Ems System Performance-Based Funding And Reimbursement Model - Finance Committee Draft Advisory Page 3
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34Finance Committee DRAFT Advisory
EMS System Performance-based Funding and Reimbursement Model
Common themes have emerged from the IOM report and the three cost projects:
1. Costs vary significantly based on level of service provided, including but not limited to
factors such as, local requirements, service area, compensated or uncompensated labor,
response time standards and performance, clinical sophistication, quality of care, and cost
per response.
2. Cost of response varies based on population and age, call volume, service area (urban to
remote), and number of EMS agencies within a service area.
3. Determining a consensus of the definition of EMS remains a challenge. The current
definition of EMS System includes all aspects of emergency care from dispatch services
through the 911 response to hospitals and rehabilitation services (ems.gov). There is no
clear term specifically identifying “EMS” provided by EMS personnel in the field outside
of a facility setting.
4. There is no accepted definition by Medicare for readiness cost or a current methodology
for calculating this cost.
5. EMS response is provided by multiple governmental and non-governmental agencies
including: city, county, district municipal service, fire-based, hospital-based, law
enforcement, private for-profit, community non-profit and others. All entities have
different accounting structures and methods to determine costs. For many agencies, costs
are bundled with other services and not delineated for EMS functions (GAO, 2007).
6. Depending on service area and model type, EMS response personnel are either paid
career, compensated volunteers, or uncompensated volunteers making it difficult to
benchmark true labor costs.
7. While there is a need to identify and evaluate total EMS System costs, the national
Medicare Ambulance Fee Schedule was limited by statute to the Medicare covered
benefit (ambulance transport) and the GAO cost report was also limited to the cost of
ambulance transport. Both the Project Hope and GAO projects were ultimately limited
to ambulance service cost and not EMS System costs.
8. Current episodic reimbursement methods do not cover the total cost of all EMS System
component parts, including readiness costs.
9. EMS response is reported to be at the intersection of healthcare, public health, and public
safety, yet reimbursement by health insurance providers is often the only source of
funding.
10. Local government funding of EMS and ambulance service varies widely across the
United States and is subject to change annually. The changes may be unrelated to the
cost of providing the service. For example, local government funding only subsidizes the
first response component and not ambulance service. In other areas, local government
subsidizes uncompensated care. Often times, no local government subsidies are provided
for any EMS activities.
11. Federal, state and local grant sources are often restricted to certain EMS agencies based
on provider type. Non-governmental EMS agencies are often not eligible for grant
funding.
12. Ambulance services experience significant levels of uncompensated care including
charity care provided to the uninsured and below-cost reimbursement from Medicare,
Medicaid and other government insurers, about double the amount compared to other
healthcare provider groups (American Ambulance Association, 2007). Virtually no state
March 29,2012
Draft Advisory
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