Get Ready for Value-Based Purchasing

Get Ready for Value-Based Purchasing

April 9 signaled the start of a new era for EMS in this country. For the first time, the Centers for Medicare & Medicaid Services (CMS) released charge and payment data for all Medicare Part B providers. The CMS communication that announced the news contained the following notable quotes from principal deputy administrator Jonathan Blum:1

• “In letters to the American Medical Association and Florida Medical Association, the Centers for Medicare & Medicaid Services (CMS) announced our intent today to take another major step forward in making our healthcare system more transparent and accountable.”

• “We plan to provide the public unprecedented access to information about the number and type of healthcare services that individual physicians and certain other healthcare professionals delivered in 2012, and the amount Medicare paid them for those services, beginning not earlier than April 9. Providing consumers with this information will help them make more informed choices about the care they receive.”

This is the classic “good news, bad news” scenario. Let’s look at the good news first (which will be quicker).

By releasing EMS payment data, CMS clearly identifies our profession as “healthcare services” and “healthcare professionals.” This is a major step for our profession and those of us who have been trying to explain for years that we are healthcare providers. This recognition positions our profession as a participant in helping the healthcare industry achieve the Institute for Healthcare Improvement’s Triple Aim goals.

That’s pretty much where the good news ends.

The challenge the EMS industry now has is much like the challenge faced by our hospital partners for the past two years, since CMS started publishing charge and payment data for them: reacting to published data amid a public that may not fully understand what the numbers mean. And this is the second release of CMS charge and payment data this year that doesn’t necessarily portray our profession in the most positive light. The CMS Office of Inspector General released its finding on fraud and abuse in the ambulance industry last September. In the report the OIG found:2

• “Since 2002, Medicare Part B payments for ambulance transports have grown at a faster rate than all Medicare Part B payments.”

• “From 2002 to 2011, the number of beneficiaries who received ambulance transports increased 34%, although the total number of Medicare fee-for-service beneficiaries increased just 7%.”

• “The number of dialysis-related transports increased 269%.”

Continue Reading

Being the fastest-growing Medicare Part B expense is not a good place to be—it makes us “low-hanging fruit” for fraud investigators and even payers of our services.

A December 2013 article in the New York Times reported the OIG’s findings and challenged our industry:3

• “In such a fragmented system, it is hard to know how much high-priced ambulance transport contributes nationally to America’s $2.7 trillion healthcare bill.”

• “But Medicare, the insurance program for the elderly, does tabulate its numbers and has become alarmed at its fast-rising expenditures for ambulance rides: nearly $6 billion a year, up from just $2 billion in 2002.”

Seeing the words Medicare and alarmed in the same sentence should be a klaxon for the EMS industry.

Unfortunately that was not the only recent national media story about the fraud and abuse in our profession. A story in Bloomberg Businessweek in April highlighted the dark side of ambulance services with a headline that read Medicare’s $5 Billion Ambulance Tab Signals Area of Abuse and statements like:4

• “The patient smoked cigarettes in the passenger seat of the ambulance every week, chatting with the driver while taxpayers foot the $1,000 bill to drive him four blocks for his dialysis treatment.”

• “The U.S. Department of Health and Human Services has identified ambulance service as one of the biggest areas of overuse and abuse in Medicare.”

• “To keep them coming back…ambulance drivers would hand out envelopes with $100 to $400 in cash every month to the passengers, many of whom were poor and unable to work because of their health condition, the government said. Leahy said she hasn't prosecuted any of the patients since all have cooperated with the investigation.”

The Value Proposition

At the core of this issue is the question of value. What value is the customer placing on our services? If the payer viewed our services (ambulance transport) as valuable, they would not be so inclined to balk at the cost—that’s basic economic theory. The reality for our profession is that we’ve done a dismal job of demonstrating that we bring value to our payers. There is a virtual dearth of any peer-reviewed published studies that demonstrate going to the hospital by ambulance, or providing EMS first response, improves patient outcomes, improves the patient’s experience or reduces costs.

In numerous public forums with literally thousands of EMS professionals, when the question was asked, no one could reference one study that demonstrated that using EMS for transportation to the hospital made a difference in the patient’s outcome. Some would answer that in cases of STEMI and stroke, access to EMS to shorten the time from symptom onset to hospital intervention improves patient outcomes, and this author would agree. However, there is not any study that actually proves it—believe me, I’ve been searching!

The payers of our healthcare system are moving toward value-based purchasing (VBP). Hospitals have been under a VBP model since 2012, when Medicare instituted bonuses and penalties based on hospitals’ ability to meet specific clinical and patient experience metrics. Physicians will be under a similar economic model starting in 2015.5 As healthcare providers, EMS needs to prepare for that economic model. Among the many challenges will be the determination of outcome metrics to be measured and reported. As a profession, we have lacked in developing standardized metrics for our service delivery model that can show value to the payer. The only real metric we have is response times, which have been shown through peer-reviewed scientific studies to not make a difference in patient outcome.

