One of the biggest challenges involved in providing superior prehospital care is obtaining the appropriate funding to pay for it. Funding is needed for salaries, equipment, as well as ongoing training. It seems that there is a disproportionate amount of money available for fire services, but these funds tend not to be as readily obtainable by emergency medical services (EMS). There are, of course, many models for EMS, all of which vary in their funding structure, but rarely does any model rely on a single revenue source. Similarly, each model has different requirements and often a different focus. For example, whereas a paid municipal department may rely heavily on tax revenues and government funding to pay for their employees and benefits, a private volunteer agency may receive no public funding and have minimal if any costs associated with payroll. However, both agencies would likely look to other funding sources such as private businesses, donations, state and federal grants, etc, to ensure the reliable delivery of high-quality care.
There is also variance among agencies regarding the level of service they are willing and able to provide, which may be a direct result of financial concerns. For example, some agencies choose to staff advanced life support ambulances only. Others choose to staff a mix of basic and advanced life support. Some choose to staff multiple ambulances to try to ensure their agency is the one providing timely service in the district, while others staff only a single ambulance, relying on surrounding agencies to cover their district when the primary agency is unavailable. These decisions of how to staff and the level of service to provide are often based on cost and resources but are key to strategic planning.
Another important aspect of EMS finance that varies among agencies is reimbursement. Serving a relatively poor population can be quite expensive, particularly if it is busy. Despite the high volume, low reimbursement rates and inability to collect on self-pay patients can lead to high losses. These agencies often are dependent on funding from the municipality as a public service. Conversely, serving an affluent area with patients carrying excellent insurance can be very lucrative, even with relatively low volume. Location near an institution with a large number of paid transfers can also be extremely lucrative. Regardless, finding funding sources to offset low reimbursements is critical to viability as is the ability to collect on bills. Variances in reimbursement vary not only locally, but regionally as well and these differences must all be considered when developing a budget and business strategy.
Describe sources of funding for EMS agencies.
Discuss levels of reimbursement for EMS.
Detail CMS (Centers for Medicare & Medicaid Services) criteria for reimbursement and discuss regional variability for reimbursement.
Define “payor mix” and discuss the financial impact of regional variability on EMS agencies.
Describe mileage as a modifier to reimbursement.
Describe “medical necessity” and preauthorization for interfacility transport calls.
Describe how electronic PCR (patient care record) may improve reimbursement.
Describe tax districts and discuss municipal funding.
Describe EMS district contracts.
Describe grant writing as a method to obtain needed equipment and training.
The National Academy of Sciences-National Research Council's Accidental Death and Disability: The Neglected Disease of Modern Society and subsequent Highway Safety Act of 1966 contended that prehospital care had been terribly neglected. One of the tenets of the Highway Safety Act was to establish the Department of Transportation (DOT) and in doing so, gave the DOT authority and funding to try to improve EMS. This was essentially the first federal funding for EMS. Unfortunately, while somewhat helpful initially, these funds led to solutions that lacked sustainability despite extensions of funding in 1976 and 1979 and the bulk of the burden of funding fell to individual states and individual agencies to maintain financial viability—part of the reason why there is such variability in financial stability among EMS agencies.
Today, funding comes from a myriad of sources including various taxes, special contracts, direct patient billing, grants, private funding, fund-raising, and subscription services to name a few.1 We will examine each of these potential revenue streams.
Taxes are one of the most common means of raising money for EMS systems. These can include property taxes, sales taxes, real estate taxes, or other “special taxes.” Property taxes are among the most common. These taxes vary with property values and may or may not increase depending on assessed values, leading to the potential for variability. For better or for worse, it also follows that areas that are more affluent often generate more revenue with this type of system whereas poorer areas do not, and hence may not collect adequate funds. Sales taxes are another type of tax and can be used in different ways depending on the location. For example, a simple sales tax addition would net revenue for sales of all goods. However, in areas in which there is a large transient population or tourist population, a more specific sales tax may help offset some of the burden on the local population. This might include a hotel tax, restaurant tax, or other “tourist” tax.
In addition to property taxes, special real estate taxes can be added to real estate sales. These can be very lucrative but are most effective in areas where single-family homes are bought and sold as opposed to areas with many homes and apartments that are simply rented. Other special taxes may be instituted that are simply for the generation of fire/EMS funds. Most commonly the level of these types of taxes are based on dwelling size, fire-fighting measures (sprinklers), materials, etc. These taxes tend to be more often linked to fire prevention and therefore aid municipal fire service-based agencies far more than private/volunteer agencies.
Exclusive contracts are often an effective way to secure part of the market. These contracts are made between an agency and a municipality, a fire department, or a specific facility. With municipalities, in return for a sum of money and/or other considerations, a guarantee regarding certain services is given. This usually involves guarantees of response time, level of service, and availability. In some areas, contracts may be made between the fire district and an ambulance agency, and in others, the fire chief can simply decree that a certain agency will be called first for calls in the fire district and only if that agency is unavailable will a second agency be called. This type of exclusivity ensures a certain revenue stream despite where and how competitors may be positioning themselves. Contracts can also be made between agencies and facilities. This can be for transports into or out of that facility. Often specialty centers such as pediatric hospitals, burn centers, trauma centers, etc, contract with an agency for their many transfers of patients. Securing such a contract may be particularly lucrative as these transfers often carry a premium and commonly have a higher reimbursement rate than a typical emergency call.
The most intuitively obvious way to get paid for providing prehospital care is by billing the patient. Paradoxically, this is often the most complicated due to varying reimbursement schemes, which are discussed later. In general, reimbursement occurs via billing to Medicare, Medicaid, private/commercial insurance, or self-pay. Obviously not only is there wide variation based on the area of the country, but even within a local region there may be variance in payor mix between a relatively affluent area of young professionals and an area of poor seniors, both of which may be served by the same ambulance service.
Grants are another way in which EMS systems may earn revenue, although the availability of these grants by far favors fire agencies over EMS agencies. EMS agencies that are fire based may share in some of these funds depending on the precise wording and appropriation of the monies, but often are still left working with old and outdated equipment while their fire colleagues enjoy new vehicles, safety gear, and other critical apparatus necessary to their mission. Initially, these grants were often federal, beginning in 1966 and continuing through 1981 with some focus on self-sustainability. However, much of the grant money shifted from federal grants to state grants, which also left EMS competing for funds with other state public health initiatives. In very rare occasions, local grants may be available, but generally any grant money to be found must be located at the state and federal levels.
