2004 Medicare Inflation Update and Sunset of Interim Rural Mileage Payment

December 2, 2003

MEMBER ADVISORY

TO: AAA Membership

FROM: Deb Gault, Chair
AAA Federal Reimbursement Committee

RE: 2004 Medicare Inflation Update and Sunset of Interim Rural
Mileage Payment

In a regulation to be published in the Federal Register on December 5, 2003,
the Centers for Medicare and Medicaid Services (CMS) will announce that the
annual Ambulance Inflation Factor for 2004 will be 2.1 percent. This
adjustment factor will be applied to all Medicare payments for ambulance
services provided in 2004.

The rule to be published on December 5 will also amend the regulation
covering bonus payments for rural ambulance services under Medicare to
eliminate the bonus payment for rural mileage of 18 through 50 miles on any
trip originating in a rural area. This provision was added by the Medicare,
Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (“BIPA”),
but it was intended only as transitional assistance for rural suppliers and
providers and is effective only through December 31, 2003. (The 50 percent
bonus paid by Medicare for the first 17 miles of a trip originating in a
rural area will remain in effect.) The AAA advocated unsuccessfully on
behalf of rural ambulance service providers to the Congress and CMS to
extend the bonus payment for rural mileage 18 through 50 miles.

The rule also contains several technical amendments to the ambulance
regulation, the most significant of which clarifies that an advanced life
support intervention must be furnished by ALS personnel.

While CMS has indicated that they intend to provide relief from some of the
Physician Certificate Statement (PCS) requirements for ambulance transports,
they did not use this regulation to implement the relief. We will keep you
posted on these efforts.