July 2019 Proposal – Medicare’s Ambulance Cost Data Collection Program

The Centers for Medicare and Medicaid Services (CMS) released its calendar year (CY) 2020 proposed payment rule for the Physician Fee Schedule (PFS) on July 29, 2019, and it included the proposal for Medicare’s new ambulance cost data collection program.

To review:

  • TEMSA has had two seminars on the subject, and TEMSA’s next seminar will be Monday, November 25 in Fort Worth. Registration will begin in September.
  • In exchange for renewing the ambulance extender policy, Congress included a provision in the Balance Budget Act of 2018 that will require ground ambulances to submit to a cost data collection program to collect cost, revenue, utilization, and other information determined appropriate by the Secretary of Health and Human Services (HHS).
  • According to CMS’s proposal: “Such system must be designed to collect information: (1) needed to evaluate the extent to which reported costs relate to payment rates under the AFS; (2) on the utilization of capital equipment and ambulance capacity, including information consistent with the type of information described in section 1121(a) of the Act; and (3) on different types of ground ambulance services furnished in different geographic locations…”

Click here to reference the actual proposal, which begins on page 532.

This summary is provided for informational purposes only. The American Ambulance Association will present another seminar with TEMSA on Monday, November 25 in Fort Worth. Click here for preliminary details.

Key Dates

The following is an overview of the key dates.

  • HHS is required to specify the data collection system by December 31, 2019, and to identify the ground ambulance providers and suppliers that would be required to submit information.
  • “[Not] later than December 31, 2019, for the data collection for the first year and each subsequent year through 2024, the Secretary must determine a representative sample to submit information under the data collection system.
  • Beginning January 1, 2022, HHS is required to apply a 10 percent payment reduction to Medicare payments for the applicable period to a ground ambulance provider or supplier that is required to submit information under the data collection system and fails to do so.
  • The Medicare Payment Advisory Commission (MedPAC) is directed to submit reports to Congress no later than March 15, 2023. The law allows HHS to revise the data collection system as appropriate after taking into consideration the report(s) that MedPAC will submit to Congress.
  • The law requires ground ambulance providers and suppliers to submit information for years after 2024, but in no case less often than once every three years, as determined appropriate by HHS.
  • CMS is proposing to make the data collection period a continuous 12-month period of time, “which is either the calendar year aligning with the data collection year, or when an organization uses another fiscal year for accounting purposes…”
  • Per CMS: “Therefore, we are proposing that the first data collection period be January 1, 2020, through December 31, 2021, with organizations reporting on a calendar year basis collecting data from January 1, 2020, through December 31, 2021, and organizations reporting on a fiscal year basis collecting data over a continuous 12-month period of time from the start of the fiscal year basis collecting data over a continuous 12-month period of time from the start of the fiscal year beginning in calendar year 2020.”
  • CMS is proposing to give EMS agencies up to five months to report data to CMS.

Who Must Submit Data? 25 Percent of EMS Agencies
Per CMS on page 533:

Under section 1834(l)(17)(B)(ii) of the Act, not later than December 31, 2019, for the data collection for the first year and for each subsequent year through 2024, the Secretary must determine a representative sample to submit information under the data collection system. The sample must be representative of different types of ground ambulance providers and suppliers (such as those providers and suppliers that are part of an emergency service or part of a government organization) and the geographic locations in which ground ambulance services are furnished (such as urban, rural, and low population density areas), and not include an individual ground ambulance provider or supplier in the sample for 2 consecutive years, to the extent practicable.

CMS begins its discussion related to the sampling proposal on page 578.