State funds are often available in the form of low-interest loans for capital improvements or state taxes or assessments related to driver licenses fees and fines. These are often only meager as they are generally distributed across the entire state. States may also become involved in special purpose grants designed for very specific reasons, but which then can have benefits beyond the original stated purpose. State grants may also be in the form of matching grants, in which case an agency must demonstrate that they can match the state dollars or at least some predetermined percentage of those dollars in order to receive them. Again, these funds tend to favor fire agencies far more often than they do EMS agencies, but occasionally these dollars do become available. Federal grant money is available, but rarely directly to an individual agency. Rather, these funds are most often dispensed through state agencies.
Private funding is another potential revenue stream that is available to a few agencies that often have the good fortune of being located in close proximity to large, national corporations with significant presence in an area and/or that have a large number of employees who live in a certain area. These corporations often support public services as a demonstration of goodwill and being a good neighbor, as well as for the obvious public relation benefit and tax benefits they may enjoy. Nonetheless, this type of funding is often available when sought out. Smaller corporate neighbors often can also contribute on a smaller scale and are happy to do so. Corporations may also sponsor employee donation matches, and in doing so, support their own employees as well as the organizations that they personally care about. Outside of the local community, there are also various foundations locally or nationally that may have funding available for EMS. These, again, tend to favor fire agencies over EMS, but in the age of current technology, Web sites such as http://foundation center.org help agencies locate foundations that may be of potential benefit to them. These foundations are often nonprofit organizations that exist expressly for supporting various causes. These are usually independent foundations. There are also corporate foundations that are formed as a vehicle for corporations to conduct their charitable contributions. Lastly, there are sometimes local foundations that tend to be more community based, focusing on aiding a specific area.
Many agencies participate in some type of public fund-raising efforts. Those may include bake sales, car washes, boot drives, or simple direct-mail fund-raisers. Some popular fund-raisers that are often held at meetings or gatherings are 50/50 raffles, where the winner wins half and the other half goes to the sponsoring agency. The best type of fund-raiser may vary from area to area and with different demographics. These are decisions that must be made carefully, as while the funds do need to be raised, pragmatic concerns such as safety, the relative affluence of the community, etc, may impact which type of fund-raiser would be best received by the community and how frequently fund-raisers should be held.
One of the newer means of raising funds involves a “subscription service.” As opposed to a fire-based subscription service, which is often based on an annual fee per square foot with modifications for fire prevention measures, EMS programs usually charge an annual fee per address, which would cover either any and all EMS provided that year or the portion that is not covered by the patients' health insurance. In this way, subscribers need not worry about calling the ambulance and significant expense for transportation. Conversely, the ambulance agencies may collect an annual “premium” without needing to provide any services at all. Nonsubscribers are billed in the traditional method and unaffected by this service. This type of program is obviously somewhat involved to implement and manage and requires due diligence be performed to ensure that the time and money invested by the agency in such a program does, in fact, yield a net benefit, but can be helpful to both the agency and the community.
The simplest way to understand EMS reimbursement is to recognize the use of the HCPCS (Healthcare Common Procedure Coding System) for billing by CMS (Centers for Medicare & Medicaid Services). These codes are used so that the appropriate level of payment is billed based on the services provided. In EMS, they range from AO425 to AO436, each with a slightly different code description, reflective of the various levels of service (Table 25-1).
EMS Reimbursement Codes
||Download (.pdf) TABLE 25-1
EMS Reimbursement Codes
|HCPCS Code ||Code Description |
|AO425 ||Ground mileage, per statute mile |
|AO426 ||Ambulance service, advanced life support, nonemergency transport, level 1 (ALS1) |
|AO427 ||Ambulance service, advanced life support, emergency transport, level 1 (ALS1-emergency) |
|AO428 ||Ambulance service, basic life support, nonemergency transport (BLS) |
|AO429 ||Ambulance service, basic life support, emergency transport (BLS-emergency) |
|AO430 ||Ambulance service, conventional air services, transport, one way (fixed wing) |
|AO431 ||Ambulance service, conventional air services, transport, one way (rotary wing) |
|AO432 ||Paramedic intercept (PI), rural area, transport furnished by a volunteer ambulance company which is prohibited by state law from billing third-party payers |
|AO433 ||Advanced life support, level 2 (ALS2) |
|AO434 ||Specialty care transport (SCT) |
|AO435 ||Fixed-wing air mileage, per statute mile |
|AO436 ||Rotary-wing air mileage, per statute mile |
The following definitions for the services above are provided by Chapter 10 of the Medicare Benefit Policy Manual:
ALS1 (advanced life support, level 1): Transportation by ground ambulance providing supplies and services including an ALS assessment or at least one ALS intervention. For these purposes, ALS is defined as an individual trained above the level of a Basic EMT. An ALS intervention is one that requires higher training than an EMT Basic and is deemed medically necessary.
ALS1-emergency (advanced life support, level 1-emergency): This is the same as an ALS1 response, but in the context of an emergency response. That is, one which requires an immediate response. In most systems, this would constitute a priority 1 or 2 response, a “hot” response, or a lights and sirens response. The type of response is determined by the dispatch protocol for that type of complaint.
BLS (basic life support): Transportation by ground ambulance, staffed by at least one EMT-basic
BLS-emergency (basic life support-emergency): Like ALS1, this is the same as a BLS response, but in the context of an emergency response as described above.
Paramedic intercept: These are ALS services that are provided without the ambulance transport. Usually this is in the context of an agency with BLS services being dispatched to transport a patient, but requiring advanced ALS services and so an ALS provider meets the ambulance on the way to the hospital. There are only limited situations in which this code can be used, as the services must be in a rural area, with a contract with a volunteer agency.2 The volunteer agency must be prohibited from billing anyone for their services, and the ALS service must bill all patients who receive services from them, regardless of whether they are Medicare beneficiaries. As of 2008, New York is the only state in which these services are covered.
ALS2 (advanced life support, level 2): This is ALS service by ground ambulance that requires at least three separate administrations of one or more intravenous medications or the performance of at least one of several advanced procedures such as defibrillation, endotracheal intubation, chest decompression, etc.
SCT (specialty care transport): This is an interfacility transport by ground ambulance that requires a level of service above that that can be provided by a paramedic. Often this may require a nurse or physician to provide a higher level of care or monitoring of medications that are beyond the scope of the paramedic.
SCT transports are particularly lucrative because the relative value units (RVUs) for an SCT are 3.25 compared with 2.75 for the ALS2, 1.90 for the ALS1-emergency, and 1.20 for ALS1. This is interesting given that while SCTs often may involve the critically ill patient, there is a higher level of care available that may often provide whatever increased level of care is required.
