The Value of EMS

“You call, we haul, that’s all.”

This has been the traditional approach to funding ambulance services by the Centers for Medicare and Medicaid Services (CMS) and most insurance companies. Because Medicare is a transportation benefit and not a medical benefit, EMS is paid to haul patients to hospital emergency departments and not for the medical care it provides on scene. Sure, a designation is made between BLS and ALS, but only if you transport. No transport = no payment.

Many are now trying to change the system to better compensate EMS agencies for the care they provide—and not just if they transport. The National EMS Advisory Council (NEMSAC) is up for the challenge and recently released its finance advisory, which identified the problem, conducted a complete analysis, and made recommendations to the NHTSA Office of EMS and the Federal Interagency Committee on EMS. The document, “EMS System Performance-based Funding and Reimbursement Model,” calls for a complete paradigm swing by looking at EMS as an integrated healthcare entity and basing reimbursement on the total cost of the EMS system, including readiness.

Ambulance services provide an estimated $2.869 billion in charity and undercompensated care in the U.S. annually. Yes, you read that right: The nation’s ambulance services provide almost $3 billion in care every year to patients but don’t get paid for it; that is almost half of what Medicare pays for our services ($5.2 billion). These numbers reflect a financial burden that is nearly double that of other healthcare providers. Hospitals, for example, receive a disproportionate share of payments from CMS to offset this loss, while EMS receives nothing. (And by the way, the EMS uncompensated care dollars do not include first responders’ contributions, which could drastically increase the amount of charity care we provide.)

To compound the problem, regulations are continually increasing, driving up costs, while reimbursements are increasingly denied based on retrospective medical necessity determinations. It is reported that current reimbursement is below cost for 72% of all ambulance transports. This number will grow as more patients become Medicare- and Medicaid-eligible due to age and healthcare reform initiatives. Needless to say, the time to change EMS reimbursement is now.

Healthcare Partners

EMS plays a role in healthcare, public safety, public health and emergency management, and it has the skill set to develop its niche as a cross-section of all these disciplines. However, based on the number of healthcare functions that EMS performs, NEMSAC has determined that EMS outnumbers other disciplines by more than 2:1. EMS must embrace its role in healthcare and be funded accordingly.

EMS systems have real opportunities to improve patient outcomes and customer satisfaction while reducing overall healthcare costs. Developing a shared savings plan with CMS and commercial insurers is one way to invest in the EMS system of the future. Yet to be successful, EMS must raise the bar professionally. We must remain focused on providing high-quality, cost-effective healthcare services, push for higher education standards and develop trust within the medical community.

Trust can be developed by maintaining high standards of care. NEMSAC has determined that one difficulty in ascertaining true costs and developing reimbursement models is the lack of consistent standards for EMS systems. As such, one of NEMSAC’s primary recommendations is to authorize an EMS system design project to adopt standardized EMS system functions and EMS-specific performance measures. This would help set the minimum standards on which cost-based reimbursement can be determined and implemented. Once completed, the next step would be to develop financial models to support each function.

True value will be recognized when EMS reaches its full potential within the healthcare system as a mid-level healthcare provider. Research shows that EMS can safely and effectively determine the right care for the right patient at the right time. With quality standards and medical oversight, treat with referral, and no transport or transportation to alternative destinations become viable, compensable options, saving healthcare dollars.

Community paramedicine and other mobile primary healthcare services can be safely provided by EMS in both rural and urban environments. The cost savings realized can fund these and other innovative programs as EMS evolves and further integrates itself into its predominant health care role.

“We prevent, evaluate, coordinate and provide appropriate medical and community care” will be the new EMS mantra. That is our EMS destiny.

See the complete NEMSAC report at ems.gov/nemsac/FinanceCommitteeAdvisoryPerformance-Based
Reimbursement-May2012.pdf.

This column is reprinted from Best Practices in Emergency Service. For more, see emergencybestpractices.com.

Troy M. Hagen, MBA, EMT-P, is director of Ada County Paramedics in Boise, ID. He has more than 22 years of EMS experience. He is president-elect of the National EMS Management Association and an EMS World editorial advisory board member.