Medicare Payment Primer: Ground and Air Ambulance Services

This Insight is part of our Medicare Payment Primers series.

Medicare pays ambulance providers/suppliers for ground and air ambulance services under Part B when the following conditions are satisfied:

• Actual transportation of the beneficiary occurs.
• The beneficiary is transported to the nearest appropriate medical facility capable of providing the care the beneficiary requires. A hospital at which there is no physician available to provide the necessary care would not be the nearest appropriate medical facility, even if the hospital otherwise had the capacity and capabilities to provide the care.
• The transport is medically necessary, i.e., other means of transport are medically contraindicated. In all cases, appropriate documentation must be maintained and presented upon request. Note that the presence (or absence) of a physician’s order for ambulance transport does not necessarily prove (or disprove) whether the transport was medically necessary.
• The ambulance provider/supplier meets all applicable vehicle, staffing, billing, and reporting requirements.
• The transport is not part of a Medicare Part A service. A transport occurring during a Medicare Part A stay in a hospital or skilled nursing facility (SNF) is included in the Part A payment except when a patient is transported from an SNF (1) to a hospital for emergency services or intensive outpatient services not available at the SNF or (2) to/from a dialysis facility. In these cases, separate Part B payment is made for the transport. In all other cases, the ambulance provider/supplier must look to the hospital or SNF for payment.

Payment for covered transports is made pursuant to ground and air ambulance fee schedules, each of which includes a base rate payment plus separate payment for mileage to the nearest appropriate facility. There is no separate payment for items and services used during transport, e.g., oxygen, drugs, medical supplies, extra attendants, ancillary services.

The ground ambulance fee schedule base rate is calculated by multiplying the conversion factor by the relative value unit (RVU) associated with the service intensity of the transport. The following RVUs have been assigned to the specified service levels:

The conversion factor is a nationally uniform dollar amount updated annually by an ambulance inflation factor. It is subject to a geographic adjustment factor (GAF) to address regional differences in the cost of ambulance services.  The GAF is based on the non-facility practice expense of the geographic practice cost index (GPCI) of the Medicare Physician Fee Schedule and is determined by the patient’s point-of-pickup (POP). The applicable GAF is multiplied by 70% of the base rate.

The mileage reimbursement for ground ambulance is based on a nationally uniform loaded mileage rate, with an additional amount for certain mileage for a rural POP, defined by zip code. The additional payment for rural POPs is 1.5 times the rural mileage allowance for loaded miles 1-17.

The air ambulance fee schedule operates in a similar manner, except it includes a nationally uniform base rate for fixed wing and a similar nationally uniform base rate for rotary wing, a nationally uniform loaded mileage rate for each type of air service, and a rural adjustment to the base rate and mileage for services furnished for a rural POP shown as an increase of 50% . Also, the GAF for air ambulance services is applied to 50% of the base rate for the applicable transport, as opposed to 70% for ground ambulance services.

Ambulance services furnished by a critical access hospital (CAH) (or an entity owned and operated by a CAH) are paid on a reasonable cost basis but only if the CAH or entity is the only provider or supplier of ambulance services located within 35 miles of the CAH or entity.

Medicare beneficiary liability for covered ambulance transport is limited to any unmet Part B deductible and a 20% coinsurance amount. Although a rare occurrence, a beneficiary may be liable for mileage not covered by Medicare if the beneficiary is transported to a facility other than one deemed to be the nearest appropriate facility.

Resources

Medicare Benefit Policy Manual Chapter 10 – Ambulance https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/bp102c10.pdf

Medicare Claims Processing Manual Chapter 15 – Ambulance https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c15.pdf

This Insight is part of our Medicare Payment Primers series. If you have questions about regulatory requirements and compliance, our executives are happy to assist.