In addition to the level of service that provides a reimbursement rate, there are also mileage modifiers to take into account the distance traveled with a patient aboard the ambulance. So, for example, an ALS1-emergency service would be reimbursed at the rate of the ALS1 rate plus the distance in miles traveled multiplied by the ground mileage rate. This aids agencies that have longer transports to facilities.
Air ambulance services, regardless of fixed wing or rotary wing, differ from ground ambulance coding in that the patient must meet certain requirements to determine whether reimbursement at the air ambulance rate will be approved. As with ground service, the service must be both “necessary and reasonable.” The air ambulance rates are much greater than ground to account for the much higher costs associated with providing such services. To qualify for this reimbursement rate though, a patient must meet certain requirements that make ground service inappropriate, which include such requirements as:
The patient requires immediate and rapid ambulance transportation that could not have been otherwise provided by ground.
The point of pickup is inaccessible by ground.
Great distances or obstacles are involved in getting the patient to the nearest appropriate hospital.
Medical reasonableness may be determined when time is a significant factor that puts the patient's health at severe risk. Conditions that may meet this requirement include intracranial hemorrhage, life-threatening trauma, emergent need for a hyperbaric oxygen chamber, etc. When time is a significant factor and that time by ground is excessive, air ambulance transport may also be appropriate.
CMS CRITERIA FOR REIMBURSEMENT
In brief, the criteria for reimbursement are based on the codes as described above and the necessity of the services that are provided. Presuming that reimbursement is appropriate, over the past two decades, various adjustments have been made to the fee schedule to help account for differences in rural versus urban transports. In 1997, this began with the Balanced Budget Act which implemented the national fee schedule. Then the Medicare Prescription Drug, Improvement and Modernization Act of 2003 made adjustments that allowed for a regional fee schedule as well as a bonus on the mileage for transports over 50 miles. It also increased the base pay for ground ambulance transports originating in certain rural areas when the point of pickup was in a group of designated ZIP codes. Finally, a temporary increase in payments for rural areas (2% increase) and urban areas (1%) between 2004 and 2007 was approved. In 2008, the Medicare Improvements for Patients and Providers Act extended these increases through 2009 and increased them to 3% for rural and 2% for urban. Base payment rate for ground ambulance trips from the most rural areas based on population density was increased in 2010 with the Patient Protections and Affordable Care Act of 2010, unofficially referred to as the “super-rural” bonus. Rural and urban increases were extended through 2010 with this act and then again through 2011 with the Medicare and Medicaid Extenders Act of 2010 and through 2012 with the Temporary Payroll Tax Cut Continuation Act of 2011 and the Middle Class Tax Relief and Job Creation Act of 2012. The current legislation, the American Taxpayer Relief Act of 2012, extends the increases once again through 2013 along with the “super-rural” bonus.
The current payment structure is exceedingly complicated and open for change on a yearly basis. In addition to the various adjustments for rural and super-rural ZIP codes, there is also an adjustment based on the Geographic Practice Cost Index (GPCI), which adjusts for regional cost differences. For example, West Virginia has a GPCI of 0.828, while the areas that are classified in San Francisco, CA, have a GPCI of 1.360. When the full calculation is performed, for a rural ground base rate, the calculation is (RVU × (0.3 + (0.7 × GPCI))) × base rate × 1.03 + base rate × 1.03, and then for those in the super-rural areas in the lowest quartile of all rural populations by density, the base rate is then multiplied by 1.226, and for the first 17 miles of rural mileage by ground, the rural mileage rate is 1.5 times the base rural mileage rate.3
IMPACT OF PAYOR MIX ON REIMBURSEMENT
Reimbursement can be very highly variable based on demographics. While across the board, according to the Government Accountability Office Survey of Ambulance Services, nationally, a typical payor mix consists of approximately 40% to 45% Medicare, 15% to 20% Medicaid, 15% to 20% private/commercial insurance, and about 25% private pay, these numbers can vary drastically. What this means for an individual agency is that if the majority of their patients are uninsured or self-pay patients, they may have an extremely difficult time collecting any of their charges. Conversely, if the demographic mix is biased toward the Medicare population, the agency may be able to count on the complicated fee structure described previously, but may not be able to collect much more than that. If an agency has the good fortune of being located in an area that is relatively affluent or even primarily working middle class with private insurance, they may do very well with collecting charges and being a solvent agency while an agency with similar volume across town struggles to make ends meet. The GPCI mentioned above helps take these differences into account and adjust for them. While it may not completely solve the problem of agencies being able to collect charges from self-pay patients, at least it will ensure they will be able to recover monies from the Medicare and private insurance patients to help subsidize the other patients.
As previously discussed, the mileage reimbursement factor can also make a significant impact on a fee. These rates can be substantial, as exemplified by the state of Georgia, which gives an example from the 2009 rules in which the base BLS-emergency rate for a rural 44-mile transport is $540.34, but the mileage component from a rural area adds another $11.26 per mile, nearly doubling the reimbursement.3 There are also mileage bonuses that are designed to help rural services that perform only very few transports (rural adjustment factor or RAF). For rural ground mileage in which the point of pickup is from a certain ZIP code, miles 1 to 17 are reimbursed at 150% of the rural mileage rate, even further increasing this valuable factor.
The definition of a “rural” area for the purposes of reimbursement, except for a paramedic intercept, is any ZIP code located outside of either a Metropolitan Statistical Area (MSA) (Figure 25-1) or in New England, a New England County Metropolitan Area (NECMA). There are also the rural areas which exist within an MSA or NECMA that are categorized as rural under the Goldsmith modification. This was described by Harold Goldsmith, Dena Puskin, and Dianne Stiles in 1993 to account for sparsely populated areas within very large metropolitan ZIP codes that necessitate long transports to appropriate health services. There are also the “super-rural” areas, in which they are in a rural ZIP code that is among the lowest quartile of all rural ZIP codes based on population density. For transports that originate from the super-rural ZIP codes, the base payment for ground ambulance transports increases by 22.6%. Everything that is neither rural nor super-rural is classified as “urban,” though it may hardly be a typical large, bustling metropolis.
One of the caveats to the mileage reimbursement rate is that mileage is reimbursed only up to the mileage for the closest appropriate facility. Bypassing an appropriate facility to travel to one with comparable services farther away is not generally covered. However, as long as the origin of the transport is within the same “locality” as that of another that might be receiving the patient, then the mileage to either of the facilities is covered. Locality is defined as “the service area surrounding the institution to which individuals normally travel or are expected to travel to receive hospital or skilled nursing services.” The Medicare Benefit Policy Manual explains that despite having a hospital closer to a patient's home, if there are other hospitals that are farther away, but routinely provide services to members of that patient's community, then the community is considered to be within the “locality” of those other hospitals and ambulance service to any of these hospitals should be covered.
