Healthcare Reform Seen as Unparalleled Opportunity for EMS

The following article is part one of two in an EMS Insider exclusive series on healthcare changes. The Insider, the premier publication for EMS managers, supervisors, chiefs and medical directors, is a must-have resource for the critical, accurate information EMS leaders need. The monthly publication offers quality investigative reporting, exclusive articles, management tips and the very latest news on legislative issues, grants, current trends and controversies. For more about how to become an Insider, click here.

The landmark decision by the U.S. Supreme Court to uphold the constitutionality of the Patient Protection and Affordable Care Act (PPACA) could become a watershed moment for EMS, according to number of EMS leaders. The five-to-four decision by the justices may open the door for the kind of opportunities to deliver patient care outside the narrow confines of the traditional prehospital emergency system. The question now is: “How will we step up and define how our organizations move forward?”

The Supreme Court decision upheld the individual mandate with a twist. Although the federal government doesn’t have the power to force citizens to purchase health insurance, it can impose a tax on those who choose to go without coverage. All other provisions of the healthcare law, often referred to as “Obamacare,” including the Medicaid provision (with modifications) and the section establishing accountable care organizations (ACOs), were upheld.

Although the legislation has passed a major judicial hurdle, it still faces political challenges. Even before the ruling was made public, Speaker of the House John Boehner pledged his party would launch an immediate effort to repeal the law. Still, EMS leaders warn against taking a “wait-and-see” approach. “This is not the time to sit at home. This is the time to be engaged,” says Scott Bourn, PhD, EMT-P, vice president of clinical practices and research at American Medical Response, Inc. (AMR).

He and others believe that the opportunity exists for EMS to evolve beyond the conventional “load-and-go” model into a more sophisticated concept of caring for patients outside of a hospital, including transport to alternative facilities and the expansion of the scope and practice of paramedics. “There is a tremendous opportunity for EMS,” Bourn says. He describes integration into the healthcare system as a “therapeutic win-win” for the patient, the hospital and EMS.

James J. Augustine, MD, FACEP, director of clinical operations at Emergency Medicine Physicians (EMP) in Canton, Ohio, says this is a chance for EMS to help design a better system of emergency care outside the traditional role of transporting patients from site to site. “EMS has a very important role as a provider of unscheduled care,” he says. “This really is our opportunity to identify the issues and parts of our practice that need to be reformed.”

He notes that healthcare can benefit from the experience of both fire and EMS in the area of prevention measures. “Preventing premature deaths has been the mark of the prehospital emergency system for the past 40 years,” he says. He believes that EMS should promulgate its successes in prevention and allow those lessons learned to be used in the design of new healthcare prevention efforts, improving the overall delivery of healthcare. “I’m a big supporter of our emergency system, and there are opportunities ahead to demonstrate our expertise,” he says.

Insurance coverage
One thing is certain, a dramatic increase in the number of people who will be insured will occur. The U.S. Census Bureau estimates that currently, nearly 50 million Americans–including nearly one in four working-age adults–are without insurance.

Many lost their healthcare coverage when they lost their jobs. Those who kept their insurance have been faced with rising premiums that put a strain on employers and employees alike. According to the Kaiser Family Foundation, a nonprofit organization that focuses on healthcare policy and issues, the average health insurance premium for family coverage has more than doubled during the past decade to $13,770 a year.

To provide health insurance for those who can’t afford it, PPACA calls for the expansion of the Medicaid program. After 2013, individuals who earn up to 133% of the Federal Poverty Level (approximately $14,856 annually) will become eligible for Medicaid, a state-run program that uses matching funds from the federal government.

Currently, the federal government pays 57% of the cost of Medicaid to the states. Under the new law, the federal government will fully fund Medicaid for the first three years, decreasing its support to 95% by 2017, then 90% by 2020.

Twenty-six states have publicly balked at the idea of taking on that kind of debt. In the ruling, the Supreme Court said that the portion of PPACA allowing Congress to penalize states that opt out by withholding all or part of the state’s Medicaid funds was unconstitutional. It is nearly certain that some states won’t add these additional Medicaid recipients to their rolls, although it’s unclear at this time which ones will participate and which ones will not–a factor that will certainly affect EMS. Providers operating in these states will face higher uncompensated care due to a larger uninsured population.

