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CMS Imposes Moratoria on New Ambulance Providers

January 31, 2014
AAA Member Advisory
TO: AAA Membership
FROM:      Jimmy Johnson, AAA President
RE:          CMS Imposes Moratoria on New Ambulance Providers in Pennsylvania and New Jersey Counties and Extends Moratorium in Houston, Texas Area

By Kathy Lester

CMS is scheduled to publish in the February 4 issue of the Federal Register a notice which will impose a 6-month moratorium on new ambulance suppliers in certain Pennsylvania and New Jersey counties and would extend the moratoria in the Houston, Texas, area that were implemented last summer. In the notice, CMS reiterates its concerns that there is a high risk of fraud, waste, and abuse in these areas. The moratoria will apply to Medicaid (including CHIP) as well. CMS provided the AAA with advance notification of the new and extended moratoria.

In developing these moratoria, CMS consulted with the Office of the Inspector General (OIG) and Department of Justice (DOJ). CMS highlighted its particular concern about “fraud schemes [that] are viral, meaning they replicate rapidly within communities,” as well as schemes that “migrate – as law enforcement cracks down on a particular scheme, the criminals may redesign the scheme or relocate to a new geographic area.” The Agency also noted recommendations from the Medicare Payment Advisory Commission (MedPAC) supporting greater action in these areas and noting that moratoria would not impact beneficiary access to legitimate services.

The moratoria apply to the specific counties in Pennsylvania around the Philadelphia area; they are: Philadelphia County, as well as the surrounding counties of Bucks, Delaware, and Montgomery. It also includes the New Jersey counties of Burlington, Camden, and Gloucester. The notice extends the moratoria to the following counties in and around the City of Houston: Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller. The Agency determined that it was necessary to impose the moratoria to bordering counties as well “to prevent potentially fraudulent ambulance suppliers from enrolling their practices in a neighboring county with the intent of providing services in a moratorium.”

The structure of the moratoria remains the same. The Agency may extend them through notice after the end of the 6-month period. CMS could lift them, if a natural disaster were to occur. The Agency will continue to monitor activity and consult with law enforcement to evaluate the spread of any “significant risk of fraud” beyond the designated areas.

Once again, the moratoria are consistent with the recommendation the AAA has advocated as a way to address the problem of fraud and abuse related to non-emergency BLS dialysis transports. The AAA continues to advocate for policies targeted at fraud and abuse and strongly against policies which would reduce reimbursement for particular types of transports or service levels as a way to address the problem.

The moratoria will not apply to changes in practice locations, changes to provider or supplier information such as phone number, address, or changes in ownership.

In determining the latest moratoria, CMS examined “qualitative and quantitative factors suggesting a high risk of fraud, waste, or abuse.” The notice indicates that there were an average of 1.4 ambulance suppliers per 10,000 Medicare beneficiaries in the comparison counties, while in Philadelphia County there were 4.8 ambulance suppliers per 10,000 beneficiaries. The average annual growth rate in this area was 15 times higher than that of the comparison counties. CMS also looked at payments and found that in 2012, ambulance suppliers in Philadelphia County were receiving $1,314 per average ambulance user per year, compared to ambulance suppliers in comparison counties that received $803.

In terms of extending the Texas moratoria, CMS indicated that the OIG and DOJ agreed that there continue to be “a significant potential for fraud, waste, and abuse…in this geographic area.”

The moratorium does not apply to ambulances owned or operated by Medicare providers, unless they are enrolled as suppliers under the Medicare program. However, under Texas law, provider-based ambulance services must enroll as suppliers, so the moratorium extends to Medicaid enrollment as well for these providers. It also does not apply to air ambulance.

There is no judicial review and suppliers must appeal a determination through the existing appeals process.

Guaranteed cash flow during transition.