On November 13, 2014, the Centers for Medicare and Medicaid Services (CMS) issued a Final Rule that updates regulations to account for the ambulance bonuses and changes many ZIP code designations for purposes of Medicare reimbursement.  The Rule, “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,” is a massive Final Rule that revises payment policies for several types of Part B Medicare providers, including ambulance services, for calendar year 2015. 

We’ve excerpted the ambulance-specific parts of the lengthy Final Rule for you HERE. You can also download files that contain the ZIP codes that are changing in each state by clicking HERE and downloading the following file at the bottom of the webpage: CY2015 Final Rule Zip Code Files [ZIP, 1MB].  You can comment on the Final Rule through December 30, 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-FC when commenting).

For ambulance services, the Final Rule does two things: (1) it updates the ambulance regulations to account for the ground ambulance bonus extensions through March 31, 2015; and (2) it updates certain geographic areas, changing some areas from rural to urban and other areas from urban to rural beginning January 1, 2015. Here is a summary of the two changes:

Ambulance Regulations Updated to Include Bonuses Through March 2015

This past spring, Congress extended the Medicare ground ambulance bonus payments to March 31, 2015. This Final Rule amends the ambulance reimbursement regulations so they now include:

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

If Congress does not act by March 31, 2015 to extend the bonuses, they will expire on that date.

Final Changes For Rural And Urban Delineations

CMS also updated 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 Final Rule affects a lot more ZIP codes than the Proposed Rule had estimated, and providers who pick up in certain currently rural ZIP codes should pay close attention.  

CMS stated in the Proposed Rule that approximately 99.48% of ZIP Codes would be unchanged by the revised delineations and the updated Rural Urban Commuting Area (RUCA) Codes.  The agency said in the Proposed Rule that 122 ZIP codes would change from rural to urban and 100 ZIP codes would change from urban to rural. However, in the Final Rule CMS acknowledged that it had seriously underestimated the impact of the changes and the percentage of ZIP Codes that would be unchanged is significantly lower, approximately 92.02%. 

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

• 3,038 ZIP Codes (7.08% of all US ZIP Codes) would change from rural to urban
• 387 ZIP Codes (0.90% of all US ZIP Codes) would change from urban to rural

The changes are significant because ambulance transports originating in rural ZIP codes are paid at a higher rate of reimbursement than transports originating in urban ZIP codes. 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 ZIP code, 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 (387 ZIP Codes in 41 states) will experience payment increases under the Final Rule. California will have the most ZIP codes changing from urban to rural (43 of the total 387 ZIP Codes). On the other hand, ambulance services that pick up in the ZIP codes that are changing from rural to urban (3,038 Zip Codes in 46 states and Puerto Rico) will experience payment decreases under the Final Rule. Pennsylvania will have the most ZIP Codes changing from rural to urban (293 of the total, or 13.06%). West Virginia will have the greatest percentage of ZIP Codes changing from rural to urban (269 ZIP Codes, or 28.74%).