To amend title XVIII of the Social Security Act to provide payments to Medicare ambulance suppliers of the full cost or furnishing such services, to provide payments to rural ambulance providers and suppliers to account for the cost of serving areas with low population density, and for other purposes.

April 28, 2005

Mr. REYNOLDS (for himself, Mr. ALLEN, Mr. PICKERING, Mr. OBERSTAR, Mr. TAYLOR of Mississippi, Mr. DICKS, Mr. REYES, Mr. PAYNE, Mr. MCNULTY, Mr. HINCHEY, Mr. PLATTS, Mr. KOLBE, Mr. MCHUGH, Mr. BOUSTANY, Mr. KILDEE, Mr. DAVIS of Alabama, Mr. RENZI, and Mr. HOLDEN) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To amend title XVIII of the Social Security Act to provide payments to Medicare ambulance suppliers of the full cost or furnishing such services, to provide payments to rural ambulance providers and suppliers to account for the cost of serving areas with low population density, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Ambulance Payment Reform and Rural Equity Act of 2005'.

SEC. 2. AMBULANCE PAYMENT RATES.

(a) Payment Rates- Section 1834(l)(3) of the Social Security Act (42 U.S.C. 1395m(l)(3)) is amended to read as follows:

`(3) PAYMENT RATES- Subject to any adjustment under subparagraph (B) and paragraph (13) and the full payment of a national mileage rate pursuant to paragraph (2)(E), the Secretary shall modify the fee schedule established under paragraph (1) as follows:

`(A) PAYMENT RATES IN 2006-

`(i) GROUND AMBULANCE SERVICES- In the case of ground ambulance services furnished under this part in 2006, the Secretary shall set the payment rates under the fee schedule for such services at a rate based on the average costs (as determined by the Secretary on the basis of the most recent and reliable information available) incurred by full cost ambulance suppliers in providing nonemergency basic life support ambulance services covered under this title, with adjustments to the rates for other ground ambulance service levels to be determined based on the rule established under paragraph (1). For the purposes of the preceding sentence, the term `full cost ambulance supplier' means a supplier for which volunteers or other unpaid staff comprise less than 20 percent of the supplier's total staff and which receives less than 20 percent of space and other capital assets free of charge.

`(ii) OTHER AMBULANCE SERVICES- In the case of ambulance services not described in subclause (i) that are furnished under this part in 2006, the Secretary shall set the payment rates under the fee schedule for such services based on the rule established under paragraph (1).

`(B) PAYMENT RATES IN SUBSEQUENT YEARS FOR ALL AMBULANCE SERVICES- In the case of any ambulance service furnished under this part in 2007 or any subsequent year, the Secretary shall set the payment rates under the fee schedule for such service at amounts equal to the payment rate under the fee schedule for that service furnished during the previous year, increased by the percentage increase in the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year.'.

(b) Conforming Amendment- (1) Section 221(c) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (114 Stat. 2763A-487), as enacted into law by section 1(a)(6) of Public Law 106-554, is repealed.

(2) The amendment made by paragraph (1) shall take effect on January 1, 2006, and shall apply to payments for ambulance services furnished on or after such date.

SEC. 3. IMPROVEMENT IN PAYMENTS TO RETAIN EMERGENCY AND OTHER CAPACITY FOR AMBULANCES IN RURAL AREAS.

(a) In General- Section 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)) is amended by adding at the end the following new paragraph:

`(15) ADDITIONAL PAYMENTS FOR PROVIDERS FURNISHING AMBULANCES SERVICES IN RURAL AREAS-

`(A) IN GENERAL- In the case of ground ambulance services furnished on or after January 1, 2006, for which the transportation originates in a rural area (as determined under subparagraph (B)), the Secretary shall provide for a percent increase in the base rate of the fee schedule for a trip identified under this subsection.

`(B) IDENTIFICATION OF RURAL AREAS- The Secretary, in consultation with the Office of Rural Health Policy, shall use the Rural-Urban Commuting Areas (RUCA) coding system, adopted by that Office, to designate rural areas for the purposes of this paragraph. A rural area is any area in RUCA level 2 through 10 and any unclassified area.

