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Medicare Program; Fee Schedule for Payment of Ambulance Services-Update for CY 2003

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Centers for Medicare & Medicaid Services (CMS), HHS.




This notice updates the Ambulance Inflation Factor (AIF) for ambulance services for calendar year (CY) 2003. The AIF is used in determining the payment limit for ambulance services required by section 1834(l) of the Social Security Act (the Act).


The AIF for 2003 is effective for ambulance services furnished during the period January 1, 2003, through December 31, 2003.

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Anne E. Tayloe, (410) 786-4546.

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I. Background

Requirements of the Statute for Updating the Ambulance Inflation Factor (AIF) for Ambulance Services for CY 2003

On February 27, 2002, we published a final rule entitled “Medicare Program; Fee Schedule for Payment of Ambulance Services and Revisions to the Physician Certification Requirements for Coverage of Nonemergency Ambulance Services; Final Rule” (HCFA-1002-FC) in the Federal Register (67 FR 9100), that established a fee schedule for ambulance services required by section 1834(l) of the Social Security Act (the Act). This final rule provided that the ambulance fee schedule would be updated by the AIF annually, based on the percentage increase in the consumer price index (CPI) for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year (§ 414.610(f)). It also provided that notice of the AIF would be published in the Federal Register without opportunity for prior comment (§ 414.620). We will follow applicable rulemaking procedures in publishing revisions to the fee schedule for ambulance services that result from any factors other than the inflation factor. In this notice, we set forth the ambulance inflation factor for CY 2003.

II. Provisions of the Notice

Section 1834(l)(3)(B) of the Act provides the basis for updating payment amounts for ambulance services. Specifically, this section provides for an update in payments for CY 2003 that is equal to the percentage increase in the CPI for all urban consumers (CPI-U), for the 12-month period ending with June of the previous year (that is, June 2002). For CY 2003 that percentage is 1.1 percent.

During the transition period, the AIF is applied to both the fee schedule portion of the blended payment amount and to the reasonable charge/cost portion of the blended payment amount separately for each ambulance provider/supplier. Then, these two amounts are added together to determine the total payment amount for each provider/supplier.

III. Waiver of Proposed Rulemaking

We ordinarily publish a proposed notice in the Federal Register and provide a period for public comment before we make final the provisions of the notice. We can waive this procedure, however, if we find good cause that notice-and-comment procedure is impracticable, unnecessary, or contrary to the public interest and we incorporate a statement of finding and its reasons in the notice issued. We find it unnecessary to undertake notice and comment rulemaking in this instance because the law specifies the method of computation of annual updates, and we have no discretion in this matter. Further, this notice does not change substantive policy, but merely applies the statutorily-specified update method. Therefore, under 5 U.S.C. 553(b)(B), for good cause, we waive notice and comment procedures.

IV. Regulatory Impact Statement

We have examined the impacts of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354), section 1102(b) of Start Printed Page 70443the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This is not considered a major rule because it has an effect on the Medicare program of less than $100 million in 1 year.

The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6 million to $29 million in any 1 year. For purposes of the RFA, all ambulance providers/suppliers are considered to be small entities. Individuals and States are not included in the definition of a small entity.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 100 beds. This notice does not apply to small rural hospitals.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditure in any 1 year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. This notice does not result in an expenditure in any 1 year by State, local, or tribal governments of $110 million.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. This rule will not have a substantial effect on State or local governments.

This notice provides an update for inflation as mandated by statute. We estimate that the total expenditure for CY 2003 for ambulance services covered by the Medicare program is approximately $3 billion. Inflation of 1.1 percent will result in an additional total expenditure of approximately $30 million.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

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Authority: Section 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)).

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(Catalog of Federal Domestic Assistance Program No. 93.774, Medicare—Supplementary Medical Insurance Program)

Dated: October 4, 2002.

Thomas A. Scully,

Administrator, Centers for Medicare & Medicaid Services.

Approved: November 1, 2002.

Tommy G. Thompson,


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[FR Doc. 02-29850 Filed 11-20-02; 10:28 am]