CMS Dialysis Transportation
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CMS' New Dialysis Transportation Reimbursement Cuts Prove Cause for Concern

November 5, 2018
Katherine Meikle

How CMS's New Dialysis Reimbursement Rules Affect NEMT Providers

October 2018 served as a marker for the implementation of the BIPARTISAN BUDGET ACT OF 2018[1], which ruled to cut Medicare reimbursement of non-emergency dialysis patients’ transportation services. Passed by Congress in February, administrators say the resolution was made to reduce ambulatory over-billing.

Considering PATIENT TRANSPORTATION FRAUD COSTS THE CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS) MILLIONS OF DOLLARS A YEAR[2], eliminating improper billing schemes is a worthwhile and necessary goal. However, it appears that this latest attempt to strike down improper billing is poised to seriously hurt vendors and patients in the process.

The Issue

False billing is not a new practice, nor is it limited to Medicare and the transportation of dialysis patients. In fact, up to $76 billion is wasted annually in healthcare due to fraud and dishonest practices.

In 2013 ADVANCED SURGICAL PARTNERS IN COSTA MESA, CALIFORNIA MADE HEADLINES[3] when they reportedly charged a 61-year-old high-school Spanish teacher $87,500 for a 20-minute knee operation that usually costs approximately $3,000. A SPOKESPERSON FOR THE BILLED INSURANCE GROUP, BLUE SHIELD, SAID THAT THE SURGERY CENTER WAS[4] “charging 30 times the average by remaining out of network to advance this outrageous and anti-consumer practice."

2016 saw LOUISVILLE, KENTUCKY BASED PROVIDER OF HOME-BASED CARE MD2U[5] agree to pay millions due to a government lawsuit which alleged that THEY VIOLATED THE FALSE CLAIMS ACT BY[6]: “knowingly submitting false medical claims to Medicare and other government healthcare programs, altering records to support false claims and providing services that were medically unnecessary”.

The U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES[7] announced that in July 2017 over 400 defendants in 41 Federal districts were charged with participation in fraud efforts. These schemes involved about $1.3 billion in false billings charged to Medicare and Medicaid and involved the largest number of opioid-related defendants ever.

In terms of Medicare and Medicaid transportation fraud specifically, MAINE COMPANIES AMBULANCE SERVICE INC. (ASI) AND NORTHERN MAINE MEDICAL CENTER (NMMC)[8] agreed to pay $1,032,000 in a 2010 settlement over the alleged improper submission of Advanced Life Support transport claims.

It’s clear that something needs to be done to combat deceitful healthcare billing before it has the chance to get to court, but what’s the answer? Congress has a few ideas.

The Policies


In the Bipartisan Budget Act of 2018, a 13% reduction in funding for non-emergency transportation services was taken. This reduction was in addition to a 10% reduction mandated in 2013. Combined, these policies cut reimbursements by a total of 23% over the past five years.

Another antifraud policy, this one a demonstration project, is the source of doubled frustration for transport providers in eight South and Mid-Atlantic states and the District of Columbia: rather than reducing Medicare reimbursement amounts, this policy affects whether transports are eligible for reimbursement at all. Under the new policy, Medicare patients must get prior authorization for regular, non-emergency ambulance transport or the costs will not be reimbursed. This experiment is being conducted in DC, Delaware, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia, and West Virginia.

The Impact

The further cuts to Medicare reimbursement of non-emergency dialysis patients’ transportation services largely affect two parties: the transportation providers and the dialysis patients themselves.

Regarding the prior authorization experiment, DEAN BOLENDORF, VP OF HEALTHFLEET AMBULANCE IN FORT WASHINGTON, PENNSYLVANIA, POINTED OUT[10] “We’re being treated differently from other providers in different states as they are not subject to both the cut and prior authorization. We’ve already paid our dues,” Bollendorf said. “We’ve worked with the government to address the fraud problem.”

As a result of the new 2018 policy combined with the one from 2013, many providers will lose money per ride, or at the very least have to stretch budgets to make up the difference. It will no longer become feasible for some groups to offer the service. Indeed, Med Trust CEO Josh Watts says that the company has stopped offering transport for dialysis patients due to unsustainable reimbursement.

West Tennessee Health head Joyce Noles said earlier this year that SHE EXPECTED TO LOSE AN AVERAGE OF AT LEAST $65 PER TRANSPORT ONCE THE NEW POLICY TOOK EFFECT[11]. "This is going to be a large impact on many services and the cost will have to be passed on somehow”, she stated. One way this could be done is by using stretcher vans, which means only non-medical personnel would be on board. However in the potential cases of medical episodes, this move would be deeply concerning.

Though these services are technically labeled as “non-emergency transport”, they are still vital to the successful health treatment of people across the United States. In rural areas especially, dialysis cuts have the potential to “absolutely devastate the access to care transportation for at-risk patients,” Watts remarked.

In essence, while steps are needed to eliminate ambulatory over-billing, it appears that countless patients will be caught in the crossfire of these various antifraud efforts.

1. "Making Sense of the Bipartisan Budget Act of 2018 and What it Means for Defense", Center for Strategic & International Studies, by Seamus P. Daniels and Todd Harrison, 20 February 2018.

2. "Dialysis Patients Upset by Upcoming Medicare Ambulance Cuts", The Grand Healthcare, accessed 14 February 2018.

3. "Small Surgeries, Huge Markups", Los Angeles Times, by Chad Terhune, 31 January 2013.

4. "Outpatient Surgery Centers Criticized for Overbilling Practices", California Healthline, 31 January 2013.

5. "Kentucky Home Care Provider Admits to Overbilling Medicare with Help of EHRs", Healthcare Innovation, by Leventhal, Rajiv, 11 July 2016.

6. "Louisville Based MD2U, A Regional Provider of Home-Based Care, and Its Principal Owners Admit to Violating the Federal False Claims Act and Being Liable for Millions", The United States Department of Justice, 7 July 2016.

7. "Taxpayers Could See More than $4.4 Billion Returned to Treasury Plus Billions in Estimated 2017 Savings from OIG Recommendations", Office of Inspector General: U.S. Department of Health and Human Services.

8. "Fiscal Year 2010 Office of Inspector GeneralMedicaid Integrity Report", Department of Health & Human Services, by Daniel Levinson, March 2011.

9. "Medicare Cut to Ambulance Pay Threatens Dialysis Patients' Access", Modern Healthcare, Virgil Dickson, 11 April 2018.

10. "Dialysis Patient's Access to Care Threatened by Medicare Cuts for Ambulance Transport", MedTrust, 20 May 2018.

11. "Medicare Transport Pay Cuts Threaten Dialysis Patient's Care", EMS 1, 12 April 2018.