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Paying for Your Mobile Health Program


Did I get your attention? The reimbursement innovation proposed by the Centers for Medicare and Medicaid Services (CMS) holds great promise to transform the landscape of EMS.

While community paramedic programs have gained increased traction, proliferating across the country, ET3 is not designed to address their financial support. In a recent paper from the Healthforce Center at the University of California, San Francisco, where they have been conducting an evaluation of California’s CP programs, the proof of concept has been demonstrated with in-depth analysis of the 13 demonstration projects spanning the state.1 For now the Center for Medicare and Medicaid Innovation (CMMI) will not be examining a methodology to allow for payment from Medicare and Medicaid for community paramedic interventions.

In the nascent days of EMS, we struggled to define success, and trial and error was our teacher. Now we struggle to finance our systems, resorting to a hodgepodge of mechanisms that depend as much on payer mixes and insurance reimbursement as on direct public or taxpayer support. Many services struggle in this regard in spite of the high quality of care they deliver to socially and economically challenged communities.

Regarding mobile health programs, the first question asked was, How are we going to pay for it?

There were limitations on all sides. For the overwhelming majority of EMS providers in the U.S., Medicare and Medicaid won’t pay for an EMS-provided service that does not result in a transport (with the minor exception of the CMS rule that allows payment for a nonresuscitated cardiac arrest victim who is not transported to an emergency department). This is a significant challenge for many services, since generally those are the largest insurers in anyone’s payer mix. 

The Pros and Cons of Capitation

For those with commercial insurance plans, payment for the provision of community paramedic care would have to be negotiated with those individual plans. In a capitated arrangement, an EMS or ambulance service receives a risk-adjusted set amount for each enrolled person assigned to them (for example, everyone enrolled in a particular health plan) per period of time (week, month, year). They are paid this money whether or not that person seeks EMS treatment or transport. This arrangement can actually work; there are a handful of services that have achieved success with their community paramedic programs using this model. Conversely there have been services almost bankrupted due to capitation. 

Capitation is a daunting framework with substantial risk. The overwhelming majority of services in the U.S. have neither the capabilities to provide service beyond their geographic area nor the balance of patients or economies of scale necessary to equalize the risk. Populations in a capitated world are not homogeneous, and financial mistakes in the embryonic stages of any new program could shutter your doors. The risk of financial failure cannot be underestimated.

Operational Costs

If you wanted to calculate how much it costs to operate an ambulance, it is fairly easy. Digital time stamps record your arrival and exit at work. Time spent on tasks is easily extrapolated from dispatch records; cost records for fuel/maintenance/preventive maintenance/hours of operation are maintained electronically; employee salaries/benefits and the costs of expendable supplies and durable medical products are known. All told we have an amazing, truly unprecedented capability to access information on our direct operational costs.

For community paramedicine we don’t manage patients or provide care within a well-defined space. A typical call may run from 20 minutes to an hour. In our postdischarge cohort of the MIH patients with whom we work, this occurs over the course of 30 days. We may not work with them every day, not every patient requires the same level of support, and some may get one, two, three, or in some cases as many as five home visits a week. 

Our challenge was to develop a viable model in an attempt to determine how long we spent with our patients. It wasn’t only the home visits and care we needed to track; it was a whole host of duties we assumed. Over three months we undertook a time-based cost accounting analysis to develop a model to determine what we did and how long it took to accomplish.

As exciting as it sounds, we followed the community paramedics around with a stopwatch and timed everything they did: how long it took for them to receive referrals, as well as reading and responding to faxes, e-mails, and phone calls with social workers; contact with patients; travel to and from home visits; tasks undertaken at the home and time to accomplish each one; patient exams; home safety surveys; accompanying patients to medical appointments, follow-ups, and physical and occupational therapies; arranging for Meals on Wheels or transportation for doctor visits—anything the patient required during that 30 days we were entrusted with their care. 

We discovered some interesting facts. EMS and others in healthcare have scored patients to assess risk using Apgar scores, trauma scores, REMS scores, etc., for the better part of the last century. Every hospital that bills CMS has to determine a score on each patient admitted to its facility. Many hospitals use the LACE index, which examines four variables: 

  • Length of stay of the index admission; 
  • Acuity of the admission—was this patient admitted through the emergency department or an elective admission? 
  • Comorbidities, incorporating the Charlson Comorbidity Index; 
  • Emergency department visits within the last six months.

LACE identifies patients at risk for readmission or death within 30 days of discharge. For our community paramedic program, we had access to individual LACE scores before patients were discharged from the hospital. Patients who had low LACE scores required less assistance. They were generally self-sufficient and had greater mobility. Most had made arrangements to follow up with their primary care doctor, if not prior to discharge, then on their first day home. Most important, though, when they needed help they were not reticent to ask for it from the community paramedics, and they tended to ask for assistance before issues became crises.

