EMS: What the Affordable Care Act Means for Fire Service EMS

Sept. 1, 2012

On June 28, 2012, the U.S. Supreme Court handed down a 5-4 decision on what has been unofficially labeled “Obamacare.” Unless you have been in a cave, you known the court upheld what is legally known as The Patient Protection and Affordable Care Act.

What is the impact on fire service EMS? In my opinion, it will have a major impact on fire service EMS.

First, the law is more than 2,700 pages long, but “EMS” appears only four times within the law. That may make one think there is very little impact on fire service EMS, but that is not necessarily true, since fire service EMS has a major impact on the healthcare system as a whole. Some hospitals provide statistics showing that more than 50% of their admissions come through their emergency room after patients have been delivered by ambulance. When you consider that a recent federally funded study called the “National EMS Assessment” showed that approximately 40% of all agencies that provide EMS transport are fire-based EMS systems, the impact fire service EMS has on the healthcare system as a whole is huge. No other EMS system model comes close to those numbers. (For details about the report, see my February 2012 column, “Study Proves Fire Service Is Top EMS Provider in U.S.”).

So what can we expect?

First, expect ambulance reimbursement to be affected. It gets complicated when you start talking about National Fee Schedules, Geographic Practice Cost Index, Ambulance Inflation Factor, designated super rural ZIP codes and Consumer Price Index for All Urban Consumers, so I won’t get into that since I do not profess to be an EMS-billing expert. But I strongly suggest you talk to your billing company because there is additional revenue that can be collected for your service as a result of the Supreme Court’s decision. This includes a 3% bump for rural transports and a 2% increase for ground ambulance transports that originate in urban areas. Both are retroactive from Jan. 1 through Dec. 31, 2010. Through the end of this year, base rates will be modified by a bonus of 22.6% when the point of pickup is in one of the group of designated super rural ZIP codes. These ZIP codes, which are based on population, represent the lowest 25% of all rural populations.

But perhaps the biggest impact will occur when an estimated 32 million more Americans are added to the health insurance rolls and 105 million more Americans will no longer have a lifetime limit on their medical insurance coverage. That means people who have put off their healthcare because they had no medical insurance will be more inclined to seek medical care for whatever is bothering them. A percentage of those will be people who call for an ambulance. Therefore, ambulance calls will increase and when you factor in baby boomers that will be growing older and need more medical care, the impact could be significant.

Some speculate the biggest effects that will come from Obamacare will be the formation of Accountable Care Organizations (ACOs). You probably have not heard much about these organizations, but it is expected they will become major players in the healthcare system as a result of the Supreme Court decision. As I write, there are 187 certified ACOs in the U.S. where none existed just a few years ago. An ACO is a healthcare organization characterized by a payment-and-care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients.

Basically, ACOs will exist to drive healthcare costs down and will not pay healthcare providers for medical care of their beneficiaries if they do a poor job providing that care. As an example, if a patient is discharged from a hospital after being treated for congestive heart failure and is readmitted within 30 days with the same problem, the hospital will have to eat the cost of the second treatment and maybe even be penalized monetarily. Hospitals will have a goal of making sure patients are not readmitted to the hospital after being discharged.

What does that mean to fire service EMS? Here is where some believe hospitals will partner with EMS systems to treat patients at home and release them. Hospitals will probably partner with EMS systems to also do follow-up care with patients after discharge to make sure they are not having any problems.

If your fire-based EMS system does not partner with local hospitals that are in an ACO in the future, chances are your local private ambulance company will and those patients will not be calling 911. Many speculate that is why private equity firms were quick to rush in and purchase AMR and Rural/Metro last year – they see increased dollars coming to large private ambulance companies in the future as more people have insurance and hospitals partner with EMS systems to deliver care outside the hospital environment.

I certainly do not have a crystal ball or else I would have won the Powerball by now. So certainly my speculation about what the Affordable Care Act will mean for fire service EMS is just that – speculation. But I am reasonably certain it will have a dramatic impact on fire departments that transport patients. Your fire department must be prepared to adjust to the changes that are coming.

Gary Ludwig will present “Management Case Studies for EMS Managers” and “Does the EMS Manager Know About This?” at EMS World Expo 2012, Oct. 29-Nov. 2 in New Orleans, LA

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