CMS proposed the following sample:

We are also proposing that 25 percent of ground ambulance organizations be sampled from all strata (as described below) in each of the first 4 years of reporting without replacement; that is, if an organization is sampled in Year 1, it would not be eligible for sampling again in the subsequent 3 years of data collection. We are proposing a 25 percent sampling rate because if a lower sampling rate is used, estimates of cost, revenue, and utilization from the data collected via the instrument for subgroups of ground ambulance suppliers would be of inadequate precision as described in the following section. Furthermore, our analyses illustrated that using 50 percent sampling rate yielded only marginal gains in precision over a corresponding strategy that involves sampling NPIs at a 25 percent rate while doubling the response burden. In our view, these gains are not sufficient to merit the increased burden that would be imposed by implementing a higher sampling rate. Our proposal was informed by analyses regarding the alternative sampling rates in Chapter 7 of the CAMH report. We invite comments on the proposed sampling rate of 25 percent each year.

CMS also commented on the concept of proposing a stratified random sample on page 584. According to CMS, the top 10 percent of ground ambulance agencies by volume accounted for nearly 70 percent of total Medicare ground ambulance transports in 2016. Meanwhile, the bottom 50 percent of ambulance providers and suppliers by volume accounted for only 3 percent of total Medicare ground ambulance transports.

To meet the law’s requirement to sample a wide variety of EMS agencies, CMS is proposing to use a stratified random sample:

We believe that use of a stratified random sample would comport with the statutory requirements. Therefore, we are proposing a stratified random sample approach. Specifically, we are proposing to sample from each strata at the same rate (25 percent, as described above). We believe that data collected from a sample of this type can be adjusted via statistical weighting to be representative of all ground ambulance organizations billing Medicare for ground ambulance services even if response rates vary across the characteristics used for stratification.

As TEMSA indicated at the beginning of this summary, HHS cannot include an individual ambulance provider and supplier in two consecutive years. (There may be exceptions, however.)

CMS is proposing to sample ground ambulance agencies that are enrolled in Medicare and that billed for at least one Medicare ambulance transport in the most recent year for which a full year of claims data prior to sampling is available.

What Are the Non-Compliance Penalties?
Per CMS on page 534:

Section 1834(l)(17)(D) of the Act requires that beginning January 1, 2022, the Secretary apply a 10 percent payment reduction to payments made under section 1834(l) of the Act for the applicable period to a ground ambulance provider or supplier that is required to submit information under the data collection system and does not sufficiently submit such information. The term “applicable period” is defined under section 1834(l)(17)(D)(ii) of the Act to mean, for a ground ambulance provider or supplier, a year specified by the Secretary not more than 2 years after the end of the period for which the Secretary has made a determination that the ground ambulance provider or supplier has failed to sufficiently submit information under the data collection system.

Under the law, a hardship exemption is available. Per CMS on page 534:

A hardship exemption to the payment reduction is authorized under section 1834(l)(17)(D)(iii) of the Act, which provides that the Secretary may exempt a ground ambulance provider or supplier from the payment reduction for an applicable period in the event of significant hardship, such as a natural disaster, bankruptcy, or other similar situation that the Secretary determines interfered with the ability of the ground ambulance provider or supplier to submit such information in a timely manner for the specified period.

In addition, the law directs CMS to establish an informal review process under which a ground ambulance provider or supplier may seek an informal review of a determination that it is subject to the payment reduction.

What Will MedPAC report to Congress?

MedPAC will be required to report on the following items to Congress:

  • An analysis of information submitted through the data collection system;
  • An analysis of any burden on ground ambulance providers and suppliers associated with the data collection system;
  • A recommendation as to whether information should continue to be submitted through such data collection system or if such system should be revised by the Secretary, as provided under section 1834(l)(17)(E)(i) of the Act; and
  • Other information determined appropriate by MedPAC.

What Resources Did CMS Use to Develop This Proposal?

CMS outlined the research that is utilized to develop this program on page 537. It included peer-reviewed literature, government, and trade association reports, interviews with industry experts, and Medicare claims and enrollment data.

In addition, a contractor analyzed the following five data collection tools:

  • The Moran Company Statistical and Financial Data Survey. This was commissioned by the American Ambulance Association in 2012.
  • Ground Emergency Medical Transport Cost Report form and instructions from California’s Medicaid program.
  • The Emergency Medical Services Cost Analysis Project framework, which was funded by the National Highway Traffic Safety Administration in 2007.
  • A 2012 Government Accountability Office (GAO) ambulance survey, which examined ground ambulance suppliers’ costs for transports.
  • The Rural Ambulance Service Budget Model, which was developed by a task force of the Rural EMS and Trauma Technical Assistance Center.

