Medicare Update

1. MEDICARE
UPDATE
Brian S. Werfel, Esq.
September 17, 2014

2. 2013 Medicare
Payment Data

3. NATIONAL DATA
FY 2013
Description 2013
Allowed #
2013
Allowed $
2013
Paid $
A0425 Ground Mileage 140,891,705 1,099,189,084 864,339,277
A0426 ALS Non-Emergency 325,531 85,189,084 66,422,692
A0427 ALS Emergency 4,974,507 2,076,931,304 1,615,499,541
A0428 BLS Non-Emergency 6,833,969 1,509,979,925 1,182,578,453
A0429 BLS Emergency 2,726,768 976,470,132 758,337,761
A0430 Fixed Wing 10,820 45,337,204 35,462,990
A0431 Helicopter 56,200 258,426,685 201,690,114
A0432 Paramedic Intercept 3,153 1,183,491 908,676
A0433 ALS-2 111,789 67,358,827 52,420,103
A0434 Specialty Care Transport 104,605 77,832,279 61,021,808
A0435 Fixed Wing Mileage 1,972,269 23,203,089 18,185,274
A0436 Helicopter Mileage 3,309,845 104,479,754 81,690,492
Totals 161,321,063 6,325,760,889 4,938,557,181

4. NATIONAL DATA
FY 2013 vs. FY 2012
Description 2013
Allowed #
2012
Allowed #
%
Change
A0425 Ground Mileage 140,891,705 139,251,814 1.18%
A0426 ALS Non-Emergency 325,531 315,322 3.24%
A0427 ALS Emergency 4,974,507 4,984,105 - 0.19%
A0428 BLS Non-Emergency 6,833,969 6,685,824 2.22%
A0429 BLS Emergency 2,726,768 2,687,644 1.46%
A0430 Fixed Wing 10,820 10,074 7.41%
A0431 Helicopter 56,200 58,308 - 3.62%
A0432 Paramedic Intercept 3,153 3,067 2.80%
A0433 ALS-2 111,789 111,723 0.06%
A0434 Specialty Care Transport 104,605 103,315 1.25%
A0435 Fixed Wing Mileage 1,972,269 1,858,117 6.14%
A0436 Helicopter Mileage 3,309,845 3,390,550 - 2.38%
Totals 161,321,063 159,459,862 1.17%

5. NATIONAL DATA
FY 2013 VS. FY 2012
Description 2013
Paid $
2012
Paid $
%
Change
A0425 Ground Mileage 864,339,277 $861,277,845 0.36%
A0426 ALS Non-Emergency 66,422,692 $64,860,566 2.41%
A0427 ALS Emergency 1,615,499,541 $1,630,257,405 - 0.91%
A0428 BLS Non-Emergency 1,182,578,453 $1,178,364,961 0.36%
A0429 BLS Emergency 758,337,761 $753,395,553 0.66%
A0430 Fixed Wing 35,462,990 $33,298,889 6.50%
A0431 Helicopter 201,690,114 $211,489,526 - 4.63%
A0432 Paramedic Intercept 908,676 $894,878 1.54%
A0433 ALS-2 52,420,103 $52,855,918 - 0.82%
A0434 Specialty Care Transport 61,021,808 $60,263,801 1.26%
A0435 Fixed Wing Mileage 18,185,274 $17,090,963 6.40%
A0436 Helicopter Mileage 81,690,492 $84,621,519 - 3.46%
Totals 4,938,557,181 $4,948,671,824 - 0.20%

6. NATIONAL DIALYSIS
FY 2013
Description 2013
Allowed #
2013
Allowed $
2013
Paid $
A0425 Ground Mileage 24,042,444 $182,660,653 $143,820,280
A0426 ALS Non-Emergency 9,058 $2,348,337 $1,844,296
A0427 ALS Emergency 36,644 $15,107,658 $11,824,080
A0428 BLS Non-Emergency 3,441,190 $753,980,360 $592,925,709
A0429 BLS Emergency 23,564 $8,407,654 $6,576,810
A0430 Fixed Wing
A0431 Helicopter
A0432 Paramedic Intercept
A0433 ALS-2 884 $522,505 $409,976
A0434 Specialty Care Transport 8,048 6$,406,502 $5,049,534
A0435 Fixed Wing Mileage
A0436 Helicopter Mileage
Totals 27,561,831 $969,433,669 $762,450,685

