Ambulance. of Pennsylvania THE AMBULANCE ASSOCIATION OF PENNSYLVANIA

Size: px

Start display at page:

Download "Ambulance. of Pennsylvania THE AMBULANCE ASSOCIATION OF PENNSYLVANIA"

Sydney Tucker
5 years ago
Views:

1 Ambulance of Pennsylvania THE AMBULANCE ASSOCIATION OF PENNSYLVANIA PRESENTS A POSITION PAPER CALLING FOR A REVIEW AND ADJUSTMENT OF THE CURRENT MEDICAL ASSISTANCE REIMBURSEMENT STRUCTURE FOR AMBULANCE TRANSPORTATION SERVICES IN PENNSYLVANIA

2 THE AMBULANCE ASSOCIATION OF PENNSYLVANIA PRESENTS A POSITION PAPER CALLING FOR A REVIEW AND ADJUSTMENT OF THE CURRENT MEDICAL ASSISTANCE REIMBURSEMENT STRUCTURE FOR AMBULANCE TRANSPORTATION SERVICES IN PENNSYLVANIA

3 TABLE OF CONTENTS PAGE EXECUTIVE SUMNARY What is Needed 01 Why it is Needed 01 Supporting Financial Data 03 Comparison of Reimbursements 03 Comparison of Costs PART I Description of the Ambulance Industry PART II Trends Affecting the Ambulance Industry PART III Impact of the Medical Assistance Reimbursement Freeze 13 PART IV Ambulance Association of Pennsylvania 14

4 EXECUTIVE SUMMARY

5 EXECUTIVE SUMMARY WHAT IS NEEDED: The enclosed report demonstrates the need to increase Medical Assistance reimbursement to ambulance providers for services rendered to low income Pennsylvanians. We request that the Department of Welfare be provided with an additional 4.5 million dollar appropriation specifically earmarked for ambulance services. WHY IT IS NEEDED: Rising Costs Medical transportation expenses have risen dramatically because of increases in: 1. Costs of life-supporting technology 2. Insurance costs 3. Federal reimbursement regulations and federal, state and industry regulatory standards. Inside look at increasing expenses, from 1978 to Vehicle Costs have increased from $18,000./vehicle to $40,000./vehicle for BLS and $35,000./vehicle to $70,000./vehicle for ALS. Equipment and Supply Costs for basic life support services have increased from $2,000. to $6,000.; for advanced life support services from $8,000. to $30,000. Personnel Expenses (with benefits) for Emergency Medical Technicians have increased from $4.40/hour to $9.50/hour; for Paramedics from $5.50/hour to $15.00/hour. Workman's Compensation has increased from $7.00/$100. to $17.37/$100. Automobile Liability has increased from $1,000./vehicle to,000./vehicle. Professional Liability has increased from $500./vehicle to $3,000./vehicle. -1-

6 Frozen Medical Assistance Reimbursements Meanwhile, Medical Assistance reimbursements have been frozen for the past 12 years, at the inadequate rate of $ per trip. WHY LEGISLATIVE ACTION IS NEEDED NOW: This appropriation is necessary to: 1. Guarantee continued access to quality care for Medical Assistance recipients. 2. Preserve the high-quality standards of the state's medical transportation industry. 3. Maintain the financial viability of Pennsylvania's ambulance organizations. 4. Fairly compensate ambulance services supported by local government tax dollars. -2-

7 Comparison of Reimbursements SUPPORTING FINANCIAL DATA A breakdown of typical reimbursement for ambulance service on a "per call" basis reveals that, when charges and mileage costs * are combined, Medical Assistance is paying only 15% of BLS charges, 10% of ALS charges, and less than 5% of charges for specialized service. This information is substantiated by Medical Assistance data and is based on customary ambulance fees tabulated by Blue Shield of Pennsylvania in Camp Hill. Medical Insurance Carrier Average Reimbursement Paid Per Service/or Response BC/BS Commercial Insurance Medicare Medical Assistance BLS $150. $150. $110. $20-30 ALS $300. $300. $225. $20-30 Specialized $700. $700. N/A $20-30 *Mi1eage Costs BC/BS and Commercial Carriers Medicare Medical Assistance $4-6/mile $2.50/mile $1.00/mile (after 20 miles) **A normal specialized transport between community hospital and tertiary hospital generally encompasses a minimum of 4 hours of service time. Example would be the transfer of: High risk mothers Premature infants Pediatric emergencies Trauma patients Spinal cord patients Burn victims

