STAY ON TOP OF YOUR GAME
What does the future of EMS reimbursement look like?
By Vincent D. Robbins, FACPE, FACHE
January is an excellent time to take a step back and ponder our future. What issues will be challenging our leadership this
year? What trends have surfaced that require
We’ll start the conversation with reimbursement. Year after year, it tops the list as we continue to see revenue erosion and rising expenses.
In most states, reimbursement alone is inadequate to keep pace with our increasing costs. In
addition, Medicare seems to always be looking
for ways to reduce our payments. Due to the
Affordable Care Act, the number of people
covered by Medicaid, typically a poor payer (i.e.,
low levels of reimbursement), has increased by
an average of 10%. Medicare has reduced its
rates twice in the last six years in many jurisdictions. Finally, the national sequester, which further reduced Medicare by 2%, remains in effect.
PRESSURE TO REDUCE
The continuing merger of major insurance
companies has given the resulting giants more
leverage to negotiate lower reimbursement rates
against providers. The pressure to limit or reduce
local, county and state taxes poses a further
threat, as elected officials push for cutbacks to
entitlements and reductions in the cost of public health and safety services. The new national
trend to require non-profit hospitals to pay real
estate taxes on programs not directly associated
with their core missions has stretched budgets
and is affecting the EMS services they provide.
Medicare continues to look at new ways to
reimburse providers and suppliers, focused on
reducing expenditures and rewarding those who
can bend the healthcare cost curve downward.
Initiatives to assess and refer patients, or treat
them at their homes rather than transport them,
have caught Medicare’s eye.
We’re also seeing Centers for Medicare and
Medicaid Services (CMS) claims processers
actively looking at imposing “medical necessity”
rules for EMS reimbursement, meaning only
certain diagnoses would be paid, regardless of
the reason the ambulance was called.
All of this has placed tremendous financial
strain on EMS providers. Recent bankruptcies
and geographic market withdrawals by several large ambulance companies are a dramatic
demonstration of the toll such reimbursement
contraction has caused.
During a presentation I gave recently, I asked
the audience of EMS providers and managers
how they would rate the current financial state
of their organization. The results were stunning.
The majority (55%) reported that their
agencies were fiscally unstable or in trouble.
What makes this even more disturbing is that
85% of the respondents received some form
of tax subsidy or direct government funding,
not relying on fee-for-service alone.
WHAT DOES THE FUTURE HOLD?
CMS has learned that one way to reduce their
expenditures over the short and long term is
through restriction of reimbursements based
on quality of service and outcomes of patients.
They’ve also learned that, in order to reduce total
healthcare expenditures, they must decrease the
number of times patients repeatedly seek services
for the same medical conditions. By rewarding
providers who score high on quality and have
the best patient outcomes, Medicare has been
able to reduce its escalating reimbursements.
CMS recently introduced Hospital Consumer Assessment of Healthcare Providers and
Systems (HCAHPS). HCAHPS are standardized surveys that ask the patient how they felt
about their care: How quickly they received care,
the efficiency and compassion of the caregiver,
the proficiency of the clinician, etc. All results
are captured in a national database and then
used to rank institutions and modify (increase
or decrease) reimbursement payments.
Imagine that your patients were asked these
kinds of questions within days of receiving services from your agency. How would they answer?
If such results directly increased or decreased the
reimbursement payments your agency received,
CMS may also consider providing reim-
bursement for non-transport cases. Medicare
has claimed for decades that such payments
wouldn’t be compliant with existing regulations
or the statute upon which they rely, however,
there seems to be a recent change in attitude.
At least one study demonstrated that CMS
would save hundreds of millions of dollars annually by paying EMS agencies to treat and release,
or treat and transport to lower-cost healthcare
facilities, instead of hospitals. The study concluded that if CMS reimbursed EMS services
for “alternative handling” of emergency ambulance cases, they could save Medicare $283 to
$560 million or more per year. 1 If insurance
payers did the same, the national annual savings
would likely exceed twice as much.
CMS has found ways to reduce reimbursements for healthcare, often shifting moneys from
poor performers to higher-quality providers.
Prudence suggests our industry should be preparing for these monumental changes. To shift
from a fee-for-service structure to one based on
any other methodology won’t be without substantial difficulty. Nevertheless, it remains our
responsibility to prepare our agencies for change
when, and if, the time comes. JEMS
1. Albert A, Morganti K, Margolis G, et al. Giving EMS flexibility in
transporting low-acuity patients could generate substantial Medicare savings. Health Aff (Millwood). 2013; 32( 12):2142–2148.
Vincent D. Robbins, FACPE, FACHE, is the
president and CEO of MONOC in New Jersey.
He’s also president of the National EMS Man-
Learn more from Vincent Robbins at the
EMS Today Conference, Feb. 21–23, in
Charlotte, N.C. EMS Today.com