- Email: [email protected]
We want to know what you want to know!
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by TerryL. Schmidt
We Want to Know What You Want to Know! W i t h this i s s u e of the Aero Medical Journal we start a new segment to Man-
ager's Corner entitled ';Reimbursement Hot Line." Each issue will contain a question and answer format. "We Want To Know What You Want To Know" is designed for you to submit questions on reimbursement issues and other management and marketing topics in the area of reimbursement and marketing. Terry L. Schmidt, Inc., Health Care Consultants, with offices in Washington, D.C. and San Diego, Calif. will be providing responses. In addition, a Reimbursement Hot-Line has been established in Washington for a quick consultation on reimbursement issues. You may reach the Reimbursement HotLine by calling 202/488-0999. Submit your reimbursement questions to Terry L. Schmidt, Inc., Health Care Consultants, 8950 Villa La Jolla Drive, Suite 1200, La Jolla, CA 92037. Reimbursement Q & A Q: The hospital contracts for air ambulance services for inpatients or patients who are admitted through the emergency department. Can we bill under either Part A or Part B of Medicare?
A: Your question is very straightforward, but the answer is rather convoluted because of the artificial separation of the Medicare program into the two parts. The Medicare program is the result of a legislative compromise which necessitated a two-part insurance program. In order to gain sufficient support to pass Medicare and Medicaid laws, Congress devised a hospital insurance program (Part A) and a supplemental insurance program covering all other services (Part B). Part A pays the reasonable costs of healthcare provided in hospitals, skilled nursing homes, home health agencies and hospices. It is totally funded by payroll deductions. Part B, the supplementary insurance program, pays the reasonable charges (less 20 percent) and is funded by enrollee
Terry L. Schmidt is the President of Terry L. Schmidt, Inc., Health Care Consultants in LaJolla [Calif.] and Washington, D C.
"The Medicare program is the result of a legislative compromise which necessitated a twopart insurance program." monthly premiums plus government funds. Ambulance services are covered only under the Part B program, but billing may be to the Part A Intermediary or the Part B Carrier, depending on the conditions surrounding delivery of the service and the provider or supplier of the service. No matter which Medicare contractor processes the claim, the funds are taken from the Part B pot. The Part A Intermediary is responsible for the processing of claims for ambulance services furnished by participating hospitals, skilled nursing facilities and home health agencies. Billing for ambulance services is on HCFA Form 1450 when furnished by a participating provider hospital, etc. and on HCFA Form 1491 or HCFA Form 1500 when furnished by a supplier (ambulance company, etc.). When Part A Intermediaries complete the claims processing of Forms 1450, and the ambulance services are furnished by the hospital or skilled nursing home, reimbursement is made for the reasonable costs incurred in furnishing the ambulance service to the beneficiary. When services are provided under arrangements (contract), the charge to the provider by the ambulance company becomes the provider's cost. This charge must be reasonable and not exceed the amount established as reasonable by the Medicare Part B Carrier serving the same locality. The costs for furnishing
ambulance services, whether supplied by the hospital itself or under arrangements, must be removed from the provider's costs under Part A. A supplier (any company which is not a hospital, skilled nursing home, home health agency or hospice) of ambulance services has a supplier number and bills Medicare directly through the Part B Carrier on HCFA Form 1491or HCFA Form 1500. Reimbursement under Part B is made on the basis of Medicaredetermined reasonable charges (not costs) less the 20 percent beneficiary copayment. The Intermediaries base their payment determinations on reasonable costs and the Carriers base their payment determinations on reasonable charges minus 20 percent which is supposed to be collecte8 from the beneficiary. The difference in dollars to the program depends on the relationship of the charge screens to the actual costs of providing the ambulance service. Thus, the advantage to the ambulance service provider/supplier depends on the difference between the cost level determined by the Intermediary and the charge level (minus 20 percent) determined by the Carrier. The Carrier may not be billed without a supplier number and the Intermediary may not be billed by a supplier. Hospital-contracted air ambulance services may be billed either way. You need to know your local situation to determine which is better. /I AM,I
JULY/AUGUST1986
31
by TerryL. Schmidt
We Want to Know What You Want to Know! W i t h this i s s u e of the Aero Medical Journal we start a new segment to Man-
ager's Corner entitled ';Reimbursement Hot Line." Each issue will contain a question and answer format. "We Want To Know What You Want To Know" is designed for you to submit questions on reimbursement issues and other management and marketing topics in the area of reimbursement and marketing. Terry L. Schmidt, Inc., Health Care Consultants, with offices in Washington, D.C. and San Diego, Calif. will be providing responses. In addition, a Reimbursement Hot-Line has been established in Washington for a quick consultation on reimbursement issues. You may reach the Reimbursement HotLine by calling 202/488-0999. Submit your reimbursement questions to Terry L. Schmidt, Inc., Health Care Consultants, 8950 Villa La Jolla Drive, Suite 1200, La Jolla, CA 92037. Reimbursement Q & A Q: The hospital contracts for air ambulance services for inpatients or patients who are admitted through the emergency department. Can we bill under either Part A or Part B of Medicare?
