One of the areas of ambulance billing that can pose challenges for EMS revenue cycle professionals is the proper billing for transports of patients in a hospital inpatient stay. In this three-part article series, we’ll demystify the rules and give you a solid game plan for properly billing for inpatient transports. We’ll start by examining the rules surrounding payer identification in Part One.
Who’s the Payer?
The first question you must answer to properly bill a hospital inpatient transport is, “Who is the patient’s primary payer?” The rules are significantly different if the patient is covered by Medicare, Medicaid, a commercial insurer, or is a self-pay.i
Medicare. First, we’ll look at the single biggest payer for ambulance transports: Medicare. Remember: Medicare is a law, not an insurance company. If the hospital inpatient has Medicare as primary insurer, it is important to understand that Medicare law imposes certain bundling rules which must be considered to determine who properly gets the bill. These rules may, in some cases, make the hospital financially responsible for a transport of an inpatient. We’ll get into the Medicare bundling rules in detail in a bit.
Medicaid. If the primary payer for the hospital inpatient is Medicaid, then a biller will need to be aware of the state-specific rules applicable to that patient’s Medicaid plan. Remember, most Medicaid patients in the U.S. are likely to be covered under a Medicaid managed care plan, many of which require preauthorization (also known as prior authorization) for non-emergency ambulance transports. And, some state Medicaid programs have bundling rules (similar to the ones we discuss for Medicare below).
It is also critical to remember that Medicaid rules vary by state, and the applicable rules are those of the state Medicaid program in which the patient is enrolled, not necessarily those that apply in the state in which your ambulance service is located. So, if you have a patient from another state, you may have to familiarize yourself with a completely different set of rules than the ones for the state that you normally bill.
You may also need to deal with a transportation broker to make an out-of-network preauthorization request for any non-emergency transport. If your request is denied, you may also need to familiarize yourself with the applicable state’s rules regarding when it is permissible for a provider to directly bill a Medicaid patient and what type of advance notice is required to do so. And, if you do all of that, CONGRATULATIONS! — you’ve just preserved your right to bill a patient who will most likely pay you nothing, or only pennies on the dollar. To avoid this outcome, the key is to perform effective call intake in advance of the transport for a non-emergency Medicaid inpatient and consider declining the trip if proper assurances of payment cannot be obtained up front. Otherwise, your agency will most likely be left holding the bag.
Commercial Insurance. If a hospital inpatient is covered by a purely commercial healthcare plan (i.e., not a Medicare Advantage, Medicaid managed care, or replacement plan), the most important thing to remember is that complex bundling rules, which we will discuss in part two of this article series, are not applicable. That means that the hospital is not financially responsible as a matter of law for ambulance transports provided to their inpatients, as they are in some cases with Medicare patients. Of course, if your agency has a contract with the patient’s insurance plan, the transport may be governed by the terms of that agreement, which should be consulted for requirements such as preauthorization, medical necessity standards, and others. If you don’t have such a contract, you can generally bill the patient’s insurer at your full, retail charge. Whether they pay that full charge is, of course, another matter entirely. Unless state law prohibits balance billing in situations where you do not receive full payment from the insurer, you may then bill the patient for the difference between what the insurer paid and the amount of your full charge.ii
Self-pay. For inpatients who not covered by any insurance, you are generally free to bill them directly at your full retail charge. Balance billing limitations would not apply since those generally apply only to balances remaining after insurance pays, and there is no insurance payment in a case of a self-pay or uninsured patient. Of course, your agency may not find success collecting from self-pay patients, and for that reason, it is perfectly acceptable to obtain payment in advance for non-emergency transport services furnished to self-pay patients. Your agency may also implement a financial hardship policy for patients who meet established financial criteria for reduction or write-off of your bill, though this option of course results in less revenue and greater financial risk for your organization.
Next time, in Part Two of this three-part article series, we’ll examine the rules for hospital bundling.
i Remember that “primary payer” can differ not only by patient but by transport. For example, if a patient has both Medicare and Medicaid, but is receiving a non-Medicare covered service, such as a wheelchair van transport, Medicaid may become primary if that is a covered service under your state’s Medicaid program.
ii Note that the Federal No Surprises Act, which takes effect in 2022, applies only to balance billing by air ambulances. It does not apply to ground ambulance balance billing.