“For EMS leaders who are politically active, this is the time to start asking what your state plans to do,” says Bourn. As stakeholders, EMS has a say in whether the state accepts those funds. Those not covered by the Medicaid expansion will be required by law to maintain “minimum essential” healthcare coverage beginning in January 2014, or they will pay a penalty when filing their income taxes in 2015. Because the penalty is expected to be lower than the cost of insurance, some people may simple chose to pay the penalty.

For those who aren’t covered by employer policies, PPACA provides for health insurance exchanges. These exchanges, set to go into effect no later than Jan. 1, 2013, should drive down the cost of healthcare policies by allowing individuals, who previously had to purchase policies at a higher rate, to buy into a cheaper “group rate” policy.

However, many states have held off on implementing of these exchanges in anticipation of the Supreme Court ruling and may not meet the deadline. The U.S. General Accounting Office has estimated that the net result of PPACA could be approximately 30 million Americans currently without health insurance will be insured under the new law.

The EMS leaders we spoke to all agreed that although Medicaid reimburses below the cost of providing the service–6% below according to a 2007 report by the American Ambulance Association, based on 2004 data–some reimbursement is better than nothing. In Minnesota, Aaron Reinert, executive director of Lakes Region EMS, says the added coverage could mean an additional $2 billion in healthcare coverage to his state. He sees this as a huge advantage to begin to receive reimbursement for services his agency already provides.

Increasing the number of patients whose service is paid for by a third party offers an added benefit of providing a certain level of fiscal stability for an organization. Agencies that can now count on a stable reimbursement rate in the 80—90% range can think about long-term fiscal planning and investments in innovation, although a couple of bumpy years may be ahead until the new payor mix settles. Although no one believes ambulance services will get rich transporting these potentially insured patients, EMS administrators aren’t the only who see a promising opportunity.

During the past year, private equity firms have been buying ambulance providers, including the two largest ambulance companies in the U.S., Rural/Metro Corporation and AMR. They see potential revenues created by the confluence of the baby boomers and the expanding market of those covered by Medicaid under healthcare reform. They aren’t the only ones eyeing Medicaid money. Analysts say that Medicaid represents a growth opportunity for U.S. insurers.

In July, the nation’s second-largest health insurer, WellPoint Inc., acquired Amerigroup Corp., which runs Medicaid coverage in 13 states, for a reported purchase price of $4.46 billion.

Healthcare integration
EMS was hardly mentioned in the more than 2,600 pages of the healthcare reform act; however, the ability to test new payment and care delivery models through demonstration projects funded by the Center for Medicare and Medicaid Innovation does exist. Enterprising providers ought to be seeking demonstration projects to authorize system changes that allow for treat-and-release, alternate destinations and in-home care.

“It isn’t the bill I would’ve written “¦ but it provides needed access to insurance, especially for chronically ill patients,” says Bourn. That, he says, will change the dynamics of patient care for EMS. With increased primary care, these patients’ conditions will be less likely to deteriorate to the point where they need EMS. The bill also creates an opportunity for EMS to become integrated into the healthcare system in a way it never has been. “Right now, we operate on an island,” Bourn says. “We can’t be an island anymore.”

Using the core competencies of EMS, there are numerous opportunities to care for patients outside the traditional emergency room setting. “Sometimes the patient needs to be monitored at home,” Bourn says. He doesn’t advocate replacing home healthcare workers, but rather augmenting their responsibilities by using interventions within the paramedic’s skill set and expert assessment on who’s sick and not sick to make an informed decision on whether to go to the hospital or stay home. “We are the experts in remote care in EMS,” he says.

O.J. Doyle, the only full-time state EMS lobbyist and consultant for the Minnesota Ambulance Association and the American College of Emergency Physicians, couldn’t agree more. “Healthcare reform creates a very fertile environment for the community paramedic,” he says. Doyle, a former paramedic, has been both an operations director and the owner of an ambulance service. “As we move forward, innovation and creativity is going to be rewarded,” he says. The goal will be to keep people who don’t need to be in the hospital out of the emergency department.