One of the requirements for reimbursement of services is to demonstrate medical necessity of services. Necessity is defined as “when the patient's condition is such that use of any other method of transportation is contraindicated.” It is irrelevant as to whether those other methods of transportation are actually available, but if the patient does not need an ambulance, payment may not be made. Those alternatives may include such options as wheelchair van, taxi, bus, or even privately owned vehicle. Additionally, the transport must be for a medically necessary reason. This would include both transport to, or return from receiving a Medicare covered service. The Medicare Benefit Policy Manual includes a fairly complete list of the circumstances under which necessity is covered, but some of the more common reasons include bed confinement, oxygen dependency, need for restraints, need for stretcher, or transport in an emergent situation.
In the scenario in which a patient is transferred from one facility to another facility because the first facility lacked the appropriate or necessary resources to care for the patient, this transfer is generally a covered service. Any emergent transport, interfacility or otherwise, is a covered service. However, when services are deemed to be nonemergent, proof of the necessity of an ambulance is often required and cannot be met simply by a physician's order. The proof is demonstrated via the prior authorization process. This is generally required for nonemergent repetitive scheduled transports, nonemergent nonrepetitive scheduled transports, and some nonemergency, nonscheduled transports. An example of the nonemergency repetitive scheduled transports would be routine dialysis. To meet the “repetitive” requirement, a transport must be required at least weekly for 3 weeks or at least three times within 10 days. Nonemergent, nonrepetitive scheduled transports might include transport for a scheduled doctor visit for which the patient requires an ambulance as opposed to some other means of transportation. “Scheduled” means when the transport is scheduled more than 24 hours prior to the time of transports, while “nonscheduled” transports occur within 24 hours of scheduling.
ELECTRONIC PATIENT CARE REPORT
For years, ambulance agencies have been using the patient care report (PCR) as a means of both medical documentation and for billing purposes. Historically, this has been a handwritten document of widely variable utility based on legibility, incompleteness, inaccuracy, and variation in practice, not to mention susceptibility to being lost. As technology has moved forward, electronic PCRs have come to market, which have had a tremendous impact on billing, reimbursement, and general operations. Now, rather than having to be mailed, faxed, or otherwise sent into billing agencies, literally at the click of a mouse, the electronic patient care report (ePCR) can immediately be sent to billing, the state for research, the agency archives, and almost anywhere else that it is needed. The impact that the ePCR has had on reimbursement through decreased time, better legibility, autopopulating of fields, and compliance with completion of mandatory fields has been impressive. In addition, these ePCRs can be linked directly to third-party billers as well as supply software, to help streamline both the billing process and the inventory process without duplicating work.
There is still great debate in the EMS community about the actual time savings that an ePCR brings. For an individual call, completing the documentation may be more tedious with the ePCR than it once was. However, many users are comparing their current ePCRs to the shoddy handwritten documentation that they had been allowed to get away with. The ePCRs do have many time-saving features for the user, but they do mandate certain fields, sometimes have limited options from a drop-down box, and are prone to technological glitches that can prove extremely frustrating.
Nobody can deny the impact of ePCR on legibility, and with the aid of spell check, documentation is often much clearer than it had been using the traditional PCR. However, not all providers have entirely embraced this technology as it has required them to learn some basic typing skills, and some of the programs can be quite tedious with multiple pages and many data elements to capture. Nonetheless, the legibility aspect has greatly improved the PCR as a true communication tool. Physicians in the emergency department can now read and understand a PCR much more easily; billing companies can similarly appreciate what was done and why.
One feature of many ePCRs is the ability to autopopulate certain fields. For example, certain demographic information on patients such as address details can autopopulate when used with a certain CAD device (AmbuPro EMS and TriTech IMC CAD). In other programs such as ESO ePCR, fields such as City, County, and State can be automatically filled in when the ZIP code is entered. Similarly, for common pickup points or destinations, simply selecting the name of the location can autopopulate the entire address field. For patients for whom prior calls have been made, medication lists, allergies, past medical history, etc, can be retrieved. This can save a tremendous amount of time with documentation, and instead of starting from scratch, the provider can simply verify this information and make updates as needed. Alternatively, in a critical patient who cannot give much history, this may prove useful in gathering additional information about the patient.
Electronic PCRs can often check for mandated fields required for reimbursement, or reporting purposes. If they do not hold up processing of the chart, at the very least they can prompt the user to fill in these required fields. This can decrease delays in reimbursement and in fact has allowed the reimbursement process to begin sometimes before the crew even returns from the call through wireless submission of the ePCR. Many states and regions maintain databases such as the National EMS Information System (NEMSIS) that require certain information about each patient. Similarly, there are some required data fields needed for billing. With paper PCRs, these fields can easily be bypassed, but ePCR not only can force the user to fill out those fields, but can allow administrators to customize mandatory fields.
Many of the ePCRs on the market further enhance the billing process by electronically connecting the PCR with third-party billing companies. Again, at the click of the mouse, the information is sent electronically via secure server to the billing company, allowing more rapid and accurate billing and hence, reimbursement. Several of the ePCR solutions available on the market are more robust than others, offering features to further streamline operations such as either directly linking with existing inventory software or offering their own inventory software that links with the ePCR software. In this way, when the PCR is completed, indicating what resources were utilized, the inventory is automatically updated to reflect this, reducing redundancy of data entry and ensuring proper updating of the inventory and reconciliation with the PCRs.
The delivery of ambulance services can come in many varieties, all of which must not only provide appropriate care, but be financially responsible. Some communities operate only municipal ambulances—that is, the ambulance service is provided by the local government and local taxpayers. Other communities contract with commercial services such as Rural/Metro Ambulance Service or American Medical Response, two of the largest companies in the United States. Still other communities contract with somewhat smaller, local agencies to ensure that while the daily management responsibilities and cost of running an ambulance service are not the municipality's, significant resources are put forth to ensure that its citizens are afforded excellent and timely care. An agency that is able to secure a contract of this type may help ensure that even if another ambulance agency holds a Certificate of Need that encompasses that district, they should get the first call for calls in the district. On the other hand, if circumstances change and the contract needs to be dissolved or withdrawn, as a standard item, the contracts generally have details that outline this process and under what circumstances this is allowed. For example, failing to meet the response time parameters, failing to keep the ambulance staffed as per the contract, or failing to meet other performance measures that are written into the contract may all result in dissolution of the contract and subsequent withdrawal.