Per CMS:

Our contractor’s analysis of these tools revealed that while there was overlap of the broad cost categories collected (for example, labor, vehicles, and facilities costs) via these tools, there were significant differences in the more specific data collected within these broad categories. Overall, there was a large amount of variability regarding whether the tools allowed for detailed accounting of costs and whether the tools used respondent-defined or survey-defined categories for reporting. The five tools also differed in terms of their instructions, format, and design in terms of how a portion of organizations’ total costs were allocated to ground ambulance costs, the time frame for reporting, and the flexibility of reporting.

Based on these activities, our contractor prepared a report entitled, “Medicare Ground Ambulance Data Collection System –Sampling and Data Collection Instrument Considerations and Recommendations” (referred to as “the CAMH90 report”) which is referenced throughout this proposed rule. It is available at https://www.cms.gov/Center/Provider-Type/Ambulances- Services-Center.html and provides more detail on the research, findings and recommendations concerning the data collection instrument and sampling. This report, in addition to other considerations we describe below, informed our proposals for the data collection instrument.

CMS’s Proposal for the Data Collection Tool: Web-Based System

CMS is proposing a web-based system to collect the data. CMS outlined its proposed data collection tool on page 542:

Based on our analysis of the existing or previously used data collection instruments described above, we do not believe that any of them would be sufficient to adequately capture the data required by section 1834(l) of the Act. Therefore, we are proposing to collect ground ambulance organization data using a survey that we developed specifically for this purpose, which we will refer to from this point forward in this proposed rule as the data collection instrument, and which we would make available via a secure web-based system. We believe that the data collection instrument should be usable by all ground ambulance organizations, regardless of their size, scope of operations and services offered, and structure. The proposed data collection instrument includes screening questions and skip patterns that direct ground ambulance organizations to only view and respond to questions that apply to their specific type of organization. We also believe that the proposed data collection instrument is easier to navigate and less time consuming to complete than a cost report spreadsheet. The proposed secure web-based survey would be available before the start of the first data reporting period to allow time for users to register, receive their secure login information, and receive training from CMS on how to use the system.

CMS’s Proposal for Data Elements: Total Costs, Total Revenue & Total Utilization

CMS outlined the potential data elements to collection on page 543, and it outlined its proposal in the following statement (page 546):

Therefore, we propose the first option as discussed above, which would require ground ambulance organizations to report on their: (1) total costs related to ground ambulance services; (2) total revenue from ground ambulance services; and (3) total ground ambulance service utilization. This approach would consider all ground ambulance costs, revenue, and utilization, regardless of whether the service was billable to Medicare or related to a Medicare beneficiary to collect total cost, total revenue, and total utilization data.

The proposed data collection instrument is available on CMS’s website at:

https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html.

EMS Characteristics
Due to the variation in the training level of EMS professionals, geographic inconsistencies, and other characteristics, HHS is proposing to collect additional information, such as:

  • Ownership information.
  • Volunteer labor.
  • The category that best describes the ambulance organization.
  • Shared operational costs with an entity of another type, including a fire department, hospital, or other entity.
  • Routinely responds to emergency calls for service.
  • Operates land, water, and air ambulances.
  • Has a staffing model that is static (that is, consistent staffing over the course of a day/week) or dynamic (that is, staffing varies over the course of a day/week) or combined deployment (certain times of the day have a fixed number of units, and other times are dynamic depending on need).
  • Provides continuous emergency services.
  • Provides paramedic or other emergency response staff to meet ambulances from other organizations in the course of a response.

