[Federal Register Volume 64, Number 14 (Friday, January 22, 1999)]
[Proposed Rules]
[Pages 3474-3478]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1615]


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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

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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).

I. 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--
     Establish mechanisms to control increases in expenditures 
for ambulance services under Part B of the program;
     Establish definitions for ambulance services that link 
payments to the type of services furnished;
     Consider appropriate regional and operational differences;
     Consider adjustments to payment rates to account for 
inflation and other relevant factors; and
     Phase in the fee schedule in an efficient and fair manner.

II. 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]]

     There is a need for a rule;
     There are a limited number of identifiable interests that 
will be significantly affected by the rule;
     There is a reasonable likelihood that a committee can be 
convened with a balanced representation of persons who--
     Can adequately represent the interests identified; and
     Are willing to negotiate in good faith to reach a 
consensus on the proposed rule;
     There is a reasonable likelihood that a committee will 
reach a consensus on the proposed rule within a fixed period of time;
     The negotiated rulemaking procedure will not unreasonably 
delay the notice of proposed rulemaking and the issuance of a final 
rule;
     The agency has adequate resources and is willing to commit 
such resources, including technical assistance, to the committee; and
     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.

III. 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.

IV. Subject and Scope of the Rule

A. 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:
     Establish mechanisms to control increases in expenditures 
for ambulance services under Part B of the program;
     Establish definitions for ambulance services that link 
payments to the type of services furnished;
     Consider appropriate regional and operational differences; 
and
     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.

B. 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.

C. 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.

V. 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:
     American Health Care Association (AHCA).
     American Ambulance Association (AAA).
     Association of Air Medical Services (AAMS).
     International Association of Fire Chiefs (IAFC).
     International Association of Fire Fighters (IAFF).
     National Association of State Emergency Medical Services 
Directors (NASEMSD).
     American Hospital Association (AHA).
     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:
     The name of the applicant or nominee and a description of 
the interests such person represents;
     Evidence that the applicant or nominee is authorized to 
represent parties related to the interests the person proposes to 
represent;
     A written commitment that the applicant or nominee will 
actively participate in the negotiations in good faith; and
     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.

[[Page 3477]]

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.

VI. 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.

VII. Formation of the Negotiating Committee

A. 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.

B. 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.

C. 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--
     Would be significantly affected by the rule, and
     Is already adequately represented in the negotiating 
group.

D. 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.

VIII. 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.

A. 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--
     Chair negotiating sessions in an impartial manner;
     Help the negotiation process run smoothly;
     Help participants define issues and reach consensus; and
     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.

B. 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.

C. 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.

D. Meetings

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

E. 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.

F. 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.

G. 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.

[[Page 3478]]

H. 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.

I. 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. 99-1615 Filed 1-21-99; 8:45 am]
BILLING CODE 4120-01-P