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Health-Care Reform Will Impact EMS Revenues


The health-care reform debate reached a fever pitch in mid-July as Congress worked intensely to pass legislation prior to its August recess. At press time, however, that appeared unlikely in light of a nonpartisan Congressional Budget Office analysis of "America's Affordable Health Choices Act of 2009" (H.R. 3200, introduced July 14). The analysis, released July 17, estimates that "enacting H.R. 3200 would result in a net increase in the federal budget deficit of $239 billion over the 2010–2019 period."

In July, EMS Insider reported that the discussion draft of H.R. 3200 included a provision to extend for two years the temporary 2% urban and 3% rural boosts in the base rate and mileage for Medicare ambulance transports, which are currently due to expire Jan. 1, 2010. As introduced July 14, H.R. 3200 does include the extensions, but American Ambulance Association Senior Vice President for Government Affairs Tristan North said, "They also lumped ambulance in with all the other Medicare health-care providers in subjecting us to a productivity update. That would be a 1.3% reduction based on current figures in our inflation update." The net effect would be only a .7% urban and 1.7% rural boost, North said. He strongly encourages EMS agencies to seek support from their representatives in Congress for S. 1066 and H.R. 2443, both of which would provide a permanent 6% rate boost for all Medicare transports.

North said AAA is eager to see a draft of the Senate Finance Committee's version of health-care reform, because it may contain efficiencies that could garner broader support from Republicans and conservative "Blue Dog" Democrats.

The Big Picture
The details are changing daily; however, a vision of health-care reform and how it could affect EMS is emerging. "Regardless of the form it takes, it is going to significantly shift the way reimbursement is handled," said Bill Atkinson, PhD. He began his career as an EMT and is now CEO of Wake Med, a large health-care system in North Carolina, and a member of the American Hospital Association's Health Care Reform Taskforce. It's also important to note that very little language in the bills under discussion refers specifically to ambulance transport or emergency medical services. EMS will be captured under broader terms that would profoundly change the industry.

"There seems to be universal consensus that there's going to be a move toward encouragement of prevention, wellness and primary care," Atkinson said. "That's pertinent to EMS; it's probably going to make for a major transference in not only where dollars are spent and where they're approved, but—in some cases—where patients might be for their care, where transport takes place for ambulance services or where wheelchair services are involved."

There's also talk of "bundling" payments. "Bundling is defined generically as taking all services delivered for acute and post-acute care and putting them into one pricing package," Atkinson said. For example, a hip fracture would result in a single bundled payment for every service related to that injury, including, imaging, surgery, durable medical goods and physical therapy. "A single payment would be paid to an entity yet to be determined that would decide where the payments are made and at what level. Under that type of scenario, that would include transport."

Atkinson doesn't believe this type of bundling will capture 9-1-1 responses, but he added, "Once the patient hits the hospital it would, and potentially it applies to every other type of transport along the lines."

The point of bundling is to contain costs by reducing the incentive to perform excessive imaging and tests. Consequently, ambulance agencies that run primarily interfacility transport for such services as MRIs or CAT scans could find themselves in trouble. "All of a sudden, services could drop off in any specialty or primary care area," Atkinson said. "The pattern could change instantly by something that has nothing to do with the reimbursement to the ambulance. [The patient] just won't need the ambulance."

AAA's North said bundling might work for hospital-based ambulance services, "but for independent ambulance providers—about 95% of the providers out there—it becomes a complicated situation. Working directly with a Medicare carrier is the most efficient means for reimbursement. We would be concerned if we had to go through another entity."

A new bureaucracy to handle reimbursement isn't likely, Atkinson said, because there's simply no money to create one. "There would have to be some [regional] governing body that probably involves physicians, hospitals and other entities," he said. "Either way, you're in the alliance or you're not, and that alliance will pick who its partners are. It will pick an ambulance service, and it will use only one."

Between the incentives to reduce services and changes in reimbursement, consolidation among all types of health-care providers, including EMS agencies, is likely. "There is a clear indication that consolidation is going to be not only a byproduct [of health-care reform], but probably encouraged because you're going to need to cooperate," Atkinson said. In his opinion, that's not necessarily a bad thing: "It probably takes some pressure off agencies."

Health-care reform will also likely require ambulance services to use electronic patient care reports. "It's not going to be optional," Atkinson said, "not because the law will require it, but because common sense will require it. No hospital is going to tolerate paperwork from anybody. If agencies are waiting for someone to come along and fund that—it's just not going to happen." Eventually, Atkinson said reimbursements could be cut by as much as 10% for any provider that doesn't use electronic records.

Quality measures and treatment pathways are also aspects of the coming changes. "I expect the standards for all health-care providers (even if EMS isn't in the present language) will be shifting," Atkinson said. "That said, if the guidelines shift for hospitals and physicians, the ‘community standard' will have changed, and this is the basis upon which all prehospital care programs are built."

"It goes back to the movement toward paying for outcomes, not paying a fee for service," Atkinson said. "If you do the wrong thing, no one is going to pay you."

Despite the intense debate over substance and cost currently underway on Capitol Hill, Atkinson believes health-care reform is coming, and sooner rather than later. What that entails is yet to be determined, but he's optimistic reform will result in positive changes. "The opportunities are significant for EMS providers and others to try to fix the things that haven't worked in the past. I think there are many, many opportunities here."

AAA is keeping a close eye on the legislation as it develops to help ensure those opportunities are realized.

"Right now all Americans have universal ambulance service coverage," North said. "Regardless of your ability to pay, an ambulance will arrive. Our concern is you need to make sure ambulance services—which are, in many cases, the entry point into the health-care system—are able to provide the best quality prehospital care."


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