Defining the Primary Service Area
Per CMS on page 553:

We are proposing to require ground ambulance organizations that are selected during sampling to identify their primary service area by either: (1) providing a list of ZIP codes that constitute their primary service area; or (2) selecting a primary service area using pre-populated drop-down menus at the county and municipality level in question 1, section 3 of the data collection instrument. We are also proposing to require respondents to specify whether they have a “secondary” service area, which are areas where services are regularly provided under mutual aid, auto-aid, or other agreements in section 3, question 4 of the data collection instrument and if so, to identify the secondary service area using ZIP codes or other regions as described above for the primary service area (section 3, question 5). Mutual aid agreements are joint agreements with neighboring areas in which they can ask each other for assistance. Auto-aid arrangements allow a central dispatch to send the closest ambulance to the scene. We are not proposing to collect information on areas served only in exceptional circumstances, such as areas rarely served under mutual or auto-aid agreements or deployments in response to natural disasters or mass casualty events because we believe reporting on rarely-served areas would involve significant additional burden and would add to instrument complexity without generating data that would be useful for analysis.

CMS provides its reasoning for proposing the following questions to help study the EMS agency’s geographic region:

  • Whether the respondent is the primary emergency ambulance organization for at least one type of service in their primary service area.
  • Average trip time in primary and secondary service areas.
  • Average response time (for organizations responding to emergency calls for service) for primary and secondary service areas.
  • Whether the organization is required or incentivized to meet response time targets by contract or other arrangement (for organizations responding to emergency calls for service).

Collecting Data on Ground Ambulance Utilization
The law requires CMS to collect information on the utilization of ground ambulance services.

CMS is proposing a “two-pronged approach” to collect data on the volume and mix of services. To measure volume, CMS is proposing the following data elements:

  • Total responses, including those where a ground ambulance was not deployed.
  • Ground ambulance responses, that is, responses where a ground ambulance was deployed.
  • Ground ambulance responses that did not result in a transport.
  • Ground ambulance transports.
  • Paid ground ambulance transports, that is, ground ambulance transports where the ambulance provider or supplier was paid for a billed amount in part or in full.
  • Standby events.
  • Paramedic intercept services as defined by Medicare.
  • Other situations where paramedic staff contributes to a response where another organization provides the ground ambulance transport.

To account for EMS agencies that specialize in non-emergency transports or inter-facility transports, CMS is proposing the following data elements:

  • The share of responses that were emergency versus non-emergency.
  • The share of transports that were land versus water (asked only of organization reporting that they operate water ambulances).
  • The share of transports by service level.
  • The share of transports that were inter-facility transports.

Collecting Data on Costs
CMS’s discussion regarding data collection on costs begins on page 559. CMS outlined what it believes are two important pieces of guidance.

For the first piece of guidance, CMS stated the following:

First, in the case where a sampled organization is part of a broader organization (such as when a single parent company operates different ground ambulance suppliers ), we propose to ask the respondents to report an allocated portion of the relevant ground ambulance labor, facilities, vehicle, supply/equipment, and other costs from the broader parent organization level in separate questions in several places in the cost sections of the data collection instrument (section 7.2 question 3, section 8.2 question 2, section 8.3 question 2, section 9.2 question 5, section 9.3 question 6, section 10.2 question 4, and section 11 questions 2 and 5).

For the second piece of guidance, CMS stated the following:

Second, we are proposing to include a general instruction stating that in cases where costs are paid by another entity with which the respondent has an ongoing business relationship, the respondent must collect and report these costs to ensure that the data reported reflects all costs relevant to ground ambulance services. Examples include when a municipality pays rent, utilities, or benefits directly for a government or non-profit ambulance organization, or when hospitals provide supplies and/or medications to ground ambulance operations at no cost. During interviews with ground ambulance organizations, we were told that there are many nuanced arrangements that fit this broad scenario. Although we recognize this would be an additional step for some ground ambulance organizations, we are concerned that the lack of reported cost data in one of these major categories could significantly affect calculated total cost.

