Medicare: Ambulance fee schedule; negotiated rulemaking committee; intent to establish and meeting,

[Federal Register: January 22, 1999 (Volume 64, Number 14)]

[Proposed Rules]

[Page 3474-3478]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr22ja99-29]

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 405

[HCFA-1002-NOI]

RIN 0938-AI72

Medicare Program: Ambulance Fee Schedule; Intent To Form Negotiated Rulemaking Committee

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice of Intent to form negotiated rulemaking committee and notice of meeting

SUMMARY: Section 4531(b) of the Balanced Budget Act (BBA) of 1997 requires that the Secretary establish a fee schedule for the payment of ambulance services under the Medicare program by negotiated rulemaking. We are required to establish a Negotiated Rulemaking Committee under the Federal Advisory Committee Act (FACA). The Committee's purpose will be to negotiate this fee schedule for ambulance services. The Committee will consist of representatives of interests that are likely to be significantly affected by the proposed rule. The Committee will be assisted by a neutral facilitator.

This notice announces our intent to establish a Negotiated Rulemaking Committee and outlines the scope of issues to be negotiated by the Committee as specified by section 4531(b)(2) of the BBA. We request public comment on whether we have properly identified the key issues to be negotiated by the committee as well as the interests that will be affected by those issues.

DATES: Comments: Comments and requests for representation or for membership on the Committee will be considered if we receive them at the appropriate address provided below, no later than 5 p.m. on February 22, 1999.

Meetings: The first meeting will be held at Turf Valley Hotel in Ellicott City, Maryland at 9 a.m. on February 22, 23, and 24, 1999 (410) 465-1500.

ADDRESSES: Mail written comments and requests for representation or for membership on the Committee, or nominations of another person for membership on the Committee (1 original and 3 copies) to the following address: Health Care Financing Administration, Department of Health and Human Services, Attention: HCFA-1002-NOI, P.O. Box 7517, Baltimore, MD 21207-5187.

If you prefer, you may deliver your written comments, applications, or nominations (1 original and 3 copies) to one of the following addresses:

Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201; or Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

FOR FURTHER INFORMATION CONTACT:

Bob Niemann (410) 786-4569 or Margot Blige (410) 786-4642 for general issues related to ambulance services. Lynn Sylvester (202) 606-9140 or Elayne Tempel (207) 780-3408, Conveners.

SUPPLEMENTARY INFORMATION:

Comments, Procedures, Availability of Copies, and Electronic Access

Because of staffing and resource limitations, we cannot accept comments by facsimile (FAX) transmission. In commenting, please refer to file code HCFA-1002-NOI. Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, in Room 445-G of the Department's offices at 300 Independence Avenue, SW, Washington, DC., on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-7890).

Copies: To order copies of the Federal Register containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 512-1800 or by faxing to (202) 512- 2250. The cost for each copy is $8. As an alternative, you can view and photocopy the Federal Register document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register. This Federal Register document is also available from the Federal Register online database through GPO Access, a service of the U.S. Government Printing Office. Free public access is available on a Wide Area Information Server (WAIS) through the Internet and via asynchronous dial-in. Internet users can access the database by using the World Wide Web; the Superintendent of Document home page address is http://www.access.gpo.gov/su__docs/, by using local WAIS client software, or by telnet to swais.access.gpo.gov, then log in as guest (no password required). Dial-in users should use communications software and modem to call (202) 512-1661; type swais, then log in as guest (no password required).

1. Balanced Budget Act of 1997

   Section 4531(b)(2) of the Balanced Budget Act of 1997 (BBA), Public Law 105-33, added a new section 1834(l) to the Social Security Act (the Act). Section 1834(l) of the Act mandates implementation, by January 1, 2000, of a national fee schedule for payment of ambulance services furnished under Medicare Part B. The fee schedule is to be established through negotiated rulemaking. Section 4531(b)(2) also provides that in establishing such fee schedule, the Secretary will--

   ‹bullet› Establish mechanisms to control increases in expenditures for ambulance services under Part B of the program;

   ‹bullet› Establish definitions for ambulance services that link payments to the type of services furnished;

   ‹bullet› Consider appropriate regional and operational differences;

   ‹bullet› Consider adjustments to payment rates to account for inflation and other relevant factors; and

   ‹bullet› Phase in the fee schedule in an efficient and fair manner.