7. NATIONAL DIALYSIS
FY 2013 VS. FY 2012
Description 2013
Allowed #
2012
Allowed #
%
Change
A0425 Ground Mileage 24,042,444 22,663,118 609%
A0426 ALS Non-Emergency 9,058 7,568 19.69%
A0427 ALS Emergency 36,644 34,111 7.43%
A0428 BLS Non-Emergency 3,441,190 3,228,449 6.59%
A0429 BLS Emergency 23,564 22,762 3.52%
A0430 Fixed Wing
A0431 Helicopter
A0432 Paramedic Intercept
A0433 ALS-2 884 1,158 - 23.66%
A0434 Specialty Care Transport 8,048 8,058 - 0.12%
A0435 Fixed Wing Mileage
A0436 Helicopter Mileage
Totals 27,561,831 25,965,224 6.15%

8. NATIONAL DIALYSIS
FY 2013 VS. FY 2012
Description 2013
Paid $
2012
Paid $
%
Change
A0425 Ground Mileage
$143,820,280
$139,759,810.40
2.91%
A0426 ALS Non-Emergency $1,844,296 $1,540,337.52 19.73%
A0427 ALS Emergency $11,824,080 $11,058,719.32 6.92%
A0428 BLS Non-Emergency
$592,925,709
$572,920,033.98
3.49%
A0429 BLS Emergency $6,576,810 $6,397,094.89 2.81%
A0430 Fixed Wing
A0431 Helicopter
A0432 Paramedic Intercept
A0433 ALS-2 $409,976 $538,990.19 - 23.94%
A0434 Specialty Care Transport $5,049,534 $4,880,874.31 3.46%
A0435 Fixed Wing Mileage
A0436 Helicopter Mileage
Totals $762,450,685 $737,095,860.6
61
3.44%

9. WISCONSIN – FY 2013
Description 2013
Allowed #
2013
Paid $
A0425 Ground Mileage 1,812,421 $11,517,681
A0426 ALS Non-Emergency 5,098 $1,043,709
A0427 ALS Emergency 72,900 $23,411,393
A0428 BLS Non-Emergency 37,285 $6,255,057
A0429 BLS Emergency 60,366 $16,287,358
A0430 Fixed Wing 11 $29,828
A0431 Helicopter 487 $1,842,283
A0433 ALS-2 1,965 $936,947
A0434 Specialty Care Transport 1,975 $1,104,787
A0435 Fixed Wing Mileage 1,358 $9,992
A0436 Helicopter Mileage 26,679 $659,368
Totals 2,020,546 $63,098,403

10. WISCONSIN
FY 2013 vs. FY 2012
Description 2013
Allowed #
2012
Allowed #
%
Change
A0425 Ground Mileage 1,812,421 1,760,695 2.94%
A0426 ALS Non-Emergency 5,098 4,397 15.95%
A0427 ALS Emergency 72,900 71,694 1.68%
A0428 BLS Non-Emergency 37,285 34,201 9.02%
A0429 BLS Emergency 60,366 61,653 -2.09%
A0430 Fixed Wing 11 6 85.17%
A0431 Helicopter 487 482 1.00%
A0433 ALS-2 1,965 2,027 -3.04%
A0434 Specialty Care Transport 1,975 1,339 47.46%
A0435 Fixed Wing Mileage 1,358 837 62.26%
A0436 Helicopter Mileage 26,679 26,946 -0.99%

