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Leadership/Management

Squeeze Me Tighter: EMS and Healthcare Reform

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      The early optimism about healthcare reform waned as summer wore on, swallowed amid partisan rancor, growing public skepticism and the vulgar realities of patchworking together such an enormous package of law.

   But when Congress took off for the month in August, preliminary legislation was on the table that spelled out what America might expect from a final bill, if and when one's passed. And there are components in there, frankly, that should be of great concern to EMS and the ambulance transport industry. The well-intended efforts of lawmakers could lead to unintended consequences with profound ramifications for the way we do business.

   "Any healthcare reform package that ultimately passes will have impacts on EMS and medical transportation, and the consequences of those impacts aren't fully known," says Rick Keller, an expert on EMS finance and resource utilization with industry consultants Fitch & Associates. "We don't know how significant they'll be. The unintended consequences could be huge."

   There will be a lot of coulds in this discussion, because as it's written, nothing it talks about is final. What's in the preliminary legislation lawmakers unveiled in July could change tremendously in September, when Congress reconvenes and begins its final push toward disposition. The most ambitious aspects may be gutted, mooting some of this discussion (though remember it for the future; these questions aren't going away). Heck, a bill may never be passed at all.

   But if one is, and it retains certain elements included at the break, it will likely cause problems for a lot of people in the emergency medical response and ambulance transportation businesses. Lots of money and operational ability are at stake. Those end-of-life death panels you heard about may have been a crude partisan rhetorical contrivance, but in a worst-case scenario, dispassionate councils of non-EMS bureaucrats may indeed hold your future in their hands.

THE COSTS OF DOING BUSINESS

   Concern No. 1 involves perhaps the biggest issue under debate, a possible public insurance option.

   Consider a public health insurance program by which the government pays emergency and ambulance providers for services provided to those it insures. Now consider the existing public health insurance program by which the government pays emergency and ambulance providers for services provided to those it insures.

   Per a 2007 report from the Government Accountability Office, that program, Medicare, reimburses many ambulance providers at less than their actual costs of providing service. While noting a wide national variability in the costs of ground ambulance transport, the GAO determined that on average, Medicare repaid urban ambulance providers at 6% below their average costs, and so-called "super-rural" providers at 17% below. In 2010, the GAO estimated, up to 61% of providers without shared costs could be reimbursed at less than their expenses. Among super-rurals, that figure may be as high as 82%.

   The GAO's numbers assume the planned expiration of temporary payment increases first provided by the 2003 Medicare Prescription Drug, Improvement and Modernization Act (MMA) and increased by the 2008 Medicare Improvements for Patients and Providers Act (MIPPA). That expiration may or may not happen. But the point is, for many ambulance organizations, every Medicare patient is a money-losing proposition.

   Now imagine millions more such patients, treated and transported under a public plan based on a reimbursement structure that's similarly insufficient.

   "If people start shifting from commercial plans to a government plan, and they reimburse by a similar methodology, that will have a real ominous impact on EMS," says Keller.

   Of course it's not known exactly what kind of reimbursement levels and structure any new public insurance option, if there is one (which possibility seemed to be dwindling by September), might have. Concerns are based only on past experiences with something similar. For what it's worth, an amendment to the House's introduced healthcare reform bill (H.R. 3200, the America's Affordable Health Choices Act), added at the behest of moderate "Blue Dog" Democrats, would require a public plan to negotiate payment rates with providers that are no lower than those paid by Medicare, but no higher than the average rates paid by other qualified health benefit plans.

   (There are a number of prospective amendments to this bill not included in the version available online; these were to be bundled into a separate bill in September.)

   And as far as Medicare itself, there are efforts afoot to reduce some or all of the cost/payment discrepancies. Within the House bill there's a two-year extension of that temporary 2% urban/3% rural increase for ground ambulance services, which is set to expire at the end of 2009. Meanwhile, separate legislation, the Medicare Ambulance Access Preservation Act (S. 1066 in the Senate, H.R. 2443 in the House), would go even further, providing permanent increases of 6% for urban/rural ground transports and 17% for transports originating in super-rural areas--basically resolving the deficits identified by the GAO.

   Whatever happens with healthcare reform, the Medicare Ambulance Access Preservation Act is something EMS and ambulance providers could really use, and a good bill to bend your representatives' ears about.

   "Reimbursement rates are always a concern," says Robert Waller, executive director of the Kansas Board of EMS and chair of the National Association of State EMS Officials' Government Information Committee. "EMS receives around 1% of the total reimbursement funding from Medicare, so any change in the rate, especially if they increase it, will have a dramatic impact."

ADJUST DESSERTS

   The second threat is more complicated. While the House healthcare reform bill may extend temporary payment increases for ambulance services, it has another aspect that may conversely reduce the dollars you ultimately see.

