Summary: Supplying prompt ambulance services around the clock is particularly difficult in some rural areas because these providers serve a large geographic area with a low population density, resulting in significant overhead costs. To reduce costs, they must often maintain a volunteer staff. Mileage reimbursement is crucial to these providers because their ambulance trips are longer than those of their urban counterparts. In addition, because of the scarcity of hospitals, beneficiaries are sometimes taken to hospitals that do not allow Medicare reimbursement. The proposed Medicare fee schedule will alter the way rural ambulance providers are paid. Variations in payment rates will be eliminated, and providers that transport beneficiaries in rural areas will receive enhanced payments to sustain service in sparsely populated areas. GAO recommends that the Health Care Financing Administration refine the payment adjuster to better target the necessary fixed costs of providers in rural areas. A review of 1998 claims data reveals that payment denials have varied widely among carriers, resulting in unequal coverage for Medicare beneficiaries. Different practices among carriers, differences in local policies, and carriers' failure to apply the coverage appropriately may have contributed to the variation in claim denials.
