Navigating the complexities of ambulance billing requires a solid understanding of the regulations governing the industry at both federal and state levels. With healthcare laws constantly evolving, it’s essential that ambulance service providers and billing professionals remain aware of these guidelines to avoid costly compliance issues and ensure proper reimbursement.
Understanding Federal Regulations for Ambulance Billing
At the federal level, most ambulance services are reimbursed by Medicare and Medicaid, so understanding the rules governing these programs is crucial. The Centers for Medicare & Medicaid Services (CMS) sets forth specific guidelines on when ambulance services are covered and how billing must be done to comply with federal law.
Reasonable and Necessary Requirements
Medicare covers ambulance transport when both reasonable and necessary criteria are met and documented.
A central element is the medical necessity requirement. Medicare, for example, only covers ambulance services when they are deemed medically necessary. This means the patient must require transportation to receive care for a serious medical condition and transport by other means is contraindicated.
Medicare will only cover ambulance transport to the closest appropriate facility that can provide the required care. Medicare will not cover transport to a facility that is farther away if a closer facility is capable of treating the patient.
There are instances when a patient must be transported beyond the closest appropriate facility based on extenuating circumstances. We learned this during the Covid-19 pandemic. Facilities were at capacity with limited resources. If the patient is transported beyond the closest appropriate facility based on extenuating circumstances, this must be well documented. If the closest cardiac facility is at capacity and cannot accept the patient, document it. If the closest Level I Trauma Center is on divert because of a mass casualty incident, document it. This documentation helps establish that a further facility is indeed the closest appropriate facility based on the circumstances.
It is possible that only one of the reasonable and necessary criteria are met. You may encounter a patient that requires cardiac monitoring, IV medications, or a ventilator but chooses to be transported to a hospital or skilled nursing facility closer to their home. If this facility is not the closest appropriate facility capable of treating the patient, both reasonable and necessary criteria have not been met.
How do you bill a transport like this? In the case where a patient chooses a facility for convenience, the appropriate level of service and mileage is added to the claim. The additional mileage beyond the closest appropriate facility is billed as non-covered mileage. The non-covered mileage will be denied by Medicare. It may be paid by a secondary payor but will likely be denied as well. In that instance, the patient will be responsible for the balance and an Advance Beneficiary Notice of Noncoverage (ABN) should be obtained prior to transport.
An ABN is required for ambulance transport services when Medicare may not cover the transport because it does not meet coverage criteria. An ABN is needed when the patient is transported to a location that is not the closest appropriate facility (e.g., traveling to a facility that is farther away when a closer facility can provide the necessary care). Issuing an ABN ensures the patient is informed of their potential financial responsibility and helps protect the provider from denied claims. You should clearly explain why Medicare may not pay for the service, detail the potential cost the patient could incur, and offer the patient a choice to proceed with the service and accept financial responsibility or decline the service. The ABN must be signed and dated by the patient, or their representative, before the service is provided. Proper documentation and timing of the ABN are critical to ensuring compliance with Medicare rules.
Ambulance billing compliance is complex, requiring attention to both federal and state regulations. By staying informed about these rules, maintaining accurate documentation, and implementing best practices, providers can avoid the pitfalls of non-compliance and ensure their services are properly reimbursed. Navigating these regulations successfully protects your practice from penalties, while also ensuring patients receive the necessary care without unexpected billing surprises.
