Federal opinion favorable to repetitive transport providers
On July 11, 2011, a federal trial court in Tennessee issued a significant decision favorable to ambulance providers who perform scheduled repetitive transports for dialysis and other types of chronically ill patients. The decision, in the case of MooreCare Ambulance Service, LLC vs. Department of Health and Human Services, addressed the standard to be applied by the Medicare administrative contractors (MACs) in determining whether scheduled repetitive transports are medically necessary.
In a nutshell, the court held that providers need only demonstrate that the trip was, in fact, a scheduled repetitive transport, and that a physician has signed a timely physician certification statement (PCS) indicating the trip was medically necessary. In other words, the court held that MACs should not look behind the PCS to determine whether other information in the record establishes medical necessity. The decision may be appealed by the government and, even if that does not occur, it is binding only on the MAC for Tennessee. However, it could be persuasive on other administrative review bodies or courts faced with similar issues.
Background
The case arose from an audit performed by AdvanceMed, the Medicare safeguard contractor for Tennessee. In May 2007, AdvanceMed requested all medical records and supporting documentation from MooreCare Ambulance Service for claims with dates of service from Jan. 1, 2005, through Sept. 30, 2006. AdvanceMed reviewed a random sample of 60 claims and found “a high level of payment error.” Specifically, 89.32% of the claims examined were determined to have been improperly billed by MooreCare. AdvanceMed determined that this resulted in overbilling in the total amount of $19,131.59, which was extrapolated to a potential recoupment of $2,114,613.
MooreCare appealed through the standard administrative appeals process, first seeking a redetermination by CIGNA, the MAC for Tennessee at the time. Not surprisingly, CIGNA determined that the “assessed overpayment” decision by AdvanceMed was “fully valid” and affirmed the overpayment amount. MooreCare then appealed to the Qualified Independent Contractor (QIC), which issued a “partially favorable” ruling, reducing the overpayment amount from $19,131.59 to $11,170.33.
Not satisfied with this partial victory, MooreCare appealed the ruling to the next level, an administrative law judge (ALJ). The ALJ reviewed 23 claims that had been found non-payable and reversed the decision to 13 claims. Still not satisfied, the plaintiff appealed to the Medicare Appeals Council, the highest level of administrative appeal. The Appeals Council again reviewed all 23 claims that had been reviewed by the ALJ. It affirmed some of the findings but also reversed some of the cases that had been decided favorably to MooreCare by the ALJ.
The central issue addressed by the Appeals Council was whether MooreCare had provided sufficient evidence that the ambulance trips under review were medically necessary. MooreCare largely relied on the PCSs from the patients’ physicians stating that the patient could only safely travel by ambulance, and on the “run reports,” which constituted provider’s own medical record of the trips. Relying on its interpretation of the Code of Federal Regulations and the Medicare Benefit Policy Manual, the Appeals Council concluded that “a signed PCS alone is insufficient to support Medicare coverage.” The Appeals Council then went on to examine each claim and whether the record supported the use of an ambulance. The MAC found that in 20 cases the claim was not covered by Medicare, usually because the medical necessity for an ambulance had not been clearly demonstrated.
The court’s decision
MooreCare appealed the Appeal Council’s findings to the federal district court in Tennessee. The court carefully reviewed the pertinent Medicare ambulance fee schedule regulation and interpreted it differently than the Appeals Council, the ALJ, the QIC and the MAC. The court observed that there’s a basic rule governing whether ambulance services are covered by Medicare, but there’s also a special rule for scheduled repetitive transports.
The basic rule is that ambulance services are covered where the use of other methods of transportation is contraindicated by the individual’s condition. Under the basic rule, the beneficiary’s condition must require both the ambulance transport itself and the level of service provided in order for the billed service to be considered medically necessary. Non-emergency transportation via ambulance is appropriate if either the beneficiary is bed confined, and it’s documented that the beneficiary’s condition is such that other methods of transportation are contraindicated or, if his or her medical condition, regardless of bed confinement, is such that transportation by ambulance is medically required. Thus, bed confinement [is] one factor that is considered in medical necessity determinations.” 45 C.F.R. § 410.40(d)(1).
However, the court interpreted the regulation as creating a separate special rule for “non-emergency, scheduled, repetitive ambulance services.” Under this special rule, Medicare covers medically necessary non-emergency, scheduled, repetitive ambulance services if the ambulance supplier, before furnishing the service to the beneficiary, obtains a written order from the beneficiary’s attending physician certifying that the medical necessity requirements … are met.
The physician’s order must be dated no earlier than 60 days before the date the service is furnished.” Thus, if the service is “scheduled” and “repetitive” and a valid PCS is signed, additional review of the record to determine medical necessity is not required under the regulations. The PCS alone is sufficient.
After reaching this legal conclusion, the court asked MooreCare to point to evidence in the administrative record showing for each challenged claim that the service at issue was “scheduled and repetitive” and that a valid PCS existed. Where such evidence was lacking, the court stated that MooreCare could establish medical necessity under “general rule.”
The court then proceeded to evaluate each of the 23 claims at issue by first attempting to apply the “special rule,” and, if the special rule did not resolve the issue, by applying the “general rule.” The court found “a considerable number of the [Appeals Council’s] decisions to be either inconsistent with applicable law or unsupported by substantial evidence.”
As noted above, the special rule identified by the court requires that the provider submit a timely PCS signed by a physician dated prior to the transport. This derives from the ambulance fee schedule regulations, which require that for repetitive scheduled transports a PCS must have been signed by physician before the transport. However, the court showed some latitude here for one set of claims for a single patient, permitting payment for transports run between Aug. 16, 2006, to Oct. 16, 2007, even though the PCS was not signed until Aug. 23, after the service began.
The court did not articulate the reason for this leniency, but it may have recognized that providers may not be aware that a series of trips are repetitive and scheduled until the definition of repetitive transports is met. Medicare has defined transports to be repetitive if they are required more than three times in any 10-day period or once a week for three consecutive weeks for a chronic condition. A provider may be unaware that transports will be repetitive until after one of these thresholds has been met.
This decision may be appealed by the MAC or the government, because it establishes a precedent that is greatly at odds with the traditional view of medical necessity. That view is reflected in the general rule. Even if the decision is not appealed, however, the decision is only binding on the MAC in Tennessee, which is now CAHABA. However, the decision may be persuasive on administrative tribunals and courts in addressing the same issue in other jurisdictions.
The decision is potentially significant because it establishes a much lower bar for scheduled repetitive transport providers to meet in establishing medical necessity. Historically, the medical necessity of such trips has been difficult to justify under what the court referred to as the “general rule,” and numerous providers have been prosecuted, fined and even jailed for overly aggressive application of the medical necessity rules. Under the special rule articulated in this decision, the PCS alone is sufficient to establish medical necessity for a scheduled repetitive trip. This would constitute a major policy change the government undoubtedly does not want to see.
In closing, it should be noted that providers outside of Tennessee should continue to apply the traditional medical necessity rule and obtain signed PCSs in advance of transports. Unless and until courts in other jurisdictions reach the same conclusion as the MooreCare court, or an appellate court affirms the finding for a broader area, MACs and the administrative bodies that review their findings will continue to apply the traditional medical necessity rules.