Contracts with agencies can vary widely in content and structure. Often there is a certain level of service that is specified, such as ALS or BLS, with certain response time during certain hours. For example, a municipality may contract with an agency that for their district, they expect one ALS ambulance and one BLS ambulance during the day, dropping down to one ALS ambulance overnight. Similarly, a contract may specify that at all times, a minimum of two BLS ambulances will be in service. Obviously, these decisions are best made with recommendations by the agency itself based on historical data, but these type of stipulations may be written directly into the contract. Another requirement of the contract may be response time. For example, within EMS, there has long been a standard that responses should be within 8 minutes 90% of the time. While this standard has persevered for years, it may not be applicable or practical to all areas. In particular, more rural areas or even areas in which there is not 24-hour coverage would likely find it impossible to meet this standard. Regardless of whether the 8-minute standard is clinically significant or not, these types of timing standards are often incorporated into district contracts.
There are grants available for EMS at every level, from local to state to federal, although as previously discussed, these grants often favor fire agencies and availability is much more variable at the local level. The US Fire Administration published their Funding Alternatives for Emergency Medical and Fire Services report in April 2012 that outlines many of the options for EMS funding and provides a starting point for finding many of the state and federal grants. It also provides information and resources on how to write a better grant proposal and other places to find assistance. EMSgrantshelp.com is another Web site that helps agencies, though generally fire, locate relevant grants that are available. These types of resources are only the starting point for locating grants and ones that are a bit harder to find may be less competitive and potentially easier to obtain.
Local grants may be available through philanthropic foundations, local corporations, small businesses, etc. Some national companies will try to ensure that each of their stores or franchises will support the local community through small local grants. While these may not be tremendously lucrative, they do tighten the bonds within the community and may help a small agency significantly.
State grants may include such items as surplus state vehicles, matching grants for capital equipment purchases, training, etc. Other types of state grants address state-specific problems. For example, Alaska has vast territory with very rural landscape, so one of the state grants (Code Blue) helps fund equipment for rural EMS in that state. California has specific state grants available to assist with wildfire education and safety, given their high risk of such events.
Finally, there are the federal grants which are available, but sought after by many agencies. There tend to be several ways in which federal grant money can be provided. The easiest is through a block grant, which essentially allows the federal government to give individual states money fairly and equally based on a formula. These monies are then filtered down to the state agencies and/or down to local government for distribution. The more well-known type of grants are project grants that fund specific programs and agencies or organizations compete for limited dollars, equipment, etc. Much more controversial are funds that are granted through federal legislation, earmarking certain funds for projects, but with highly political tactics used to obtain these funds.
Specific federal departments will also fund grants. For example, the US Department of Transportation funds the Hazardous Materials Grant Program, which has three main grants within it, one of which is the Hazardous Materials Emergency Preparedness Grants. In 2012, this comprised over $21 million that was distributed to the states, territories, and Native American tribal councils, and then filtered to local EMS agencies.
The National Highway Traffic Safety Administration has also served as a source of funding for EMS systems. In 2009, the NHTSA helped develop and administer a grant program to help 9-1-1 centers upgrade to enhanced 9-1-1, providing the caller's location information automatically. The NHTSA has also sponsored a half million dollar safety grant for a National EMS “Culture of Safety” Conference and development of a national strategy to address EMS safety. In addition, the NHTSA has co-sponsored a number of other grants with other governmental agencies to aid EMS agencies at the state and local levels.
One of the agencies with which the NHTSA has worked closely is the Department of Health and Human Services. In 2013, the DHHS announced the Emergency Medical Services for Children (EMSC): Targeted Issues Demonstration grant to enhance pediatric emergency medicine. This is just one of several efforts that the EMSC has been involved in, including the very important Pediatric Emergency Care Applied Research Network (PECARN) project. The Office of Rural Health Policy is a specific office within the Health Resources and Services Administration that addresses health care issues for rural areas at the local and state levels. One of its many responsibilities is to administer grant programs that help with upgrades in EMS such as through the Medicare Rural Hospital Flexibility Grant Program (Flex).
The National Institute of Health has also been actively involved in grants that apply to EMS, such as Research on Emergency Medical Services for Children. While NIH grants such as this are often very broad, encompassing everything from prehospital care to in-patient care, demonstration of applicability to the overall goals of improving pediatric emergency care may give eligibility to agencies. The EMSC is a national initiative to reduce pediatric injury and illness. In Arizona, for example, funds have been used to support pediatric specific education. In Maryland, the EMSC Program develops “state guidelines and resources for pediatric care (and) review of pediatric emergency care and facility regulations.” In addition, grants for EMS biomedical and bioengineering research are also available through the NIH.
The Centers for Disease Control and Prevention has recognized trauma as a disease and promotes health “through information dissemination, preparedness, prevention, research, and surveillance.” While they annually award around $7 billion in grants and contracts, these funds are generally available to large organizations with a broad outreach. There have been some block grants through the CDC, such as the Preventive Health and Health Services Block Grant, which help provide EMS to states, excluding equipment purchases. For example, in Massachusetts, these funds were used to help set standards for EMT training.
Even the US Department of Housing and Urban Development offers grants and aid to EMS providers, in a somewhat different manner from other federal agencies. The HUD Good Neighbor Next Door Program offers full-time emergency services providers the opportunity to buy a HUD-owned home at 50% off the market value. More traditionally, to promote areas of lower socioeconomic status and ensure public safety, the HUD has Community Block Development Grants that have been used by some cities to purchase new vehicles and renovate old buildings or build new structures used for public safety.
CORRELATION OF EMS SYSTEM COST STRUCTURE TO REVENUE SOURCE(S)
The basic design of an EMS system typically carries closely associated mechanisms for generation of revenue to fund ongoing and future EMS system needs and capabilities. Revenue models commonly differ between fire department (or other city agency administrated systems) and those conducted by public utility or privately held organizations. In fire service led agencies, EMS operational revenue generally is allocated from the fire department's overall annual budget. This, in turn, is most often funded from city, township, village, county, or fire district governmental authority general operating budget monies, also known as the “general fund” for that authority. General funds are most commonly enabled through tax revenue resulting from collection of sales taxes, property taxes, and in some areas, specifically identified fire service taxes. In local government agency–administered EMS systems in which the fire service may provide initial response and treatment, but does not transport, operational revenue is largely collected via the same mechanism(s) and then allocated to that government's so-called “third-service” EMS agency (the other two public safety services being the police and fire agencies).
In contrast, public utility model and privately owned EMS agencies rarely derive whole or majority percentages of operating revenue from geographical-related taxation.4 Important, though minority percentages, of EMS agency financing may be obtained via governmental area subsidy. For example, a city may contract with a private provider of ambulance service, giving the agency a set amount of money upfront per annum to partially offset the provider's anticipated operating costs in that city. Typically, the subsidy is far less than the income realized by the agency through billing for its medical care services directly to patients or indirectly via their health insurance companies.