The measure we’ve invested the most time and effort in tracking and reporting is cardiac arrest survival. There are a plethora of issues with using this metric for VBP. First, it is a very small percentage of our response volume. Second, despite recurring updates of guidelines and billions of dollars invested, the survival of patients with OHCA has been essentially unchanged from the mid-1970s to the mid-2000s, averaging 7.6% for all OHCA and 17.7% for OHCA due to ventricular fibrillation.6

Finally, if you ask most payers privately and off the record, they will tell you that “saving” a cardiac arrest victim does not bring them any economic value. In fact, if they are honest, it costs them more in the long run. It is probably this motivation that encouraged Medicare to start paying EMS for determining death in the field without transport. They likely did the math and found out that when we were financially incentivized to transport a patient to the hospital to get paid, that’s what we did. That transport to essentially pronounce a patient dead was an expensive endeavor for Medicare—so to prevent it, they changed the incentive to allow us to get paid for not transporting.

Our mission, should we choose to accept it, is to transform the discussion with our payers away from fee-for-transport to a VBP model. The true value we can bring to the healthcare system most likely includes mobile integrated healthcare strategies that safely navigate patients through that complicated system to meet the IHI Triple Aim. Thanks to CMS-funded programs like the CMMI grant at the Regional Emergency Medical Services Authority in Reno, NV, and the 1115 waiver project being done at MedStar, we are on CMS’ radar screen for positive reasons. During a recent meeting with Patrick Conway, MD, CMS’ chief medical officer, he expressed strong support for additional demonstration projects for EMS-based MIH programs in an effort to increase the numbers of patients enrolled in these programs. With a larger patient population, we can work together to shape the EMS payment model of the future.

Due to projects like the UPMC CONNECT community paramedic project in Pittsburgh and the community paramedic program with Kaiser and MetroWest Ambulance in Portland, large payer systems like Highmark Blue Cross Blue Shield and Kaiser are expressing keen interest in the value of patient navigation. NHTSA recently released an RFP for groups to work on a redesign of the future economic model for EMS.7 The proposals sent back to NHTSA and ASPR will no doubt include some ideas on VBP for EMS, either on some type of global payment model or outcome-based payments, regardless of whether the patient was transported to the hospital.


We are under attack, and it’s our own fault. We own this “value” issue and need to rise up to meet the challenge. Our profession needs to take bold steps, in unity, to demonstrate the value we can bring to the healthcare system. If what we currently provide is not viewed as valuable, or if we are unable to transform with the changing healthcare market, we may suffer the same fate as Eastman Kodak, Atari and Blockbuster. This is the time for us to realize what business we are in and what role we should play in that business to demonstrate value.


1. Blum J. Historic release of data delivers unprecedented transparency on the medical services physicians provide and how much they are paid. The CMS Blog,
2. Wright S. Department of Health and Human Services Office of Inspector General. Memorandum Report: Utilization of Medicare Ambulance Transports, 2002–2011,
3. Rosenthal E. Think the E.R. Is Expensive? Look at How Much It Costs to Get There. New York Times, 2013 Dec 4.
4. Pettypiece S. Medicare’s $5 Billion Ambulance Tab Signals Area of Abuse. Bloomberg,
5. Centers for Medicare and Medicaid Services. Medicare FFS Physician Feedback Program/Value-Based Payment Modifier,
6. Ewy GA, Sanders AB. Alternative approach to improving survival of patients with out-of-hospital primary cardiac arrest. J Am Coll Cardiol, 2013; 61(2): 113–8.
7. Promoting Innovation in Emergency Medical Services,

Matt Zavadsky, MS-HSA, EMT, is the public affairs director at MedStar Mobile Healthcare, the exclusive emergency and non-emergency EMS/MIH provider for Fort Worth and 14 other cities in North Texas and the recipient of the EMS World/NAEMT 2013 Paid EMS Service of the Year.

What goes into building the educational program at a state show?
The First Responder Emergency Extrication program teaches responders how to extricate occupants from today's advanced vehicles.
Fifty people gathered to learn how to respond to an overdose and were given free Narcan kits.
Six EMSCNJ-affiliated volunteers who are pursuing medical-related careers were each given $1,000 grants.
Bismarck State College received a $100K grant to buy a high-fidelity training manikin and vehicle for nursing program.
The Assistance to Firefighters Grant Workshop helps small departments successfully earn grants for equipment.
The annual weekend event Urban Shield 2018 uses various mock scenarios to help agencies collaborate and improve their skills.
Albany Technical College students can interact with a manikin patient while instructors observe from a video monitor.
A team of biomedical students have developed a BVM device with pressure control to improve patient outcomes.
For retaining educational content, frequent testing appears the best strategy. 
The U.S. Customs and Border Protection provides evidence-based recommendations to first responders handling calls with a suspected presence of fentanyl.
It helps cardiac arrest victims—but what does it do to nonprofessional rescuers?
For best results, review the old, absorb the new, and focus on your specific needs.
Eight students will receive tuition scholarships for Reading Hospital Foundation's Paramedic Education Program.
Fire and EMS professionals interested in speaking should consider topics that address the improvement of pre-hospital outcomes clinically, financially, or operationally.