This Page Was Last Updated: 03 May, 2007 21:27

The current Medicare Part B Bulletin contains the following information:

On April 17, 1998, you were notified that effective July 1, 1998, Medicare Part B would no longer make payment for ambulance services provided to SNF patients. The Health Care Financing Administration has delayed this instruction until further notice.

Effective July 1, 1998, and until further notice, Medicare Part B will continue to process and pay claims submitted by independent ambulance suppliers for ambulance services for a resident in a Part A stay in a SNF not on PPS and for a resident in a Part B stay.

27th May 1998

Advisory on Skilled Nursing Facility bundled billing

American Ambulance Association

The following is the membership advisory from the American Ambulance Association regarding the recent agreement achieved by the AAA with HCFA on several clarifications regarding the application to ambulance service of the SNF/PPS and Consolidated Billing provision of the Balanced Budget Act. The final rule has still not been published by HCFA containing these provisions.

The two most significant developments are:

Ambulance services are included in the transition period for consolidated billing which postpones the effective date of the consolidated billing provisions for most ambulance services until January 1, 1999. However, some SNFs may choose to begin consolidated billing on July 1, 1998. For both the PPS and consolidated billing provisions, only those Part B services provided as part of the resident's nursing home plan of care are included.

Skilled Nursing Facility Prospective Payment and Consolidated Billing Advisory

Under section 4432 of the Balanced Budget Act of 1997, beginning as soon as July 1, 1998, skilled nursing facilities ("SNFs") must assume responsibility for certain Medicare Part B services, including some ambulance trips, that were previously billed separately by suppliers. The legislation contains two distinct provisions:

SNF Prospective Payment System. Under this provision, payment for most Part B services for beneficiaries receiving Part A covered SNF services will be bundled into a single prospectively determined payment rate (the SNF "PPS" payment). This payment is in lieu of any separate payment that the SNF or a Part B supplier would otherwise receive for those services. Thus, a Part B supplier will not be able to submit a bill for those services to its Medicare carrier but must look to the SNF for payment for the service.

SNF Consolidated Billing. For those nursing facility residents who are not receiving Part A covered SNF services (e.g., those who have exhausted their 100-day Part A SNF entitlement), but who are enrolled in and entitled to Part B services, the new provision requires the SNF to submit to its intermediary a "consolidated bill" that will include most covered Part B services. The SNF is required to make arrangements for such services with Part B suppliers (including ambulance suppliers), and the supplier may not submit a bill for such services to its Medicare carrier, but must look to the SNF for payment for the service. Although, as we understand, written contracts are not required for a SNF to bill for such covered services, ambulance suppliers should have such contracts with the SNFs with which they do business to establish the payment and other terms of those arrangements.

This advisory is intended to inform ambulance suppliers of how these provision will affect them, including advice as to what services are and are not affected by the new provisions, and when various parts of the new systems are to be implemented.

Guidance from HCFA on Ambulance Billing Issues

We have received some guidance from HCFA in the form of regulations and program memoranda. However it is important to note that HCFA's position on some of these issues are still in a state of flux and some issues remain to be resolved. In a recent meeting in Washington with senior HCFA officials, the AAA was able to obtain interpretations of the new provisions extremely favorable to ambulance services. The Association also was able to convince HCFA to include ambulance services under a transition period that should postpone the effective date of the consolidated billing
provisions for most ambulance services until January 1, 1999. (However, as discussed below, some SNFs may choose to begin consolidated billing on July 1, 1998.)

The following is the guidance we can provide at this time on the major parts of this new legislation. Because of the confusion surrounding HCFA's implementation of these provisions, if you should receive different information form any source (including carriers), please advise the AAA as soon as possible so that we may obtain clarification. Please fax a copy of any carrier or intermediary guidance you obtain on this subject to David Nevins at the AAA. However, the following advice is based on discussions we have had directly with responsible HCFA staff and should be considered
authoritative as of this date.

1. What nursing homes are covered?

Any nursing home that has any Medicare certified SNF beds is covered by these new requirements, even with respect to nursing beds that are not Medicare certified. This means that all beds in a Medicare certified nursing facility, including those in the non-participating portion of a nursing facility of which an SNF is a distinct part, will be covered. However, we understand that HCFA will not apply the new requirements to residents of a surrounding facility that is not a nursing home, such as "board and care" and "assisted living" arrangements.