2. Negotiated Rulemaking Process

   Section 1834(l)(1) of the Act provides that these negotiations take place within the framework of the Negotiated Rulemaking Act of 1990 (Public Law 101-648, 5 U.S.C. 561-570). Under the Negotiated Rulemaking Act, the head of an agency generally must consider whether--

   [[Page 3475]]

   ‹bullet› There is a need for a rule;

   ‹bullet› There are a limited number of identifiable interests that will be significantly affected by the rule;

   ‹bullet› There is a reasonable likelihood that a committee can be convened with a balanced representation of persons who--

   ‹bullet› Can adequately represent the interests identified; and

   ‹bullet› Are willing to negotiate in good faith to reach a consensus on the proposed rule;

   ‹bullet› There is a reasonable likelihood that a committee will reach a consensus on the proposed rule within a fixed period of time;

   ‹bullet› The negotiated rulemaking procedure will not unreasonably delay the notice of proposed rulemaking and the issuance of a final rule;

   ‹bullet› The agency has adequate resources and is willing to commit such resources, including technical assistance, to the committee; and

   ‹bullet› The agency, to the maximum extent possible consistent with the legal obligations of the agency, will use the consensus of the committee with respect to the proposed rule as the basis for the rule proposed by the agency for notice and comment.

   We note that the Congress has determined that the above conditions have been met and has mandated that the negotiated rulemaking process is appropriate.

   Negotiations are conducted by a committee chartered under the Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2). The committee includes an agency representative and is assisted by a neutral facilitator. The goal of the Committee is to reach consensus on the language or issues involved in a rule. If consensus is reached, it is used as the basis of the agency's proposal. The process does not affect otherwise applicable procedural requirements of the FACA, the Administrative Procedure Act, and other statutes.

   The Negotiated Rulemaking Act permits (but does not require) an agency to use the services of an impartial convener to assist the agency in identifying interests that will be significantly affected by the proposed rule, including residents of rural areas, and in conducting discussions with persons representing the identified interests to ascertain whether the establishment of a negotiated rulemaking committee is feasible and appropriate in the particular rulemaking. At the agency's request, the convener also ascertains the names of persons who are willing and qualified to represent interests that will be significantly affected by the rule. The agency may also ask the convener to recommend a process for the negotiations. The convener submits a written report, which is available to the public. Pursuant to this procedure authorized by the Negotiated Rulemaking Act, Lynn Sylvester and Elayne Temple of the Federal Mediation and Conciliation Service (FMCS) will act as conveners for the negotiated rulemaking on the ambulance fee schedule. Over the last several months, they have interviewed a wide range of organizations that were identified as having a possible interest in this negotiated rulemaking. They submitted a report to HCFA based on those convening interviews, which serves as a basis for this notice. The report lists the proposed representatives on the Committee. The convening report is a public document and is available upon request from the HCFA contacts listed above.

3. Interaction With the Proposed Rule Published on June 17, 1997

   On June 17, 1997, we published a proposed rule in the Federal Register to revise and update the Medicare ambulance regulations at 42 CFR 410.40 (62 FR 32715). Specifically, we proposed to base Medicare payment on the level of service required to treat the beneficiary's condition; to clarify and revise policy on coverage of nonemergency ambulance services; and to set national vehicle, staff, and billing and reporting requirements. As noted above, section 1834(l)(2) of the Act provides, in part, that in establishing the ambulance fee schedule, the Secretary will establish definitions for ambulance services that link payments to the types of services provided. One of the provisions of the June 17, 1997 proposed rule would have defined ambulance services as either advanced life support (ALS) or basic life support (BLS) services and linked Medicare payment to the type of service required by the beneficiary's condition. We received an extremely large number of comments on this issue and, in general, commenters were very concerned about our proposal. In light of that concern, and because service definition is a required element of the negotiated rulemaking, we have decided not to proceed with a final rule on the definition of ALS and BLS services. We will include this issue as a matter for the negotiating committee.