   This basically has to do with how yearly Medicare inflation updates are calculated. As written, H.R. 3200 would subject ambulance services, along with other providers, to a "productivity adjustment" that could mean a cut to those increases.

   Basically, the productivity adjustment--determined by a 10-year average of the private nonfarm business index--is subtracted from the annual inflation update applied to Medicare payments. If that adjustment figure (in our case 1.3%) were applied to last year's inflation update (an unusually high 5%, due to gas prices), it would have trimmed it to 3.7%. If the inflation update were something more typical--say, 2.5%--well, you can do that math.

   "That would obviously be very problematic, because normally the 2.5% doesn't even keep us in line with inflation," says Tristan North, senior vice president of government affairs for the American Ambulance Association. "A lot of folks don't fully understand this yet, because it hasn't ever been applied to ambulance services and wasn't included in the first draft of the House bill. But it's in the bill that was actually introduced, and it would do even further damage to ambulance services."

   And that's assuming there is an inflation update, since the consumer price index actually decreased from June 2008 to June 2009.

   On top of that, the House bill also discusses the potential "bundling" of payments for services. Were EMS/ambulance included in that, we would be among a range of acute and post-acute care entities receiving portions of a single reimbursement. Who would divvy the pot up, and how, would have to be determined. At least for non-hospital-based providers, it's not hard to imagine how that could make things difficult.

EASY TARGETS

   There was another Medicare-related scare this summer, independent of the healthcare reform bill, but that danger has at least momentarily diminished. In July, the Centers for Medicare and Medicaid Services (CMS) announced that beginning January 1, it would require ambulance mileage to be claimed in tenths, rather than rounded up.

   Rounding up to the next whole number is currently permitted, and it means a little extra income for services making those journeys: You travel 15.1 miles, but claim and get paid for 16. Next year, under the new policy, you'd have claimed and been paid for the 15.1 you actually traveled.

   That could have produced big problems for systems financially and operationally, and would have had a cumulative impact across the industry of millions of dollars. "Someone who does 20,000 transports a year could lose around $30,000 as a result of that seemingly insignificant change," says North.

   After a plea by the AAA, though, CMS changed its mind and rescinded the new policy in early September, so for now it's not happening. But it has not ruled out changing mileage policy at a later date, possibly through a proposed rule. That method would at least provide an opportunity for public comment. Any change in ambulance reimbursement, the AAA emphasizes, must be "budget-neutral, equitable for all ambulance service agencies and take into consideration operational and billing issues."

   If you're sensing a penny-pinching theme here, you're right. One of the mechanisms identified to pay for what's in healthcare reform is reduction of existing government Medicare costs. That likely means cutting, or at least slowing any growth in, reimbursement. The GAO says Medicare is highly vulnerable to overpayments, and the CMS' short-lived directive cited potential overpayments resulting from the rounding policy, and noted that inaccurate mileage claims could "become an issue" in an audit.

   There will also likely be greater back-end scrutiny of reimbursements.

   "The other thing they've identified in reducing costs is going after non-medically necessary fraud and abuse," notes Keller. "Ambulance services are easy targets for those types of efforts, because the rules are pretty vague, and medical necessity can be subjective. So we're seeing more and more OIG and CMS investigations into ambulance services."

   Productivity adjustments, bundling, mileage changes--each of these could serve to carve additional meat away from the meager bones ambulance services currently get under Medicare. We may end up shouldering the load for savings scratched out elsewhere. It wouldn't be the first time. But it's an especially bad time to try to trim fat from those who are already emaciated. Does anyone feel they're in a position to withstand any more belt-tightening?

   "It would be a scenario not of going from bad to worse, but of going from worse to gruesome," says Dia Gainor, chief of the Idaho EMS Bureau and chair of the National EMS Advisory Council, which advises NHTSA's Office of EMS on industry issues. "For some of our rural, frontier counties with very small populations but things like interstate highways running through them, it could be catastrophic."

   "When you have volunteer services, like we do in Kansas, that have one or two trucks delivering care over 700 square miles, then lower that reimbursement rate on them, you affect budgets that are already tight," says Waller. "It's obvious what that would do to rural and frontier communities in states like ours. How are they going to fund the next generation of EMS? How is the community going to finance it? How will our people be able to access EMS for their care when the funding and ability to operate it is continually being reduced?"

THE BRIGHT SIDES

   There are, however, some potential positives to the healthcare reform bill.

   Advocates for EMS scored a big victory with inclusion in the Senate HELP (Health, Education, Labor and Pensions) Committee's language of money for four multiyear emergency care regionalization pilot projects of the type proposed in the Institute of Medicine's 2006 Emergency Medical Services at the Crossroads report. The money will come from the HHS Assistant Secretary for Preparedness and Response (ASPR), and will support the design, implementation and evaluation of systems of regionalized, comprehensive and accountable emergency care and trauma systems. Equivalent provisions were added to the House bill.

