NASHVILLE, TN) February 19, 2016 – Legislation which urges the Centers of Medicare and Medicaid Services (CMS) to reverse or revise their 2015 zip code reclassifications for Medicare payment for ambulance services, is scheduled for final consideration in the State Senate on Tuesday. Senate Joint Resolution 393, sponsored by Senator Ken Yager (R-Kingston) aims to alleviate the financial burden on multiple communities in Tennessee that have suffered under the hastily imposed CMS rule which reclassified from rural to urban.
Although the issue was brought to Sen. Yager from his Campbell County constituents, the new classification model affects more than 60 rural communities and municipalities across Tennessee. “In the body of the resolution, I have set out some of the communities I’m aware of that are affected adversely by this, which really reflect a state-wide problem, where rural communities are, because of this reclassification, losing revenue for their ambulance services,” said Yager. “It is a struggle to keep your rural ambulance service in the black. This is a resolution that would urge the CMS to reconsider their position on this and change that classification.”
Under the Medicare Modernization Act of 2003, add-on payment policies to provide varying payment increases to ambulance services were classified into three categories: “super-rural”, “rural” and “urban”. Rural ambulance services receive one percent more than urban. With Medicare patients accounting for more than 50 percent of ambulatory services’ transport volume and payment, the reclassification from rural to urban results in nearly a nine percent cut in reimbursement for the already financially strapped ambulance services.
There are concerns that these cuts will result in slower response times in the rural communities of Tennessee. Campbell County Mayor, E.L. Morton testified before the committee about how the reclassifications affect their services. “We’re sitting on about a 25 minutes response time and seeking ways to try to put another ambulance on the road. That would put us down to a 17 minutes response time, if we could do that,” stated Morton. “That was about a $250,000 objective, to gain the efficiencies within the department and then we’re handed the reclassification this year that put us almost $600,000 behind that plan. So it actually threatens to take one of the four ambulances that we provide everyday off the road, which would increase our response time to above the 40 minute level.”
“Unfortunately, with hardly any notice, the CMS changed the way it classified those communities, changing many rural communities in Tennessee to urban areas; for example, Lafollette and Campbell County, which is going to cost these counties. That one percent differential will result in a nine percent loss of total revenue to them,” Yager reiterated.
The CMS reclassification affects any private and public ambulance services that claim Medicare on behalf of their patients and many of the affected municipalities’ ambulance services are small businesses.