[Federal Register: November 25, 2005 (Volume 70, Number 226)]
[Notices]
[Page 71163-71165]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25no05-94]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1294-N]
RIN 0938-AN99
Medicare Program; Coverage and Payment of Ambulance Services;
Inflation Update for CY 2006
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This notice announces an updated Ambulance Inflation Factor
(AIF) for payment of ambulance services during calendar year (CY) 2006.
The statute requires that this inflation factor be applied in
determining the fee schedule amounts and payment limits for ambulance
services. The updated AIF for 2006 applies to ambulance services
furnished during the period January 1, 2006, through December 31, 2006.
DATES: Effective date: The AIF for 2006 is effective for ambulance
services furnished during the period January 1, 2006, through December
31, 2006.
FOR FURTHER INFORMATION CONTACT: Anne E. Tayloe, (410) 786-4546.
SUPPLEMENTARY INFORMATION:
I. Background
A. Legislative and Regulatory History
Under section 1861(s)(7) of the Social Security Act (the Act),
Medicare Part B (Supplementary Medical Insurance) covers and pays for
ambulance services, to the extent prescribed in regulations at 42 CFR
Part 410 and Part 414, when the use of other methods of transportation
would be contraindicated. The House Ways and Means Committee and Senate
Finance Committee Reports that accompanied the 1965 legislation
creating the Act suggest that the Congress intended that: the ambulance
benefit cover transportation services only if other means of
transportation are contraindicated by the beneficiary's medical
condition; and only ambulance service to local facilities be covered
unless necessary services are not available locally, in which case,
transportation to the nearest facility furnishing those services is
covered (H.R. Rep. No. 213, 89th Cong., 1st Sess. 37 and S. Rep. No.
404, 89th Cong., 1st Sess., Pt I, 43 (1965)). The reports indicate that
transportation may also be provided from one hospital to another, to
the beneficiary's home, or to an extended care facility.
Our regulations relating to ambulance services are located at 42
CFR Part 410, subpart B and Part 414, subpart H. Section 410.10(i)
lists ambulance services as one of the covered medical and other health
services under Medicare Part B. Ambulance services are subject to basic
conditions and limitations set forth at Sec. 410.12 and to specific
conditions and limitations included at Sec. 410.40. Part 414, subpart
H describes how payment is made for ambulance services covered by
Medicare.
Ambulance services are divided into different levels of services
based on the medically necessary treatment provided during transport as
well as into ground (including water) and air ambulance services. These
services include the following levels of service.
For Ground:
Basic Life Support (BLS)
Advanced Life Support, Level 1 (ALS1)
Advanced Life Support, Level 2 (ALS2)
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Specialty Care Transport (SCT)
Paramedic ALS Intercept (PI)
For Air:
Fixed Wing Air Ambulance (FW)
Rotary Wing Air Ambulance (RW)
Historically, payment levels for ambulance services depended, in
part, upon the entity that furnished the services. Prior to
implementation of the ambulance fee schedule on April 1, 2002,
providers (hospitals, including critical access hospitals, skilled
nursing facilities, and home health agencies) were paid on a
retrospective reasonable cost basis. Suppliers, which are entities that
are independent of any provider, were paid on a reasonable charge
basis.
On February 27, 2002, the Fee Schedule for Payment of Ambulance
Services and Revisions to the Physician Certification Requirements for
Coverage of Non-Emergency Ambulance Services final rule was published
in the Federal Register (67 FR 9100). That final rule implemented
section 1834(l) of the Act (which was added by the Balanced Budget Act
of 1997) and established a fee schedule for the payment of ambulance
services under the Medicare program effective for services furnished on
or after April 1, 2002. The fee schedule described in the final rule
replaced the retrospective reasonable cost payment system for providers
and the reasonable charge system for suppliers of ambulance services.
In addition, that final rule: Implemented the requirement in section
1834(l)(6) of the Act that ambulance suppliers accept Medicare
assignment; codified the establishment of new Health Care Common
Procedure Coding System (HCPCS) codes to be reported on claims for
ambulance services; established increased payment under the fee
schedule for ambulance services furnished in rural areas based on the
location of the beneficiary at the time the beneficiary is placed on
board the ambulance; and revised the certification requirements for
coverage of non-emergency ambulance services. That final rule also
provided for a 5-year transition period during which program payment
for Medicare covered ambulance services would be based upon a blended
rate comprised of a fee schedule portion and a reasonable cost
(providers) or reasonable charge (suppliers) portion. We are now in the
fourth year of that transition over to full payment based solely on the
fee schedule amount.
B. Ambulance Inflation Factor (AIF) for CY 2006
Section 1834(l)(3)(B) of the Act provides the basis for updating
payment amounts for ambulance services. Our implementing regulations at
Sec. 414.610(f) provide that the ambulance fee schedule must be
updated by the AIF annually, based on the consumer price index for all
urban consumers (CPI-U) (U.S. city average) for the 12-month period
ending with June of the previous year.
Our regulations at Sec. 414.620 provide that changes in payment
rates resulting from incorporation of the AIF will be announced by
notice in the Federal Register without opportunity for prior comment.
We find it unnecessary to undertake notice and comment rulemaking
because the statute and regulations specify the methods of computation
of annual updates. This notice does not change policy, but merely
applies the update methods specified in the statute and regulations.