   We note that section 1834(1)(3) of the Act provides that, in establishing the fee schedule, the Secretary must ensure that the aggregate payment amount made for ambulance services in calendar year (CY) 2000 does not exceed the aggregate payment amount that would have been made absent the fee schedule. Although we are foregoing final agency action on the ALS/BLS definition proposal and including the issue as a part of the negotiations, we believe that the savings that would have been realized through implementation of that policy should not be lost to the Medicare program. We have estimated that $65 million would have been realized if the ALS/BLS proposal had been published as a final rule. Therefore, we intend to set the spending target for CY 2000 (the first year that the fee schedule will be in effect) $65 million lower than budget neutrality to reflect these savings. We intend to proceed with a final rule for those provisions of the June 17, 1997 proposed rule that are unrelated to the ALS/BLS issue. In addition, that rule will implement the provisions of section 4531(c) of the BBA, which authorizes the Secretary to include, under certain specified conditions, ALS services provided by a paramedic intercept service in a rural area as a covered ambulance service.

4. Subject and Scope of the Rule

   1. General

      Currently, the Medicare program pays for ambulance services on a reasonable cost basis when they are provided by a hospital, skilled nursing facility, or home health agency and on a reasonable charge basis when provided by an outside supplier. Section 4531(b)(1) of the BBA requires that ambulance services covered under the Medicare program be paid based on the lower of the actual charge or the fee schedule amount. The fee schedule is limited in that payments may not exceed what would have been paid if the fee schedule were not put into effect. As discussed above, we intend to set spending for the first year at $65 million less than budget neutrality.

      The effective date for the fee schedule is January 1, 2000, but the Secretary has the authority under section 1834(l)(2)(E) of the Act to provide for a phase-in period. In addition, section 1834(l)(2) requires that in developing the fee schedule the Secretary:

      ‹bullet› Establish mechanisms to control increases in expenditures for ambulance services under Part B of the program;

      ‹bullet› Establish definitions for ambulance services that link payments to the type of services furnished;

      ‹bullet› Consider appropriate regional and operational differences; and

      ‹bullet› Consider adjustments to payment rates to account for inflation and other relevant factors.

      [[Page 3476]]

      While we recognize that it is difficult to predict the end product of negotiated rulemaking on the ambulance fee schedule, we anticipate that the proposed rule resulting from negotiations will include a specific recommended schedule of relative values for ambulance services, any adjustments or add-on amounts for particular types of services, and possibly a mechanism for controlling expenditures and a phase-in schedule. While section 1834(l)(2)(D) of the Act requires that we include an inflation adjustment in the considerations, section 1834(l)(3)of the Act prescribes the inflation factor to be used for future years. Therefore, we are not including the inflation factor as part of the negotiation process. Medicare billing data will be available for use in the negotiations and we will share that information with Committee participants.

   2. Issues and Questions To Be Resolved

      Issues that we anticipate being resolved are outlined below. We also invite public comment on other issues not identified that may be within the scope of this rule.

      We believe the issues to be the following:

      1. The type of services furnished. That is, how services are grouped for payment purposes and the minimum services that must be furnished in order to meet the definition of each payment group. For example, what is an ALS versus BLS service? How many gradations of service are required? For example, should there be three levels of care: BLS, ALS and critical care transport? What are the relative values of each level of care and what are the projected utilizations of each?

      2. Definition(s) of type of provider and how that affects the payment rate. For example, should volunteer, municipal and private ambulance services be treated differently?

      3. Definition(s) of appropriate regional differences and how they affect the payment rate. For example, the use of a geographic wage adjustment.

      4. Definition(s) of appropriate operational differences and how they affect the payment rate. For example:

         --ALS versus BLS; --Ground versus air; --Fixed wing versus helicopter; --Hospital-based versus independent; --For-profit versus volunteer; --Rural versus urban; or --Isolated essential ambulance source (that is, only one ambulance source in a given geographical area)

      5. Whether mileage should be paid separately from the base rate, and if so, what components of the ambulance service should be included in the base rate and what should be included in mileage.

      6. Phase-in methodology of the fee schedule from the existing payment method, both method and time period.

      7. Mechanism to control expenditures, for example, a volume performance measure such as the number of trips per beneficiary or the ratio of ALS to BLS that is used to adjust the conversion factor for the following year.

   3. Issues That Are Outside the Scope of This Negotiation

      Based on the convening report, several issues were identified that we have determined are outside the scope of this rule. The following is a list of some, although not necessarily all, of the issues that we have determined are outside the scope of this negotiation.

      1. Program policies with respect to the coverage, as distinguished from payment, of ambulance services. For example, the definition of ``bed-ridden'' and ``medically necessary,'' physician certification for the use of ambulance, coverage of paramedic intercept services, and ambulance waiting time (which is not covered by Medicare).

