Overview of The Moran Company Recommendations on Ambulance Cost Collection System

Written by Aaron Director on March 1, 2018. Posted in News.

Overview of The Moran Company Recommendations on Ambulance Cost Collection System

From 2012 – 2014, The Moran Company developed, through a three-phase project, recommendations about how the Medicare program could collect costs associated with providing ambulance services. Consistent as well with the findings of the Congressionally mandated report on ambulance cost reporting/cost collection, The Moran Company determined that Medicare cost reporting would not be appropriate, result in the submission of accurate data, or solve the historic problem of under-reporting by the industry. Instead, The Moran Company recommended a “hybrid” model that relies on the data elements and accounting methods used in Medicare cost reporting and collects this information in a two-step process to ensure that the unique and varied business structures and their cost differences are appropriately captured.

Step 1: Collect information to categorize ambulance services to allow for a statistically representative grouping and for appropriate comparison of cost data.

The first step would involve all ambulance operations completing a very short (8-10 question) survey for each of their NPIs. The information collected in this step could include:

Organizational designation (e.g., a government authority, independent company, public safety or fire-based, hospital-based, other) [this information ensures that an appropriate number of each type of organization is represented in the cost collection step]
Percentage of volunteer EMT labor [this information ensures that an appropriate number of all volunteer, partial volunteer, and no volunteer services are represented in the cost collection step]
Volume of ambulance services delivered per year [this information ensures that costs from small, medium, and large services are represented in the cost collect step]
Percentage of Medicare emergency and non-emergency services provided per year [this information ensures that the costs of both emergency and non-emergency services are appropriately captured in the cost collection step]
Average duration of transports [this information ensures that the costs associated with various lengths of transport are captured in the cost collection step]
Whether the service has a sole source contract and, if so, the percent of the activity provided under that contract [this information ensures that the cost differences associated with sole source contracts are captured in the cost collection step]
If required to pay fees to the local jurisdiction [this information ensures that the costs associated with local jurisdiction fees are captured in the cost collection step]
Other services that are a requirement of doing business [this information allows for the costs that may not be ambulance-related but mandated by local contracts to be accounted for in the cost collection step]
Percentage of transports that are urban, rural, or super rural [this information is important to ensure that the costs associated with each designation are appropriately represented in the cost collection step]

Step 2: Collect cost and revenue information from a statistically appropriate group of ambulance suppliers and providers.

The second step would involve providing information about specific cost and revenue data elements. These would be consistent with the existing Medicare cost reporting elements for other providers, but in certain instances tailored to ensure that all allowable costs of ambulance services are collected. For example, vehicle maintenance and fuel would be part of ambulance cost data and included, even if these data elements are not included on nursing home costs reports.

CMS would determine a statistically appropriate sample size for each organization type and ensure an appropriate mix of rural, urban, super-rural, as well as volunteer, sole source, and emergency/non-emergency services. Over time all ambulance providers and suppliers would be required to report the data, but no individual service (defined by the NPI number) would be required to report every year.

Public Reporting. Once CMS has collected the data, it will make a de-identified file of the information available to allow policy-makers and stakeholders to evaluate the information collected. The AAA’s goal is to use this information to allow for meaningful reform that for the first time would link the payment rates to the cost of providing services. The AAA also seeks to modernize the use of ambulance services in the health care system through policies such as alternative destination, treatment at the scene with referral and no transport, and community paramedicine.