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ABCs of EMS Medicaid Funding: The New Rules After OBBBA

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A clear-eyed look at CPE, IGT, and provider tax programs—and how to protect your agency’s budget now.

There’s no siren when a funding stream disappears. No alarm sounds when CMS quietly redefines which costs are reimbursable under Medicaid. But if you’re relying on Medicaid supplemental payments, whether through CPE, IGT, or provider tax, you need to know what recent legislation means for your agency’s budget and future.

A Small Slice of the Medicaid Pie, But a Big Impact

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, introducing sweeping changes to tax, energy, and entitlement policy. One major provision is a $1 trillion cut to Medicaid over the next decade, driven by new eligibility restrictions, work requirements for enrollees, and limits on Medicaid financing plans, also known as supplemental payment programs. These cuts raise concern for EMS providers in more than 30 states who rely on supplemental payments for critical revenue. While some impacts are obvious, others will vary depending on the type of program in use within each state.

At Digitech, we’ve seen the confusion firsthand. EMS leaders across the country are trying to make sense of the patchwork of Medicaid supplemental payment programs in play. And we get it. The alphabet soup is dense, and the funding rules vary by state. But understanding how these programs work is important, especially now. EMS receives just a fraction of what hospitals take in through supplemental payments — less than $500 million annually, by our estimates (as no aggregated numbers exist for EMS), compared to $94 billion for hospitals in FY 2022.[1] The impact on EMS is outsized in relation to this small piece of the federal spending puzzle. For many overworked, chronically underfunded systems, these dollars aren’t extra. They’re critically important to the viability of EMS.

How State Dollars Unlock Federal EMS Funding

Despite their different names and acronyms, all EMS supplemental payment programs work in a similar way: they use state funds to pull down federal matching dollars. Because Medicaid is a joint state-federal program, for every dollar a state “spends,” the federal government provides a matching percentage—anywhere from 50% to 77%, depending on the state’s per capita income. (States with lower income levels get a higher federal match.[2]) This core funding structure is what makes supplemental payments possible and why changes to the rules at either level can directly impact EMS budgets.

The Common Thread in All EMS Supplemental Programs

ABCs of EMS Medicaid Funding Graphics

Similarly, Medicaid programs are jointly administered by the federal and state governments. Any changes provider payments or covered services at the state level needs federal approval. The OBBBA brings some of the most significant shifts we’ve seen in Medicaid financing in decades, and that includes the supplemental payment programs many EMS providers have depended on for a decade or more. If your agency relies on these dollars to keep units staffed and ready, expect changes ahead.

Three Paths to Supplemental Medicaid Payment

Before we dive into the possible impact of restrictions or changes that the OBBBA may bring to Medicaid supplemental payments, it’s important to understand the three main types of these programs commonly used by EMS agencies:

  • Certified Public Expenditure (CPE): Used by government agencies, this model allows providers to report the actual cost of delivering Medicaid-covered ambulance transports. As allowed through a State Plan Amendment approved by CMS, an eligible EMS entity may voluntarily certify public funds spent to support the cost of providing a Medicaid-covered service (e.g., ambulance transport). CPE programs can go by many names, including Ambulance Services Supplemental Payment Program (ASSPP), Emergency Service Transporter Supplemental Payment Program (ESPP), Ground Emergency Medical Transport (GEMT), Public Emergency Medical Transport (PEMT), amongst others.

  • Intergovernmental Transfer (IGT): In an IGT program, a local government entity (like a city or county EMS agency) transfers funds to the state Medicaid agency before a Medicaid payment is made. The state agency then uses this money to draw down federal match. The combined funds are returned to providers as supplemental payments. Each state makes its own decisions, within federal requirements, regarding how to finance its share of the Medicaid program. Generally speaking, these are often linked to State Directed Payments (SDPs) and used to support Medicaid Managed Care transports. The enhanced payments may be established at statewide average cost, Average Commercial Rate (ACR), or Medicare.