Additional mechanisms of revenue more commonly affiliated with public utility model and privately owned EMS agencies are utility fee assessments for EMS and agency-specific service subscription programs. In the utility fee model, citizens in a served area may be assessed a set fee per month of utility service, typically water based, but any provided utility could be coupled for EMS revenue generation based on local government regulatory preferences. The concept in this model is straightforward: spreading EMS system operating costs among as many potential patients as possible increases funding stability while simultaneously keeping costs per potential patient reasonably low in most locales. Local governments generally allow citizens to “opt out” of such assessments, but commonly structure such preference to require active communication from the citizen to either the local government or the EMS agency directly. In the utility fee assessment model, while the participating population percentages will vary based on the individual agency and/or location served, a significant majority of the population usually participates. Some utility fee funding programs have enjoyed widespread acceptance by allowing participants to utilize EMS without additional billing beyond their health insurance covered charges.
In lieu of utility-linked fees, EMS subscription fee models exist to leverage revenue generation against the same concept. Even in communities utilizing a utility-linked fee, residents of rental property, multiunit dwellings, retirement facilities, or extended care facilities may not be eligible to participate based on the involved utilities being billed to property owner entities, individual, or corporate. In these situations, the subscription program allows individuals to pay on a set schedule, most often in advance and yearly, for EMS at reduced or no out-of-pocket costs at the time of actual service. Given the purposeful action that must be undertaken, and repeated at least annually, to participate in these subscription programs, EMS agencies often prefer the utility fee-related funding mechanism when given the option by its affiliated governmental authority. Either method can provide some financial certainty to EMS agencies that, solely due to system design, cannot access general fund taxation revenues.
The charges to the users of EMS may be established at agency or local governmental level. The actual costs paid by patients or their representative vary substantially depending on billing methodology. In EMS systems fully funded by one or more of the mechanisms discussed above, no further charges are generated. In these situations, the costs of care rendered have essentially been “prepaid” usually by the larger populace in taxation or utility-linked assessments or occasionally by the individual through a subscription program. Complete cost of care coverage is rare in subscription programs due to a more limited pool of participating subscribers.
Insured individuals are commonly provided EMS care with subsequent agency billing to their insurance carriers, health care oriented, or, in the specific instances of motor vehicle-involved injuries, automotive coverage oriented. Depending on local, state, and federal allowable practices, many EMS agencies negotiate reimbursement charges and rates with prominent insurance providers for the care delivered to their covered parties. This is the same concept utilized by hospitals and individual medical practitioners in establishing their payment schedules with the same insurers. Some areas allow EMS systems to bill insured patients any charges not paid by their insurers. This practice is commonly referred to as “balance billing” the patient. Other locales specifically prohibit this practice by local or state regulation.
In EMS systems that generate bills for services, patients that are uninsured/self-pay can expect to receive an invoice for charges set by the agency or its governing body. An EMS system may choose to utilize this billing practice for all users, with the insured individuals subsequently responsible for getting paid back by their own insurance company. This latter practice is relatively uncommon due to efficiency of payment channels that can be established directly between EMS agencies and insurance providers, depending on an individual agencies billing infrastructure.
Agencies that generate bills for individual service do so through two primary billing structures—in-house or contracted. “In-house” billing refers to local government or an EMS agency directly employing billing professionals and handling all aspects of its billing, from negotiating reimbursement rates and charges with insurance companies to the accounting related to individual payments. Given the complexity of health care financing and insurance reimbursement practices today, many governmental authorities and EMS organizations choose to subcontract billing services to a specialized financial firm. These billing companies are paid either by flat fee or percentage of billable dollars depending on their contract with the EMS system. While structuring the subcontract payment in percentage of billable dollars terms can provide motivation to bill and collect maximum allowable charges, this same motivation can be the genesis for questionable billing practices unless strict adherence to ethical billing is maintained.
The responsibility for ethical billing rests with the EMS agency, or in the case of governmental body-provided EMS, that local governmental body. This “ownership” of billing practices remains with the EMS even when contracting for billing services. Examples are evident in the lay press of the veracity of this principle. While billing service vendor deliberations are rarely part of an EMS physician's duties, the EMS system's adherence to appropriate stewardship of trust extended to it in all forms by its served citizens has clear benefit in fostering and protecting a reputation for quality clinical care.
Regardless of billing structure, financial viability of an EMS agency is directly impacted by its patient payor mix. Systems with a majority of patients covered by government programs, namely Medicare, Medicaid, and/or Tricare, are substantially impacted by subtle changes in reimbursement rates or timetables in these programs.5 Systems with significant portions of patients covered by commercial health insurance may also be affected by the aforementioned government programs, as some private insurers often index their payment rates to one of these same programs. With a multitude of options available in the commercial health insurance market, an EMS system that serves a community with diverse industry and administrative services may well find no one insurer has prominent effect on its revenue projections (Figure 25-2). EMS systems serving a preponderance of uninsured or underinsured patients may find increasingly difficult financial realities. As the practice of EMS medicine involves increasing technology-assisted therapies and emerging pharmaceuticals, costs of clinical care provision, regardless of insured status, rise for all patients.
EMS payor mix. (Based on data from the National EMS Advisory Council EMS System Performance-based Funding and Reimbursement Model May 23, 2012.)
In light of difficult economies over the last several years in the United States, many patients once insured, are now without health care underwriting. These patients may find particular value in EMS systems that do not charge individuals, offer relatively small utility-linked service fees, or encourage participation in subscription programs as previously discussed in this chapter. Although many clinical and administrative EMS personnel view “self-pay” status as equivalent to “no pay,” realities in many communities prove a number of patients view financial obligations to EMS systems seriously, arranging individual payment plans for services they have received.
No single mix of patient payor sources is optimal. In fact, nearly every EMS system finds on such analysis that just as it serves the full spectrum of the human condition, it is compensated by the full spectrum of payors. Accurate appraisal of payor sources and percentages of such sources is important for individual EMS system financial planning, particularly in regard to needed billing resources and efforts in collections.
Detailed discussions and advisements concerning formal contractual arrangements and performance stipulations for billing services are beyond the intent and the scope of this text. However, general concepts can be discussed with a solely educational objective. A major focus, at least in some billing service marketing materials and in comparing in-house billing activities with potential outsourcing options, involves the percentage of billable dollars collected, especially those ultimately placed into the EMS agency's operating funds. Many large, urban EMS systems in America that do bill individual patients realize less than 50% of billable dollars in return. Obviously, assuming proper ethical practices and financial efficiencies, the closer to 100% of billable dollars collected, the more favorable impact on future fiscal abilities in an EMS system.
