Low Medicare Rates, Higher Stakes: What MedPAC’s Report Means for EMS

On June 15, the Medicare Payment Advisory Committee (MedPAC) issued their required report to Congress on the Ground Ambulance Data Collection System (GADCS). The GADCS report, Chapter 6, can be found within the full report. 

As expected from the previous draft reports and meetings, the report focused on cost reporting. The recommendations of the report are: 

• Continue collecting cost and revenue data from ground ambulance providers 
• Focus data collection on information essential to assessing the accuracy of Medicare payments and Medicare beneficiaries’ access to ambulance services 
• Pursue opportunities to streamline data collection 

Eight years elapsed from the time that MedPAC was tasked with collecting and assessing cost data until the issuance of this report. The report does share from the data that was collected that costs for ambulance services are largely driven by volume of transports along with ownership type and staffing model type. Costs tend to decrease with size/scale and that rural services operate at higher costs.  

Unfortunately, the original charge to MedPAC to review the adequacy of Medicare ambulance payments was largely not addressed. The report did acknowledge that the Medicare reimbursement amounts established in 2002 were largely set without assessing the cost of providing the services and that using an inflation index to solely adjust rates may not accurately track with the costs of providing ambulance services. It also focused on the fact that there was substantial variability in the data and tied that to concerns that agencies were not consistently reporting costs. Additionally, they stated that government-based EMS agencies were not fully reporting local revenue/tax sources. 

It appears that the next iteration of GADCS should “focus on Information essential to assessing . . . the accuracy of Medicare payments . . .”. As an industry it is important that we continue to advocate that current Medicare payments were never set utilizing the cost of providing the service. It is also critical that the industry continues to educate stakeholders that the emergency ambulance system does not function without paying for the readiness of the system and that cannot be carved out from the actual transport.  

The stakes have also increased now that supplemental Medicaid payments are being anchored to Medicare allowed rates. Artificially low Medicare rates now set a ceiling for reimbursement for the majority of transports agencies provide (Medicare and Medicaid make-up over 2/3 of the services provided for almost every agency). This creates a local burden when the federal and State governments under-reimburse for these essential services. 

Moving Forward

Here are some key takeaways from Digitech’s cost reporting team that we believe could help our industry as we look into the future of Ambulance cost reporting: 

• The data in the GADCS collection supports the fact that delivery of emergency services is expensive and substantially more than current Medicare allowed amounts 
• Standardization of EMS cost elements will benefit the industry and allow for more consistent data capture 
• EMS providers must capture the full set of costs that are involved in the delivery of services to decrease the variability across providers 
• Data capture and analytics need to be a core capability built into EMS systems, not an afterthought  

Digitech is ready to support industry and individual agency efforts to take cost reporting to the next level.