11. WISCONSIN
FY 2013 vs. FY 2012
Description 2013
Paid $
2012
Paid $
%
Change
A0425 Ground Mileage $11,517,681 $11,275,829 2.14%
A0426 ALS Non-Emergency $1,043,709 $904,080 15.44%
A0427 ALS Emergency $23,411,393 $23,144,136 1.15%
A0428 BLS Non-Emergency $6,255,057 $5,798,595 7.87%
A0429 BLS Emergency $16,287,358 $16,772,646 -2.89%
A0430 Fixed Wing $29,828 $18,190 63.98%
A0431 Helicopter $1,842,283 $1,810,258 1.77%
A0433 ALS-2 $936,947 $972,712 -3.68%
A0434 Specialty Care Transport $1,104,787 $751,382 47.03%
A0435 Fixed Wing Mileage $9,992 $7,203 38.72%
A0436 Helicopter Mileage $659,368 $662,637 -0.49%

12. WISCONSIN DIALYSIS
Description 2013
Paid $
2012
Paid $
%
Change
A0425 Ground Mileage $174,867 $154,524 13.17%
A0428 BLS Non-Emergency $827,609 $644,086 28.49%
Totals $1,265,209 $1,047,456 20.79%

13. 2015 INFLATION UPDATE
• On August 29, 2014, CMS issued
Transmittal 3057, which contained the
Ambulance Inflation Factor (AIF) for
CY 2015
AIF = CPI-U – MFP
CPI-U = 2.1%
MFP = 0.7%
AIF = 1.4%

14. TEMPORARYADJUSTMENTS
• On April 2, 2014, the President signed the
Protecting Access to Medicare Act of 2014
• Extension of temporary adjustments through
March 31, 2015
– 2% urban
– 3% rural
– “super rural” bonus
• Does not provide for a suspension of 2%
“sequester”!!!

15. PERMANENT REDUCTION
FOR DIALYSIS SERVICES
• American Taxpayer Relief Act of 2012
mandated a permanent 10% reduction in
Medicare’s payment for BLS non-emergency
ambulance transports to/from dialysis
• Transmittal 2703 (May 10, 2013)
– Reduction will be applied to any claim
submitted:
• A0428
• “G” or “J” modifier as either the origin or destination

16. FUTURE OF DIALYSIS
• Future Congressional Action
– Further reductions to Fee Schedule Payments
• Nothing currently proposed for 2014
– Cap on number of covered ambulance trips
• Per patient per year
• Similar to physical therapy caps
– Possible expansion of dialysis payment bundle
– “Safe harbors” to induce dialysis facilities to transport
their own patients
• Increase in Enforcement Activity

17. PART B PAYMENT
DATA RELEASE
• On April 9, 2014, CMS released the
Medicare Provider Utilization
– Sortable database of FFS payments by individual
physician, ambulance supplier and other health
care suppliers
– http://projects.wsj.com/medicarebilling/?mod=medicarein
– A.A.A. Press Release and Talking Points
• See handouts

19. 2013 MEDPAC REPORT

20. MEDPAC REPORT
Key Findings:
• In 2011, Medicare paid $5.3 billion for ambulance services
• 3 temporary adjustments for ground ambulanced accounted for
$192 million
• 2 permanent adjustments accounted for $220 million
• 50% increase for rural miles 1 – 17
• 50% increase for rural air ambulance
• Ambulance volume increased by 10% from 2007 to 2011
• Most of increase in volume was from increase in BLS-NE
• Dialysis in particular
• Increase centered in urban areas
• Number of ambulance providers has grown steadily since 2007

22. MEDPAC REPORT
Conclusions:
• Current adjustments for ground ambulance are not
good indicators of transports with relatively high
costs
• i.e., high costs with low volumes
• Medicare beneficiaries are not experiencing access
to care problems

23. MEDPAC REPORT
Recommendations:
• Permit expiration of current temporary
adjustments
• Decrease rate for BLS non-emergencies (5.7%)
• Increase base rates for ALS, ALS-2, SCT and BLS-E (2.8%)
• Restructure existing adjustment for rural ground miles 1 –
17
• Better target isolated, low volume providers
• Implement new national claims processing edits
• Better define medical necessity
requirement

24. NEW FROM THE OIG

25. OIG REPORT ON UTILIZATION
• Between 2002 – 2011:
– 69% increase in Part B ambulance transports
– 34% increase in number of beneficiaries requiring
ambulance transport
– 26% increase in number of ambulance suppliers
• ~ 100% increase in number of BLS-NE suppliers
– 269% increase in dialysis transports
• 85% increase in number of ESRD patients transported by
ambulance
– 829% increase in transports to partial
hospitalization programs

