FOR IMMEDIATE RELEASE: December 20, 2001

SCHUMER: LOW MEDICARE PAYMENTS THREATEN SCHOHARIE AMBULANCE SERVICE

Senator unveils plan to boost Medicare reimbursements to ambulance
providers in an effort to keep response times down and patient care intact

With nation on high alert for new threats since September 11, Schumer points to urgent need to increase support for first responder emergency personnel

With falling Medicare reimbursements threatening ambulance service throughout the Capital Region and New York State, US Senator Charles E. Schumer today unveiled a plan that would boost payments to ambulance providers in Schoharie County.

Currently, Medicare pays about $2.1 billion each year to reimburse ambulance providers for two types of service – basic life support (BLS) and advanced life support (ALS). In some parts of New York, payments for BLS transports can be as low as $162.92, while in others they can be as high as $189.10 per trip. ALS transport reimbursements in New York State range from $277.19 to $361.36 per trip. In an effort to correct these disparities, Congress directed the Center for Medicare and Medicaid Services to put together a simpler, more equitable reimbursement formula. This new formula, however, is expected to cut Medicare payments to ambulance providers throughout New York State.

"With the need for top-flight emergency services never greater in the wake of September 11, it is vital that we provide reimbursements that reflect the actual cost of providing these services. Denying our state ambulance providers the dollars they need denies New York residents the quality of care they deserve," said Schumer. "Boosting reimbursement rates for these ambulance providers will help ensure that the public is served by qualified emergency personnel."

The new reimbursement formula – scheduled to go into effect in April of next year– would reduce reimbursement rates for ambulance service in New York by about $15 million annually to about $145 million, well below the actual cost of providing these services. According to one major ambulance provider, which handles approximately a third of Medicare ambulance transports in New York, the cost to the company of a basic ambulance trip is $222. Under the new fee schedule, however, it would receive only $163.51 per trip.

The Medicare Ambulance Payment Reform Act, introduced by Senator Mark Dayton and co-sponsored by Schumer, would require Medicare to peg ambulance reimbursement rates to the "national average cost" of providing the service. Industry experts say this legislation would mean New York ambulance providers would get $203 million in Medicare reimbursements annually – $58 million more per year than they would receive under the formula scheduled to go into effect in April.

Rural/Metro Medical Services – the primary provider of private ambulance service in Schoharie County – responds to 6,100 calls annually with 12 emergency vehicles and employs some 60 people throughout Herkimer, Montgomery and Schoharie counties.

"September 11 was a vivid reminder of the full extent on which we rely on our First Responders, those whose job it is to run toward danger not from it," said Schumer. "If we want to continue to rely on them as we did in the aftermath of those senseless terrorist attacks, we must make a financial
commitment to keeping them afloat."

In Schoharie County, ambulance providers currently receive $187.65 per BLS trip and $349.68 per ALS trip $4.28 per BLS mile and $4.89 per ALS mile in reimbursements. Schoharie providers face cuts as high as 44 percent to those rates under the proposed fee schedule. For example, non-emergency ALS transport reimbursements will fall from $349.68 to $196.21. The legislation Schumer is backing would soften the blow of those cuts by reimbursing Schoharie providers $299.65 per non-emergency ALS trip. In the Capital Region overall, providers estimate that they would receive an additional $1.55 million annually to cover the full cost of their services. On average, it costs $100,000 to buy, supply and equip a new ambulance.

The Capital Region is not alone in feeling the crunch of the new fee schedule. According to industry sources, ambulance providers in Central New York – one of the hardest hit New York regions by the proposed fee schedule – stand to lose $800,000 annually but would gain an additional $2.8 million in Medicare reimbursements under Schumer's plan. Providers in Buffalo would lose $600,000 annually but would gain an additional $1.6 million in Medicare reimbursements under Schumer's plan. In Rochester, providers would lose $300,000 under the proposed fee schedule but would receive $2 million in additional reimbursements under the legislation.

Specifically, the Medicare Ambulance Payment Reform Act would:
• Require Medicare to set ambulance payment rates at the "national average cost" of providing service when it implements a new fee schedule currently under consideration.

• Require the findings of 1997 Congressionally-mandated study due to be finished in June be used to ensure adequate reimbursement for rural ambulance providers, who not only serve a higher percentage of Medicare patients, but also incur higher per-trip costs due to fewer transports and longer travel distances.

• Establish a "prudent layperson" standard for the payment of emergency ambulance claims, such that if a reasonable person believed an emergency medical problem existed when the ambulance was requested, then Medicare would pay the claim. Currently, ambulance payments are sometimes denied if the patient's condition is not as serious as the layperson who called the ambulance believed at the time. If the payment is denied, the patient and the ambulance service are then stuck with the bill.

• Make it easier for providers to file claims with Medicare by eliminating a processing system that often leads to legitimate reimbursement claims being rejected as "medically unnecessary."

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