  • Provider Assessment (Tax): Unlike CPE or IGT, this is a broad term for a program that funds State contributions toward Medicaid healthcare expenditures in order to secure matching federal funds. Provider taxes may benefit both governmental and private EMS agencies, depending on regulation and CMS approval. To qualify, the taxes must be broad-based and uniform – levied at the same rate across all providers in a class, and providers cannot be held harmless (direct/indirect guarantee that each provider will be repaid for the amount of taxes paid). There’s a federal “safe harbor” if the tax stays below 6% of net patient revenue; the indirect guarantee does not apply if the tax rate falls at or below the safe harbor limit.

Medicaid Supplemental Payment Programs at a Glance

Type of Program Certified Public Expenditure (CPE) Intergovernmental Transfer (IGT) Provider Assessment (Tax)
Entities Eligible Governmental Governmental Governmental, nonprofit, and for-profit (private)
Reporting Requirements Annual cost report Cost report or average commercial rate survey Net patient revenue report
Medicaid Payment Delivery Systems Covered Typically, Medicaid FFS (in Texas, CPE is utilized for uninsured charity care reimbursement only) Typically, Medicaid MCO but may also be utilized for Medicaid FFS Medicaid FFS and Medicaid MCO
Approvals Needed State Plan Amendment (SPA) CMS preprint Typically, state legislation and CMS preprint
Frequency of Approvals Once approved, remains in effect until amended Must be re-approved annually/biennially Must be re-aproved annually/biennially
Audit/Desk Review Requirements Yes No No

Now that we’ve defined the three programs, we move on to how these programs work.

CPE: How It Works and Where It Falls Short

In CPE programs, participating agencies submit detailed annual cost reports to document the true cost of providing ambulance transports to Medicaid patients.

How it works: If your agency calculates an average transport cost of $2000 and the Medicaid allowable (interim payment already received) is $200, the $1800 difference becomes eligible for reimbursement. Assuming a 50/50 state-federal match, you’d be eligible to receive $900 in federal funds. But there are three key limitations:

  1. A CPE is only available for governmental providers.
  2. Only Medicaid Fee-for-Service transports are eligible for reimbursement under a CPE. If your state has transitioned most enrollees to Medicaid Managed Care through a managed care organization (MCO), the funding opportunity through a CPE can be very limited.
  3. Cost reporting introduces administrative overhead on the state and participating providers to maintain CMS compliance. This can be a significant burden.

Not sure how much of your Medicaid population is covered by FFS vs. MCO? Check with your billing vendor. You can also get a rough estimate at kff.org.[3] They estimate that the national average is around 75%.[4]

IGT: Filling in the Gaps in Managed Care States

While traditional CPE programs work well in states that have a majority of their claims covered by FFS, an IGT-based supplemental payment program may be layered on to cover costs related to Medicaid MCO transports.

In this scenario, a governmental EMS provider sends funds to the state Medicaid agency, which then uses those dollars to draw down federal matching funds. The combined funds (local and federal) are distributed back to the participating providers as supplemental payments. States may use IGT programs based on average statewide costs (which requires cost reporting) or Average Commercial Rates (ACR). But these programs require formalization and an annual CMS approval to remain in place, making them more vulnerable to policy shifts.

Provider Tax Programs: Broader Access, Different Rules

Unlike CPE and IGT, provider assessment (tax) programs are available to ALL EMS agencies, including governmental, nonprofit and private for-profit. Under this model, EMS agencies are taxed based on a formula tied to transport number or percentage of revenue. The state uses those funds to draw down federal matching funds, which are then redistributed to providers in the form of enhanced payments. Providers receive supplemental payments proportional to their Medicaid transport volume, making this a potentially meaningful funding stream for high-volume providers.

Policy Impact: What Does the OBBBA Mean for EMS Supplemental Payments?