A: Your question is very straightforward, but the answer is rather convoluted because of the artificial separation of the Medicare program into the two parts. The Medicare program is the result of a legislative compromise which necessitated a two-part insurance program. In order to gain sufficient support to pass Medicare and Medicaid laws, Congress devised a hospital insurance program (Part A) and a supplemental insurance program covering all other services (Part B). Part A pays the reasonable costs of healthcare provided in hospitals, skilled nursing homes, home health agencies and hospices. It is totally funded by payroll deductions. Part B, the supplementary insurance program, pays the reasonable charges (less 20 percent) and is funded by enrollee
Terry L. Schmidt is the President of Terry L. Schmidt, Inc., Health Care Consultants in LaJolla [Calif.] and Washington, D C.
"The Medicare program is the result of a legislative compromise which necessitated a twopart insurance program." monthly premiums plus government funds. Ambulance services are covered only under the Part B program, but billing may be to the Part A Intermediary or the Part B Carrier, depending on the conditions surrounding delivery of the service and the provider or supplier of the service. No matter which Medicare contractor processes the claim, the funds are taken from the Part B pot. The Part A Intermediary is responsible for the processing of claims for ambulance services furnished by participating hospitals, skilled nursing facilities and home health agencies. Billing for ambulance services is on HCFA Form 1450 when furnished by a participating provider hospital, etc. and on HCFA Form 1491 or HCFA Form 1500 when furnished by a supplier (ambulance company, etc.). When Part A Intermediaries complete the claims processing of Forms 1450, and the ambulance services are furnished by the hospital or skilled nursing home, reimbursement is made for the reasonable costs incurred in furnishing the ambulance service to the beneficiary. When services are provided under arrangements (contract), the charge to the provider by the ambulance company becomes the provider's cost. This charge must be reasonable and not exceed the amount established as reasonable by the Medicare Part B Carrier serving the same locality. The costs for furnishing
ambulance services, whether supplied by the hospital itself or under arrangements, must be removed from the provider's costs under Part A. A supplier (any company which is not a hospital, skilled nursing home, home health agency or hospice) of ambulance services has a supplier number and bills Medicare directly through the Part B Carrier on HCFA Form 1491or HCFA Form 1500. Reimbursement under Part B is made on the basis of Medicaredetermined reasonable charges (not costs) less the 20 percent beneficiary copayment. The Intermediaries base their payment determinations on reasonable costs and the Carriers base their payment determinations on reasonable charges minus 20 percent which is supposed to be collecte8 from the beneficiary. The difference in dollars to the program depends on the relationship of the charge screens to the actual costs of providing the ambulance service. Thus, the advantage to the ambulance service provider/supplier depends on the difference between the cost level determined by the Intermediary and the charge level (minus 20 percent) determined by the Carrier. The Carrier may not be billed without a supplier number and the Intermediary may not be billed by a supplier. Hospital-contracted air ambulance services may be billed either way. You need to know your local situation to determine which is better. /I AM,I
JULY/AUGUST1986
31