26. OIG STUDY ON APPEALS
• The First Level of Medicare Appeals Process, 2008
– 2012: Volumes, Outcomes, and Timeliness
• October 2013
• MACs processed 2.9 million redeterminations in
2012
– 33% increase over 2008
– 233,941 appeals for ambulance
• 3% increase over 2008
• 51% of Part B appeals were favorable to providers
– 43% for ambulance claims

27. PROPOSED RULE RE: CMPS
• May 12, 2014 Proposed Rule
• Expands OIG’s authority to impose civil monetary
penalties for certain misconduct
– $15,000 per day for failure to grant timely access
to records in connection with an audit or
investigation
– $10,000 per day for each day an overpayment is
not returned following the 60th day after it has
been “identified”

28. PROPOSED RULE RE:
EXCLUSIONS
• May 9, 2014 Proposed Rule
• Revises OIG’s exclusion authority to incorporate
ACA changes
– Would give OIG right to exclude individuals
convicted for obstructing an audit or investigation
– Expands OIG’s authority to exclude individuals
for failing to supply certain payment data to CMS
– Would give OIG right to exclude individuals that
knowingly make false statements in connection
with the submission of an enrollment application

29. OIG GUIDANCE ON EXCLUSIONS
• On May 8, 2013
• Updated Special Advisory Bulletin on Effect of Exclusion
from Participation in Federal Health Programs
• Reiterates existing guidance on consequences of employing
an excluded individual
– Prohibition would extend to those not involved directly in patient care
• Management and billing
• Driving an ambulance
• Ambulance dispatch services
• Referring physician or individual signing PCS form

30. EXCLUSION TESTING
• Employees
– IG recommends testing employees once a month
• Referring Sources
– Repetitive Patients v. Non-Repetitive Patients
• Vendors
– Contractual commitment to do testing on employees of
vendor that service your accounts
– Indemnity?

31. OIG ADVISORY OPINIONS
• Billing Waivers & Waiver of Coinsurance
– Opinion 13-17 – IG permitted a municipal ambulance service
to use tax revenues to cover out-of-pocket expenses due fro
non-residents
– Opinion 13-14 – IG permitted the waives coinsurance and
deductibles due from residents for EMS provided by a county
EMS agency and several volunteer rescue squads.
– Opinion 13-11 – IG permitted a BLS ambulance supplier to
accept payment from the town for cost-sharing amounts due
from residents. The private ambulance service also agreed to
waive cost-sharing amounts when responding under mutual-aid
– Opinion 13-08 – IG permitted a fire protection district to NOT
bill residents or their insurance
• Expansion of existing line of opinions that permitted taxpayer-supported entities
to bill only to the extent of a resident’s insurance

32. OIG ADVISORY OPINIONS
• Reimbursement for Dispatch
– Opinion 13-05 – IG permitted a municipality to require
the winner of an RFP for 911 services to reimburse the
municipality for a portion of dispatch costs
• County Health District
– Opinion 13-04 – IG permitted a County Health District to
provide non-emergency ambulance services, which would
include the provision of transports to/from County health
facilities

33. OIG ADVISORY OPINIONS
• Opinion 13-18
– RFP asked bidders to provide:
• Free ambulance transports to City employees
• Free AEDs and other equipment
• Free EMS training
• 20% discount on ambulance transports to uninsured seniors
• Replenishment of supplies used by City first-responders
– OIG took issues with the proposal to provide free or
below-market equipment to the City, and therefore refused
to sign off on the arrangement as a whole

34. WHAT ELSE IS NEW?

35. 2015 PROPOSED RULE
• July 11, 2014
• Technical changes to reflect extensions of temporary
adjustments through March 31, 2015
• 2% Urban
• 3% Rural
• “Super Rural” Bonus
• Proposal to adopt recent OMB modifications to Rural-
Urban Commuting Area (RUCA)
– CMS estimates
• 122 zip codes go from Urban to Rural
• 100 zip codes would go from Rural to Urban
• No impact on super rural
– AAA estimates
• 1,500 zip codes go from Rural to Urban

