HARTFORD, Conn. — Over the past five years, the New Britain Emergency Medical Services ambulance service has missed out on at least $10 million because of a growing number of calls from patients on Medicaid, which reimburses the service only 41 percent of its costs.
In addition to the low reimbursement rate, Medicaid pays the agency nothing at all when Medicaid patients refuse a trip to the emergency room, said Bruce Baxter, New Britain EMS executive director and chief of service.
“I’ve got to be honest,” Baxter said. “This is a crisis point.”
New Britain EMS has relied on a combination of cost-cutting and help from the city to stay in the black, but last year, the service cleared only $8,000, a number that reflects several factors, including depreciation of the agency’s assets, debts and revenue. The agency’s total operating budget was about $4 million.
It’s a problem faced by ambulance companies in urban centers across the state.
David Lowell, director of operations at Hunter’s Ambulance Service and president of the Association of Connecticut Ambulance Providers, said rising costs and inadequate Medicaid and Medicare reimbursement rates have presented private and non-private ambulance groups with their biggest challenge in recent memory.
Fuel prices, insurance and wages — which comprise the lion’s share of the ambulance industry’s costs — have all gone up. As those expenses ballooned, Medicare reimbursement rates fell, creating what Lowell describes as the perfect storm for the industry.
The industry is seeking a 5 percent increase in the Medicare reimbursement rate this year, but that will be a huge fight, Lowell said.
Baxter and Lowell agree that if reimbursement rates remain stagnant, ambulance care will suffer.
“Our long-term hope is that we can stimulate some legislation [nationwide] and in Connecticut that will result with all ambulance providers being compensated based on the cost of producing service,” Baxter said.
Legislators are working to create a state aid program for ambulance services that serve a disproportionate number of Medicaid patients, but for now, those providers have set their sights on $1 million that has been reserved for ambulance services in New Britain, Hartford, New Haven, Willimantic, Waterbury and Bridgeport. Medicaid patients in those cities make up 21 to 38 percent of the total patient volume for ambulance services. Medicaid is available only to people with limited income.
The state aid would help alleviate the financial burden the Medicaid reimbursement rates have placed on ambulance services.
The bill — which follows successful rate increases for hospitals and health care professionals who bill Medicaid — is expected to pass, but is not considered a permanent solution.
Baxter worries that if his agency doesn’t get the help it needs from the state or the federal government, the city will have to help the agency or face deteriorating EMS care.
“The worst case scenario is that it may take longer for an ambulance to get to you,” he said.
In its previous fiscal year, which ended in April, New Britain EMS posted an $8,000 profit, a paltry amount in Baxter’s eyes.
“If I could end the year with $150,000, of which maybe half was a positive operating margin, and I had the ability to save $100,000 for capital replacement, I’d be in a good position,” he said.
Medicaid patients make up 38 percent of the agency’s clients, more than twice the state and national average of 14 percent. The number of Medicaid patients who request an ambulance has gone up about 12 percent since 2002, Baxter said.
Baxter and his staff have kept New Britain EMS afloat by cutting expenses, and with support from the city, which has used its purchasing power to buy EMS equipment at cheaper rates and asked EMS to pay the city back, said Mayor Timothy Stewart. About three years ago, the city took out a $2.1 million loan on behalf of New Britain EMS. The agency, which used the money to refurnish its building at 225 Arch St., will repay the city over 20 years.
If the department runs aground, the city will have to fill its ambulance needs through a private company, which would compromise the city’s level of service and strip its oversight, Stewart said. Two city council members sit on the agency’s board of directors.
Private companies, Stewart said, are more focused on earning profits than on serving the community, something New Britain EMS sometimes does for free. Paramedics attend large public events such as baseball games and parades for free in case someone gets sick.
“You’re not going to get the same level of service,” Stewart said of the private companies.Contact Monica Polanco at [email protected]