      2. The aggregate amount of Trust Fund dollars available for payment during the first year. This amount will be based on the amount the program would have paid in the year 2000 absent the fee schedule, reduced by the $65 million dollar savings that would have been realized through publication of a final rule on the ALS/BLS definition.

      3. The way items and services are grouped in terms of the Billing Codes used to bill Medicare.

      4. The base year, which will be the latest year for which complete HCFA ambulance claims data exist.

      5. Local or State ordinances requiring certain ambulance staffing or all ALS ambulance.

      6. The choice of an appropriate coding system to implement the fee schedule; section 1834(l)(7) of the Act gives HCFA the authority to specify the coding system.

5. Affected Interests and Potential Participants

   In addition to our participation on the Committee, the Conveners have proposed and we agree to accept representatives from the following organizations as negotiation participants:

   ‹bullet› American Health Care Association (AHCA).

   ‹bullet› American Ambulance Association (AAA).

   ‹bullet› Association of Air Medical Services (AAMS).

   ‹bullet› International Association of Fire Chiefs (IAFC).

   ‹bullet› International Association of Fire Fighters (IAFF).

   ‹bullet› National Association of State Emergency Medical Services Directors (NASEMSD).

   ‹bullet› American Hospital Association (AHA).

   ‹bullet› National Volunteer Fire Council (NVFC).

   In addition to this list, we note that we have requested that the American College of Emergency Physicians (ACEP) and the National Association of EMS Physicians (NAEMSP) form a coalition and send one representative to be a negotiation participant. We invite public comment on this list of Committee participants.

   We note that Medicare contractors, which are those entities that adjudicate claims in local regions, will provide technical information to the negotiator representing HCFA. Since we consider the contractors to be agents of HCFA, we believe that they are most efficiently and effectively utilized in this manner rather than as negotiators in the process.

   This document gives notice of this process to other potential participants and affords them the opportunity to request that they be considered for membership on the Committee. Persons who will be significantly affected by this rule may apply for or nominate another person for membership on the Committee to represent such interests by submitting comments on this notice. Any application or nomination must include:

   ‹bullet› The name of the applicant or nominee and a description of the interests such person represents;

   ‹bullet› Evidence that the applicant or nominee is authorized to represent parties related to the interests the person proposes to represent;

   ‹bullet› A written commitment that the applicant or nominee will actively participate in the negotiations in good faith; and

   ‹bullet› The reasons that the applicant or nominee believes its interests are sufficiently different from the persons or entities listed above so that those interested would not be adequately represented on the Committee as currently proposed.

   Individuals representing the proposed organizations and health industry sectors should have practical experience, be recognized in their particular community, have the ability to engage in negotiations that lead to consensus, and be able to fully represent the views of the interests they represent.

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   We reserve the right to refuse representatives who do not possess these characteristics. Given the limited time frame for the development of this rule, we expect that the negotiations will be intensive. Representatives must be prepared and committed to fully participate in the negotiations in an attempt to reach consensus on the issues discussed.

   The intent in establishing the Committee is that all interests are represented, not necessarily all parties. We believe the proposed list of participants represents all interests associated with adoption of a national fee schedule for ambulance services. In determining whether a party had a significant interest and was represented, we considered groups who have and will continue to actively represent the main interest groups. Lastly, while we are obligated to ensure that all interests that are significantly affected are adequately represented, it is critical to the Committee's success that it be kept to a manageable size, particularly because of the short time frame in which the Committee must complete its task.

   Groups or individuals who wish to apply for a seat on the Committee should respond to this notice and provide the detailed information described above.

6. Schedule for the Negotiations

   We have set a deadline of 5-6 months beginning with the date of the first meeting for the negotiated rulemaking Committee to complete work on the proposed rule. We anticipate 4 or 5 additional meetings, to be scheduled by the Committee, with the final meeting no later than the end of June 1999. The first meeting of the Committee is scheduled for February 22, 23, and 24, 1999 at the Turf Valley Hotel in Ellicott City, Maryland beginning at 9 a.m. The purpose of this meeting is to discuss in detail how the negotiations will proceed, the schedule for subsequent meetings, and how the Committee will function. The Committee will agree to ground rules for Committee operations, will determine how best to address the principal issues, and, if time permits, will begin to address those issues.

