Ambulance financial woes prompt talk of stronger regulatory role

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The operations chief for Brattleboro-based Rescue Inc. has a succinct diagnosis for what ails Vermont's ambulance services.

"We're using a funding formula that predates our modern medicine," Drew Hazelton told the House Health Care Committee on Friday.

State officials say they're working hard to fund a cure, and possibilities include a boost in Medicaid reimbursement, a new provider tax and new partnerships with hospitals. Rep. Bill Lippert, D-Hinesburg, who is chair of the Health Care Committee, raised the stakes by suggesting the state is not properly considering or regulating ambulance services.

"I think there are bigger issues, and that is that we are not recognizing an essential part of our health care system in the state of Vermont as part of the health care system," Lippert said.

While medics said they welcomed such big-picture discussions, they also urged prompt legislative action as their expenses rise and revenues fade. "We need some help now, is what we're asking for," said Jim Finger, president of the Vermont Ambulance Association. "We can't keep going year after year without having a mechanism to get some kind of (reimbursement) increase."

Hazelton, who also serves as the ambulance association's legislative chairman, last month outlined the dilemma in a Brattleboro presentation for Windham County legislators. There is increasing demand for medics to provide complex, expensive services, he said, but the state's Medicaid reimbursements for ambulance runs — set at less than half of what the federal Medicare program pays — haven't changed since 2008.

The result is that ambulance services are losing hundreds of dollars for every run that involves a Medicaid patient. And federal health care changes have led to a big boost in the number of patients who use that program: In Rescue Inc.'s 15-community territory, Hazelton said, the share of calls that involve a Medicaid patient has risen from 18 percent to more than 30 percent in two years.

To further aggravate the problem, there are instances in which medics get no Medicaid or Medicare payment at all. For example, there's no reimbursement for medication, or for calls in which a patient is not transported to a hospital.

Officials laid out the following scenario during Friday's testimony: An ambulance responds to a heroin overdose, and medics save a life with Narcan, an expensive overdose reversal drug. But if that patient won't go to the hospital, the ambulance service gets no reimbursement for the call.

"That's incredible to me," said Rep. Chris Pearson, P-Burlington, who is vice chairman of the Health Care Committee.

Administrators like Hazelton don't currently have a lot of options to make up for the financial losses. "Where we've seen (another) major change is in our private insurance. Only 10 percent of our population that we're serving has private insurance now," he told Health Care Committee members. "So, trying to cost-shift onto private insurance is also not working."

That raises the specter of service cuts, and it means taxpayers are having to dig deeper to support their local ambulances. "It's a growing burden on municipalities," said Rep. Paul Poirier, I-Barre. "In many cases, it's the taxpayer who is paying increased property taxes to provide this service."

Two pieces of legislation — H.138 and S.151 — propose requiring Medicaid to reimburse ambulance services at the same level as Medicare. But those bills have not budged since their introduction last year.

There was some brief talk at Friday's committee meeting about recommending a boost in Medicaid rates. The discussion touched on other options, including a new provider tax to support ambulances.

But the reimbursement system is federally based, so officials are approaching the problem carefully. Nolan Langweil, a senior fiscal analyst at the Legislative Joint Fiscal Office, acknowledged he was being deliberately vague in his testimony.

"We've been talking about, is there some sort of provider tax or provider contribution that could be used in this process," Langweil said. "We have to be very careful of not violating federal laws."

Rep. Oliver Olsen, I-Londonderry, said he had participated in recent discussions between the ambulance association and the Joint Fiscal Office. "I think it's fair to say at this point, there isn't any one particular option that has jelled just yet," Olsen said. "But I think that there are a number of different ways forward that would help alleviate the challenges that we're seeing."

In addition to the reimbursement challenges ambulance services face, Hazelton also noted during Friday's hearing that Rescue Inc. ends up writing off most of its costs for serving uninsured patients. That led to another proposal for financial relief.

"Maybe there is a way that a partnership could be formed with hospitals, because they do have programs already for charity care and uncollectible debt, and, if that could be shared with you, that might lessen the burden somewhat," said Rep. Leigh Dakin, D-Chester.

From his chairman's seat, however, Lippert returned repeatedly to the idea that ambulances operate outside the purview of the Green Mountain Care Board.

Susan Barrett, the care board's executive director, said she had received a recent letter about the ambulance dilemma from a group of Windham County legislators. But she added that "we don't have any statutory authority, per se, for EMS."

Lippert said there may be a gap in the system in that regard. While acknowledging he had no conceptual framework for his proposal, he asked about extending the state's statutory review authority to include ambulance services.

"There's a direct relationship to issues of hospital access (and) compensated and uncompensated care," Lippert said. "Without the ambulance and EMS services — if they were suddenly not available — we would have a crisis in this state of health care. Hospitals would be suddenly needing to create some kind of access system for emergency care."

Lippert acknowledged that "when you start talking about regulatory authority, some people get very nervous. But it's also one way to actually capture a full picture of what we're talking about in this state in terms of health care costs and health care services."


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