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Hunting for Dollars: Three Political Trends Driving Change in EMS Funding

by Michael Brook on October 16, 2017 at 12:19 PM

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While addressing EMS funding through legislative and political channels is nothing new, the flurry of activity at the national and state levels is greater than it has been at any point in the last 10 years. There are several factors that are driving this increased activity.

  1. Fee-for-Service vs. Fee-for-Value

The biggest driver is the evolution of healthcare coverage and the attempts to try and contain costs in the United States. The Affordable Care Act, along with other legislation, has been pushing healthcare providers to move away from volume-based services and to necessary services. This is being done through incentivizing providers based on patient outcomes and the quality of services being provided, not the number of tests conducted or the length of hospital stays. Most other areas in healthcare, such as hospitals and physicians, have started to operate under that model.

Right now, EMS is still provided on a fee-for-service basis, but we all hear the footsteps. This uncertainty is causing EMS to take risks that it hasn’t before, which is why there are multiple pieces of federal legislation starting down the path of quality based outcomes, including HR 3729 (previously HR 3236) and Senate Bill 967 in 2017 (and previous iterations in 2016).

  1. Ambulance Supplemental Payment Plans

Another related driver is the sheer fact that the cost of providing ambulance services is high (24/7 readiness) and most Medicaid programs, and any uninsured patient, only reimburse at a small fraction of the cost of provided services.  Many states have implemented or taken steps to implement Ambulance Supplemental Payment Plans to obtain additional federal monies to compensate for Medicaid transports. Additionally, some states have or are looking at Quality Fees/Taxes that can be used to obtain additional funding for Medicaid transports. These efforts to secure funding are not necessarily viable, ongoing funding streams, but they do supplement the recovery for transporting agencies.

  1. Self-Sustainability Push

Finally, the other big factor is that more EMS agencies are being asked to become self-sustaining or, at least, be less of a burden on the municipalities that provide the services. It is very common now for an EMS agency to need to justify the revenue versus the cost of adding ambulances when it used to be a case that it was for the public good.

There is a lot of confusion in the industry around current legislation and even around EMS operations. Should industry groups be for or against specific legislation and what are the exact implications of the legislation? Is it good for EMS to be re-categorized from a “Supplier” designation with CMS to a ‘Provider”? If changes are made, what are the impacts on services provided and reimbursement opportunities?  How much should private versus municipal-based ambulance services influence funding mechanisms?

Part of the answer is that we will have to wait and see: this is an evolution and nobody can answer the previous questions with certainty. EMS has to change, and the details of many of the pieces of outstanding legislation are not known until after they are passed and fully fleshed out. What, then, can you do?

Use your network to understand different perspectives and don’t fall for the proclamations that make these issues out to be black or white. At Intermedix, we look across our businesses to think about trends, the bigger picture and what these trends might mean in EMS. We continue to grow our analytic capabilities, including sophisticated dashboards and utilizing data science and predictive analytics to prepare for what’s to come. To that end, we encourage you to discuss these changes with us, share your ideas and leverage our insight to help us guide you in the future.

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This post was written by Michael Brook

Michael Brook is the senior vice president of EMS client services at Intermedix. Michael is the west region operational leader focus on EMS billing service. Michael obtained his bachelor's degree in economics with a minor in mathematics from University of California, Davis and obtained his masters degree from the Sloan School of Management at Massachusetts Institute of Technology.

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