CPE Under the Microscope

The OBBBA doesn’t appear to directly target CPE programs, but they are under CMS scrutiny in terms of its interpretation of what counts as reimbursable costs for Medicaid patient transports. Historically, agencies could include readiness costs (staffing, ambulance maintenance, administrative support) in addition to the actual response cost and clearing the hospital. CMS is challenging that readiness piece. In some states like Texas, CMS audits have already excluded readiness costs, restricting the allowable cost to the time when the ambulance crew first comes in contact with a patient to when the patient is dropped at the hospital. This shift ignores the 24/7 readiness that is essential to serving Medicaid patients, even if the clock doesn’t start until patient contact. Without those substantial expenditures, the Medicaid patient could not call 911, receive immediate treatment, and be transported to the hospital. If readiness is excluded, local taxpayers will likely be left to fill the funding gap.

IGT: High Risk, Fast Changes

IGT programs are vulnerable to quick federal changes. CMS could decide to cap allowable costs (reimbursement) at the Medicare rate, which would lower supplemental payments, in many cases substantially. Because IGT programs require annual CMS approval, changes can happen fast with little time for agencies to adjust.

Provider Tax: Uncertain but Tightening

Nearly every state uses provider assessments for at least one provider class (49 out of 50, with only Alaska as the exception), whether that’s hospitals, EMS, nursing facilities, or others. This is why any cuts to provider assessments are an important issue. The ripple effects go far beyond EMS, impacting multiple parts of the healthcare system.

The OBBBA’s impact on provider tax programs is less clear and may vary by state, but CMS has already signaled that changes are coming. Most likely, we’ll see freezes on assessment increases, limits on new programs, and tighter rules for existing ones.

From our work with EMS agencies across the country, we believe provider assessments are the most likely target for significant federal scrutiny. Not only has the OBBBA highlighted them, but CMS has also proposed new rules aimed at closing loopholes in how these programs operate (link to rule).

States that rely heavily on provider assessments to supplement Medicaid funding—particularly those with large Medicaid populations such as Kentucky, Missouri, and Tennessee—should prepare for possible revenue contraction. One lesson from recent experience is that regulatory changes often cause the most harm because of the uncertainty and lag time. You don’t feel the impact right away; it can take months before reduced payments are reflected in your reports and budget. At that point, replacing the lost revenue becomes extremely difficult.

In Texas, for example, Digitech and our clients have had to navigate significant changes to the Ambulance Services Supplemental Payment Program (ASSPP) after cost reports were submitted. New cost allocation and data reporting requirements, likely tied to a federal OIG audit, were implemented midstream, creating delays, confusion, and making it impossible for providers to budget accurately.

We recommend running worst-case scenario models now and factoring in the possibility of delayed or reduced payments. For high-volume Medicaid providers in states that depend on provider assessments, this is a “double whammy” risk. As Medicaid enrollment drops due to new eligibility restrictions, you may face both increased uncompensated care and reduced supplemental funding.

Act Now to Protect Your EMS Funding Future

Given federal spending changing substantially and Medicaid rules tightening, EMS agencies need a clear understanding of which supplemental payment programs they use and how each could be impacted as changes take effect. The exact impacts are still uncertain, as broad legislation like the OBBBA must be interpreted, implemented, and potentially altered over time.

Now is the time to review your funding streams, run scenarios, and start conversations with state partners and local decision-makers. These changes may roll out gradually, but agencies that understand their exposure and plan ahead will be in the strongest position to protect service levels and budgets.

Digitech encourages you to reach out to our Medicaid supplemental payment program experts if you want to discuss this situation in more detail. Talk to us now to understand the potential impact on your agency:

Meet Digitech at EMS Industry Events – Q3 2025

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Digitech’s 2025 calendar keeps rolling with a robust lineup of EMS conferences in Q3. These events offer an opportunity to engage with EMS leaders, exchange ideas, and highlight how our billing solutions can help agencies thrive. Take a look at where we’ll be this quarter!