36. PROPOSED RULE
ON
ENROLLMENT

37. AMBULANCE ‘BACK
BILLING’
• CMS proposing to limit effective date
of Medicare billing privileges to later
of:
–Date enrollment application is filed
–Date you begin providing services at new
practice location

38. REVOCATION OF
BILLING PRIVILEGES
• CMS proposing to expand its authority
to revoke billing privileges for
providers that have engaged in “a
pattern or practice” of abusive billing
– Including high percentage of claim denials

39. LIMIT ON USE OF
CORRECTIVE ACTION PLANS
• CMS proposing to limit the use of Corrective
Action Plans (CAPs) to minor issues of non-compliance
– e.g., failure to timely file revalidation
• CMS indicated that failure to disclose a “Practice
Location” would not be eligible for CAP
– Would require you to appeal

40. PATIENT SIGNATURE
REQUIREMENT
• July 11, 2014
• Transmittal 2984
• CMS removed the requirement that you must
capture the address of anyone signing on the
patient’s behalf
• The AAA had requested this change over 2
years ago

41. SNF RECOUPMENTS
• In 2013, CMS issued a transmittal
instructing RACs to recoup ambulance
transports between two SNFs
– Indicated by use of Discharge Status Code
“03” on the SNFs claim
–Effective April 7, 2014

42. ICD-10 CODES
• Implementation delay until October 1,
2015
• ICD-9 Codes: ~ 17,000
• ICD-10 Codes: ~ 150,000
If you want to laugh:
http://www.youtube.com/user/findacode

43. ICD-10 CODES
• AAA has published an ICD-10
crosswalk for the current CMS
Medicare Condition Code List
• See handout

44. MEDICARE REVALIDATION
• CMS is continuing its efforts to require all existing Medicare
providers and suppliers to “revalidate” their Medicare
enrollment information
– Original target date: March 2013
– Extension: March 2015
–2014 Enrollment Fee: $542
• Medicare contractors given discretion on when to revalidate
various provider groups
• Failure to revalidate can result in 1 year ban on participation
in Medicare!!

45. MEDICARE REVALIDATION
• List of all providers that have been asked to
revalidate, arranged by calendar quarter
• CMS Website:
– http://www.cms.gov/Medicare/Provider-Enrollment-and-
Certification/MedicareProviderSupEnroll/Revalidationshtml

46. ALJ DELAYS
• November 2013 – Office of Medicare
Hearings and Appeals (OMHA) announces
substantial delay in assignment of new cases
to ALS
– 24 months for new case assignments
– 6+ months for hearings to be held
– Up to 3 years before a decision should be
expected!!

47. ALJ PILOT PROJECT –
SETTLEMENT CONFERENCES
• On July 7, 2014, OMHA announced a new
mediation program designed to reduce the ALJ
backlog
– Settlement Conference Facilitation (SCF)
• Eligibility requirements
– 20 or more claims at issue
– $100,000 or less at issue
– Beneficiary must not have been determined to be
liable for

48. ALJ PILOT PROJECT –
STATISTICAL SAMPLING
• Project for appeals involving large numbers of
claims
• ALJ will review a sample of appealed claims,
and extrapolate against larger universe of
appealed claims
• Eligibility requirements
– 250 or more claims at issue
– No request for Settlement Conference
– Beneficiary must not have been determined to be
liable for

49. MEDICARE ADVANTAGE
PLANS
• CMS announced that it is suspending the
“Payment Dispute Resolution Process”
as of February 1, 2014
– Used to resolve situations where MA plan
pays the claim, but at the incorrect rate
– Lack of funding

50. A.A.A. MEDICAID
RATE SURVEY
• In March 2014, the A.A.A. completed a
survey of the current Medicaid rates in
all 50 states
– Includes information the payment of Medicare
crossovers
– See handout

51. V.A. MILLENNIUM BILL
• V.A.’s payment for emergency
ambulance services is contingent on V.A.
paying for veteran’s care at hospital ED
– Patient’s with Part A Medicare, but not Part
B
– Must bill veteran