II. Provisions of the Notice
A. Ambulance Inflation Factor (AIF) for 2006
Section 1834(l)(3)(B) of the Act, as specified in Sec. 414.610(f),
provides for an update in payments for CY 2006 that is equal to the
percentage increase in the CPI for all urban consumers (CPI-U), for the
12-month period ending with June of the previous year (that is, June
2005). For CY 2006 that percentage is 2.5 percent.
The national fee schedule for ambulance services has been phased in
over a five-year transition period beginning April 1, 2002. (See Sec.
414.615). According to section 414 of the Medicare Prescription Drug,
Improvement and Modernization Act of 2003 (MMA) (Pub. L. 108-173), CMS
established new Sec. 414.617 which specifies that for ambulance
services furnished during the period July 1, 2004 through December 31,
2009, the ground ambulance base rate is subject to a floor amount,
which is determined by establishing nine fee schedules based on each of
the nine census divisions, and using the same methodology as was used
to establish the national fee schedule. If the regional fee schedule
methodology for a given census division results in an amount that is
lower than or equal to the national ground base rate, then it is not
used, and the national fee schedule amount applies for all providers
and suppliers in the census division. If the regional fee schedule
methodology for a given census division results in an amount that is
greater than the national ground base rate, then the fee schedule
portion of the base rate for that census division is equal to a blend
of the national rate and the regional rate. For CY 2006, this blend
would be 40 percent regional ground base rate and 60 percent national
ground base rate. Prior to January 1, 2006, during the transition
period, the AIF was applied to both the fee schedule portion of the
blended payment amount (both national and regional (if it applied)) and
to the reasonable cost or charge portion of the blended payment amount
separately, respectively, for each ambulance provider or supplier.
Then, these two amounts were added together to determine the total
payment amount for each provider or supplier. As of January 1, 2006,
the total payment amount for air ambulance providers and suppliers will
be based on 100 percent of the national ambulance fee schedule, while
the total payment amount for ground ambulance providers and suppliers
will be based on either 100 percent of the national ambulance fee
schedule or 60 percent of the national ambulance fee schedule and 40
percent of the regional ambulance fee schedule.
III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 30-day notice in the Federal Register and when a collection of
information requirement is submitted to the OMB for review and
approval. In order to fairly evaluate whether OMB should approve an
information collection, section 3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we examine the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
IV. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register to provide a period of public comment before the
provisions of a notice such as this take effect. We can waive this
procedure, however, if we find good cause that a notice and comment
procedure is impracticable, unnecessary, or contrary to the public
interest and incorporate a statement of
[[Page 71165]]
finding and its reasons in the notice issued.
We find it unnecessary to undertake notice and comment rulemaking
because the statute and regulation specify the methods of computation
of annual updates, and we have no discretion in this matter. Further,
this notice does not change substantive policy, but merely applies the
update methods specified in statute and regulation. Therefore, for good
cause, we waive notice and comment procedures.
Under the Congressional Review Act, major rules generally cannot
take effect until 60 days after the rule is published in the Federal
Register. However, section 808(2) of the Congressional Review Act
states that agencies may waive this 60-day requirement for ``good
cause'' and establish an earlier effective date. As explained above, we
believe that there is ``good cause'' for waiver of the APA requirement
for notice and comment rulemaking because it would be unnecessary for
us to fulfill that requirement. For the same reason, we believe that
the ``good cause'' exception applies to the 60-day effective date
requirement for major rules in the Congressional Review Act.
V. Regulatory Impact Statement
We have examined the impacts of this notice as required by
Executive Order 12866 (September 1993, Regulatory Planning and Review),
the Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-
354), section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). As stated
above, the AIF (equal to the percentage increase in the CPI-U of June
30, 2005 as compared to June 30, 2004) for 2006 is 2.5 percent. We
estimate that the application of the AIF will result in this notice
being considered a major rule because it will result in an additional
total program expenditure of approximately $112 million in CY 2006.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6 million to $29 million in any 1 year. For purposes of the RFA, all
ambulance providers or suppliers are considered to be small entities.
Individuals and States are not included in the definition of a small
entity.
The Department of Health and Human Services (HHS) considers that a
substantial number of entities are affected if the rule impacts more
than 5 percent of the total number of small entities as it does in this
notice. This notice will impact every ambulance provider and supplier
in the same way because all ambulance payment rates for all ambulance
services furnished by all types of ambulance providers and suppliers
are increased by the same ambulance inflation factor. While all
ambulance payment rates are increased by the 2.5 percent AIF, the
impact of this increase does not meet the threshold established by HHS
to be considered a significant impact.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. We have no data to
indicate that a substantial number of small rural hospitals will be
impacted by this notice.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in expenditure in any 1 year by State,
local, or tribal governments, in the aggregate, or by the private
sector, of $110 million. This notice does not result in expenditures in
any 1 year by State, local, or tribal governments of $110 million.
Executive Order 13132 establishes certain requirements that an
agency must meet when it publishes a notice that imposes substantial
direct requirement costs on State and local governments, preempts State
law, or otherwise has Federalism implications. This notice will not
have a substantial effect on State or local governments.
We estimate that the total program expenditure for CY 2006 for
ambulance services covered by the Medicare program is approximately
$4.5 billion. Application of an AIF of 2.5 percent will result in an
additional total program expenditure of approximately $112 million over
CY 2005.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
Authority: Section 1834(l) of the Social Security Act (42 U.S.C.
1395m(l)).
(Catalog of Federal Domestic Assistance Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
Dated: August 9, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
Approved: October 7, 2005.
Michael O. Leavitt,
Secretary.
[FR Doc. 05-23163 Filed 11-23-05; 8:45 am]
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