The healthcare system is undergoing arguably the most transformative shift in economic models in recent history, transitioning away from fee-for-service (FFS) models that financially reward providers based on the volume of services provided, to value-based models that financially reward providers based on the value of the services they provide. EMS is not immune to these changes. We need to be prepared for some tough questions and interesting economic proposals that are beginning to be introduced in some EMS systems.
At the Pinnacle EMS Conference in San Antonio, Texas, leaders from the EMS, hospital, payer and physician community gathered to present a half-day power seminar designed specifically to prepare EMS leaders for the reimbursement revolution. Here are some pearls of wisdom from these leaders.
Concepts of Pay-for-Performance
Doug Hooten, MBA and Matt Zavadsky, MS-HSA, EMT, MedStar Mobile Healthcare
The concept of pay-for-performance starts with an understanding of who is evaluating the performance. Payers, hospitals, medical directors, regulators and public officials each look at performance through a different lens. The traditional view of EMS performance includes factors such as timeliness, courtesy, price and ease of ordering the service. In the new EMS arena—EMS 3.0—healthcare partners view performance in terms of patient navigation to the right source of care, patient outcomes, whether or not the patient was brought to an in-network facility, and the overall spend of the care.
When approaching a pay-for-performance agreement, it’s best to under-promise and over-deliver. Know your limits on the impact you can have on things like ED visits, hospital admissions and the cost of care associated with each.
Pay-for-performance is closely tied to the value that EMS can bring to the contract. In healthcare, value is most often described as the intersection of quality and cost. Quality is usually defined as patient outcomes plus patient experience, while cost includes both direct (point of care) and indirect (downstream) sources. This equation poses a challenge for EMS providers.
Historically, EMS has had a difficulty demonstrating whether or not there is a difference in patient outcomes based on whether or not the patient was transported by ambulance to the ED. While we do a good job measuring processes (response times, CPR flow times, etc.), we rarely determine if the patient had a better or worse outcome from our intervention. Very few EMS providers score true patient experience the way the rest of healthcare does—by an external agency using standardized measures. Similarly, the concept of what we truly cost has been elusive for most EMS providers. Some providers may know what it costs to deliver an EMS response; this is generally a small part of the overall cost of the patient’s episode of care. The cost of the ED visit and potential hospital admission is the more significant expenditure. In the reimbursement model for EMS 3.0, EMS should be incentivized to improve the patient’s quality and experience of care, and reduce the overall expenditures for the defined population.
The industry, however, has a long way to go and a lot of business acumen to learn before new payment models can be thoroughly vetted. We will need to determine specific metrics for the outcomes of patients entrusted to us—using the major outcome domains of quality and safety, experience, utilization and cost—as we contemplate entering into any innovative payment models.
Integrated Health System Perspective
Andrew Jones, Sr. Director of Strategic Initiatives Group, Kaiser Permanente
Hospitals and integrated health systems are changing their focus from bringing everyone into the brick-and-mortar hospital to providing the right care, at the right time and in the right setting. This is largely due to the new methods of payment that encourage improving the experience and quality of care for the patient, enhancing their satisfaction with their healthcare, and reducing the per capita cost of care. Increasingly, health systems are stepping outside of their walls to address social, economic and environmental conditions that contribute to poor health outcomes, shortened lives and higher costs.
Given the fact that 80% of an individual’s and a community’s health is related to the social determinants, health sector professionals are increasingly asking themselves, “How do we more effectively intervene ‘upstream’ to impact the forces that contribute to high rates of chronic and other diseases?” Just 10–20% of what creates health is related to access to care; the rest is determined by the quality of the care received.
At Kaiser Permanente, we have engaged in several initiatives strategically designed to enhance community health. These include:
- Total impact measurement and management (TIMM)
- Mobile integrated healthcare (MIH)
- Home health
- Behavioral health
- Economic development
- Location as a service
EMS plays a critical role for us, far beyond just ambulance transportation, and we are working with several EMS partners throughout the country on new economic models that reward EMS for helping us with these community initiatives. We encourage EMS to identify all the ways it can play a role in participating and accelerating this critical agenda.
S. David Lloyd, MD, MBA, Medical Director, North Texas Specialty Physicians
North Texas Specialty Physicians (NTSP) is an independent practice association with more than 500 physicians in North Texas. We are at full economic risk for more than 50,000 Medicare Advantage patients in the Dallas/Fort Worth market. Our care management division, Silverback Care Management, is responsible for utilization management, complex case management and disease management for patients who are at high-risk of healthcare utilization. For the past several years, we have partnered with Medstar to provide critical services as part of our effort to manage these vulnerable patients.