8 Comparison Of Vehicle Costs The following information compares the average cost of the most commonly used certified ambulance. Type II generally used for non-emergent services $18,000. $22,000. $28,000. $40,000. Type III generally used for emergency services $35,000. $42,000. $50,000. $70,000. Comparison of Equipment and Supply Costs The following information compares the average baseline costs for equipment and supplies in each vehicle: Service Level BLS ALS* $2,000, $8,000, $3,500. $12,000, $4,800. $20,000. $6,000. $30,000, *Includes a monitor, pharmaceuticals and IV supplies, pacemaker, radiotelemetry, and ALS supplies. -4-

9 Comparison of Personnel Expenses The following information provides an average of wages, including medical benefits, for trained medical personnel: Personnel Level EWT w/o benefits $4.00 with benefits $4.40 *.40 Paramedics *.oo w/o benefits $5.00 with benefits $5.50 $5.00 $5.75 $7.00 $8.05 $6.00 $7.20 $8.00 $9.60 $8.00 $10.00 $12.00 $15.00 Comparison of Workman's Compensation Costs The following information compares the cost of Workman's Compensation paid by an organization in addition to wages and benefits. Figures reflect cost in percentage of gross payroll. Type Workman's Comp 7.04% 11.95% 17.37% * A reelassification dropped the rate this year. -5-

10 Comparison of Insurance Costs The following information compares typical costs for automobile and professional liability. Automobile Liability $1,000. $2,500. $4,000. $8,000. *The cost of insuring one ambulance for a year. This costs will vary by region. Example used here is for Philadelphia. Professional Liability $500. $1,000. $1,500. $3,000. Figures reflect the cost by vehicle, based on liability limits of one million dollars. -6-

11 PART I DESCRIPTION OF THE AMBULANCE INDUSTRY

12 PART I DESCRIPTION OF THE AMBULANCE INDUSTRY Since Benjamin Franklin fostered the idea of having a hospital rather than a poor house attend to sick people more than 230 years ago, the hospital has become the place of choice to provide care and treatment for major illnesses and medical emergencies. Although getting to a hospital often presented a dilemma in colonial times, today the idea of emergency care has changed dramatically. Even long before Franklin, from roots planted firmly in the soil of antiquity, the specialty of emergency medicine has begun to carve out a place in the world of modern medical care. Somewhere in the 1800's the formation of ambulance services began to take hold. Mortuary companies and municipalities, through their fire departments, assembled the first tractable memory of a special horse driven chariot to transport patients to the hospital. Enhanced with the advent of motorized vehicles, in the late 1800's, the first true ambulance vehicles staffed with personnel became a reality. During the early 1900's ambulance services began to evolve. Private companies, volunteer fire services and Veterans of Foreign War posts, formed ambulance corps specifically designed to provide rapid movement of the patient. The theory of "load and go" as quickly as possible was the major objective of these times. It wasn't until the Korean Conflict that the thought of pre-hospital treatment and care was considered as a possibility to reduce injuries and premature death. The Vietnam War later introduced the idea of field treatment with the use of para-medic personnel. The measurable results in decreasing battlefield casualties quickly found its way into U.S. cities. The era of "EMS" Emergency Medical Services was born. Supported with specialized vehicles, equipment, training standards and the new emphasis on "care in the streets", the medical community finally realized the true value of EMS by officially recognizing it as the 23rd medical speciality in However, ambulance service does more than provide EMS. Over the years, it has developed into three distinct levels of service: -7-

13 1. Basic Life Support (BLS) for both emergency and non-emergency situations. 2. Advanced Life Support (ALS) for life-threatening emergencies. 3. Speciality Services to provide transportation of recovery cases to hospital speciality departments, i.e, infant/pediatrics, maternal, cardiac, burn, spinal cord, trauma, etc. The vast majority of trips however, are non-emergent cases. In the past decade, this side of the profession has grown dramatically due to; 1.) current trends in specialized hospital care, 2.) the emergence of home health care and skilled nursing care facilities for long term care and 3.) recent federal cost-containment measures that have reduced hospital lengths of stay. Many transfers, either between hospitals or from hospitals to skilled nursing facilities as well as transportation to hospitals for out-patient tests, would be impossible without reliable ambulance services. This situation is especially true for low-income individuals who depend on access to ambulance service. From the early days of Benjamin Franklin the ambulance industry has evolved into a conscientious quality and cost conscious service that uses high tech equipment and qualified personnel for a dual purpose; to provide access to medical care in life-and-death situations and to handle essential situations when non-ambulatory patients need a means to obtain necessary treatment, tests, or medications or continuing medical care. -8-

