MMA letter to Senate Health Cost Containment Committee raises concerns about EMS rate provision

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The Honorable James T. Welch, Chair
Senate Committee on Health Care Cost Containment and Reform
State House, Boston
 
Dear Senator Welch and Distinguished Members of the Committee,
 
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association wishes to offer testimony on An Act relative to health empowerment and affordability by leveraging transformative health care (The HEALTH Act). Continually increasing health care costs pose a constant threat to municipal and state budgets, crowding out funding for other worthwhile programs and necessary services. The rising cost of health care also exacerbates long-term problems such as the multi-billion-dollar unfunded OPEB liability that will burden taxpayers for years to come. We applaud your Committee for the monumental task you and your Senate colleagues have undertaken in recent months, and for the work that you have put into generating this first draft of cost containment legislation.
 
While many of the proposals included in The HEALTH Act are designed to bend the overall cost curve down and benefit our cities and towns, we do have significant concerns regarding the proposed changes to the process for setting rates for Emergency Medical Services (EMS), found in Sections 98 and 109. Cities and towns set fees and charges for a wide variety of municipal services, and are required by state law to match fees to the cost of providing the service. These local officials know the various unique circumstances that result in the rates they set for EMS, including geography, services offered, and the most common types of calls received in their communities. Applying a statewide rate of not more than 160% of the Medicare rate would not take into account these different circumstances.
 
Given the variations in geography, labor rates, level of service, intensity of service, and other important factors, setting a one-size-fits-all cap would essentially misfit all. This is the reason why local rate setting is so important to ensure adequate funding and resources for life-saving EMS services. While the aforementioned sections would allow municipalities to apply for a waiver from this rate, the vast majority of municipalities would need to seek waivers, creating an unnecessary and burdensome administrative process. Further, there is always the prospect that waivers might not be granted, which would then create dramatic revenue problems for these cities and towns. This would then either force significant cuts to emergency services, or force communities to cut funding for other valuable municipal services. A waiver process is not feasible if most municipalities would need to seek relief in this manner. Our initial assessment is that the proposed rate would result in the loss of up to 40 percent of the fees collected for EMS in municipalities across the Commonwealth.
 
The MMA does support the proposed change found in these sections that would eliminate the practice of “pay the patient” by insurance companies. This practice undermines the ability of cities and towns to fund and operate responsive and efficient ambulance services that are at the core of emergency medical services in Massachusetts. “Pay the patient” would force communities to pursue their own residents to recoup thousands of dollars in ambulance expenses. Turning cities and towns into bill collectors is an inefficient use of municipal resources. Further, the “pay the patient” construct creates incentives for abuse and unnecessary requests for transport.
 
Thank you again for holding this public hearing and soliciting input and testimony from all stakeholders. Local officials across the state applaud your efforts to advance impactful legislation to reduce the cost of health care, and we look forward to working with you to ensure that the framework works for cities and towns. If you have any questions regarding the EMS reimbursement provisions or “pay the patient,” or would like additional comment on other aspects of the legislation, please do not hesitate to have your office contact MMA Legislative Director John Robertson at (617) 426-7272 at any time.
 
Sincerely,
 
Geoffrey C. Beckwith
Executive Director & CEO