On October 4, the Medicare Payment Advisory Commission (MedPAC) met to discuss Medicare payment policies for several provider groups including ambulance service providers.  Congress directed MedPAC to review Medicare ambulance payments as part of the Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) in which the House and Senate also extended temporary Medicare ambulance relief through the end of this year.  Specifically, Congress requested that MedPAC study the appropriateness of the 2% urban, 3% rural and super rural temporary increases, the affect of the increases on Medicare margins and what reforms should be made to the Medicare ambulance fee schedule including whether the increases should be incorporated into the base rates.

At the meeting on October 4, the MedPAC Commissioners were presented with a set of draft recommendations from the MedPAC Chairman.  In summary, contrary to the report just issued in which the Government Accountability Office (GAO) once again determined that ambulance services providers are reimbursed below cost by Medicare, the recommendations included not extending the temporary increases.  The recommendations did acknowledge that ALS emergency, BLS emergency, ALS nonemergency and SCT levels of service need an increase in reimbursement but did so in a budget neutral manner by suggesting a cut in reimbursement of BLS nonemergency.  The Commission cited the increase in the growth and utilization of BLS nonemergency and the need to address fraud and abuse in dialysis transports as the rationale for the reduction.  
 

The recommendations also included restructuring the current permanent 50% bump for rural miles 1-17 and the temporary super rural bonus payment.  In their analysis, MedPAC believes a restructuring would better target low volume providers who they acknowledge are reimbursed significantly below cost by Medicare.  
 

The MedPAC Commissioners will meet next on November 1 and November 2 at which time they will vote on final recommendations.   It is unlikely that Congress will address the recommendations during the Lame Duck session, however, the House and Senate will need to determine whether to extend the 2% urban, 3% rural and super rural bonus payment before the end of the year.