14 PART II TRENDS AFFECTING THE AMBULANCE INDUSTRY

15 PART II TRENDS AFFECTING THE AMBULANCE INDUSTRY It's ironic that a service based on the principle of providing access to quality health care has not received fair reimbursement for this vital service. In a time of soaring costs, this threatens the ability of the ambulance industry to provide much needed services to Pennsylvania's poor. In the past decade or so, the ambulance industry has had to cope with an unprecedented escalation of costs because of these factors: INCREASED TECHNOLOGY Lifesaving equipment such as portable monitors, defibrillators, and respirators have revolutionized pre-hospital care. But they carry high price tags and ambulance providers are required to use this state-of-the-art equipment. Use is mandated through standards and protocols developed by the medical community, federal and state legislation, and by the ambulance industry itself. DECREASED AVAILABILITY OF TRAINED PERSONNEL Constrained by higher costs and lower reimbursements, ambulance providers have found it difficult to offer competitive salaries. As a result, the supply of trained Emergency Medical Technicians (EMT's) is critically low, while the demand for this is high. ESCALATING VEHICLE AND EQUIPMENT COSTS Before EMS became the 23rd medical specialty, the ambulance industry was largely unregulated and vehicle costs were relatively low. Standard vans were often converted and used as ambulances. After 1979 however, stricter state guidelines specified that vehicles must be certified according to federal KKK-1822 A,B,C specifications. While instituting consistently high standards, these guidelines also inflated vehicle manufacturing costs substantially. Meanwhile, the competition for new emergency medical technology has driven up the cost of outfitting each van. The normal cost of a fully loaded, paramedic-staffed ALS vehicle is about $500,000. per year. RISING INSURANCE COSTS As with other Pennsylvania businesses, the ambulance industry's insurance tab has steadily increased. Manufacturing liability insurance premiums, which have jumped 500% since 1980, have been rolled into vehicle and equipment costs. Increases have also occurred in professional liability insurance premiums, which rose 500% since Soaring premiums have added substantially to ambulance companies' operating costs. -9-

16 Fewer and fewer insurance companies have even been selling liability insurance to ambulance providers. The pool of available insurance companies continues to shrink. A majority of the companies that still insure ambulances do so only under a "Special Risks" category, charging higher premiums. INCREASED COSTS OF WORKMEN'S COMPENSATION At one time, all transportation-related companies like ambulance services were pooled together to determine Workman's Compensation, and costs to ambulance providers were relatively stable. But in the past five years, changes in government regulations have increased the cost of Workman's Compensation dramatically. Where once it was an insignificant part of an ambulance service's budget, Workman's Compensation now comprises Ylh % of payroll figures. INCREASING STATE AND FEDERAL REGULATIONS Act 45, which was enacted in 1986, now regulates the ambulance industry in Pennsylvania. The Act imposes standards that had been adopted previously by some ambulance providers on a voluntary basis. Now all emergency and non-emergency medical transportation providers are required to become certified under revised standards. Act 45 impacted on industry costs in four ways: 1. Specific Requirement for Ambulance Personnel There are several levels of training for ambulance personnel: Basic Life Support (BLS) training is the minimum standard recommended for ambulance attendants. It consists of 80 to 180 hours of medical training in advanced first-aid, oxygen therapy, splinting of fractures, cardiopulmonary resuscitation, and other skills that help to stabilize a patient's condition in a pre-hospital setting. After completing an approved BLS training program, the candidate is certified as an Emergency Medical Technician (EMT-A). The next level, Emergency Medical Technician (EMT-D) requires special training in the use of defibrillators for cardiac arrest cases. The next level, Emergency Medical Technician-Paramedic requires about 1200 hours of training and is usually categorized as Advanced Life Support (ALS). Candidates receive training in IV therapy, cardiac drugs, defibrill ation, and other ALS techniques. Pennsylvania requires that at least one person on each BLS ambulance be trained to the EMT-A level. To be considered an ALS ambulance, at least one person must be trained to the EMT-A level, and a second person must be an EMT-PARAMEDIC. -10-