2. What ambulance services are covered by the new provisions?

The most significant interpretation that the AAA was able to obtain at the recent meeting with HCFA, which differs from HCFA's previous position, is that for purposes of both the PPS system and the consolidated billing requirements, only those Part B services provided as part of the resident's nursing home plan of care are included. For purposes of ambulance services, this would include repetitive trips (such as for dialysis treatment or radiation therapy) and other medically necessary trips in connection with services designed to meet the medical, nursing, and psychosocial needs
identified in the resident's written plan of care. Under this interpretation (which follows from HCFA's definition of "resident" in the new regulations) we understand that the following ambulance trips would not be covered and may continue to be billed separately to your Medicare carrier by the ambulance supplier.

(a) the initial trip for admission to the SNF;

(b) the final trip following discharge from the SNF;

(c) any trip in connection with an inpatient admission to a hospital or another SNF; and

(d) any trip in connection with an outpatient hospital service that is not part of the patient's written plan of care, e.g., an emergency trip from an SNF to a hospital and return to the SNF.

Based on our discussions with HCFA and our understanding of the recently issued regulations, the foregoing ambulance services are excluded from both the Part A SNF PPS and the Part B consolidated billing requirements. We are continuing to work with HCFA and representatives of the nursing home industry to further clarify these issues.

3. When will the new provisions become effective?

Perhaps the most confusing aspect of these new provisions is the question of when they become effective for particular services. There are a number of courses for this confusion, the principal ones being (1) the SNF PPS provisions have a different effective date from the consolidated billing provisions and (2) different SNFs will have different starting dates for the PPS system.

(a) Effective date for the SNF PPS provisions:

SNFs will be required to start the new PPS billing system (but not consolidated billing) as of the first day of their next cost reporting period beginning on or after July 1, 1998. This means that some SNFs will begin receiving the new PPS per diem payment for Part A and covered Part B services as early as July 1 of this year. For those SNFs, you will not be able to bill Part B for any ambulance service provided to any of its residents who are receiving Part A covered services if the service is part of the SNF's plan of care for a resident, i.e. for a service that is not excluded from these requirements (as discussed above). The following information for HCFA indicates approximately what percentage of SNFs have cost reporting periods beginning at different times over the next year:

(b) Effective date for Consolidated Billing:

The statutory effective date for all SNFs to begin consolidated billing, regardless of when they go onto the PPS system, is July 1, 1998. However, HCFA will permit SNFs that are not prepared to begin the
consolidated billing on July 1 to postpone the effective date until January 1, 1999. This means that a SNF has the option of beginning to submit consolidated bills for covered Part B services (again, that means those services not excluded as discussed above) on either July 1, 1998 or January 1, 1999, but not on any date in between. Remember, this option belongs to the SNF, and as of the date it chooses to begin consolidated billing, you may not bill the carrier, but must look to the SNF for payment for any service that is part of the SNF's plan of care for a resident, i.e., for a service that is not excluded from those requirements (as discussed above). We have been informed by representatives of the nursing homes that some SNFs may choose to begin consolidated billing on July 1, 1998.

4. Action Steps for Ambulance Providers to Take Immediately

Because of the SNF's prerogatives with regard to the effective dates of consolidated billing, and because of the differences among SNFs as to the effective date of their initial PPS period, it is imperative that you make contact with the SNFs from which you expect to make transports to obtain the information you will need to enter into arrangements with those SNFs. You will need to obtain the following information:

(a) When does the SNF expect to begin consolidate billing? Does it plan to take advantage of the
postponement until January 1, 1999, or does it expect to begin consolidate billing on July 1, 1998?

(b) If the SNF expects to begin consolidated billing on July 1, 1998, has it received billing instructions
from its Medicare intermediary? The SNF should have discussed this matter with the intermediary, as we understand that some intermediaries may not be prepared to accept consolidated bills at that time.

(c) What is the starting date of the SNF's first PPS period? You will need to know this date so that you
can prepare to enter into arrangements with the SNFs for payment of those services for which they will be responsible and for which you may not bill your Medicare carrier. As discussed above, the starting date of a SNF's PPS period may be different from its starting date for consolidated billing, which may only be July 1, 1998 or January 1, 1999.

We intend to provide members with additional information to assist in the process of contracting with SNFs for those services for which the SNF is responsible. However, in the meantime, you need to keep a number of concerns in mind:

First, any arrangement under which you provide something of value to a SNF (such as a discount on the SNF's Part A covered trips) in order to obtain referrals of other services (such as the SNF's Part B trips) may be considered a violation of the antikickback statute.