Ambulance Providers: Costs and Expected Medicare Margins Vary Greatly
Highlights
In 2002, Medicare implemented a national fee schedule designed to standardize payments for ambulance services. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) required GAO to study ambulance service costs. GAO examined providers' costs of ground ambulance transports in 2004 and factors that contributed to cost differences; average Medicare ambulance payments expected under the national fee schedule in 2010 and how those payments will relate to providers' costs per transport; and changes that occurred in Medicare beneficiaries' use of ambulance transports from 2001 to 2004. GAO estimated costs of ambulance transports based on a nationally representative survey of 215 ambulance providers that did not share costs with nonambulance services. Providers that shared costs with other institutions or services and could not report their costs for ambulance services separately, such as fire departments, were excluded because their reported costs appeared unreliable. GAO used its survey, Medicare claims, and other data for its analyses.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Centers for Medicare & Medicaid Services | In light of the variability in ambulance providers' Medicare margins and the potential for negative margins to have an impact on beneficiary access, the Administrator of the Centers for Medicare and Medicaid Services should monitor utilization of ambulance transports to ensure that Medicare payments are adequate to provide for beneficiary access to ambulance services, particularly in super-rural areas. |
CMS stated that it has responded to our recommendation through a final rule published prior to our report and quarterly open door forums with the industry. Both of these actions were initiated prior to our report and without the benefit of our findings. Although CMS claims to monitor access issues that arise in the industry by: (1) participating in quarterly open door forums with the ambulance industry and (2)working closely with the American Ambulance Association (AAA); this is not the same as monitoring utilization to ensure that Medicare payments are adequate to provide for beneficiary access to ambulance services.
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