The Advantages of Medicare Part B Billing for Ambulance Services

When it comes to billing Medicare for ambulance services, understanding the nuances between Part A and Part B billing procedures can significantly impact your organization’s revenue and compliance. While providers such as hospitals typically bill Medicare Part A using the 837-I (CMS 1450/UB-04) format, ambulance services, even if hospital-based, can benefit greatly from billing their services under Medicare Part B instead. 

Understanding the Difference Between Medicare Part A and Part B Billing

Historically, there was a subtle difference in reimbursement between a provider-based ambulance service and an ambulance service who would bill independently. Although the fee schedules have now been balanced, allowing for identical payments regardless of the billing format, obtaining a separate Part B Medicare number for ambulance services still presents several distinct advantages. 

1. The Ability to Better Comply with Unique Ambulance Billing Requirements 

Ambulance billing is a very specialized and complex subset of medical billing. It involves different types of services such as non-emergency, emergency, and Specialty Care Transport, as well as various levels of care like Advanced Life Support (ALS), ALS2, and Basic Life Support (BLS). Billing these services under Part B, as opposed to incorporating them into general hospital billing, allows for specialization — which could help improve your reimbursement levels. Expert billers who are trained specifically in ambulance billing can more accurately bill at the appropriate level and type of service, potentially increasing and optimizing your revenue. 

2. Increased Reimbursement Potential  

Utilizing billers with specialized training in ambulance billing (as opposed to general hospital billing) presents a significant advantage, especially in an industry that’s subject to stringent regulations and frequent audits. Any errors or oversight, even minor ones, can result in the loss of valuable reimbursement dollars. By focusing on specialized Part B billing for your ambulance services, there is a higher potential for increased reimbursement through meticulous and consistent coding practices. 

3. Decreased Audit Potential  

Although the specialized nature of ambulance services makes them a prime target for reviews by the Office of Inspector General (OIG) or the Centers for Medicare and Medicaid Services (CMS), separating ambulance billing from general hospital billing can reduce your overall audit risk. When integrated with hospital billing, the larger Medicare reimbursement footprint can attract more scrutiny, increasing the likelihood of a review. 

Conversely, by establishing ambulance services as a separate Part B entity, the reduced overall Medicare reimbursement levels make both the hospital and the ambulance service smaller targets for audits. However, it’s important to note that the reverse can also be true; independent ambulance services are sometimes more easily targeted. Therefore, your organization should always weigh the benefits and risks based on the specific circumstances. 

4. Simplified Compliance 

With the expansion of the Medicare Advantage Program (formerly known as ‘Medicare+Choice’ or ‘Medicare Part C’), ambulance services that cater to these Medicare beneficiaries require specialized billing practices. Separate Medicare Part B billing, as opposed to bundled hospital billing, creates a cleaner, more streamlined process. This approach not only simplifies compliance, but also reduces the likelihood of Medicare scrutiny — after all, greater control over billing operations can lead to improved accuracy and adherence to regulatory requirements. 

Making the Change from Part A to Part B 

Transitioning from Part A to Part B billing involves certain administrative considerations. So long as the ambulance service remains part of the hospital system and uses the hospital’s Part A provider number, they cannot elect to bill under Part B without a separate Part B provider number. 

However, there is a potential solution that involves billing under the 837-P format while utilizing the hospital’s Part A provider number. This method might be the easiest transition, allowing the hospital’s ambulance service to continue with its existing provider number while enabling EMS|MC to bill in the 837-P format. Given that reimbursement would come from the Part B pool, this approach aligns with the guidelines suggested by Medicare Manuals. 

According to the CMS-855B form, hospitals may also obtain a separate Part B provider number for certain departments that wish to bill their services independently. This provision allows for a hospital that’s already enrolled in Part A to bill Part B separately for designated services without changing the entity’s name, tax identification number, or other core identifiers. 

In contrast, the CMS Manual states that if a hospital ever decides to divest itself of its ambulance service, the newly separate entity must complete a CMS-855B form to bill Medicare as a supplier. This scenario would necessitate significant structural changes, including obtaining a new entity name, tax ID number, and National Provider Identifier (NPI). Depending on the desired level of separation between the hospital and the ambulance service, the newly formed entity could either remain hospital-owned or operate completely independently.  

Key Takeaways 

Switching to Medicare Part B billing for your ambulance services offers several advantages. And although the transition involves certain administrative steps, the benefits can far outweigh the complexities. With expert guidance from EMS|MC, making this change can be a seamless process, ensuring that your organization maximizes its reimbursement potential while maintaining its strict adherence to regulatory standards. 

Want to make the change from Part A to Part B? Request a consultation with us here.

Want to learn more about EMS compliance and discover how to safeguard your operations and revenue? Download and read our eBook on how to establish an effective compliance plan here.  


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