Conversely, patients who had predischarge LACE scores indicative of being high risk required more intensive support. Some at highest end of the scale received more home visits (three or more) the first week of discharge, along with daily follow-ups via phone. We tightened processes to ensure they had a primary care provider and made sure they not only had their prescriptions filled but were compliant taking them. Most important, we knew going in that these patients rarely asked for help unless they were in crisis.

We could almost predict the amount of time we needed to spend with each patient based on their LACE score.

A New Mechanism

Information is power. If you understand the population you’re caring for, by collecting information and analyzing data, you will be better prepared to develop clinical pathways to meet their needs and respond to changing trends.

Working within the confines of the healthcare system has certain advantages as well. You can leverage a whole host of resources from within a hospital or healthcare system that, under typical circumstances, most EMS agencies cannot access. Generally they would have to substantially increase their operating costs to achieve the same level of utility. 

Our challenge was to find and develop a mechanism, utilizing the resources of the hospital, that would allow for billing under Medicare and Medicaid without having to create new legislation.

We used a variety of tools to accomplish this. For example:

1) The biggest challenge for any community paramedic program: how to access Medicare and Medicaid for billing. Under current regulations, except for a handful of states that allow Medicaid reimbursement for these services,2 the rest of the U.S. cannot bill CMS for them. 

While there has been considerable effort by various groups to facilitate access to Medicare and Medicaid for their CP programs, there is a much easier way to work within the system to provide the service. You don’t have to change the current regulations or get an act through Congress.

It is quite simple, really: Have your local hospital establish a separate department for mobile health. While stand-alone and even hospital-based EMS services cannot bill for most traditional CP services, establishing a mobile health office  as a separate department—under the supervision of a nurse, in a hospital that has swing bed status3—allows CMS to be billed and reimburse you as a subcontractor providing care under the direction of the nurse. It also lets the hospital bill for the administrative costs under Medicaid (something EMS normally cannot do); bill for home visits under Medicare; and, if you are doing work inside the hospital, you can even bill for facility costs. Any care provided must of course be within the provider’s approved scope of practice.

2) Hospitals have established contracts and relationships with insurers. You don’t have to negotiate those on your own. These health plans are looking to keep postdischarge costs down and want to avoid unnecessary readmissions. In many instances providers and insurers have worked together on robust plans to assist patients postdischarge.

3) LACE scores: Use the tools provided to you. While our time-based cost accounting worksheet demonstrates the average time we devote to a patient, if you have a higher LACE score, we know we’re going to spend more time providing care for you. There are other types of scoring systems; if your local hospital doesn’t utilize LACE specifically, under the CMS guidelines it uses something similar.

4) Clinical pathways are essential for the long-term management of patients. They allow for a uniform mechanism to manage care efficiently. The development of clinical pathways can also occur in a more linear fashion. Since hospitals have established relationships, they already know what insurers will cover, and if they have developed clinical pathways, it’s just a matter of extending them past the physical borders of the hospital out into the home. 

5) Utilize hospital resources in other ways to support your program. You can gain access to hospitalists, NPs, PAs, etc., who may be able to call in prescriptions, write orders, etc. Use hospital pharmacists, therapists (physical, occupational, respiratory), addiction services, social services, etc., to better facilitate your patients’ care. It can be easily done without hiring additional staff.

6) We established safe harbors to leverage hospital buying power for medical supplies, diagnostic equipment, biomed contracts, etc. With large healthcare systems the ability to establish safe harbors and contracts for the purchase of medical equipment and supplies can significantly lower operating costs. Even without a mobile integrated healthcare program, this is a tool every EMS service that is not hospital-based should explore.


A detailed analysis of your payer mix, a demand analysis of your potential workload, patient LACE scoring (or use of another comparable scoring system), and a detailed evaluation of the internal costs to operate your program will improve your chances of achieving success. The key for any mobile healthcare program is to be part of a collaborative team across the continuum of care. Collaborative models are our future. Our best course is to utilize healthcare systems and services to achieve the best results for our patients and work toward horizontal and vertical integration across the continuum of care.  


1. Coffman JM, Wides C, Blash L, et al. Evaluation of California’s Community Paramedicine Pilot Program. Healthforce Center at UCSF,

2. Lynch E. Nevada Medicaid & Community Paramedicine. 2018 meeting presentation,

3. Government Publishing Office. Subpart C—Posthospital SNF Care, Section 409.20,


Sidebar: Questions to Ask

Financial mistakes in the embryonic stages of any new MIH program could shutter your doors. You have to ask some fundamental questions:

  • What will it cost you to provide the service?
  • Are you providing services that meet the needs of underserved populations?
  • Are you creating a service line to increase revenue?
  • Are you providing care under a capitated system where you will handle all the patients for a healthcare system?
  • If you work under a capitated system, do you only provide care for high-risk patients? 
  • What if their needs outstrip your capabilities?
  • What does clinical and financial success look like?

Daniel R. Gerard, RN, MS, NRP, is EMS coordinator for the city of Alameda, Calif. He is a recognized expert in EMS system delivery and design, EMS/health-service integration, and service delivery models for out-of-hospital care.

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