Percentage collections of billable accounts may often trend with percentage collections of billable dollars, but this is a distinctly separate measure of billing efficacy. This performance measure evaluates the thoroughness of billing collection across the spectrum of payor mix. Even in the best of EMS systems with thorough care documentation and diligent billing efforts, insurers may deny payment for a variety of reasons and uninsured accounts may convert to unpaid accounts. Thus, while 100% of billable accounts reflecting collections would promote highly desirable service revenue, this is unlikely to be approached in nearly all EMS systems serving populous communities.
Both percentage of billable dollars collected and percentage collections of billable accounts are subject to view in timeliness of collections. “Aging” of an account refers to the length of time between invoicing and collecting revenue for services. For example, a bill for services sent March 1 and unpaid on May 10, would place that account in a 60- to 90-day “age” profile. Due attention should be paid to account aging in calculating usable revenue abilities in an EMS system. Theoretically, a billing operation could recognize close to 100% collection of billable dollars and billable accounts, but its affiliated EMS agency could be in financial ruin if the typical aging of accounts necessitated aging in years, not days.
As with any administrative service, the costs of billing operations will vary depending on multiple factors. Business overhead of operational space, computers, communications, numbers of full-time and part-time employees, employer-provided employee benefits, professional insurance, and ongoing professional continuing education are just a few of the factors impacting the finances of financial services. These costs of billing, particularly if outsourced, may be expressed to an EMS agency in an agreed upon total, or fixed, cost. Alternatively, a billing service may take its revenue as an agreed upon percentage of dollars billed on behalf of the EMS agency. At least one positive and one pitfall to such arrangement have been reviewed above.
There are no such EMS industry “standards” in either fixed costs or percent dollars billed costs. The astute EMS administrative leader must carefully evaluate costs of in-house billing operations against suitable outsourcing options and make a decision in the EMS agency's best financial interests.
Regardless of billing service infrastructure, the actual allowable charges for EMS have changed over time. Throughout the 1980s and the 1990s, EMS agencies were allowed to itemize bill for equipment and personnel utilized in the clinical care rendered an individual payment. Translated to a real example, the billing for a cardiac arrest resuscitation might include the following: bag-valve-mask device, oral airway, oxygen at 25 minutes use, endotracheal tube stylet, endotracheal tube, 10-cc syringe, electrocardiogram monitor/defibrillator supplies (electrodes, tracing paper, defibrillation pads), intravenous (IV) catheter, IV start kit, four epinephrine 1:10,000 prefilled syringes, two lidocaine 2% prefilled syringes, paramedic attendant, mileage from scene of cardiac arrest to hospital rounded up to nearest whole mile. Simply summed, the more equipment and procedures involved, the higher the bill. Other allowable billing options included: (1) one inclusive charge, reflecting supplies, service, and mileage; (2) two charges, one for supplies and service with a companion charge for mileage; and (3) two charges, one for service and mileage with a companion charge for supplies. With any of these four allowable billing calculations, once a Medicare beneficiary had paid their deductible costs, the beneficiary remained responsible for 20% of Medicare paid fees. Medicare also allowed for EMS agencies to directly bill the beneficiary for charges above those paid by Medicare. This process is known as balance billing.
Significant change in allowable billing structure occurred with the Medicare ambulance fee schedule implemented April 1, 2002. While overall Medicare spending for EMS-related services was forecast to slightly decrease, an individual agency's Medicare revenue could vary widely under the new schedule depending on prior billing practices, particularly attention to detail in itemized billing. The new, and current, Medicare ambulance fee schedule is based on two primary components: level of clinical care provided and distance of patient transportation. Additional monies are paid to EMS agencies initiating transports in classified rural areas.
Medicare now requires a signature from hospital personnel to certify EMS transport. Further, EMS billings must be filed using specified diagnosis and procedure coding. Based on Medicare review of the EMS documentation of patient condition, payment on behalf of its beneficiaries are made using the following nine levels of ambulance service: basic life support (BLS)-nonemergency; BLS-emergency; advanced life support, level 1 (ALS1)-nonemergency; ALS1-emergency; ALS, level 2 (ALS2); specialty care transport (SCT); paramedic intercept (PI) services; fixed-wing (FW) air ambulance; and rotary-wing (RW) air ambulance.6 Emergency designators apply to EMS agencies responding in immediate means to calls placed via 9-1-1 communications or an equivalent in areas without such systems. The clinician reader of this text may question the inclusion of even cursory details of current Medicare payment structures. The Medicare allowable payments translate into significant clinical ability impacts.
As mentioned earlier, many private insurance allowable payments closely follow those for Medicare beneficiaries. Additionally, in Medicare's billing structure since April 2002, itemized billing for used supplies is notably absent. Thus, when an EMS medical director discusses a new assessment technology, a new therapeutic device, or a new pharmaceutical for inclusion in an EMS agency's standards of care, the financial reality is that the direct costs of implementing that standard of care cannot be transferred in billings as an itemized component. Simple summation with current Medicare allowable charges is the more equipment and procedures involved, the less likely the EMS agency is to have its true costs of service reimbursed.
The clinician reader is directed to their local administrative EMS leaders and relevant health insurer ambulance service reimbursement materials for further study as may be warranted.
EXPENSE EVALUATION: LABOR
Like most service professions, EMS expenses are significantly comprised by costs of labor.7 Many EMS agencies, particularly those serving populous suburban and urban areas, find human-related costs far exceed capital and disposable equipment expenditures. Salaries and benefits have variability on nearly any geographic scale, to an extent that a multitude of related factors must be considered by prospective EMS employees. It is not unusual in many areas of the United States for a single ambulance, staffed at a paramedic level, and placed available for continuous service to be budgeted exceeding $300,000 per year, exclusive of medical equipment.
Durable medical devices prove integral in support of advancing the standards of EMS medical care. The EMS medical oversight physician must work cooperatively with operational and financial leaders to plan clinical advances with fiscal responsibility. Electrocardiographic (ECG) monitor/defibrillators have progressed tremendously over the past 15 to 20 years, now featuring multiple modality monitoring, such as automatic blood pressure determination, waveform capnography, and core temperature measurement. Prominent in clinical care support, these devices are equally prominent in capital equipment budgeting. Many urban EMS are now faced with a literally multimillion dollar decision when purchasing these newest generation monitors.
Mechanical chest compression devices, transport ventilators, battery-powered lift-assist stretchers, and self-loading and unloading stretchers are several other higher expense items increasingly encountered by EMS agencies. While each example can be advocated by medical and marketing literature, none can be obtained cheaply. Technology advances cost, pure and simple.