`(C) TIERING OF RURAL AREAS- The Secretary shall designate 4 tiers of rural areas, using a zip code population-based methodology generated by the RUCA coding system, as follows:

`(i) TIER 1- A rural area that is a high metropolitan commuting area, in which 30 percent or more of the commuting flow is to an urban area, as designated by the Bureau of the Census (RUCA level 2).

`(ii) TIER 2- A rural area that is a low metropolitan commuting area, in which less than 30 percent of the commuting flow is to an urban area or to a large town, as designated by the Bureau of the Census (RUCA levels 3-6).

`(iii) TIER 3- A rural area that is a small town core, as designated by the Bureau of the Census, in which no significant portion of the commuting flow is to an area of population greater than 10,000 people (RUCA levels 7-9).

`(iv) TIER 4- A rural area in which there is no dominant commuting flow (RUCA level 10) and any unclassified area.

The Secretary shall consult with the Office of Rural Health Policy not less often than every 2 years to update the designation of rural areas in accordance with any changes that are made to the RUCA system.

`(D) PAYMENT ADJUSTMENTS FOR TRIPS IN RURAL AREAS- The Secretary shall adjust the payment rate under this section for ambulance trips that originate in each of the tiers established in subparagraph (C). The adjustment shall be a percentage increase in the base payment rate as follows:

`(i) TIER 1- 5.5 percent.

`(ii) TIER 2- 11 percent.

`(iii) TIER 3- 16.5 percent.

`(iv) TIER 4- 22 percent.'.

(b) Review of Payments for Rural Ambulance Services and Report to Congress-

(1) REVIEW- Not later than July 1, 2008, the Secretary of Health and Human Services shall review the system for adjusting payments for rural ambulance services under section 1834(l)(15) of the Social Security Act (42 U.S.C. 1395m(l)(15)), as added by subsection (a), to determine the adequacy and appropriateness of such adjustments. In conducting such review the Secretary shall consult with providers and suppliers affected by such adjustments and with representatives of the ambulance industry generally to determine--

(A) whether such adjustments adequately cover the additional costs incurred in serving areas of low population density; and

(B) whether the tiered structure for making such adjustments appropriately reflects the difference in costs of providing services in different types of rural areas.

(2) REPORT- Not later than January 1, 2009, the Secretary shall submit to Congress a report setting forth the results of such review and any recommendations for revision to the systems for adjusting payments for ambulance services in rural areas.

(c) Conforming Amendments- (1) Section 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)), as amended by subsection (a), is further amended by adding at the end the following new paragraph:

`(16) DESIGNATION OF RURAL AREAS FOR MILEAGE PAYMENT PURPOSES- In establishing any differential in the amount of payment for mileage between rural and urban areas in the fee schedule established under paragraph (1), the Secretary shall identify rural areas in the same manner as provided in paragraph (15)(B).'.

(2) Section 1834(l)(12)(A) of the Social Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking `January 1, 2010' and inserting `January 1, 2006'.

(3) Section 1834(l)(13)(A)(i) of the Social Security Act (42 U.S.C. 1395m(l)(13)(A)(i)) is amended by inserting `(or in the case of such services furnished in 2006, in a rural area identified by the Secretary under paragraph (15)(B))' after `such paragraph'.

SEC. 4. USE OF MEDICAL CONDITIONS FOR CODING AMBULANCE SERVICES.

Section 1834(l)(7) of the Social Security Act (42 U.S.C. 1395m(l)(7)) is amended to read as follows:

`(7) CODING SYSTEM-

`(A) IN GENERAL- The Secretary shall, in accordance with section 1173(c)(1)(B) and not later than January 1, 2006, establish a mandatory system or systems for the coding of claims for ambulance services for which payment is made under this subsection, including a code set specifying the medical condition of the individual who is transported and the level of service that is appropriate for the transportation of an individual with that medical condition.

`(B) MEDICAL CONDITIONS- The code set established under subparagraph (A) shall take into account the list of medical conditions developed in the course of the negotiated rulemaking process conducted under paragraph (1).'.

END