v  Direct Pay - We need a regulation that mandates insurance payers pay directly to the provider.  This would eliminate the need to participate with any payers simply to prevent the checks from going to the patients.  An example is Blue Cross, in order to receive the check we must participate, eliminating our ability to bill the patients for the entire cost of our transports.  There are several states that mandate this solely for ambulance providers in light of the fact we respond to 911 calls without the ability to approve or deny access to care. 

v  Prompt Pay Laws – Kentucky has a prompt pay law requiring insurance payers to pay within 30 days or pay the provider escalating interest. This isn’t enough anymore.  We need to define what a clean claim is, have different prompt pay expectations by electronic filing and paper claims and add penalties for failure to obey this law.   In several states the insurance commissioner also collects a hefty fine from the payer each time they do not pay within the given time frame.   I have included a spreadsheet, Insurance Laws for Comparison, showing all the states and their prompt pay laws.  With each state I have included in the comment box a brief of how the regulation is written.  You will not see this on the printed version.  If you wish to receive this electronically so you may view these please contact me directly.

v  Limit insurance time to deny and recoup their money.  Especially since Medicare can no longer be billed beyond 12 months this is crucial for providers.  We need to limit the time insurance companies can come back and deny claims they have paid to 6 months.  Samples of other states with similar policies are on the enclosed spreadsheet Insurance Laws for Comparison.

v  Increase Medicaid Rates - The new Healthcare Reform is going to introduce an estimated 16 million additional people into the Medicaid system and another 16 million will obtain commercial insurance through the assistance given by the Healthcare Reform bill.  We desperately need to increase our fee schedule for Medicaid now.  There are basically three methods to achieve this. 

 v  1) NEGOTIATION

 o           AN ADMINISTRATIVE REMEDY

 v  2) LOBBYING

   o      LEGISLATIVE REMEDY

 v  3) LAWSUIT

   o       LEGAL REMEDY

1) Negotiation – multiple states have been able to negotiate higher Medicaid fees such as Oregon and Michigan.  This may require changing the state laws.  I have found some very interesting laws in the Kentucky statues that I doubt you have seen.  They may show bias against ambulance service providers.

KRS 205.621 This Kentucky regulation ties regular updated fees tied to payments for physicians and dentist.  I think we should question why we have had to beg, plead, and pay for our own single increase received 2005 in how many years?  See below and attached:

KRS 205.621 Increased reimbursement for Medicaid 

(1) Reimbursement for physicians and dentists providing services to Medicaid recipients shall be increased to reflect budgeted provider profiles beginning October 1, 1990.

(2) Beginning October 1, 1992, reimbursement to physicians and dentists shall be increased annually in increments which represent a minimum of seventy-five percent (75%) of the most recently reported annual change in the consumer price index as computed by the United States Department of Labor

KAR 205.6314 Kentucky ambulance providers have seen no evidence of the following review of rates as mandated to be fair and reasonable. 

 205.6314 Review of reimbursement rates for emergency transportation providers -- Promulgation of administrative regulations relating to emergency transportation providers.

The Cabinet for Health and Family Services shall review the Medical Assistance Program reimbursement rates for emergency transportation providers to determine if existing rates are fair and reasonable. Notwithstanding this review, the cabinet shall by promulgation of administrative regulation, pursuant to KRS Chapter 13A, do the following:

(1) Prescribe reimbursement rates for emergency transportation providers to ensure that emergency rates are paid only for transporting medical assistance recipients to the emergency room of a hospital in emergency situations;

(2) Establish, in nonemergency cases, lower medical assistance reimbursement rates for emergency transportation providers for the transportation of stretcher patients from nursing homes to physician offices or hospitals; and

(3) Establish a verification system that requires medical providers to confirm that medical assistance recipients have appointments for medical services and that medical services were medically necessary and were obtained prior to payment by the cabinet to the emergency transportation provider.

Effective: June 20, 2005   

2) Lobbying to increase rates

Rates from surround states are:

 Other state Medicaid rates are available upon request.

Further we should point out that Congress mandates the Medicare fee schedule. 

HEALTHCARE REFORM BILL - By 2013 all physicians will be paid by Medicaid at the Medicare rate.  I have been unable to find yet if this will include ambulance providers.  See the HealthCare.gov article page 6.

FMAP MATCH - Currently the Federal Medical Assistance Percentage (FMAP) is providing 70.96% Federal Medical Assistance percentage and  79.67% Enhanced Federal Medical Assistance to the state funds.  This is based upon the average per capita income of the state.  The program provides open ended contributions Federal contributions according to the approved formula.  This gives us an excellent pay ratio for the state match.  See the Federal Register Nov 26, 2008 page 3.  Under the Healthcare Reform Bill payment for those additional 16 million will be paid entirely by the Federal Government for several years.