These higher dollar devices are by design or necessity often placed in multiyear purchasing plans for EMS agencies. Rarely does a sizeable EMS agency have capital equipment reserves or budgets to outfit an entire fleet upgrade by single purchase. The EMS oversight physician must always be a patient advocate, though a financial realist simultaneously.
A litany of other capital medical equipment is involved, but easily to overlook. Oxygen tanks, oxygen regulators, wall-mounted suction units, medical equipment carrying devices (backpacks, kits, bags), and portable communications, including Internet access, phones, and radios must be considered.
All of the previously mentioned capital equipment can be useful, but particularly so when placed on an ambulance for mobility of care provision. While ambulances may prove the ultimate expense in capital equipment budgeting for an EMS agency, the collective costs of durable and disposable medical equipment usually far exceed the base vehicle cost. It is certainly not cheap to buy a new ambulance; it is not cheaper to medically provision it in most situations.
Ambulance purchasing is typically the domain of an EMS executive or applicable government official. While respecting the authority of such, EMS medical oversight physicians should also clearly communicate clinical needs to assist in the proper specification of new vehicles. One current example involves periresuscitation therapeutic hypothermia. Cooling of normal saline to 4°C can be reliably achieved and maintained, but dedicated refrigeration or cooling devices are needed in planning ambulance design, preferably prior to construction of the involved vehicles.
Variety of disposable equipment options dwarfs that of capital equipment options. While many disposable items common in the delivery of EMS care costs fractions of a US dollar, those fractions often compound to surprising amounts in a year's budget. Conscientious EMS leaders, clinical and administrative, want to ensure needed equipment is reliably available. Often supply “cushions” create snowball effects in physical space and fiscal impacts. The sage supply officer may begin to question traditional practices common throughout the spectrum of medical supply stocking and ask: “Are we stocking what we stock by tradition? Or … are we stocking what we really use?” Accurate and timely data are essential in evaluating supply and demand answers for an EMS agency. The bottom line is increasingly the bottom (financial) line in stocking. Many answers to efficiency in ordering and inventory of EMS supplies now exist in commercially available software and hardware.
Financing education for EMS professionals becomes increasingly important once considering the ever-increasing clinical standards of care available. Some EMS agencies fund initial certification training for personnel either joining the organization or for established employees advancing in scope of practice level. Within these EMS systems, a few agencies directly conduct initial education programs using educators they employ full time for this purpose. Nearly all EMS organizations sponsor or contribute to some form of continuing education for their affiliated personnel, volunteer or paid. Costs of training go far beyond the educators involved. Training schedules can have significant impact on the costs for the delivery of information. Many EMS agencies choose to conduct ongoing training for only on-duty personnel to eliminate overtime labor costs. Depending on whether collective bargaining is involved in local EMS labor agreements, the duty status of personnel during continuing education may be additionally regulated. Textbooks, Internet accessed materials, tuition for packaged programs, and training materials such as manikins, disposable medical equipment, and capital equipment dedicated to training roles must be considered and budgeted. EMS medical oversight physicians will need to consider the training schedules and costs associated with new standards of care to promote their successful delivery.
Financial protection for all aspects of the EMS system previously discussed in this chapter must be seriously considered, and in many cases, is required by local statute or regulation. While medical liability and vehicle insurance premiums are quick to identify as necessary costs, additional suggested policies are numerous and include employee benefit insurance premium portions paid by the employer, durable medical equipment damage protection costs, and directors' and officers' policies for administrative leaders of the EMS system, just to name a few. Some systems also cover the costs for EMS physician policies that cover medical malpractice and administrative liability claims as part of the medical oversight professional services contract.
In sum, considerable attention is due to the expense evaluation of an EMS system given the multitude of required expenses and the variability that exists not only within those cost centers, but additionally those driven by additional standards of administrative and clinical capabilities. The future of EMS funding is likely to prove dynamic. As physician reimbursement is being viewed in bundling models with hospitals under accountable care organizations (ACOs), EMS may well prove inclusive in several of the ACO proposals.
In the current environment of health care finance and delivery restructuring, it is unclear how EMS will be funded in the future. Opportunities to contract with accountable care organizations and the possibility of a change from the current reimbursement scheme to one that pays for care rendered without transport are actively developing at the time of the writing of this text. The further development of community paramedicine and the desire for hospitals and health care systems to prevent avertable admissions and nonemergency visits to the emergency department may drive this new EMS finance landscape. EMS agency administrators and medical directors will need to meet these new challenges together in order to ensure solvency and to avoid disruption in delivery of emergency medical care services due to denial of payment or other preventable budgetary shortfalls.
Funding in EMS may come from taxes, special contracts, direct patient billing, grants, private funding, fund-raising, and subscription services
Reimbursement for EMS utilizes a complex formula based on the level and type of service provided and miles transported, with many special considerations to rural areas and especially poorly populated rural areas.
CMS criteria for reimbursement include proof of the level of service and mileage traveled as well as demonstration of necessity.
Payor mix can play a critical role in the ability to collect bills and financial dependence on outside sources, such as a municipality to provide appropriate services.
Mileage modifiers play a tremendous impact on reimbursement and can significantly increase the charges on long transports as are common in rural areas. Along with the rural modifiers, this can help offset the reduced volume that rural agencies often experience.
Medical necessity essentially is the proof that an ambulance is required as opposed to other means of transportation as defined by Medicare. A physician's order is insufficient to meet this requirement.
Electronic PCRs have had tremendous impact on ability to capture data, reduce time for billing, and improve the utility of the PCR as a communication tool.
District contracts are a means to secure an arrangement in a certain area for EMS to be provided, assuming they meet certain criteria often spelled out in the contract. These contracts provide assurances to both parties and should include dissolution terms if the need to separate should arise.
Grants are another means to secure funding and are available at the local, state, and federal levels. While local grants may be easier to obtain once identified, state and federal grants can have a large impact on many people.
; FEMA/USFA. Funding Alternatives for Fire and Emergency Services. Emmitsburg, MD: Federal Emergency Management Agency, United States Fire Administration; 1999
R. Emergency medical services system design. Emerg Med Clin N Am
United States Government Accountability Office. Ambulance Services: Changes Needed to Improve Medicare Payment Policies and Coverage Decisions. Report to Congressional Committees. GAO-02-244T. Washington, DC; November 2001. http://www.gao.gov/assets/110/109068.pdf
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Centers for Medicare and Medicaid Services. 42 CFR parts 410 and 414: Medicare program; fee schedule for payment of ambulance services and revisions to the physician certification requirements for coverage of nonemergency ambulance services; final rule. Fed Regist. 2002;67(39):9100–9135.
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