52. AIR AMBULANCE
• On April 21, 2014, the FAA announced
delay in implementation of new
helicopter ambulance safety standards
– Impacts certain operating rules
– New compliance date is April 22, 2015
– Does not impact new requirements for terrain
awareness and warning systems or flight data
monitoring systems
• April 22, 2017/2018 implementation dates

54. RECENT TRENDS
IN
FRAUD & ABUSE
ENFORCEMENT

55. The Scope of the Problem
• CMS estimated that Medicare lost
more than $24 billion on fraud and
abuse in FY 2009
– Roughly 7.5% of total payments
• Other experts place the number at as
high as $70 billion per year!!

56. Funding for
Anti-Fraud Measures
• ACA allocated an additional $250 million to
fund additional audits
• New provisions that allow Medicare
contractors to use recoupments to fund
further anti-fraud activities
– Allow process to become self-sustaining!!

57. • Away:
Shift in Focus
– Random post-payment audits
– So-called “Pay and Chase”
• Towards:
– Use of data analysis to identify systemic
issues
– Use of prepayment reviews

58. EMS Areas of Focus
1. ALS emergency
transports
2. Hospital Discharges
3. Dialysis

59. The City of Dallas
• Investigation into overutilization of ALS
emergency
– $2.5 million settlement
– Debate as to whether overbilling was fault of City or its
billing agent
• 12 neighboring cities paid $1.2 million to settle
similar charges
– Same billing agent

60. •September 2008, a whistleblower suit is
filed alleging town was overbilling ALS
emergency
–95% of transports billed ALS emergency
•Town settles for $4.5 million
–Based on advice of lawyers, who indicated
potential liability could reach $100+ million
•Town sues lawyers for malpractice
–They allege actual overpayment was only
$108,000
Clinton, Iowa

61. NORIDIAN HEALTHCARE
SOLUTIONS
• July 30, 2014 letter to provide community
• Purportedly to educate on common errors
• Issues:
1. PCS Form – “simply checking boxes or
listing medical conditions/diagnosis is
inappropriate”
2. SCT – “Critical illness/injury is defined
as….a patient who is experiencing an acute
life-threatening episode”

62. NORIDIAN HEALTHCARE
SOLUTIONS
•Targeted prepayment reviews
throughout its service areas
•California
•Utah
•Northern Marianas Islands

63. OIG REPORT ON UTILIZATION
• Between 2002 – 2011:
– 269% increase in dialysis
transports
• 85% increase in number of ESRD patients
transported by ambulance

64. WISCONSIN DIALYSIS
Description 2013
Paid $
2012
Paid $
%
Change
A0425 Ground Mileage $174,867 $154,524 13.17%
A0428 BLS Non-Emergency $827,609 $644,086 28.49%
Totals $1,265,209 $1,047,456 20.79%

65. Case Study: Texas Dialysis
“In 2007, Medicare paid $38 million per
year to Texas ambulance suppliers related to
excess services per beneficiary, compared to
services per beneficiary in the remainder of
the U.S. Audit findings…show that much
of the excess is not justifiable based on
the patients’ conditions.”

66. TEXAS DIALYSIS
550,000
350,000
150,000
Allowed #
2007 2008 2009 2010 2011
Allowed #

67. Texas DIALYSIS
100,000,000
50,000,000
0
2007 2008 2009 2010
2011
Medicare Paid $
Medicare Paid $

68. TEXAS DIALYSIS
40.00%
30.00%
20.00%
10.00%
0.00%
2007 2008 2009 2010 2011
% of Claims Denied
National Average

69. TEXAS DIALYSIS

70. Case Study: Puerto Rico
“FCSO quickly identified an extreme data anomaly
related to non-emergency ambulance services
provided in Puerto Rico and the U.S. Virgin
Islands. More specifically, our analysis of paid
claims data for procedure code A0428 – ambulance
service, basic life support, non-emergency
transport (BLS), revealed that utilization in Puerto
Rico for this procedure code was over 1,000
percent higher than the rest of the United
States.”

