Pa. Ambulance Squads Hurt by Reimbursements that Don't Meet Costs

The nonprofit ambulance service struggles because of the high number of uninsured people & because of low reimbursements from Medicare


 
 

Brian Bowling, Pittsburgh Tribune Review | | Monday, April 16, 2012


PITTSBURGH, Pa. -- Munhall Area Prehospital Services is living payroll to payroll.

"If we were to have four to five bad months, it would finish us," Emergency Medical Services Manager Richard McClean said.

The nonprofit ambulance service struggles because of the high number of uninsured people living in its Munhall-Homestead-West Homestead service area, but also because of low reimbursements from Medicare and the discounted rates it must accept from Highmark Inc. if it is to get direct payments from the insurer, McClean says.

Several ambulance services say they are hurting -- and might need to cut services or dissolve -- because of a complicated insurance reimbursement system that pays them far below their rising costs. People needing ambulances might have fewer outfits serving them, leading to longer wait times, said Knox Walk, the EMS director for Allegheny County.

"Everything else is going up, and we're being paid less," said Bryan Kircher, director of Ross/West View EMS. "It's becoming more difficult to balance the budget and (maintain) that same level of service."

Making matters worse, Highmark and other insurers refuse to reimburse the ambulance companies directly unless they sign contracts accepting steep discounts for services. The checks instead go to patients, many of whom pocket the money, said William Hess, chief of Monessen-based Mon Valley EMS.

"If you don't contract with them, 90 percent of the time they won't send the checks to us," he said.

The Ambulance Association of Pennsylvania, which represents about 200 ambulance companies, and 16 individual companies sued Highmark and six other insurers in 2010, arguing the insurers conspired to force them into discounts. A federal judge dismissed the lawsuit in June.

Turning to Transports
The discounted rate is so low, an ambulance service can only break even or make money if it does a lot of non-emergency transports, such as transferring patients between facilities. For most services, including Mon Valley, "there's not enough volume to make up the difference," Hess said.

Highmark confirmed it won't directly pay an ambulance service unless it signs a contract agreeing to the insurer's rates. The company said it hasn't recently checked whether its ambulance rates cover the cost of service.

"Because of the extended lawsuit by the ambulance providers, we have not had a recent opportunity to evaluate our current reimbursements relating to ambulance providers," Highmark said in its statement. "We look forward to the opportunity to have constructive discussions with ambulance providers regarding appropriate reimbursement levels in today's environment."

George Dudash III, CEO of McKees Rocks-based Northwest EMS, said his company signed a contract with Highmark about seven years ago when a national ambulance company that provided only non-emergency transports was moving into the area and making deals with hospitals.

Transports from Allegheny General Hospital's Suburban Campus in Bellevue were a significant part of Northwest's business, so signing a contract with Highmark made sense, he said. West Penn Allegheny Health System shut down most of the Suburban Campus operations in 2010. Consequently, Northwest is losing about $650,000 a year because of its contract with Highmark, Dudash said.

Losing Ground
Ambulance companies say Medicare's switch to fixed reimbursement rates in 2002 haven't kept up with inflation.

Medicare pays for about 50 to 65 percent of ambulance trips in most communities, several area ambulance services said. Other insurers base their rates on Medicare reimbursements.

Ellen Griffith, a spokeswoman for the Centers for Medicare and Medicaid Services, said federal law gives the agency the power to make annual cost of living adjustments, not change the basic rate; nor does it give the agency the authority to survey whether the rates cover the cost of ambulance services. Congress would have to rewrite the law to allow either, she said.

A comparison of reimbursement rates among major insurers show that Medicare's are among the lowest, averaging $393.96 for advanced life-support. Medicaid, the government insurance program for the poor, pays less than half of what Medicare does.

"Medicare is too low. Medicaid is extremely low," said Billie J. Morris, president of Ambulance & Chair Service in Washington.

Ambulance services aren't permitted to bill Medicare or Medicaid patients for the balance, but can collect co-pays. Contracts with private insurers usually prohibit balance-billing patients as well.

Sometimes the ambulance companies don't get paid anything.

Insurers don't pay for a run when no one goes to a hospital, even in cases of accidents or fires. Each run costs an ambulance service an average of $400 to $500, officials said.

"About 20 percent of our calls don't result in a transport," said Todd Pritchard, operations director for the Mt. Lebanon-based Medical Rescue Team South.

Ambulance teams might provide care during these calls, such as injecting insulin into an unresponsive diabetic.

"That's a truly life-threatening emergency," Pritchard said. "But once that person has received sugar and is alert and able to eat food, he doesn't need to go to the hospital. In essence, we're saving the insurance company money."

Fewer Funding Sources
An ambulance service has to staff a vehicle 24 hours a day, seven days a week. Most services need to staff several ambulances at the same time, said J.R. Henry, director of the Valley Ambulance Authority and Quaker Valley Ambulance Authority, both based in Moon.

Some communities subsidize their ambulance services, but many municipalities have their own financial problems and provide no funding, said Henry, who is also the mayor of West View. Subscription drives raise some money, but at best, about 20 to 30 percent of the households buy them, Henry said. One pitch used to get people to subscribe is that subscribers won't be billed.

At best, the subsidies and other fundraising only mitigate the low insurance reimbursements, Henry said.

Medicare a decade ago switched to a national rate with regional modifiers. The base rate ranges from about $200 for transporting the least critical patient to about $700 someone unconscious and not breathing, he said.

Bill Groft, director of operations for Mutual Aid Ambulance Service in Greensburg, said private insurers and people without insurance are picking up part of the cost for the people Medicare covers.

"The government programs cost-shift to the private payers," he said.



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