MEDICARE AMBULANCE REIMBURSEMENTS

AND

THE IMPACT ON COUNTY GOVERNMENT

Background

North Carolina law gives county government the duty to provide, or cause to be provided, ambulance services. Local governments have accomplished this in several ways. Most counties established their own agencies or subsidized volunteer groups. Others made arrangements with a local hospital to organize and run the ambulance service.

County government run emergency medical services (EMS) have proven to be cost efficient. Commissioners did not attempt to make a profit from EMS. In fact most counties established a fee structure below the break-even point. A quick comparison of annual accounts receivable and the EMS operations budget clearly validates this issue.

While the percentage may vary, older North Carolinians, and thus Medicare beneficiaries are the prevailing ambulance users in every NC county. Unfortunately, Medicare ambulance reimbursements for NC are the lowest in the nation. NC citizens pay the same rate into the Medicare fund as every other state. Yet, some states receive Medicare payments at more than THREE TIMES the rate approved for NC providers.

As a result of these inequities and unfair Medicare policies NC EMS providers must take a large write-off on claims submitted to Medicare. For some counties the write-off is as much as 50% of the bill. This has an adverse effect on ambulance collections. The unmet costs are primarily shifted to the ad valorem tax payers. Meanwhile, working North Carolinians are contributing their fair share into the Medicare trust fund. At a time when county commissioners are struggling to maintain local services without tax increases, we are watching our dollars go to pay for Medicare services elsewhere. We have mounted several efforts over the past six years, however, present rules, carrier resistance and federal bureaucracy have thwarted our efforts for the changes that are justly deserved and well overdue.

The Federal Balanced Budget Act of 1997and an Opportunity for Change

The Balanced Budget Act attempts to redress inequity in the ambulance industry by simplifying the rules and establishing a fee schedule. The target date for implementation of the fee schedule is January 1, 2000. The Balanced Budget Act caps the fee schedule to the amount spent on ambulance reimbursements in 1997, plus limited inflation adjustments. Once set, there is no judicial or administrative appeal to the prices.

The fee schedule will be determined through negotiated rulemaking. This procedure allows industry participation with Health Care Financing Administration to set the fee schedule. The NC Association of EMS Administrators appears close to securing a position on the committee. Participation at this level, is a unique opportunity to overcome our past inequities in Medicare ambulance reimbursements. Good or bad, the outcome will directly impact every county budget in the coming years.

NC Association of EMS Administrators would like to forge a partnership with the NCACC. Specifically, we are requesting three actions:

formal support for our efforts to negotiate rates that are fair,

assistance in raising the awareness of county commissioners across the state to the importance of this issue,

Association staff support to develop strategies for negotiated rulemaking, and to analyze other proposals brought forth during the negotiated rulemaking process.