

0

4

GA

605

310

117

1,032

GU (Guam)

0

21

0

21

HI

77

66

0

143

IA

292

383

405

1,080

ID

98

33

204

335

IL

913

591

125

1,629

IN

534

453

13

1,000

KS

208

163

404

775

KY

309

699

22

1,030

LA

470

196

73

739

MA

681

70

0

751

MD

541

89

0

630

ME

134

200

171

505

MH (Marshall Islands)

0

2

0

2

MI

624

435

126

1,185

MN

412

245

386

1,043

MO

473

346

380

1,199

MP (Northern Mariana Islands)

0

3

0

3

MS

144

280

117

541

MT

55

11

345

411

NC

603

484

15

1,102

ND

61

24

334

419

NE

145

65

422

632

NH

100

175

17

292

NJ

732

16

0

748

NM

110

13

316

439

NV

164

21

72

257

NY

1,465

722

59

2,246

OH

829

658

0

1,487

OK

253

278

260

791

OR

232

75

193

500

PA

1,433

780

31

2,244

PR (Puerto Rico)

167

10

0

177

PW (Palau)

0

2

0

2

RI

90

1

0

91

SC

341

191

12

544

SD

47

32

339

418

TN

447

354

13

814

TX

1,661

454

612

2,727

UT

170

8

182

360

VA

797

417

63

1,277

VI (U.S. Virgin Islands)

0

16

0

16

VT

33

264

12

309

WA

448

121

175

744

WI

373

407

139

919

WV

421

404

111

936

WY

25

2

171

198

Source: CRS summary of Centers for Medicare & Medicaid Services' "CY2016 End of Year Zip Code File - Updated 11/17/2016."

a. Urban = an area within a Metropolitan Statistical Area (MSA) as defined by the Office of Management and Budget or a similar area as recognized by regulation. See 42 U.S.C. 1395ww(d)(2)(D).

b. Rural = an area located outside an urban area. See 42 U.S.C. 1395ww(d)(2)(D).

c. Super-rural = an area that ranks in the lowest 25% of all rural areas, by population density. See 42 U.S.C. 1395m(l)(12)(B).