   These projects would work within defined regions to coordinate public health, safety and emergency services; improve patient access to the emergency medical system; establish ways to get patients to the most appropriate care facilities; track hospital resources (e.g., bed capacity, diversion status) in real time; and coordinate standardized data management across emergency care.

   These are important aspects to creating the kind of seamless, three-dimensional emergency care systems that can assist people most effectively.

   "It's impossible to isolate a single EMS agency and not consider its neighboring services, its destination facilities, its communications capabilities, its systems of medical supervision, from a larger geographical perspective," says Gainor. "Committing to a unified system of governance, of financing, of quality assessment and quality improvement and medical oversight would yield not only greater system stability, but reductions in variations across systems."

   Systems will be compatible with NEMSIS, have established designations for specialty medical facilities, and include patient tracking. Reports will evaluate the systems' impact, factors shaping their effectiveness, strategies for sustaining and requirements for maintaining them, and any identified barriers and proposed solutions.

   The same section of the HELP bill (which will ultimately be combined with legislation from the Senate Finance Committee that had not been completed at the break) gives some love to emergency care research, directing support for federal programs examining the basic science of emergency medicine, service-delivery models and their effects on patient outcomes, translating research into practice and otherwise delivering timely and efficient health services.

   "A lot of folks are interested in that piece," EMS lobbyist Lisa Meyer, of Cornerstone Government Affairs, told EMS On the Hill. "It's something they've been looking for since the IOM report came out. There's absolutely been a need for more EMS research, so this is a big deal."

   Some other high points include:

  • Both bills have support for trauma systems, with grants to help areas like overcrowding, uncompensated care and local/regional coordination. Possible uses for the money may include enhancing collaboration between trauma centers, other hospitals and EMS.
  • The House bill makes the ASPR's Emergency Care Coordination Center permanent, and establishes the Council of Emergency Care, consisting of federal employees with expertise in emergency care and management. It also requires a report to Congress on emergency department crowding, boarding and delays in care.
  • Shortages in the healthcare workforce are addressed in both bills. Notable to EMS is an amendment from Rep. Jane Harman (D-CA) that would create a fast track for military medics to become first responders. It passed the House Energy and Commerce Committee unanimously. Elsewhere the House bill aims to train primary care, nursing and public health providers (and here may, perversely, work contra to EMS interests by offering our talented providers springboards to become nurses or PAs). The HELP bill speaks more broadly of "allied health professionals" working in settings "where patients might require healthcare services, including acute care facilities, ambulatory care facilities, personal residences and other settings." That could mean EMS, but don't count any chickens. "I'm not sure EMS will benefit from those opportunities," says Keller. "To a lot of people, EMS isn't healthcare, it's public safety. They do not see us as a healthcare field they should invest in."
  • Both bills emphasize quality, and the development of quality measures in areas that need them. The AAA has begun some early work on how that might work and look for the ambulance industry, but don't expect action on this front for us right away. "If we just get extensions on the MIPPA increases, rather than permanent reform, we may not be looking at doing any kind of quality measures," says North. "If we're only talking about getting 2%, 3% extended, then possibly being subjected to a productivity adjustment, to then do something like quality measures that may further impact reimbursement rates is just not viable. Quality measures really need to be tied to permanent reform."
  • Both bills emphasize prevention. There may be opportunities for EMS personnel in some new programs.
  • The HELP bill reauthorizes the Emergency Medical Services for Children program.

COULD HAVE BEENS

   Despite our unprecedented voice and efforts on the Hill, major changes for us--at least positive ones--don't appear to be in the cards for this go-round.

   "What we're missing is basically whole sections of draft legislation that relate to EMS as a recognized component of the health industry and the safety net for healthcare in general," says Gainor. "This was an opportunity to shore up the federal perspective on EMS, and completely rethink what should be required and reimbursed. And unless something changes substantially in forthcoming drafts, I think it represents a huge missed opportunity."

   If it's not too late by the time you read this, there may still be some value to sounding off about these matters with your representatives. Even if the healthcare reform ship has sailed (or sunk), our issues will persist. And in a debate where every stakeholder is being heard at length, why shouldn't you? No one is better positioned to remind our rulers about their people's emergency needs.

   "The discussion is really about patient care, not politics," says Waller. "It's dealing with the sick and injured, and how they're cared for throughout the system. I think that's the part of this debate that can get lost, and EMS has never lost that focus. We need to do everything we can to make sure our communities are functional and protected."

READ FOR YOURSELF

   House legislation: America's Affordable Health Choices Act (H.R. 3200)

   Status at break: Out of committee, awaiting debate by full House upon return in September

   Find it at: http://edlabor.house.gov

   Senate legislation: Affordable Health Choices Act

   Status at break: HELP (Health, Education, Labor and Pensions) Committee legislation released before break, Finance Committee legislation to be completed after return; bills will then be combined

   For more: http://help.senate.gov; http://finance.senate.gov

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