According to Kim Stanley, chief customer officer for EMS Management and Consultants in Winston Salem, N.C., one of the most worrisome unknowns for North Carolina’s EMS community with regards to ObamaCare is the financial impact it will have on transport programs and patient services across the state
“Seventeen years ago most volunteer rescue squads did not have the experience or the resources to bill and collect reimbursements from payers, which include Medicare, Medicaid, commercial insurance companies, the VA, hospitals, nursing homes, third party liability (for accidents, etc), or patients if they are uninsured,” explains Stanley.
EMS Funding and Reimbursements
As you know, there are basically four types of EMS programs, and each has different funding sources.
- Volunteer EMS squads are frequently funded by donations, and in some cases, local municipalities supplement those programs. Many apply for and receive grants to carry out their mission, and still others bill for their services. These volunteer squads are usually non-profit entities and are staffed by trained volunteers from all walks of life.
- County, town and municipality-based programs employ EMS professionals, both full-and part-time. Ambulances are staffed with paramedics, the highest trained pre-hospital caregiver. Paramedics use advanced skills, medications and procedures to stabilize the patient before they are transported to a hospital emergency department for further care.
- There are several counties in North Carolina that contract with hospital-based ambulance services staffed with paramedics to provide EMS services.
- Some counties contract with private-for-profit ambulance-based services to handle 911 calls, as well as providing general transport. (Example: nursing home transport for bed-ridden patients to a physician’s office, transport for dialysis, etc.)
“For the EMS programs that bill for reimbursement, there are huge compliance issues that can easily result in an audit,” says Stanley. “For example, let’s say I own a private ambulance service. While reviewing their reimbursement records, a Medicare representative notice an increase in a certain type of transport my company provides. They decide to do a random sampling of 90 of my transport records during a two-year period. Medicare auditors would review those 90 trips, and if they determine that 45 of those trips were not medically necessary – that the patient could have taken another method of transportation rather than by ambulance – that would be a 50 percent error rate. They could ask my company for a reimbursement for those trips, but they could also extrapolate the reimbursement for that two-year period of time. That means they could actually ask for 50 percent of all the reimbursements my company received during those two years. If I was reimbursed $2 million, I could be responsible for returning half that amount — $1 million — to Medicare. Even after going through the appeals process, it could easily put my transport service out of business.”
Stanley says that as a result of the Affordable Care Act, there are more frequent audits of records in an effort to prevent fraud. In fact, the Department of Health and Human Services (DHHS) has budgeted $300 million to combat Medicare and Medicaid fraud by way of program safeguard contractors, or in layman’s terms, auditors. DHHS says for every dollar they spend on the auditing process, they recover approximately seven dollars in recoupments and refunds. As you can see, it can be a lucrative proposition for them. It can also make life much more difficult for your EMS program.
How ObamaCare Enrollment Affects EMS
Many people are unclear as to how ObamaCare will affect the quality of health care they receive, as well as how much it will cost them. But first, those people have to enroll. To meet the Obama administration’s goal of seven million enrollees by March 31, 2014, the program needs to sign up more than 38,000 participants per day. That’s been a challenging task thus far since the federal government’s website, HealthCare.gov, has been plagued with technical problems. Meanwhile, N.C. Governor Pat McCrory did not accept federal assistance for expanding the N.C. Medicaid program, so it’s very unclear as to how many of the 1.5 million uninsured citizens will get insurance. Right now, about 1.3 million of those will be eligible for the type of federal subsidies that will allow them to purchase health care through the health care exchange program. Those numbers will directly impact EMS programs statewide.
“Ambulance services have a higher uninsured patient census than what’s typical in health care,” Stanley says. “Now those uninsured citizens will have insurance options through Coventry Healthcare of the Carolinas or BlueCross/BlueShield of N.C. through the health care exchange. One would hope that those uninsured would get Medicaid coverage or private plan coverage, but that still remains to be seen. As for our EMS billing clients, we’re going to be monitoring their payer mix because that number will be affecting reimbursement rates. Currently, we have about a five to 15 percent collection rate for transports of uninsured North Carolinians. However, for commercial insurance reimbursements, we have a 75 to 80 percent collection rate. For Medicaid, we have about a 90 percent collection rate. We will re-categorize the uninsured group, understanding that rather than having a low chance of being paid, we have a relatively high chance of being paid, once they become insured. Right now, we just don’t know what the reimbursement rate will be. I suppose it’s better to get something than nothing.”
Penalties and Purse Strings
A hot topic of conversation during hospital staff meetings these days is the reduction of patient readmissions. As part of the Affordable Care Act, hospitals will be financially penalized if patients are readmitted within 30 days of discharge, thereby lowering the amount the hospital receives in reimbursement for services they provide. “This year 27 North Carolina hospitals will pay no penalties, while 61 others will be penalized because their readmission rates are too high,” says Stanley. “Ultimately, this is a financial issue for everyone, including all health care consumers, because we already pay so much in health care premiums in order to cover these rising health care costs. Everyone needs to do their part to reduce expenses.” That’s why hospitals have begun partnering with EMS providers to brainstorm unconventional care options. “That may include protocols like evaluating whether a patient can be taken to an alternative destination for treatment, like an urgent care or doctor’s office or clinic, rather than a hospital ER every time,” Stanley explains.
A great example of a collaboration that reduces costs while improving the quality of medical care is the partnership between Wake County EMS and a private medical practice, Doctors Making Housecalls. During a three-year pilot program primary care physicians from Doctors Making Housecalls are coming directly to specific assisted living facilities to care for falls patients who don’t meet requirements for an ED transport. These patients are treated in their own living environment which eliminates the cost of EMS transport, hospital care, and unnecessary tests and procedures. Interestingly enough, other countries like Germany have long used designated physicians, called Emergency Medical Service Physician Field Responders, to provide a similar type of in-home health care that has been quite successful.
ACA: Here to Stay
Regardless of your political affiliation or your thoughts on government-subsidized health care, the fact is, there’s no turning back; the Affordable Care Act is here to stay. The question is, how will it affect those of us in the EMS world? Will these changes impede, improve, or change our responses to an EMS call? The answer is quite possibly yes, but to what extent ... well, that is another unknown. Hopefully, we’ll all have more solid answers in the year 2014.
Amar Patel is the Director of the Center for Innovative Learning at WakeMed Health and Hospitals. Mr. Patel is responsible for integrating technology based educational programs to include human patient simulation, healthcare gaming, and hybrid education into regional educational programs. As a member of the Center for Patient Safety, Amar strives daily to make changes to processes in healthcare that will directly improve patient and provider safety.The WakeMed Center for Innovative Learning is a designated Center of Educational Excellence by Laerdal Medical, one of the world’s leading providers of health care solutions, including products and services for simulation, immobilization, basic and advanced life support, patient care, self-directed learning and medical education.