Doyle warns EMS administrators to be aware of possible state statutes that prohibit EMTs and paramedics from providing this type of care. That will require becoming active on the state level and educating lawmakers. “You are all ambulance drivers to your state-elected officials,” he says.

However, the path to passing EMS legislation has been blazed by others, including Doyle, who know how to avoid opposition from other medical professionals who may feel threatened. “It’s all about the packaging,” Doyle hints.

Employer responsibilities
From an employer perspective, beginning in 2014, employers with 50 or more full-time equivalent employees will need to offer full-time workers affordable insurance options or incur annual penalties of $2,000—3,000 per employee. The rules are slightly different for public employers. Every agency should consult a competent counselor to ensure compliance.

If you provide health insurance to your employees, research what constitutes a “Cadillac” plan. Most immediately think of the firefighters–who were given a moratorium on their plans, with a sunset clause–but this can also affect some “Mom and Pop” agencies that provide a certain level of coverage for employees, but a much higher level for themselves. The new law applies a 40% surcharge for these types of plans. The surcharge must be paid for by the employer. None of it can come out of the pockets of the employees.

How an EMS manager can prepare
Get out your Gantt charts, this could be a long to do list. From a billing, employee and systems perspective, EMS administrators should be prepared.

Expect increased volume: People who previously did not call 9-1-1 because they feared they couldn’t pay for the cost of transport and hospital bill, will now be able to call for service. At least initially, expect an increase in the number of transports. “I see this as a short-term step of a few years,” Bourn says. As patients begin receiving appropriate primary care, those numbers should level out. Expect changes in flow patterns: Now that people have insurance, they may want to be transported to a hospital they perceive provides a higher quality of care than the one they previously frequented.

Meet a hospital administrator: Your local hospital administrator may be your new best friend. They’re probably already looking at pay-for-performance issues. Ask them how you can help. For most administrators, EMS is just hospital ride, and they don’t realize EMS’ competencies and capacity. It’s up to you to educate them.

Prepare your workforce: This is a cultural change in clinical practice unmatched since EMS was introduced. There are a million ways to be a nurse, but only one way to be a paramedic. That will change. As an EMS leader, you must prepare your workforce for these changes. Some people have no desire to do anything but 9-1-1 calls. However, some, maybe toward the end of their career, prefer something that looks more like a healthcare generalist with a tremendous emergency care capacity.

What this means for the workforce is an opportunity for expanded career paths in EMS. For EMS administrators, paramedics will no longer be interchangeable, and administrators will have to be responsible for more human resource management than they ever have before.

Join an EMS organization: If you haven’t already, join national EMS organizations or associations that supports the industry. Many are already hard at work providing recommendations for their members. Several provided executive summaries within days of the Supreme Court ruling and have already scheduled webinars to assist members with understanding the possibilities and challenges presented by healthcare reform. Expect to see toolkits and other resources.

These will be particularly helpful with compliance issues.
“By paying dues, we are supporting people to be our voice at the regional, state and national level,” says Reinert, who chairs the National EMS Advisory Council (NEMSAC), an organization that provides critical advice to the National Highway Traffic Safety Administration (NHTSA) Office of EMS and the Department of Transportation and the Federal Interagency Committee on EMS (FICEMS). “[Belonging to an EMS organization] allows EMS to do something we don’t do, speak with one voice.” If you have the ability to be active in a group or association, he says, now is the time to do it.

Conduct a cost analysis: The PPACA will require a cost-analysis on a regular basis to justify billing. Check third-party agreements: The new law strengthens anti-kickback standards. Check all agreements with third-party vendors to ensure compliance. Validate certifications: By 2015, all EMS agencies will be required to conduct a re-validation of service. Make sure every provider’s certification is up to date.

Do research: Research opportunities will continue to exist for documenting the value of excellent emergency care. All EMS agencies need to contribute to research efforts that verify how EMS contributes to the overall healthcare system.


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