BOSTON - The problem, according to Blue Cross Blue Shield, was obvious. An ambulance company charged $4,415 for a non-emergency ride from Lowell to Tufts Medical Center in Boston. If the company had a contract with the insurer, the charge would have been $1,184.
The case illustrates a debate now swirling on Beacon Hill over a provision tucked into a supplementary spending bill that would require insurers to send unnegotiated payments for ambulance services directly to the companies.
The Legislature passed a spending bill on Tuesday that included that provision, which changes the law from the current system where insurers send the payments for ambulance services to patients who then pay ambulance companies.
However, Gov. Deval Patrick plans to send the bill back to the Legislature with an amendment to this section.
"The administration has concerns relative to the impact of the provision on health-care costs and will be sending that section back to the Legislature with an amendment that addresses those concerns. The amendment is currently being drafted," said Kyle Sullivan, a Patrick spokesman.
The governor's actions come amid reports that local ambulance-company owners have been making donations to local lawmakers and the governor.
John Chemaly of Trinity EMS in Lowell, David Daly of PrideSTAR in Lowell, David Walton of Patriot Ambulance in Chelmsford and Nick Melehov of Medstar in Leominster each gave Patrick money in September, from $150 to $500. Chemaly and Daly have been big supporters of state Rep. Thomas Golden, D-Lowell, each donating over $2,000 since 2002. Golden sponsored a bill last session that contained similar language to this provision, but the bill died in the Senate.
"The amendment has financial implications and that's why it is in the spending bill," Golden said in an interview.
Trinity EMS was the company that transported the Lowell patient to Boston for $4,451. Chris Dick, the company's director of marketing, wouldn't comment on the case because he said he couldn't track down the records without a patient name or date of service.
"I'd have to see the bill. We bill for services rendered, if it was a special-care transportation, 30-plus miles, with two paramedics and a cardiac monitor, it could get up to that high," he said.
Blue Cross Blue Shield of Massachusetts spokeswoman Tara Murray said the provision in the supplementary bill would cost the insurance company $60 million -- an expense that would be passed on to ratepayers, including businesses that provide insurance coverage for employees.
The provision would eliminate an incentive for ambulance companies to join their network and negotiate fees at reasonable rates, Murray said.
Insurance companies announced two months ago that ambulance companies outside the provider network would have to pursue patients for their payments. Murray said Blue Cross has found that this system has been an incentive for providers to go under contract with the insurer.
"This is new for ambulance providers, but it is not new in the industry," said Murray.
Under the new system, if a patient uses an ambulance service that is not contracted with their insurance company, the insurer sends the payment to the patient, who is expected to pay the ambulance bill.
But this doesn't always happen.
"Especially in tough economic times, when a patient receives payment from insurance for the ambulance company, they can choose whether they want to take that money and pay a different bill," said Andover Fire Chief Michael Mansfield, whose department oversees ambulance services in town.
Daly, president and CEO of PrideSTAR EMS in Lowell, said the proposed change to this system that was included in the spending bill is crucial to his industry.
"There would be significant layoffs across the industry, really significant ramifications throughout Massachusetts," he said.
He said ambulance companies met last fall with Blue Cross Blue Shield of Massachusetts to negotiate service fees, but the insurer broke off talks before coming to an agreement.
"It's too bad because we were close to coming to an agreement," said Daly.
But Daly said the proposed law could still lead to an agreement between ambulance companies and insurers.
"This still allows Blue Cross to negotiate with individual ambulance companies," said Daly. "But in the meantime, they have to pay us."
Golden questions Blue Cross' claims that his amendment would cost the insurer up to $60 million.
"We're not changing the way things are happening," he said. "The only thing we're doing is keeping the playing field as it is and not allowing the insurers to shift costs to municipalities."
State Sen. James Eldridge, D-Acton, said that while the provision isn't perfect, he doesn't want cities and towns to foot unpaid bills.
"My concern is that cities and towns would not get part of the reimbursement for ambulance costs, putting more pressures on towns' and cities' budgets," said Eldridge.
Michael Widmer, president of the Massachusetts Taxpayers Association, said the legislation gives too much freedom to ambulance companies.
"This exempts ambulances from negotiation and allows them to charge whatever they want," said Widmer, who joined with business associations and health insurers to send a letter to Patrick urging a veto of the amendment. "It's all of us who pay; it's a hidden cost that is imbedded in the system."
Seven other states have passed similar legislation, with legislation pending in New York and New Jersey.