The Question Ambulance Cost Data Collection Does Not Ask

After multiple COVID-related delays, the deadline for the first round of reporting to CMS’s Ground Ambulance Data Collection System (GADCS) is fast approaching.

GADCS is intended to determine whether current Medicare payments are sufficient to cover the cost of providing ambulance transports. As you begin to look into the GADCS reporting instrument, you will see many questions about your service, your staff, your income, and your costs. In fact, the questions related to expenses take up the bulk of the data collection instrument—asking what your expenses are for almost everything you can think of.

But there is one thing they don’t ask: What should your costs be? For example, what should you be paying your crews?

A Look at the Numbers

It's a basic function of math and economics. What we spend is limited by what we have. And in EMS, what we have is not much.

Many payers reimburse below the cost of providing ambulance services. So when the GADCS asks what your payroll is, the answer it receives in response is what you can afford your payroll to be, not what it should be. And therein lies the fundamental flaw with the GADCS.

It’s no secret that we are in a time of unprecedented stress on the EMS system, and much of that stress centers around staffing. To keep the EMS system sustainable, we must attract EMTs and paramedics to the industry, and a living wage is the primary incentive that is necessary to do that.

We must also pay EMS practitioners a wage that justifies staying with a profession that is dangerous, often thankless, and mentally and physically exhausting, and one that creates a struggle to maintain any sense of work-life balance. However, if we are only reimbursed based on what our current expenses are, then a sustainable system may not be the result of cost data collection.

Critical Access Hospitals

If a sustainable EMS system is desired, then incentives to create such a system are something that federal health care programs are certainly aware of. Let’s look at an example of the one exception to Medicare paying for transportation based on the Ambulance Fee Schedule. Qualifying critical access hospital (CAH)-based ambulance services are paid at “101 percent of the reasonable costs incurred in furnishing ambulance services” (see Medicare Claims Processing manual Chapter 15, §10.4).

But what kind of incentive is a 1% profit margin? This means that in order to incentivize hospitals in rural areas to provide ambulance services, the Medicare Ambulance Fee Schedule payment is not enough, so they are allowing the CAH to incur whatever “reasonable” costs are necessary to offer the service. So even at a 1% profit margin, these unique CAH ambulance services can bring in more money than they would have under the Fee Schedule.

More importantly, this turns that mathematical principle on its head—no longer is spending based on what we have; what we have is based on how much we have spent! This allows the CAH to set a wage that is sufficient to encourage EMTs and paramedics to work for them, and in fact creates higher wages for EMS practitioners working in those systems than what we see in other EMS systems that are paid under the Ambulance Fee Schedule.

No Surprises Act

There is another issue looming over ground ambulance—the potential for inclusion into the federal No Surprises Act (NSA). The NSA, which currently only applies to air ambulance, generally prohibits balance billing of patients in emergency situations. But the law does require insurance companies to pay an appropriate rate for the service, thereby shifting less responsibility onto the patient and allowing for the provider and the payer to argue over the value of the service through an arbitration process.

Therefore, if and when ground ambulance is included in the NSA, the question at the heart of that process will be whether your charges are justified or whether the amount offered by the insurance company is sufficient. You can show that your charges are reasonable, but again those charges will be based on what it is currently costing your service to run an ambulance call. In order to get commercial insurance to pay you the true reasonable charge to cover your costs and a respectable margin for the future, you will need to pay your clinical staff an appropriate salary before you send the bill for the services they provide.

The Way Forward

It’s a self-fulfilling prophecy. If what we are spending is based on what we get paid, and what we are paid is based on what we are spending, we will never progress into a long-term sustainable system. We will continue to be fraught with the current challenges of getting and keeping good people long term, and providing them with the best equipment our patients deserve. If we want to create an EMS system that is ready and able to provide needed prehospital care at the level that the public truly expects, then we need to look at the issue like the CAH model does.

Reimbursement should be based on what our costs to provide that care should be—not limited to what history has dictated in the past and what we have been forced to get by with.

Christopher Kelly is a lawyer with Page, Wolfberg & Wirth LLC who focuses on regulatory health care law as it relates to the EMS and ambulance industry. This article is not intended as legal advice. Kelly can be reached at 717-691-0100 or ckelly@pwwemslaw.com.