Billing For EMS Transport? Why Not? And If You Do, Expect Major Changes!

Do you bill for your EMS transport services? Not all fire departments seek reimbursement. Some departments do no billing whatsoever. Some bill everyone. Some bill only non-residents.

There are myriad reasons why some fire departments do not bill for EMS transport. I have heard "the citizen already pays for the service with their taxes." Other explanations I have heard include "it's too complicated" or "we do not want to upset the citizens."

True, the citizens may have already paid for the service with their taxes, but what happens if they do not use the service during that year? Should they get a refund? True, it can be complicated, but you are already documenting the patient care! Outsource your data to a company that specializes in reimbursement for ambulance services. Finally, it is true citizens may get upset if they thought they were getting a "free" service and then had to pay for it.

How upset do you think the citizens would be if they knew they were paying for ambulance service twice? That is exactly what happens when they use an ambulance and do not receive a bill. First, most likely they have paid for the service with their local taxes. The second payment comes when they pay a medical insurance premium and it provides for reimbursement on an ambulance transport. Also, if the citizen has paid state and federal taxes, Medicare and Medicaid programs also provide for ambulance reimbursement.

Thus, the citizen is paying twice for that service - first through local taxes and then through medical insurance, whether it be Medicare, Medicaid or a third party. Why not pass the cost on to the end-user of the service, obtaining additional revenue for the fire department? That can help hold down the need for additional tax revenue at the local level. A fire department that does not bill a medical insurance company is only making the insurance company a little richer.

If you currently bill Medicare for ambulance reimbursement, major changes are in the wind. The Balanced Budget Act, signed into law by President Clinton in September 1997, mandated cutting Medicare costs over the next five years. As part of that process, Congress gave the Health Care Finance Administration (HCFA) until Jan. 1, 2000, to develop a national fee schedule for ambulance services through a "negotiated rule-making" process. That process is designed to allow for EMS providers significantly impacted by the new fee schedule to participate in its development.

In the Balanced Budget Act, Congress also voted to require ambulance services to accept Medicare assignment once the new fee schedule is in place. The Balanced Budget Act also limited increases in Medicare reimbursement for ambulance transport to the Consumer Price Index minus 1% for five years.

As part of the negotiated rule-making process, agencies that represent EMS providers and the HCFA will negotiate a future national fee schedule for Medicare transports.

Agencies at the table representing EMS agencies include the International Association of Fire Chiefs (IAFC), International Association of Fire Fighters (IAFF), American Ambulance Association (AAA), National Volunteer Fire Council (NVFC) and National Association of State EMS Directors. Most of these agencies have put together task forces to deal with this important topic, which will obviously influence the survival of many ambulance services in the future. Meetings were scheduled to begin in January and could conclude in May so that HCFA can publish the proposed rule in the Federal Register by summer. The proposed rule must be published by summer for it to take effect on Jan. 1, 2000, as required by Congress. Coincidentally, HCFA has asked Congress to delay the implementation date because of Y2K concerns.

As of this writing, the IAFC and the IAFF are taking the position that the new fee schedule should include reimbursement for treatment and transport. Under current federal laws, only the agency which transports the patient to the hospital can receive reimbursement. By allowing reimbursement for treatment, fire departments could charge Medicare for first responder services, whether the patient is transported to the hospital or not.

This change would be consistent with the EMS Agenda for the Future document (see the October 1998 EMS column, "Mapping Our Future"). In essence, fire departments could save money for federal programs by triaging and assessing patients at the scene, providing on-scene care, treating and releasing, or transporting to an alternative medical facility instead of a costly emergency department.

The Balanced Budget Act has made the private ambulance industry quite nervous. After all, a great percentage of its income over the years has been derived from Medicare - especially in the area of inter-facility transports. In preparation for the negotiated rule-making process, the AAA, which mostly represents the interests of the private ambulance industry, has paid $300,000 to contract with an independent agency to examine the cost of ambulance transports on a nationwide basis.

Under the contract, the Project HOPE Center for Health Affairs will gather data on the cost of providing ambulance service. After completion of the data gathering, Project HOPE will develop proposed fee-schedule models based on a relative-cost approach. The AAA then plans to use this fee schedule in meetings with HCFA to validate what ambulances should be reimbursed. One position the AAA will take is that the new fee schedule should recognize the "cost of readiness" for EMS providers.

There will also be differing opinions on reimbursement for treatment versus transport. The AAA has no disagreement with the IAFC and the IAFF positions, but contends the money budgeted for first responder fees should not come from the existing "pot of money." This is highly unlikely, since HCFA is going through this process to reduce cost to the Medicare program, not increase it.

Ambulance reimbursement for fire agencies doing EMS transport is certainly an important component. Fire agencies need to be fully aware of all reimbursement issues that may affect their operations.

Gary Ludwig, MS, EMT-P, a Firehouse® contributing editor, is the chief paramedic for the St. Louis Fire Department and is currently serving his fourth term as an elected member of the EMS executive board for the International Association of Fire Chiefs. He was awarded Missouri's EMS Administrator of the Year for 1998.