This article, originally published on April 21, 2015, has been updated with current information.
“We provided an ambulance transport, what do you mean insurance won’t pay?”
We hear this question a lot – from patients, paramedics and municipal representatives who may not always appreciate or understand the nuances of ambulance billing and reimbursement. Unlike some other types of healthcare providers, where the mere provision of a service, such as an emergency department visit, administering a vaccine, filling a prescription, or even a well-patient check-up, often warrants reimbursement, ambulance reimbursement is not so cut and dry.
In order for most ambulance transports to ultimately be paid by insurance, including commercial, Medicare, or Medicaid, the transport must be considered “medically necessary.” Generally speaking, this is a subjective standard, with different definitions for different payers. Here are some examples of these three payment standards, but keep in mind that state laws may also play a role in determining whether reimbursement is warranted.
1. Prudent layperson (commercial)
Many state commercial insurance laws, or even contracts between an ambulance service and a commercial insurer, impose a “prudent layperson” standard to define when emergency ambulance transports will ultimately be deemed payable. A common theme in this prudent layperson standard is looking at “someone of average knowledge of health and medicine,” and whether such a “prudent person might anticipate serious impairment to his or her health in an emergency situation.”
This ultimately means: would an average person think this was an emergency? Would the condition warrant calling an ambulance in the particular situation, or would a prudent layperson seek alternative forms of transport, when placed in the exact same medical situation?
Thus, a stubbed toe probably doesn’t warrant an ambulance, but a cardiac event likely would. While obvious in some situations, there are many gray areas where the need for an ambulance is highly subjective. Therefore, the ultimate need for the ambulance may depend on the quality of the documentation on the patient care report, which further explains the patient’s complaint, relevant findings, and treatments provided to the patient.
2. Federal law (Medicare)
From a Medicare perspective, 42 CFR § 410.40(d) states:
“Medical necessity requirements – (1) General rule. Medicare covers ambulance services, including fixed wing and rotary wing ambulance services, only if they are furnished to a beneficiary whose medical condition is such that other means of transport are contraindicated. The beneficiary’s condition must require both the ambulance transportation itself and the level of service provided in order for the billed service to be considered medically necessary.”
This means the patient could not be transported by any lesser means, including wheelchair van, private vehicle, taxi, or bus. Medical necessity can sometimes be a difficult standard to meet, and whether or not medical necessity is met is the focus of the vast majority of today’s Medicare audits. Medicare auditors look to whether the documentation on the Patient Care Report demonstrates that other forms of transport are contraindicated.
3. State law (Medicaid)
Many state Medicaid programs outline unique and specific definitions that define whether the Medicare program will pay for ambulance transports. For instance, the Pennsylvania Medicaid regulation (at 55 Pa. Code § 1245.52) specifically states that Medicaid covers ambulance services only when medically necessary, including conditions such as patient incapacitation due to injury or illness; serious internal or head injuries; the need for restraints or oxygen and other limited conditions.
State Medicaid standards are often more specific than federal law, by describing actual conditions that can establish the need for an ambulance, though even these standards are subject to debate. Complete and accurate document of conditions, interventions, and/or procedures are necessary in order to satisfy this standard.
Using the ET3 payment model could increase ambulance billing reimbursements
The Emergency Treat, Triage and Transport (ET3) pilot program announced in 2019 by the Centers for Medicare and Medicaid Services (CMS) and the U.S. Department of Health and Human Services (HHS) may allow EMS providers to receive reimbursement for non-emergency transport to destinations other than the emergency department.
The ET3 pay model is designed to decrease the burden on emergency departments and connect the patient with the best place for care, which may not necessarily be the hospital.
What makes the ET3 model so worthwhile for EMS agencies is the authorization of Medicare transportation and Medicare reimbursement. Currently, agencies only receive payment from Medicare if they transport patients to hospitals, critical access hospitals, skilled nursing facilities and dialysis centers, regardless of whether the patient’s needs could be met at a lower-acuity facility.
When using the ET3 pay model, however, agencies are eligible to be paid for Medicare transportation and receive Medicare reimbursement, based on their determination upon patient triage at the scene. The ET3 model could also save patients out-of-pocket costs when utilizing community paramedicine programs and by avoiding costly emergency department visits.
The ET3 pilot program begins on Jan. 5, 2020 and will continue for a five-year voluntary performance evaluation period.
Good documentation is good patient care
Good documentation not only plays an important role in patient care, as discussed in a previous article , but reimbursement as well. In fact, is critical to substantiate the need for ambulance transport in the first place.
Today, we see more and more insurance audits where the payers probe more deeply into the supporting documentation upon which payment will be based. In these audits, when there are inconsistencies, incomplete records or when the documentation fails to support the need for ambulance, auditors are quick to deny coverage and demand repayment of their claims.
Just because an ambulance transport took place, there is proof of such a transport, and two crewmembers participated in the transport is not enough to assure reimbursement. The documentation must support using the ambulance, as opposed to other forms of transport, in order for most payers to make payment. Similarly, just because the patient may require transport to a hospital does not always mean transport by ambulance is the most appropriate form of transport, or that ambulance transport is payable.
The ultimate need for patient transport and need for patient transport by ambulance are two different things. The need for transport does not always make the ambulance transport payable.
Even though the three different types of payer standards as outlined above may be slightly different, the common theme is the importance of the crew documentation to satisfy the criteria as outlined. To satisfy those criteria, it is critical for ambulance crews to report sufficient information to meet the “medical necessity” requirements, no matter the payer. Even the most serious complaint, or dispatched condition, will not meet reimbursement requirements if not adequately supported by documentation.
Thorough documentation is critical, no matter the payer, and the following information becomes critical towards satisfying the payment standards:
- Dispatched/reported condition or complaint
- Patient condition on scene
- Treatments/services rendered, with patient response
- Objective report of the patient’s appearance and/or mental status
While this is not an exhaustive list, it is this specific information that suggests that other forms of transport would not have been possible and that the reasonable person would also call for, and expect, an ambulance transport. Therefore, next time you might question why a particular transport was not paid, ask first what about the documentation supported medical necessity to warrant such payment. Unfortunately, simply performing an ambulance service does not warrant payment.
