On July 11, 2014, Centers for Medicare and Medicaid Services (CMS) issued a Proposed Rule entitled: “Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule, Clinical Laboratory Fee Schedule, Access to Identifiable Data for the Center for Medicare and Medicaid Innovation Models & Other Revisions to Part B for CY 2015.” The lengthy Proposed Rule revises payment polices for several types of Part B Medicare providers, including ambulance services, and comprises the “Physician Fee Schedule” for calendar year 2015.

We’ve excerpted the ambulance-specific parts the Rule for you HERE, and you can also access a copy of the entire Proposed Rule HERE. You can also comment on the Proposed Rule through September 2, 2014, and the easiest way to do that is to go to www.regulations.gov and follow the instructions for “submitting a comment” (refer to file code CMS-1612-P when commenting).

For ambulance services, the Proposed Rule would do two things: (1) update the ambulance regulations to account for the ground ambulance bonus extensions through March 31, 2015; and (2) update certain geographic areas, changing some areas from rural to urban and other areas from urban to rural in 2015. Here is a summary of the two changes:

Regulations Updated to Include Bonuses Through March 2015

At the end of 2013 and this past spring, Congress passed two laws that had the net effect of extending the Medicare ground ambulance bonus payments to March 31, 2015. This Proposed Rule would amend the ambulance reimbursement regulations so they now include:

• 2% urban bonues through 3/31/15
• 3% rural bonuses through 3/31/15
• 22.6% super-rural bonuses through 3/31/15

This change should be transparent for ambulance services and is required by the law. But remember, if Congress does not act by March 31, 2015 to extend the bonuses, then they will expire on that date.

Proposed Changes For Rural And Urban Delineations

CMS is also proposing to update the way that geographic area delineations are made to reflect population shifts and more accurately identify urban and rural areas for ambulance fee schedule payment purposes. The proposed change would have a small effect overall on the ambulance industry, and geographic designations for approximately 99.48% of the 42,914 ZIP codes in the US would be unaffected.

Here’s a quick breakdown of what the proposed changes would do:

• 122 ZIP codes (0.28% of all US ZIP codes) would change from rural to urban
• 100 ZIP codes (0.23% of all US ZIP codes) would change from urban to rural

These changes are significant because ambulance transports originating in rural areas are paid at a slightly higher rate of reimbursement than transports originating in urban areas. For rural ground ambulance transports the mileage rate is increased by 50% for each of the first 17 miles, and these transports are currently subject to a 3% bonus (for both base rate and mileage). For air ambulance services originating in a rural area, the base rate and mileage rate are increased by 50%.

So, ambulance services that pick up in the ZIP codes that are changing from urban to rural (100 ZIP codes in 11 states) may experience payment increases if CMS adopts the revised geographic method. The state of Ohio would have the most ZIP codes changing from urban to rural (40 of the total 100 ZIP codes). On the other hand, ambulance services that pick up in the ZIP codes that are changing from rural to urban (122 Zip Codes in 22 states) may experience payment decreases if CMS adopts the revised method. The state of West Virginia would have the most ZIP codes changing from rural to urban (17 of the total 122) and Connecticut would have the greatest percentage of ZIP codes changing from rural to urban (15 ZIP codes, or 3.37%). Finally, none of the current super-rural bonus areas would lose their super-rural status if CMS adopted the provisions of this Proposed Rule. To link to CMS’s table of the states whose ZIP codes are affected, click HERE.