In this paper the ATM Header Error Correction (HEC) mechanism was analyzed and ATM Quality of Service (QoS) parameters were calculated assuming bursty satellite channel. The use of Reed Solomon (RS) codes as an outer code to improve the QoS of ATM transmission over satellite channels was examined. The various tradeoffs which have to be made when using RS codes, such as the selection of appropriate code rates while maintaining sufficient throughput and minimal processing delay are thoroughly studied. These tradeoffs are to be used as the basis for an adaptive scheme which adapts the correction capability as well as the grouping of ATM cells into RS codewords. A Forward Error Correction (FEC) scheme is proposed which interacts with the ATM layer to alleviate the problem of excessive misinsertion of ATM cells, the performance of the proposed scheme is evaluated via simulation and is shown to significantly reduce the misinsertion rate.