ED rates of admission to hospitals are increasing. One local hospital system’s ED admission rate increased from 41% in 2005 to 56% in 2013 and, according to Truven Health Analytics, up to 70% of ED visits may be medically unnecessary, often the result of gaps in care or conditions that can be managed outside of the ED.
EMS providers can bring added value to providers like us by helping to keep patients out of the hospital, unless they truly need hospitalization, by providing a few value-added services:
- Patient education and discharge instruction review
- Medication inventory
- Assessing medication compliance
- Home safety checklists and mitigation
- Fall risk assessment
- Disease management, including clinical interventions if needed, with physician follow-up appointment
- Coordination of care with the patient’s primary care system
EMS providers are uniquely positioned to break the readmission cycle because they have immediate credibility with most patients, are available 24/7 and are often the 9-1-1 provider in the community. This means that even if the patient calls 9-1-1, they EMS system can still catch them in the safety net and carefully deliver them to the right care.
- Develop specific workflows and protocols
o Disease specific management (e.g., CHF, COPD)
- Implement programs designed to reduce utilization
o Manage 9-1-1 calls
- Understand the audit environment of health plans
o Have a plan for managing protected health information
o Own the documentation
- Understand the hospital ED admission rate and cost of a hospital admission in your market
- Offer to take on the most challenging patients, especially those with significant psychosocial barriers to good health
Brenda Staffan, Regional Emergency Medical Services Authority
Entering into negotiations for a pay-for-performance agreement starts with defining two key parameters: the population—either by payer, geography, patient condition or a mix of these—and the desired outcome, such as improvement in the experience and quality of care, improvement in the health of the population and/or a reduction in the cost of care.
The second step is to determine which party is accountable for which outcome. There are outcomes that can be directly attributed to the intervention by one provider, but another provider in the care continuum could also have an impact (positively or negatively). This is especially true if the care is to be coordinated by teams from multiple entities.
Once these parameters have been defined, the next step is calculating two key formulas to be used in proving the return on investment. The first is the ratio of savings to expenditures, or the savings attributable to a certain amount of dollars expended. The typical calculation is payer expenditures without the service, minus payer expenditures with service, divided by payer expenditures for service. The second step is calculating the savings due to service, which is then divided by the total expenditures for service.
Finally, the parties to the negotiations need to come to an agreement on the percentage of savings or additional cost to be shared or borne by the entities. This generally is a weighted percentage based on each party’s share of risk. In some shared risk/shared savings agreements between healthcare payers and providers, this ratio could be an 80/20 share, with the payer keeping 80% of the savings and the provider getting 20% of the savings.
The Elephant in the Room: Fraud and Abuse in the Ambulance Industry
Asbel Montes, Acadian Ambulance Service, Inc.
It’s no secret that some ambulance providers have engaged in fraudulent ambulance billing practices, and this has received a lot of attention from the Centers for Medicare and Medicaid Services (CMS) and Congress. A report from the CMS Office of the Inspector General published in 2013 found that from 2002 to 2011, the number of beneficiaries who received ambulance transports increased 34%, although the total number of Medicare fee-for-service beneficiaries increased just 7%. Since 2002, Medicare Part B payments for ambulance transports have grown at a faster rate than all other Medicare Part B payments, and in 2011 totaled $5.7 billion.
This study, combined with numerous highly published arrests of ambulance operators engaging in fraudulent ambulance billing—including high volume public fire agencies—has put an investigative target on the back of EMS agencies.
As representatives from the American Ambulance Association (AAA) and the National Association of EMTs (NAEMT) meet with federal legislators on Capitol Hill about payment reform for EMS, the conversation invariably includes a comment from the legislators like, “Until you all get a handle on the F & A issues in the ambulance billing, it’s hard for us to talk about payment reform.” The reality is that there are very few ambulance providers who have been charged or convicted of fraudulent billing, but the ones who do tend to get a lot of attention.
Consequently, as a profession, we need to take a very proactive approach to reducing fraud and abuse in the ambulance industry by promoting changes to how EMS is paid for services. Some strategies being promoted include creating industry accountability through regulation and oversight; changing the classification of EMS from the current classification as a supplier (of transportation) to a provider (of medical care); beginning robust cost reporting; promoting expansion of prior authorization requirements for repetitive non-emergency services (the majority of the fraudulent claims); and implementing community-based, health management solutions.
In essence, for the EMS industry to survive the reimbursement revolution, we have to increase compliance with the reimbursement models we currently have, rebuild trust with our federal payers and becoming part of the solution, not part of the problem.