KAR 143.314 I found an example where each provider paid a tax (4%) or assessment on gross revenues of regional community Mental Health and Mental Retardation services.  The regulation states that the revenues generated from the levied tax and federal funds be used for rate increases for the same regional community mental health and mental retardation services.  It went on to state that the provision of this section shall be null and void if the waiver or plan amendment to increase rates is not approved by the Centers for Medicare and Medicaid Services and all collections under this section shall cease.  KBEMS gave the state in excess of $300,000 to increase the Medicaid rates once.  This was a similar situation.  See how the attached regulation is written.

GAO-03-986 Rural Ambulance Services or Project Hope an independent study completed by the GAO in 2003 showed the vastly diversified cost of providing an ambulance service.  It shows that the cost of most trips is not covered by the Medicare fee schedule.  Medicaid rates in Kentucky don’t even come close to covering the cost.  Attached are several Tables from this 61 page document.  A complete copy of this document and the accompanying research can be download from my website at 911billing.net.

Table 5: Average Number of Medicare Ambulance Trips, Population and Land Area, by Counties Grouped by Population Density, 2001

Sources: HRSA and CMS.

 Note: GAO analysis of HRSA and CMS data. We classified counties as urban if they were in an MSA and as rural if they were not in an MSA. The roughly 75 urban counties that contain rural areas as identified by the Goldsmith modification are included in the urban county group. Rural counties are grouped by quartiles of total county population density. The first quartile (0-11 persons per square mile) is further divided into frontier counties (0-6 persons per square mile) and non frontier (7-11

Table 6: Characteristics of Rural Counties and Their Ambulance Providers, by Counties Grouped by Population Density, 2001

 Sources: HRSA and CMS.

 Note: GAO analysis of HRSA and CMS data. We classified counties as rural if they were not in an MSA. Rural counties are grouped by quartiles of total county population density. The first quartile (0-11 persons per square mile) is further divided into frontier counties (0-6 persons per square mile) and non frontier counties (7-11 persons per square mile). We used the beneficiary’s address as a proxy for where each trip originated.

^aProviders that delivered less than 1 percent of their total Medicare trips in a county were excluded from the count of providers serving that county.

Table 7: Average Number of Medicare Ambulance Trips, Trip Length, and Estimates of Average Medicare Payment^a per Ambulance Trip, by Rural Counties Grouped by Population Density

 Sources: HRSA and CMS.

Note: GAO analysis of HRSA and CMS data. We classified counties as urban if they were in an MSA and as rural if they were not in an MSA. The roughly 75 urban counties that contain rural areas as identified by the Goldsmith modification are included in the urban county group. Rural counties are grouped by quartiles of total county population density. The first quartile (0-11 persons per square mile) is further divided into frontier counties (0-6 persons per square mile) and non frontier counties (7-11 persons per square mile). We used the beneficiary’s address as a proxy for where each trip originated.

^aPayment estimates were calculated by applying 100 percent of the 2003 Medicare ambulance fee schedule rates to Medicare ground ambulance trips delivered in 2001. These estimates reflect the mix of ambulance services provided in the different county categories as well as the geographic adjustment to account for wage differences across areas.

GAO-07-383 In 2007 the GAO did another study specifically aimed at the rural community and found that Costs and Expected Medicare Margins Vary Greatly. 

In the report the GAO recommends that the Administrator of CMS monitor utilization of ambulance transports to ensure that Medicare payments are adequate to provide for beneficiary access to ambulance services, particularly in super-rural areas. CMS agreed with GAO’s recommendation. This should apply to Medicaid as well as Medicare. 

 Unfunded Mandates Act – The Unfunded Mandates Act of 1995 states the government cannot force you to do something at a loss.   In the conferences that I have attended over the years I’ve been told that every time this argument has been used the states cave in.  A summary of the Unfunded Mandates Act is enclosed.

 3) Lawsuit   As with our arguments we would use the fact that the Kentucky state law requires regular review of the rates to be fair.  The Takings Clause was used by Massachusetts  in increasing their rates.   Federal law provides for Access to Care, and the GAO Hope report proves underpayment for that care.  The following states have used this avenue: Virginia, Pennsylvania, in Ohio a single company filed suit. 

Page, Wolfberg, and Wirth Attorneys in Pennsylvania have assisted with some of these lawsuits.