Financial sustainability continues to be one of the most discussed aspects of EMS-based mobile integrated healthcare-community paramedicine (MIH-CP) programs. Interestingly, the conversation has begun shifting from agencies not finding revenue sources, to those that have been able to identify funding sources. Based on feedback from numerous EMS agencies across the country, there appears to be three main reasons for this shift.
Hospital Readmission Penalties Increasing:
Hospitals that three years ago were not necessarily interested in paying for readmission prevention programs because they derived more revenue from the readmission diagnosis-related group (DRG) payment as opposed to the readmission penalty, are now re-contacting EMS agencies to pursue a partnership. This is primarily because most hospitals have experienced increasing penalties for readmissions. In 2015, 2,665 out of nearly 3,400 hospitals (78%) were docked for readmission penalties.1
The increase is likely the result of the national all-cause readmission rate for congestive heart failure (CHF) discharges has dropped from 25.1 in 2009 to 23.5 in 2013.2 This means that unless a hospital reduces its readmission rate by at least this amount, their readmission penalty will increase. As a result, hospitals are looking for willing partners to help reduce their readmission rates.
Healthcare Provider Pay-for-Performance Incentives and Penalties:
Readmission rates (with associated penalties) are also being tracked for home health, skilled nursing facilities and physicians. At its March 2014 meeting, the Medicare Payment Advisory Commission (MedPAC) voted unanimously on a recommendation that the U.S. Department of Health and Human Services (HHS) implement readmission penalties to home health agencies.3 And, included in the Protecting Access to Medicare Act of 2014 (PAMA), commonly referred to as the “doc fix,” was a value-based purchasing (VBP) program for skilled nursing facilities (SNFs).
PAMA establishes an incentive pool for high-performing SNFs as it pertains to preventing unnecessary hospital readmissions.4 PAMA also accelerated the timetable for moving physicians to performance-based payments and Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule implementing the program for physicians starting in 2016.5
Third-Party Payers Searching for Answers:
The EMS industry has finally awoken the sleeping giant. Thanks to multiple media reports in national media and healthcare journals, commercial insurers—including those with Medicare Advantage programs such as Aetna, Cigna/HealthSpring, Blue Cross/Blue Shield and others—have been contacting EMS agencies across the country inquiring about ways to begin paying for MIH-CP services to reduce the cost of care for members in their plans.
Similarly, accountable care organizations (ACOs) that have not experienced the reduction in expenditures desired by other means of care coordination are also looking for additional partners to help manage patients in their networks. In some cases, these discussions have not been limited to simply MIH-CP, but also other unique financial arrangements decoupling EMS payments from transport—in other words, paying EMS for a patient contact, not just for the transport. Some states (Minnesota and Idaho) have approved processes to allow Medicaid reimbursement for MIH-CP services under certain circumstances, and other states such as Nevada are considering similar initiatives.
Keys to Financial Sustainability
EMS agencies that have been successful finding sustainable funding sources for MIH-CP have two primary things in common. First, they have “followed the dollar.” That is, they identified who in their local market is at risk for the healthcare spend for specific populations and have reached out directly to them the make the business case. Second, the agencies are nimble. That is, they have the organizational readiness and capacity to change. They are willing to take a risk and collaborate with new partners to try something new. They are not bogged down by focusing on the economic model of yesterday, but in the value proposition of the “new EMS,” or EMS 3.0, of tomorrow.
So, in the immortal words of the great philosophers Fleetwood Mac: “Don’t stop thinking about tomorrow, it’ll soon be here, better than before, yesterday’s gone.”
1. Rice S. (Aug. 30, 2015) Most hospitals face 30-day readmissions penalty in fiscal 2016. Modern Healthcare. Retrieved on Mar. 8, 2016, from http://www.modernhealthcare.com/article/20150803/NEWS/150809981
2. Fingar K. and Washington R. (Nov. 2015) Statistical brief #196: Trends in hospital readmissions for four high-volume conditions, 2009–2013. Healthcare Cost and Utilization Project. Retrieved on Mar. 8, 2016, from http://www.hcup-us.ahrq.gov/reports/statbriefs/sb196-Readmissions-Trends-High-Volume-Conditions.pdf
3. MedPAC. (Mar. 2014) Report to the Congress: Medicare payment policy, chapter 9—Home healthcare services. Retrieved on Mar. 8, 2016, from http://www.medpac.gov/documents/reports/mar14_ch09.pdf?sfvrsn=0
4. Luke J. (n.d.) SNF readmission penalties announced: is your facility prepared? California Association of Long Term Care Medicine. Retrieved on Mar. 8, 2016, from http://www.caltcm.org/index.php?option=com_content&view=article&id=242:snf-readmission-penalties-announced–is-your-facility-prepared-&catid=22:news&Itemid=111
5. Centers for Medicare & Medicaid Services. (July 8, 2015) Proposed policy, payment and quality provision changes to the Medicare physician fee schedule for calendar year 2016. Retrieved on Mar. 8, 2016, from https://www.cms.gov/newsroom/mediareleasedatabase/fact-sheets/2015-fact-sheets-items/2015-07-08.html