Frequently Asked Questions Regarding Proposed Bill H. 863

Who is affected by the proposed bill? Is it just private emergency medical service providers?
The Legislation protects all ambulance services including your local Fire Department-based and Municipal Ambulance Services, not just “ambulance companies.”

Do other states have similar laws?
Similar Legislation is already law in many other states, including Connecticut, New Jersey, Pennsylvania, North Carolina, Florida, Virginia, Louisiana, Texas and is pending in New York and Maryland.

Why does the EMS 911 system need to be changed now?
Health insurers are trying to shift costs for Emergency Medical Services away from insurance and on to the taxpayers. Whether the system is public or private, it is a fact that tax dollars will be needed to close the gap. If the health insurers are allowed to send payments directly to patients or if they force EMS providers to contract at rates below the cost of providing the service the taxpayers will need to make up the difference with increased budget money to their Fire Department or a tax subsidy to their ambulance provider.

Why not keep the reimbursement system the way it is?
The Legislation maintains the status quo and prevents health insurers from coercing public and private ambulance services from entering into contracts that reimburse at rates below the cost of providing the service.

Why can’t EMS 911 services be reimbursed like other healthcare providers?
Blue Cross has stated that their tactic of sending payments directly to patients has been employed successfully to reduce costs in areas such as “pathology, radiology, and anesthesiology.” Emergency medical services are fundamentally different. Ambulance services and EMS providers cannot refuse patients, must be ready to respond 24/7, and are called on to transport patients first without questions about their insurance coverage. Insurance information questions are often being answered days after the fact. EMS is different from these other types of health services and must be distinguished.

Aren’t ambulance service fees out of control?
Ambulance fees are not “exorbitant” but are instead driven by the requirements of covering the cost of providing the service. These rates are often established by Boards of Selectmen, contracts, and competitive procurement. Do not be misled by the simplistic and disingenuous approach of pointing to a limited and extreme example such as the Lowell transport that has been cited. The issue is much more complex than that single, particular case is not at all representative of the facts.

Does Medicare and Medicaid set EMS rates?
A study done by the Federal Government GAO (not the ambulance industry or fire service) shows that ambulance providers, both municipal and private, are reimbursed at rates far below the cost of providing the service by Medicare, Medicaid, and patients who have no insurance whatsoever. Blue Cross is openly stating that they are trying to force EMS providers to contract at these low rates. Tax dollars will be required to make up the difference.

Why can’t insurance companies just reimburse patients directly and have them pay EMS providers?
There are myriad examples of patients being transported by ambulance multiple times, receiving payment from their insurance company, and refusing to pay the bills of the EMS agency. One recent example documented in North Carolina is of a patient being transported by the county EMS agency 22 times in 2008, receiving $12,449 directly from Blue Cross and paying the county EMS agency $0. Thankfully, North Carolina enacted legislation on June 11, 2009 to require direct payment to non-contracted EMS providers. Many other states followed suit and have already prohibited this practice to protect their health care and EMS systems.

Blue Cross Blue Shield has said that only one-third of all EMS providers are contracted. Why is that?
Health care providers are able to contract at much lower rates when the health insurer steers patient volume in the direction of the contracted health care provider. But ambulance services are different. The health insurer cannot steer a heart attack victim or someone injured in the street to a contracted provider controlling patient volume for ambulance services that are needed immediately. Ambulance services must be ready 24/7, available to all patients, at all hours of the day and night, with no ability to verify insurance coverage.

Isn’t Blue Cross Blue Shield capable of deciding rates and controlling costs?
Blue Cross Blue Shield has a poor record in controlling healthcare premiums and costs. For Blue Cross and other health insurers to attempt to literally cut payments to EMS providers when they have increased the rates paid to entities such as Partners Health Care by 75% over the recent years is outrageous. See the Boston Globe articles and information regarding the ongoing investigations by the Attorney General that began in 2009. In addition, Blue Cross paid its departed CEO a golden parachute of more than $11 million. The prior CEO received a $16.4 million payout a few years before that. Payments to Partners Health Care alone from Blue Cross in 2009 were $2 billion. Total payments to ALL ambulance providers, public and private across the entire state, was roughly 10% of that amount in 2009.

Won’t cutting reimbursement rates save money?
Blue Cross Blue Shield claims they can save (cut) $60 million in annual ambulance costs by forcing public and private ambulance providers to join their network. Blue Cross is proposing to shift these costs to the taxpayers and cripple the funding of EMS systems to save less than one percent of their claims expenditures while they are securing double-digit rate increases of premiums paid every year without fail.

Who will set rates under this legislation?
The legislation gives emergency medical services rate-setting authority to city and town officials, rather than profit-driven insurance companies. Municipal officials understand the unique circumstances of their communities and have incentives to hold down costs unlike insurance companies, that are trying to shift costs from their balance sheet onto local taxpayers.