MMA letter to Health Care Committee urging passage of emergency services bill

The Honorable Steven M. Walsh, Chairman
The Honorable Richard T. Moore, Chairman
Joint Committee on Health Care Financing
State House, Boston

Dear Chairman Walsh, Chairman Moore, and Members of the Committee,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association would like to offer comments on H. 3917, which has been reported favorably by the Joint Committee on Financial Services. We strongly support H. 3917 and believe that this legislation protects cities and towns from incurring excessive costs associated with changes in reimbursement and rate setting for emergency ambulance services.

H. 3917 will do two key things to protect the system that is currently fair and efficient. First, this legislation prevents the practice of “pay the patient first,” by which patients would be reimbursed directly by their insurance carrier and the onus would be on the patient to turn around and pay the municipality for the EMS transport expense. “Pay the Patient” is a practice that would force communities to pursue their own residents to recoup thousands of dollars in ambulance expenses. Receiving a check directly would be a confusing, non-familiar practice for most people, and there is a high likelihood for misunderstanding. In Forsyth County in North Carolina, for example, where an insurance carrier has implemented this practice, estimates are the county is missing about $400,000 in ambulance payments and has incurred additional costs associated with trying to track down such payments. While municipally owned and operated ambulances that bill for their own services are not impacted by this practice, 19 of the 25 largest communities in Massachusetts have contracts with private ambulance companies and therefore are not protected.

Second, the legislation allows municipalities to set a fair rate for ambulance services. Geography and payer mix make every community different in terms of EMS needs. For example, it is much more expensive to transport a patient in Nantucket than it is in a densely populated community located near multiple hospitals. Similarly, the payer mix of insured and uninsured is drastically different in a working class urban setting than it is in a more affluent suburban setting. Thus, communities are in the best position to set their own rates for EMS. Municipal officials are held accountable to the taxpayers, and therefore set realistic rates that match the actual cost of ambulance services.

EMS is quite different from non-emergency transport. Insurance companies should have the ability to set rates with private ambulance companies for non-emergency transports, but we believe it is detrimental to municipalities to receive inadequate reimbursements by either direct payment to patients or rates that are too low. Due to the payer mix of Medicare, Medicaid, privately insured, and uninsured patients, the average emergency ambulance trip for a privately insured patient costs roughly three times the Medicare reimbursement amount. If this payment is not collected, the municipality is forced to fund the difference. Boston alone pays $12 million out of the city’s budget after reimbursements to subsidize for Medicaid and patients with no insurance. That out-of-pocket cost for the city would skyrocket if Boston was unable to recoup the full cost from patients with private insurance, which nationally accounts for approximately 25 percent of transports.

We believe this legislation allows cities and towns to set a fair rate for ambulance services and to promptly and efficiently collect that fee, and we urge the committee to give it a favorable report.

Thank you for your interest in this matter. If you have any questions, please do not hesitate to contact MMA Legislative Director John Robertson at any time at (617) 426-7272.

Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA