[Congressional Record Volume 147, Number 112 (Friday, August 3, 2001)]
[Senate]
[Pages S8939-S8940]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Mr. Feingold):
  S. 1367. A bill to amend title XVIII of the Social Security Act to 
provide appropriate reimbursement under the medicare program for 
ambulance trips originating in rural areas; to the Committee on 
Finance.
  Ms. COLLINS. Mr. President, I am pleased to join with my friend and 
colleague, Senator Russ Feingold, in introducing legislation today to 
provide needed financial relief to rural ambulance providers.
  Historically, Medicare payments for ambulance services provided by 
freestanding ambulance providers have been based on a proportion of 
their reasonable charges, while payments to hospital-based providers 
have been

[[Page S8940]]

based on their actual costs. The Balanced Budget Act of 1997, however, 
directed the Secretary of Health and Human Services to establish a fee 
schedule for the payment of ambulance services using a negotiated 
rulemaking process. This rulemaking Committee finalized its agreement 
in February of 2000, and the then-Health Care Financing Administration, 
HCFA, issued a proposed rule last September. The new fee schedule was 
originally scheduled to start on January 1, 2001, but its 
implementation has been delayed while HCFA, now the Centers for 
Medicare and Medicaid Services, continues to work on publishing a final 
rule.
  Payment under this new fee schedule will preclude hospital providers 
of ambulance services from recouping their actual costs. For the 
average, high-volume urban provider, this should not pose a significant 
problem. Ambulance services in rural areas, however, tend to have 
higher fixed costs and low volume, which means that they are unable to 
take advantage of any economies of scale. I am therefore extremely 
concerned that the proposed rule fails to include a meaningful 
adjustment for low-volume ambulance providers.
  I recently heard about the impact that this change will have on one 
of Maine's rural hospitals, Franklin Memorial Hospital in Farmington, 
ME. Logging, tourism, and recreational activities are central to the 
economic viability of this region, and good emergency transport is 
essential Franklin Memorial owns and operates five local ambulance 
services that cover more than 2,000 square miles of rural Maine. They 
serve some of the most remote areas of the State, and ambulances often 
have to travel more than 80 miles to reach the hospital. Moreover, 
these trips frequently involve backwoods and wilderness rescues which 
require highly trained staff. Since there are only 30,000 people in 
Franklin Memorial's service area, however, volume is very low.
  Under the current Medicare reimbursement system, Franklin Memorial 
has just managed to break even on its ambulance services. Under the 
proposed fee schedule, however, these services stand to lose up to 
$500,000 a year, system-wide. While the small towns served by Franklin 
Memorial help to subsidize this service, there is no way that they can 
absorb this loss. The Medicare, Medicaid and S-CHIP Benefits 
Improvement and Protection Act, BIPA, did increase the mileage 
adjustment for rural ambulance providers driving between 17 and 50 
miles by $1.25. While this is helpful, it will not begin to compensate 
low-volume ambulance services like Franklin Memorial Hospital 
adequately.
  Congress has required the General Accounting Office to conduct a 
study of costs in low-volume areas, but any GAO-recommended adjustments 
in the ambulance fee schedule would not be effective until 2004. The 
Rural Ambulance Relief Act that I am introducing today with Senator 
Feingold will therefore establish a hold harmless provision allowing 
rural ambulance providers to elect to be paid on a reasonable cost 
basis until the Centers for Medicare and Medicaid Services is able to 
identify and adjust payments under the new ambulance fee schedule for 
services provided in low-volume rural areas.
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