Test for ambulance fraud includes patients in Pa., N.J.

Seniors living in Pennsylvania and New Jersey will need prior approval from Medicare before they can get an ambulance to take them to cancer or dialysis treatments.

The change, which begins Monday, is part of a three-year pilot to combat extraordinarily high rates of fraudulent billing by ambulance companies in Pennsylvania, New Jersey, and South Carolina.

The good news is that Medicare beneficiaries in those states will know beforehand whether the program will cover their transportation to treatments. The bad news, advocates say, is that many people will be left with no way to get to appointments that might mean the difference between life and death.

"Often people have to go long distances, they feel lousy when treatment is over, and in some cases, it's to the point of being dangerous in providing their own transportation," said Jon Burkhardt, a consultant who has studied transportation for dialysis patients.

The pilot program is part of a move by Medicare to require prior approvals for services and equipment associated with a high incidence of fraud, such as wheelchairs, chiropractic visits, and plastic surgery. Officials said the three states were selected based on "high utilization and improper payment rates."

If cost savings are shown, the program is expected to be expanded nationally.

Kate Kraemer, billing manager at Direct Bill Inc., which helps a Pennsylvania ambulance firm collect Medicare payments, said the change will keep dialysis patients from being surprised by bills that are denied weeks after they receive the service. Those bills can range from $150 to $600 per round trip for three visits a week.

But Kraemer said the project doesn't do anything about the real problem - patients who don't qualify for reimbursed transportation, but who do not have friends or family to drive them, and are too weak after a three- to four-hour dialysis session to drive themselves. Many cannot afford the cost of any form of transportation.

Since Medicare does not cover nonmedical transportation, some patients gamble that it will cover use of an ambulance even when less expensive transportation might be more appropriate.

A 2013 report by the Health and Human Services inspector general found that transports of kidney disease patients to dialysis facilities increased by 1,436 percent in Pennsylvania between 2002 and 2011, by 1,129 percent in New Jersey, and by 9,659 percent in South Carolina. Those figures compare to a national growth rate of 269 percent.

That report didn't address the issue of fraudulent billing. But a 2010 inspector general report indicated that 20 percent of the agency's spending on nonemergency ambulance trips was improper because ambulance companies overbilled the program, or transported people who did not need or qualify for the service.

For a patient to qualify for transportation to and from treatment under Medicare, they have to require the medical attention an ambulance provides - for instance, be confined to bed, or need medical care like intravenous fluids during the trip.

Medicare does not pay for transportation for people who are simply too weak from treatment to drive themselves. Doctors often try to write orders for patients they think might need the service, though in many cases the patient does not qualify for that level of care.

Marsha Simon, who has worked on transportation issues as president of health care consulting firm Simon & Co. in Washington, said the number of people with end-stage kidney disease (ESRD) who need dialysis has grown - 116,946 people received the diagnosis in 2010, bringing the total number of patients that year to 594,374. In 1980, 60,000 people had an ESRD diagnosis.

"If they don't get to appointments, they'll end up in the hospital at even greater costs to Medicare," Simon said.