Administration and Leadership, EMS Insider

AETNA/CVS Deal May Finally Change Ambulance Industry

The recent merger of Aetna and CVS may be the catalyst that finally brings the change that the ambulance industry has been consistently advocating for—reimbursement to EMS for transporting patients to facilities other than hospital EDs.

Current Policy Challenges

Currently, most health insurance and Medicare will only pay for 9-1-1 ambulance transportation to the “nearest appropriate” hospital-based ED. This is arguably the most expensive and least efficient form of healthcare.

The policy doesn’t take into account the advanced capabilities of both EMS and new clinical settings such as urgent care facilities or the savings that can be achieved through innovative change. In addition, although the cost of healthcare in general is increasing, reimbursement from all payers is decreasing, creating a significant challenge for providers.

Medicare consistently pays providers below cost for providing life-saving services, and state Medicaid agencies are consistently underfunding critical services to un- and under-insured people, allowing intermediaries to delay or even not pay ambulance services.

Most people in the U.S. believe that vital 9-1-1 EMS services or the equivalent are provided free or are included in their local property taxes. This is generally not the case. EMS services must be at the ready round the clock, but they’re only paid when the service is used—not for being on call. 

Many communities require 9-1-1 or the equivalent paramedic services to arrive on scene within eight to 12 minutes of receiving the call. The cost of this level of readiness is very expensive. Skyrocketing personnel costs, the purchase and maintenance of ambulances and equipment, and the cost of stocking expensive drugs only exacerbate an already fragile reimbursement structure. 

A Merger that Could Change the Landscape of EMS

Why does the AETNA and CVS merger excite EMS organizations? Many people assume that Walgreens and other pharmacy chains will probably follow suit and partner with local hospitals or health insurance companies.

The ambulance industry believes that being able to transport patients to alternative locations could greatly change the landscape of EMS. If local CVS or Walgreens clinics could receive low acuity patients, that would break open the bottleneck and provide several benefits for both the ambulance service and the patient.  

Adding these stores/clinics would greatly increase resources for the care of low acuity patients, and could potentially double the number of locations that an ambulance could transport to—resulting in shorter transport times and greater efficiency. 

Most importantly, diverting low acuity patients to these additional community resources would reduce overflow in the EDs and allow true emergency patients to receive the higher level of care they require. This scenario is also a win for patients: They could be transported to the most appropriate location for their needs, and be billed more accurately for services they require—rather than ED fees, which are usually more costly.

To make this happen, the CVS system needs to evolve to receive these patients, and ambulance reimbursement by federal, state, and private payers must evolve as well to meet the demands and costs of the market. 

Federal agencies seem to want to look at what EMS will look like in 10 to 25 years—rather than where the service is today and where it can develop over the next few years. However, EMS reform needs to happen soon to save these systems from bankruptcy, and to save the public from higher taxation.

We hope that this merger will introduce alternative EMS ambulance destinations with allocated reimbursements that meet the costs of providing high-quality, efficient, and necessary 9-1-1 ambulance services.