How Ambulance Companies Commit Medicare Fraud

While every industry has its fraud, unfortunately the non-emergency ambulance transportation world is especially plagued with shady practices. According to the Centers for Medicaid and Medicare Services, every year $350 million is ripped off by ambulance companies.

But not all ambulance companies are committing Medicare fraud. There are many providers that play by the rules and should therefore be applauded. This article is not about them. This article explains what the rules are, and how certain companies are systematically skirting them.

To fully understand what goes on, you first need to know how Medicare, which insures about 50 million elderly and disabled Americans and is by far the largest payer for these services, authorizes payment.

Medicare ONLY pays for non-emergency ambulance transportation in a select few circumstances. These are:

When other forms of transportation could endanger your health
If you have End-Stage Renal Disease (ESRD), need dialysis, and need transportation to a dialysis facility
If ambulance transportation is needed to obtain treatment or diagnose your health condition
If you have a written order from your doctor stating that ambulance transportation is medically necessary

Medicare only pays for non-emergency ambulance transportation to covered destinations for treatment, such as:

Hospitals
Dialysis centers
Treatment facilities like Cancer Treatment Centers and Outpatient MRIs

Medicare will not pay if you:

Can walk
Can be transported by a wheelchair
Can sit up in bed
Can be transported safely by any method other than an ambulance (car, taxi, wheelchair van, medical car, etc.)
Do not meet any of the qualifying criteria

Medicare will NOT pay for non-emergency ambulance transportation to physician's offices. However, they will pay for transportation from hospital to: home, assisted living, extended care facilities, and rehabilitation centers.

Transportation from one facility to another of the same type is covered, but only if care at the sending facility is not available to the patient at the receiving facility.

Regardless of the destination type or reason for transport, the need for a stretcher in an ambulance must be required and proven. Many people are discharged from hospital to home in personal cars and wheelchair vans. More pople are transported to dialysis by wheelchair van than by ambulance.

In order for any non-emergency ambulance transportation to be approved for payment, all other means of transportation must be contraindicated. In other words, transportation by any other means may harm the patient's health. Ambulance providers must document what physical condition or contraindication exists to justify an ambulance over any other means of transportation.

As a result of the Balanced Budget Act of 1997, Certificates of Medical Necessity (CMNs) are required and must be completed by a physician outlining medical necessity for non-emergency ambulance transportation. Today this form still exists through many revisions and is called the Physician's Certification Statement (PCS).

Despite popular misconception, this form does not guarantee payment. Instead, it merely allows the ambulance provider to submit a claim to Medicare for payment. The form can be used to support the patient care report completed by the ambulance crew members, but it is not submitted with the claim. Ambulance providers often use information on the PCS to type into the Medicare electronic submission even if it does not match the patient care report completed by the transporting crew.

These restrictions often lead to ambulance providers falsifying trip reports to omit any information that might indicate that a patient could have been safely transported by other modes of transportation.

There have been instances where ambulance companies formally trained employees to remove any information that indicated the patient was in good health. Nefarious providers will also falsely insert particular buzzwords like “bed-ridden” or “stretcher-bound” to try and make it appear that the patient was in a worse condition than in reality.

An Example

Two EMTs arrive to pick up a patient from a rehab facility to take the patient to a hospital. When they arrive, they notice that the patient is lucid, sitting up in bed, and able to walk to the bathroom on their own using a walker. As instructed, they take the patient by stretcher in an ambulance to the hospital. They then submit a detailed, accurate trip report to the billing department. The billing department then reads the report and determines that this trip will certainly be denied for Medicare reimbursement.

The billing department will then either censor the information about the patient sitting up in bed and walking using a walker, or they will insist that the EMTs that conducted the trip re-write their report entirely. They will insist that the EMTs state that the patient was totally confined to bed, immobile, and therefore required stretcher ambulance transportation.

Most fraudulent practices prosecuted by the Justice Department for non-emergency ambulance transportation follow this same formula.

Some schemes have involved using light tracing tables to forge doctor’s notes, and even recruiting healthy patients who are covered by Medicare and billing for unnecessary services that don’t meet defined requirements.

Other types of fraud include:

Billing Medicare for unnecessary routine transports
“Upcoding” or billing for a higher level of care than was provided
Charging for supplies and services that were not provided (oxygen therapy, IV infusions, etc.)
"Swapping" kickback schemes with hospitals --- agreeing to take low or no-profit trips in exchange for exclusive access to highly profitable referrals

One federal investigation found that one in five of the nearly 16,000 ambulance services nationwide that transported Medicare patients had at least one type of questionable bill. In 2012, Medicare Part B paid $5.8 billion for ambulance transports. That’s more than what was paid to cancer doctors or orthopedic surgeons.

What is Medicare doing about this?

To combat the continuing fraudulent practices, Medicare has implemented the Prior Authorization process. This mandate went into effect in December of 2014 in New Jersey, Pennsylvania and South Carolina---three states that had unusually high Medicare spending on ambulance services. The new policy requires that all repetitive non-emergency ambulance trips be pre-approved by Medicare.

Since the new policy has only recently been implemented, it’s hard to say how effective it’s been in weeding out fraud. However, the recent closures of multiple ambulance companies throughout New Jersey suggests that the Prior Authorization process is in fact curbing wasteful spending for unnecessary services.

However, at the same time, it is now considerably more difficult to obtain authorization for Medicare ambulance transportation even when a patient meets the requirements.

How Prior Authorization works

In New Jersey, when submitting claims for repetitive transports (three times a week or once a week for three or more weeks) providers must do so after obtaining a prior authorization.

This includes obtaining a physician's history, physical, and all relevant clinical notes in order to submit along with the Physician's Certification Statement to Medicare to obtain the prior authorization. If that process has not been followed and the claims are submitted, they will not be paid and instead will be placed on what's called prepayment review. Prepayment review includes a hold of all payment and a process of Additional Development Requests submitted to the provider. Once the requested information on one claim is returned, an Additional Development Request can take up to 60 days to be processed, and even then there is no guarantee of payment.

What can you do?

Understand your coverage and your rights.
Learn how to protect yourself from errors, fraud, and abuse.
Use an ambulance company with a trustworthy reputation that’s been recommended to you.
If you are aware of an ongoing Medicare fraud scheme --- report it.

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