71. Case Study: Puerto Rico
“Data analysis also revealed that 95 percent of
non-emergency ambulance utilization in
Puerto Rico involved repetitive transportation of
dialysis patients to/from their dialysis facilities
as compared to less than 5 percent in Florida.
Although dialysis patients may have multiple
health issues, the vast majority can safely and
routinely travel by means other than an
ambulance.”

72. Putting That In Perspective…
• 2008 Medicare Payment Data:
– Puerto Rico
• ~620,000 Medicare beneficiaries
• 407,000 dialysis transports
– CA, FL and NY combined
• ~11 million Medicare beneficiaries
• 356,000 dialysis transports

73. Puerto Rico – Dialysis
60,000,000
40,000,000
20,000,000
0
2009
Medicare Paid $
2010
Medicare Paid $

74. The City of Brotherly
Love
• Medicare Strike Team has been actively
investigating ambulance services
― Focus on dialysis
― Numerous indictments
― Sept. 27, 2013 – Philly couple charged with $4.4
million fraud involving medically unnecessary
services and payment of kickbacks
― April 23, 2013 – 7 individual charged with
conspiracy to commit $3.6 million health care
fraud

75. Recent Fraud Convictions
• Texas – owners of a Rio Valley ambulance service and a
billing agency indicted for submitting approximately 1,500
false claims for dialysis patients
• Texas – owner of a Houston-based ambulance service
convicted of $2.4 million fraud involving false claims for
dialysis
• Los Angeles – owners of LA ambulance service plead
guilty to $13 million fraud involving dialysis patients
• Indiana – general manager of a ambulance service pleads
guilty to complex fraud involving falsified trip reports for
dialysis transports

76. Harris County, Texas
•Rep. Kevin Brady (R – TX 8th) has called for
hearings on Medicare ambulance fraud in
Houston
– Fallout from Houston Chronicle articles
•2009 Medicare Payment Data
– $62 million spent on ambulance in Houston
– $7 million spent on ambulance in NYC

77. Harris County, Texas
•Sen. Orrin Hatch (R – UT)
•Sen. Charles Grassley (R – IA)
•February 2, 2012 letter to HHS Secretary
Sebelius
– Asking for steps CMS is taking to curb ambulance
abuses in Houston
– Focus on dialysis
– Asking specifically why CMS has not imposed a
temporary moratorium on new enrollments

78. TEMPORARYMORATORIUM ON
NEW ENROLLMENTS
• On July 26, 2012, CMS announced a temporary
moratorium on enrollment of new ground ambulance
suppliers in Houston and surrounding counties
• Response to wide-spread fraud and abuse
• Key findings:
– 26 counties in US with more than 200,000 Medicare beneficiaries
• On average, there is less than 1 ambulance supplier for every 10,000
Medicare beneficiaries in these counties
• 9.5 ambulance supplier per 10,000 Medicare beneficiaries in Harris
County, Texas (Houston)
• 275 active ambulance suppliers in Harris County
– Two-thirds have not been billing continuously since 2008

79. TEMPORARYMORATORIUM ON
NEW ENROLLMENTS
• On February 4, 2014, CMS announced that it was
extending the moratorium on new ambulance
enrollments in Houston metropolitan area for
another 6 months
– Through June 30, 2014
• New temporary moratorium on enrollment of new
ambulance suppliers for Philadelphia
metropolitan area
• Further extended through December 31, 2014

80. PRIOR AUTHORIZATION
DEMONSTRATION PROJECT
• On May 22, 2014, CMS announced that it was
implementing a prior authorization process for
dialysis transports in 3 states
– New Jersey
– Pennsylvania
– South Carolina
• Prior authorization required for claims to be
paid
– Alternative is 100% prepayment review

81. PROTECTING INTEGRITY IN
MEDICARE ACT OF 2014
• Proposes to expand dialysis prior
authorization project nationwide
– 2015
• MAC Jurisdiction L (DC, DE, MD)
• MAC Jurisdiction 11 (NC, VA, WV)
– 2017
• Rest of the nation

83. Brian Werfel, Esq.
A.A.A. Medicare Consultant
631-265-5650
bwerfel@aol.com