The CMS has started sending notices to Medicare administrative contractors telling them to reduce reimbursement for regular, non-emergency ambulance transportation for dialysis appointments by 13% starting Oct. 1. Congress called for the cut in its February continuing resolution, known as the Bipartisan Budget Act of 2018.
The agency notes that this cut will be on top of a 10% reduction that took place in 2013, so reimbursement for such rides will be 23% less than they were five years ago.
Joyce Noles, who runs emergency medical services for the West Tennessee Healthcare system based in Jacksonville, said she expects the base reimbursement rate for such services to fall to $165 per transport compared to the $264 it was receiving on average before the 23% cut.
"This is going to be a large impact on many services and the cost will have to be passed on somehow," Noles said.
Once the cut kicks in, she expects to lose money for dialysis rides under the new reimbursement plan. On average, West Tennessee Healthcare's emergency transportation services unit will lose at least $65 per ride, Noles said.
West Tennessee Healthcare may switch to using stretcher vans for rides due to the reimbursement cut, which would mean that only non-medical personnel would be in the vehicle, leaving patients without immediate help if they experience a medical episode in transit.
Josh Watts, CEO of MedTrust, an ambulance provider in South Carolina, said his company has all but stopped taking on dialysis patients over the last year as revenue dropped for such rides.
While patients in his territory had other transport options, he expects healthcare access will suffer in rural areas. If ambulance providers in those regions also stop taking on dialysis patients due to the cut, there aren't other options for those patients, he said.
"In these areas, this will absolutely devastate the access to care transportation for at-risk patients," Watts said.
Transportation for dialysis patients can mean the difference between life and death for some, as many aren't able to drive or don't own cars, according to Alice Andors, a spokeswoman for the American Kidney Fund, a charity dedicated to helping kidney patients pay their insurance costs.
"Having a good transportation system is vital for dialysis patients, whose lives depend on getting to treatment three times a week," Andors said.
Ambulance providers across Southern and Mid-Atlantic states are especially furious about the cut, as they are now operating under a demonstration that requires Medicare beneficiaries to obtain prior authorization for regular, non-emergency transportation in order for the rides to be covered. The experiment spans eight states and the District of Columbia.
"It's a double hit if you're in" one of these states, said Dean Bollendorf, vice president of Healthfleet Ambulance, based in Fort Washington, Pa. "We're being treated differently from other providers in different states as they are not subject to both the cut and prior authorization."
Prior to implementing the model, spending on repetitive, scheduled non-emergent ambulance transports in the three initial states averaged $18.9 million per month, according to a CMS spokesman. By the start of 2017, spending decreased to an average of $6 million per month.
While ambulance providers supported the prior authorization demonstration because they believed it would weed out bad actors, they say they feel punished by the latest reimbursement cut.
"We've already paid our dues," Bollendorf said. "We've worked with the government to address the fraud problem."
Fraud experts agree that incidents of ambulance companies' improperly billing Medicare have dropped in recent years, but problems persist. Notable cases of improper billing for dialysis rides have been the subject of legal action in California, Ohio and Georgia over the last two years.
"There are bad players in the market who are in the business acting only with criminal intent," said Anthony Minge, a partner with Fitch & Associates who specializes in medical billing. "In my opinion, the government should shift more of the focus to rooting out these elements."
Nearly all Medicare fraud cases, including those committed by ambulance providers, are filed under seal under the False Claims Act and take years to investigate and prosecute. During that period, no one but the investigating authorities and the judge who has the case are aware of the fraud, according to Jim Barger, an attorney with the law firm Frohsin & Barger who specializes in False Claims Act lawsuits.
"Accordingly, there is no way to access the number of frauds that are currently under investigation. Our office, for one, has continued to receive reports of Medicare ambulance fraud related to non-emergent dialysis transport," Barger said.
Both the prior authorization demonstration and the cuts to reimbursement are the result of historical abuse by some ambulance providers of the non-emergency benefit.
A 2010 report from HHS' Office of Inspector General indicated that 20% of the agency's spending on non-emergency ambulance trips were improper because ambulance companies overbilled Medicare or transported people who didn't need or qualify for the service.
In 2012, Medicare Part B paid $5.8 billion for ambulance transports, almost double the amount it paid in 2003, according to the OIG.
Virgil Dickson reports from Washington on the federal regulatory agencies. His experience before joining Modern Healthcare in 2013 includes serving as the Washington-based correspondent for PRWeek and as an editor/reporter for FDA News. Dickson earned a bachelor's degree from DePaul University in 2007.Follow on Twitter