CMS provides several other important pieces of commentary in this section:

  • To avoid the subjectivity and burden involved in asking respondents to report fair market value, we propose instead that respondents report which ambulances, other vehicles, and buildings have been donated, but not an estimate of the fair market value of those donations. We believe fair market values could be imputed using publicly available sources of data to facilitate comparison of data between organizations that have donations and those that do not. For the same reasons, we are also proposing not to collect an estimate of fair market value for donated equipment, supplies, and costs collected in the “other costs” section of the instrument. (Page 561.)
  • To avoid reporting the same costs multiple times, there are instructions and reminders throughout the proposed data collection instrument to avoid double-counting of costs. From a design perspective, we believe it is less important where a particular cost is reported on the survey data collection instrument and more important that the cost is reported only once.

CMS provided extensive descriptions of each cost category, alternative for data collection, and its proposals related to each category of costs on page 562. These include collecting data on staffing and labor costs, collecting data on facility costs, collecting data on equipment and supply costs, collecting data on other costs, and collecting data on vehicle costs. TEMSA will not summarize those descriptions in this summary.

Fire- and Hospital-Based EMS
Beginning on page 546, CMS recognized that it may be difficult to collect EMS-specific data from agencies that share operational costs with fire departments, other public service organizations, air ambulance services, hospitals, and other entities.

CMS indicated that it cannot exempt these entities because the law requires a sample of all EMS agencies. As a result, CMS is proposing instructions for the data collection instrument that would separately address the costs related to ground ambulance services for these organizations.

Per CMS:

  • Cost and revenue components completely unrelated to ground ambulance services. These costs and revenues would be unrelated to this data collection and not reported. Examples include administrative staff without ground ambulance responsibilities, health care delivery outside of ground ambulance, community paramedicine, community education and outreach, and fire and police public safety response.
  • Cost and revenue components partially related to ground ambulance services. These costs and revenue would be reported in full, but respondents would report additional information that can be used to allocate a portion of the costs to ground ambulance services. Depending on how the data would be utilized, certain costs could be included or excluded from an analysis after data are collected. Examples include EMTs who are also firefighters and facilities with both ground ambulance and fire department functions. (We considered an alternative where respondents would allocate costs and report only costs associated with ground ambulance services but believe that would pose an additional burden on the respondent to calculate allocated amounts, and would result in an allocation process that is less transparent and standardized).
  • Cost and revenue components entirely related to ground ambulance services. These costs are reported in full. Examples include EMTs with only ground ambulance responsibilities and ground ambulance vehicles.

What About EMS Agencies That Use Volunteer Labor?
CMS indicated that the law will not allow it to exempt EMS agencies that use volunteer labor.

CMS stated in the proposal:

Ground ambulance organizations that use volunteer labor might have some costs related to their volunteer labor, such as stipends, but may not have others, such as an hourly wage. Therefore, we are proposing to collect information on paid and unpaid volunteer hours during a typical week using the same EMT/response staff categories used elsewhere in the data collection instrument. We believe reported hours can be converted to market rates using data from other sources, such as the Bureau of Labor Statistics’ wage data. Ambulance providers and supplies that rely on volunteer labor report that it is becoming increasingly difficult to find volunteers and they are having to hire paid staff in their place, especially for the more costly labor categories, such as paramedics. Therefore, we are proposing that ambulance providers and suppliers that use any amount of volunteer labor be included in sampling. We invite comments as to whether organizations that rely on volunteer labor should be exempt from sampling.

What About Air Medical?
Per CMS:

We note that while the requirements of section 1834(l)(17) of the Act are specific to ground ambulance organizations, many stakeholders have expressed interest to us in making this type of information available for other providers and suppliers of ambulance services. For example, air ambulance organizations have suggested they are interested in making this information available. We recognize that the regulation of air ambulances spans multiple federal agencies, and note that section 418 of the FAA Reauthorization Act of 2018 (Pub. L. 115-254, enacted October 5, 2018) requires the Secretary of HHS, in consultation with the Secretary of Transportation, to establish an advisory committee that includes HHS, DOT, and others to review options to improve the disclosure of charges and fees for air medical services, better inform consumers of insurance options for those services, and better inform and protect consumers of these services. We welcome comments on the state of the air ambulance industry and how CMS can work within its statutory authority to ensure that appropriate payments are made to air ambulance organizations serving the Medicare population.