EMS Agencies Wary of Pa. Law on Reimbursements
April 03--A law expanding payment options for ambulance services does little to abate their struggle to get adequate insurance reimbursements, say emergency medical service agencies.
Under a state law passed in January, ambulance services can elect to receive direct payments from insurance companies.
They have the option to directly bill patients and wait for them to remit the reimbursement check from their insurance company.
On the surface, it sounds like good news for EMS agencies, which previously could not receive direct payments unless they entered into contracts with insurance companies.
But some Western Pennsylvania EMS providers believe the legislation ultimately will hurt them.
Problems with payments
"Everyone is in favor of direct pay; it's everything else that's in there that's a concern," said Darrick Gerano, director of Murrysville Medic One, which serves Murrysville and Export. "There's no fee schedule attached to it. Insurance carriers can name their price."
Under negotiated contracts, insurance companies typically reimburse about half the approximately $1,000 cost of a typical ambulance call.
The new law calls for insurance companies to pay services that sign on for direct reimbursement the same rate paid to its contracted customers.
Samuel Marshall, president of the Insurance Federation of Pennsylvania, a trade association, said it negotiated with the Ambulance Association of Pennsylvania on the law.
He said he was surprised by the EMS agencies' apprehension.
"As an insurer we pay 'X' amount for the service," he said. "This is not insurers versus ambulance companies. It's a compromise, and it's designed to protect consumers."
Part of that compromise is EMS providers in the direct payment program are prohibited from billing patients for the remaining balance.
That's a major concern, EMS leaders said.
"There's some bad taste in the mouths of those in the EMS community over it," said Rich Heuser, chief of operations at Eureka Fire Rescue EMS in Tarentum. "There are restrictions and loopholes. It's a good thing and a bad thing."
EMS agencies that don't join the new program may continue to bill for the remainder.
"We would like payments made directly to the ambulance services without strings attached," said Asenath Carlisle, general manager of Lower Valley EMS, which serves Cheswick, Harmar, Springdale and other communities, and does not plan to join the program.
"We do believe we reimburse fairly and competitively based on what others in the market pay," said Walt Cherniak Jr., an Aetna spokesman.
The Ambulance Association of Pennsylvania supported the new legislation because it requires direct reimbursement.
AAP Executive Director Heather Sharar described the legislation as "not the perfect fix," but a good start.
"It's a business decision, so for some agencies it's not the right fit," she said. "But for others it's a big help. We had services that were closing. That's a huge issue."
EMS agencies struggle
Gerano said he believes the level of reimbursements must increase or EMS agencies will continue to close.
"I think, eventually, it's going to have to change because it's going to be so bad," he said. "Every month you hear about services having financial problems or going out of business."
Fayette County once had 27 EMS agencies and now has seven, according to testimony Dean Bollendorf, AAP's president, gave in March before a state legislative committee.
The Allegheny County EMS Council conducted a survey in October. Of 34 EMS agencies responding, the survey found:
--75 percent reported a financial loss in the last three years.
--A third receive no local government funding.
--For every $100 the services billed, they collected $43.
Larry Davis, services director of the New Kensington Ambulance Service, said the agency is struggling due to a population of patients who rely on Medicare or Medicaid. Those programs reimburse ambulance providers well below the actual cost of the run, he said.
When Arnold EMS closed in 2013, it cited the Medicare/Medicaid issue as a contributing factor.
Bryan Kircher, director of Ross/West View Emergency Medical Services, said contracting with insurers guarantees payment, but usually not enough.
"When we sign a contract, the rate drops by better than 50 percent," he said. "(We'd lose) in the neighborhood of $200,000 ... the day we put ink on the contract."
Kircher said the service's main source of revenue is direct billing of users. But, he said, it's often a struggle to recoup the money because the reimbursement checks are sent to patients.
Don Thoma, operations manager at Rescue 14 EMS, which serves Hempfield, Arona and Adamsburg, said he fears EMS agencies will eventually be required to accept direct payments and will be at the mercy of insurance carriers.
"When someone dials 911, we have no choice but to go," he said. "I'm afraid that ... we're going to be at the mercy of insurance carriers of how much money we're going to get to literally save a life."
The more ambulance services that close, he said, the longer the response times for emergencies.
"That's a real problem," Thoma said. "I don't know if people realize that could be a consequence. I want them to know that it's not our doing."
Jodi Weigand is a Tribune-Review staff writer. Reach her at 724-226-4702.
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