Medicare Cost Data Collection Update

As most of you know, in February 2018 Congress passed language directing CMS to collect ambulance cost data along with the 5-year extension of the Medicare ambulance add-ons as part of the Bipartisan Budget Act of 2018 (H.R. 1892). JP Mohler, LLC (“JPM”) has actively been monitoring this legislation to help the private medical transportation industry better understand the details of new reporting requirements.

On Monday July 29 th CMS released its long awaited proposed rule that would establish the cost data collection system. Later that same week CMS released a draft of the actual data collection instrument. JPM also participated in a meeting with CGS in Cincinnati earlier this week in which the proposed rule was discussed. Based on our review of the proposed rule, the draft data collection instrument and meeting with CGS, we have highlighted a few of the key provisions and takeaways below:

Propose Rule Summary Information

  • Reporting will take place over a five (5) year period (2020 through 2024).
  • Providers will only be required to report one time during the five year period. However, all providers will be required at least once during the five (5) year period.
  • Cost and revenue data will be based on a 12 month period, most likely consistent with the provider’s calendar or fiscal year end.
  • Reporting will be due no later than five (5) months after the reporting period ends. For
    example, if a provider is a calendar year taxpayer, the reporting will be due no later than May 31 st . If a provider has a fiscal year end, the report will be due no later than the 5 the month after the fiscal year end.
  • The first reporting period will be based on 2020 cost/revenue data and must be submitted between January 1 st and May 31 st 2021.
  • If a provider fails to report, a 10% payment reduction will be assessed. There is a potential hardship exemption to avoid the 10% payment reduction, which is subject to thorough review.

The Draft Data Collection Instrument
The data collection instrument will be web based and will consist of thirteen (13) sections, which are listed below:

  1. General Survey Instructions
  2. Organization Characteristics
  3. Service Area
  4. Emergency Response Time
  5. Ground Ambulance Service Volume
  6. Service Mix
  7. Labor Costs
  8. Facilities Costs
  9. Vehicle Costs
  10. Equipment, Consumable and Supplies
  11. Other Costs
  12. Total Cost
  13. Revenues

Based on a review of the proposed regulation and data collection tool, it appears that the overall reporting may be slightly less complex than originally communicated among the industry. While it appears to be less complex, providers will still need to dedicate a significant amount of time and resources to ensure they are ready to comply with the reporting. JPM believes that nearly every provider will need to take certain steps to start capturing the data that will be required as part of the reporting. For example, if providers are not tracking the following metrics and data points, which is required as part of the reporting, it should implement procedures to do so before January 1, 2020:

  • Average response time for emergency responses
  • Total responses, which includes responses regardless of whether a ground ambulance was deployed.
  • Paid transports vs. unpaid transports
  • ALS vs. BLS response percentages
  • Segregating salary, taxes and other direct employee costs, including hours, into the following categories: EMT Basis, EMT Intermediate, Paramedic, Clerical, HR, IT, Management, Billing, Dispatch/Call Center, Vehicle Maintenance and Facilities Maintenance
  • Tracking of shared costs paid by others (e.g. costs paid by hospitals for supplies used as part of a drug bag exchange program).
  • Segregating lease/rent, insurance, maintenance, utility and other facility costs by facility.

JPM will continue to monitor and develop strategies to ensure providers are ready to report in the most efficient and cost effective manner. We will be providing updates as we learn more. In the meantime, feel free to email questions, comments and suggestions to Justin P. Mohler.

JPM is a Certified Public Accounting and Consulting Firm, who has a developed a deep technical expertise in the private medical transportation industry. Our firm has worked with more licensed private providers than any other accounting firm in Ohio. We help providers maximize their profits and cash flow by gaining an in depth understanding of their business and processes. In doing so, our goals is to help identify areas for improvement and implement those strategies that will have positive impact to the provider and its owners.