17 2. Minimum Standards for Ambulance Vehicles After the 1985 legislative act, only federally certified vehicles are permitted to be used as ambulances. 3. Minimum Standards for Ambulance Equipment Following the same certification guidelines, vehicles must now be outfitted with specialized and costly emergency medical equipment, depending on the type of service being provided. For example: standard equipment costs for BLS vehicles are, at a minimum, $6,000. per vehicle and $30,000. for an ALS vehicle. 4. Strict Quality Control Standards To assure the quality of ambulance service, the Act established standards for accreditation and peer review that individual companies follow. Although quality assurance programs are necessary they are costly, requiring the development of a review committee and the hiring of a physician to act as medical director. Besides Act 45, recent federal regulations (TEFRA and OBRA) have eliminated ambulance companies' ability to cost-shift to make up for difficiencies in reimbursements. Medicare now reimburses on a fixed profile schedule. At the same time, commercial insurance companies have begun to reimburse ambulance providers at so-called "reasonable charge" rates, which are below the real costs of providing service. GROWING NUMBER OF MEDICAL ASSISTANCE RECIPIENTS Pennsylvania's ambulance providers have seen the average number of Medical Assistance recipients using their services rise significantly in recent years. The vast majority of these cases are non-emergency in nature, as stated previously. Despite these growing numbers, however, Medical Assistance reimbursements have been frozen for the past 12 years, forcing providers to operate at a substantial loss whenever transporting Medical Assistance recipients. At least one major Pennsylvania city has felt the effects. River Rescue of Harrisburg, Inc., served a large Medical Assistance population. But last year, when the company found its financial viability threatened, the Organization made a bold decision; no longer could the Organization accept Medical Assistance as a form of reimbursement. Low income patients were now being required to directly pay for services. -11-

18 River Rescue is the city's major medical transportation service, a public outcry prompted a study by a major citizen's group. What was the study's conclusion? The study concluded that, for most Medical Assistance recipients, getting to a hospital in a non-emergency situation has become a difficult struggle. Many are forced to use alternate means of private transportation where the quality and reliability of the transport is unknown. The health and well being of these individuals has been severely impacted and there has been a significant increase in the potential for risk and the beginning of a chronic dissipation of their ability to access quality, continuing medical care. -12-

19 PART III IMPACT OF THE MEDICAL ASSISTANCE REIMBURSEMENT FREEZE

20 PART HI IMPACT OF THE MEDICAL ASSISTANCE REIMBURSEMENT FREEZE Dedicated to service, Pennsylvania's ambulance industry wants to preserve access for the state's Medical Assistance recipients to quality health care. However, increasing costs and declining revenues ~ especially from frozen Medical Assistance reimbursements are causing a major industry crisis. These factors are threatening the very existence of some companies while impairing the ability of others to service the state's indigent population. The poor should not be penalized because of the state's failure to pay for this service. Especially critical is the plight of the state's sizeable non-ambulatory population who because of medical need require ambulance transportation to local medical facilities. Because of the low reimbursement, many of these patients are finding it almost impossible to access ambulance services forcing many to be isplated from the care they need. "Paratransit" units provide services only to semi-ambulatory and ambulatory clients. As can be seen, the ambulance industry is being pressured by higher expenses and lower rates of reimbursement. If these conditions continue unabated, ambulance service to Pennsylvania residents receiving Medical Assistance will become obsolete. -13-

21 PART IV AMBULANCE ASSOCIATION OF PENNSYLVANIA

22 PART IV AMBULANCE ASSOCIATION OF PENNSYLVANIA * Representing both non-profit and for-profit ambulance operators throughout the state, the Ambulance Association of Pennsylvania (AAP) promotes continuity and quality in the ambulance delivery system while encouraging the highest ethical standards for enhancing access to quality health care. It is a strong voice on the timely issues of reimbursement standards, discrimination in the health care delivery system, and quality emergency medical service. It was founded in With approximately 100 members, the AAP represents 70% of the total number of professional ambulance operators in the state and 90% of those who provide non-emergency transportation for Medical Assistance recipients. It coordinates its efforts and pools its knowledge with ambulance organizations throughout the entire state and is affiliated with The American Ambulance Association. The AAP also serves as a resource for ambulance organizations making the transition from volunteer operations to non-profit ones. It acts as a bridge between ambulance services and related state-wide agencies and departments, including the Pennsylvania Emergency Health Services Council, regional EMS councils, and EMS departments throughout the state to formulate policies and guide the ambulance industry into the future. -14-

Uncompensated Care Provided by Minnesota s Emergency Medical Services

Uncompensated Care Provided by Minnesota s Emergency Medical Services This document is made available electronically by the Minnesota Legislative Reference Library as part of an ongoing digital archiving project. http://www.leg.state.mn.us/lrl/lrl.asp Uncompensated Care