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Ambulance Services: Medicare Payments Can Be Better Targeted to Trips in Less Densely Populated Rural Areas

GAO-03-986 Published: Sep 19, 2003. Publicly Released: Sep 19, 2003.
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The Centers for Medicare & Medicaid Services (CMS) recently implemented a Medicare ambulance fee schedule in which providers are paid a base payment per trip plus a mileage payment. An adjustment is made to the mileage rate for rural trips to account for higher costs. CMS has stated that this rural adjustment may not sufficiently target providers serving sparsely populated rural areas. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) directed GAO to examine rural ambulance costs. GAO identified factors that affect ambulance costs per trip, examined how these factors varied across geographic areas, and analyzed whether Medicare payments account for geographic cost differences. GAO used survey data on ambulance providers and Medicare claims data.


Recommendations for Executive Action

Agency Affected Recommendation Status
Centers for Medicare & Medicaid Services To help ensure that Medicare beneficiaries' access to ambulance services is adequate, the Administrator of CMS should better target the rural payment adjustment to trips provided in rural counties with particularly low population density by adjusting the base rates, rather than the mileage rate, for ground ambulance services provided in those counties.
Closed – Implemented
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) directed the Secretary of HHS to provide a percentage increase in the base payment rate, effective July 1, 2004 through 2009, for ambulance trips that originate in a rural area with a population density in the lowest quartile of all rural county populations. To establish the percentage increase, the Secretary was directed to estimate the average cost per trip (not including mileage) in the lowest quartile as compared to the average cost in the highest quartile of all rural county populations. This action was in direct response to our recommendation, and staff on one of the cognizant committees used our work to draft the language.

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Cost analysisEmergency medical servicesGround transportationHealth care costsHealth care programsManaged health careMedical feesMedical services ratesMedicareTransportation costsRural areas