7. Formation of the Negotiating Committee

   1. Procedure for Establishing an Advisory Committee

      As a general rule, an agency of the Federal Government is required to comply with the requirements of FACA when it establishes or uses a group that includes non-Federal members as a source of advice. Under FACA, an advisory committee begins negotiations only after it is chartered. This process is underway.

   2. Participants

      The number of participants in the group is estimated to be 10 and should not exceed 15 participants. A number larger than this could make it difficult to conduct effective negotiations within the time frame required by the statute. One purpose of this notice is to determine whether the proposed rule would significantly affect interests not adequately represented by the proposed participants. We do not believe that each potentially affected organization or individual must necessarily have its own representative. However, each interest must be adequately represented. Moreover, the group as a whole should reflect a proper balance or mix of interests.

   3. Requests for Representation

      If, in response to this notice, an additional individual or representative of an interest requests membership or representation on the Committee, we will determine, in consultation with the conveners, whether that individual or representative should be added to the Committee. We will make that decision based on whether the individual or interest--

      ‹bullet› Would be significantly affected by the rule, and

      ‹bullet› Is already adequately represented in the negotiating group.

   4. Establishing the Committee

      After reviewing any comments on this Notice and any requests, applications or nominations for representation, we will take the final steps to form the Committee.

8. Negotiation Procedures

   The following procedures and guidelines will apply to the Committee, unless they are modified as a result of comments received on this notice or during the negotiating process.

   1. Facilitators

      We will use neutral facilitators to conduct the negotiations. The facilitators will not be involved with the substantive development or enforcement of the regulation. The facilitators' role will be to--

      ‹bullet› Chair negotiating sessions in an impartial manner;

      ‹bullet› Help the negotiation process run smoothly;

      ‹bullet› Help participants define issues and reach consensus; and

      ‹bullet› Manage the keeping of the Committee's minutes and records. Lynn Sylvester and Elayne Tempel of the Federal Mediation and Conciliation Service (FMCS) will serve as facilitators.

   2. Good Faith Negotiations

      Participants must be willing to negotiate in good faith and be authorized to do so. We believe this may best be accomplished by selecting senior officials as participants. We believe senior officials are best suited to represent the interests and viewpoints of their organizations. This applies to us as well, and we are designating Nancy Edwards, Deputy Director of the Division of Acute Care, in our Center for Health Plans and Providers, to represent us.

   3. Administrative Support

      We will supply logistical, administrative, and management support. We will provide technical support to the Committee in gathering and analyzing additional data or information as needed.

   4. Meetings

      Meetings will be held in the Baltimore/Washington area. Unless announced otherwise, meetings are open to the public.

   5. Committee Procedures

      Under the general guidance and direction of the facilitators, and subject to any applicable legal requirements, the members will establish the detailed procedures for Committee meetings that they consider most appropriate.

   6. Defining Consensus

      The goal of the negotiating process is consensus. Under the Negotiated Rulemaking Act, consensus generally means that each interest concurs in the result unless the term is defined otherwise by the Committee. We expect the participants to fashion their working definition of this term.

   7. Failure of Advisory Committee To Reach Consensus

      If the Committee fails to reach consensus, the Committee may transmit a report specifying any areas on which consensus was reached and may include in the report any information, recommendations, or other materials that it considers appropriate. Additionally, any Committee member may include such information in an addendum to a report.

      If any Committee member withdraws, the remaining Committee members will evaluate whether the Committee should continue.

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   8. Record of Meetings

      In accordance with FACA's requirements, minutes of all committee meetings will be kept. The minutes will be placed in the public rulemaking record and Internet site on our home page.

1. Other Information

   In accordance with the provisions of Executive Order 12866 this notice was reviewed by the Office of Management and Budget.

   Authority: Section 1834(l)(1) of the Social Security Act (42 U.S.C. 1395m).

   (Catalog of Federal Domestic Assistance Program No. 93.774, Medicare--Supplementary Medical Insurance Program)

   Dated: December 17, 1998. Nancy-Ann Min DeParle, Administrator, Health Care Financing Administration.

   Dated: December 23, 1998. Donna E. Shalala, Secretary.

   [FR Doc. 99-1615Filed1-21-99; 8:45 am]

   BILLING CODE 4120-01-P