Medicare Payment for Ambulance Services Furnished by Certain CAHs

Medically necessary ambulance services furnished for dates of service on or after December 21, 2000 and prior to January 1, 2004, by a CAH or by an entity that is owned and operated by the CAH are paid based on 100 percent of the reasonable costs if the 35 mile rule for reasonable cost-based payment is met.

For dates of service on or after January 1, 2004, medically necessary ambulance services furnished by a CAH or by an entity that is owned and operated by the CAH are paid based on 101 percent of the reasonable costs if the 35 mile rule for reasonable cost-based payment is met.

For dates of service on or after December 21, 2000 and prior to October 1, 2011, in order for the 35 mile rule to be met, the CAH or the entity that is owned and operated by the CAH, must be the only provider or supplier of ambulance services located within a 35 mile drive of the CAH or the entity.

For dates of service on or after October 1, 2011, in order for the 35 mile rule to be met, the CAH or the entity that is owned and operated by the CAH, must be the only provider or supplier of ambulance services located within a 35 mile drive of the CAH. Additionally, if there is no provider or supplier of ambulance services located within a 35 mile drive of the CAH but there is an entity owned and operated by the CAH located more than a 35 mile drive from the CAH, that CAH-owned and operated entity can only be paid 101 percent of reasonable costs for its ambulance services if it is the closest provider or supplier of ambulance services to the CAH.

Section 205 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) of 2000 exempts certain CAHs from the current Medicare ambulance cost per trip payment limit as well as from the ambulance fee schedule. Section 205(a) of BIPA states:

The Secretary shall pay the reasonable costs incurred in furnishing ambulance services if such services are furnished (A) by a CAH (as defined in §1861(mm)(1)), or (B) by an entity that is owned and operated by a CAH, but only if the CAH or entity is the only provider or supplier of ambulance services that is located within a 35-mile drive of such CAH.

Those CAHs and CAH-owned and operated entities that meet the 35 mile rule for reasonable cost-based payment shall report condition code B2 (CAH ambulance attestation) on their bills.

When the 35 mile rule for reasonable cost-based payment is not met, the CAH ambulance service or the ambulance service furnished by the entity that is owned and operated by the CAH, is paid based on the ambulance fee schedule.