EXECUTIVE SUMMARY:
In a prior report we estimated that the Health Care Financing Administration (HCFA) could save the Medicare Part B program about $12.8 million annually if reimbursement for advanced life support (ALS) ambulance services was based on the medical need of the patient rather than on the type of ambulance used to transport the patient. The HCFA concurred with our recommendations to strengthen reimbursement guidelines, but has not taken the action necessary to implement them. Since we completed our prior review Medicare allowed charges for ALS services have nearly tripled, and an opportunity for significant savings to the Part B program has been lost. In this follow-up report we are again recommending that HCFA revise instructions for reimbursement of ALS ambulance services, and direct carriers to establish controls to ensure that reimbursement for ALS services is based on medical need. The HCFA generally agreed with these recommendations.