FL Fire Chiefs ED Conference

Location: Aventura, FL

Date: Jul. 11–15

Booth: TBD

Pinnacle

Location: Phoenix, AZ

Date: Jul. 14–18

Booth: #32

SEAFC Conference

Location: Franklin, TN

Date: Jul. 15–17

Booth: #78

Fire Chiefs Summit

Location: Ponte Vedra Beach, FL

Date: Jul. 16–18

Booth: TBD

NC EMS Administrators – Summer

Location: Asheville, NC

Date: Aug. 6–7

Booth: TBD

Fire Rescue International

Location: Orlando, FL

Date: Aug. 13–15

Booth: #1445

CAA Convention

Location: Monterey, CA

Date: Aug. 20–21

Booth: TBD

TASA Reimbursement

Location: Gatlinburg, TN

Date: Aug. 27–28

Booth: TBD

TEMSA (EMS Evolution)

Location: College Station, TX

Date: Sep. 22–24

Booth: TBD

SCEMSA Leadership Conference

Location: Greenville, SC

Date: Sep. 24–26

Booth: TBD

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EMS in Unprecedented Times: Federal Funding Uncertainty in 2025 and Beyond

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Widespread layoffs. Looming budget cuts. Federal funding freezes. Tariff uncertainty. Behind the attention-grabbing headlines are critical questions from EMS agencies that need answers:

  • Will government payers continue to reimburse ambulance claims amid funding freezes?
  • How will federal cuts to Medicaid affect reimbursement?
  • Will Medicare payments take a hit?
  • Are Medicaid Supplemental Payment programs like GEMT at risk?
  • How can you navigate through tariffs?

The Rapidly Evolving Landscape

First, a Civics 101 lesson. Congress is the legislative branch of the federal government and holds the power of the purse, meaning it has authority over government spending. For substantial changes to occur, such as cuts in Medicaid or Medicare spending, Congress must pass legislation or budgets. Early signs in the current administration point to Congress creating a framework for sizeable spending cuts, but specifics are lacking at this point.

In the meantime, the Executive Branch has been issuing spending freezes through executive orders. There is no doubt that many government entities and individuals have been substantially impacted by those freezes, but major spending changes need to pass through Congress. Additionally, the courts have challenged many of these freezes, resulting in judicial orders for spending to continue.

At the time of this writing, the House budget resolution under consideration aims to cut at least $880 billion in costs over the next ten years. Experts say a substantial portion will need to come from Medicaid spending. Dissention is already rising; public sentiment indicates that not enough money is spent on Medicaid. According to a Kaiser Family Foundation Poll conducted February 14-19, only about 20% of respondents felt that too much was being spent on Medicaid and that it should be cut. Even among voters who supported Trump in the election, only 34% felt that too much was being spent on Medicaid. Around 19% of the U.S. population relies on Medicaid for health coverage[1], so Congresspersons’ constituents would be undoubtedly affected by cuts.

Medicaid is jointly funded by states and the federal government. Contributions vary state to state, but range from over 50% to 80%. What would happen if the federal government reduced its portion of the contribution? With roughly 19% of EMS patients covered by Medicaid in a time where Medicaid already under-reimburses providers for the costs of emergency ambulance transports, it’s not a stretch to say that EMS providers would be impacted.

States Backed Into a Corner

If federal Medicaid funding was reduced, the states would be put in a difficult situation. In the short term, states could cover the shortfall, but most are not in a financial position to do this for very long. Other options include reducing the amount reimbursed for services (e.g., announcing a 50% cut in reimbursement rates, which are already very low to start with for most Medicaid programs) or reducing the number of covered individuals. These options could start a domino effect of negative consequences for EMS providers, as the number of uninsured individuals would grow while the Medicaid-insured population would decline. Uninsured patients rarely pay their EMS bills in full (or at all).

Similarly, with Medicare, reduced payments are unlikely to occur quickly. Medicare add-on payments were just extended through the end of the federal fiscal year, leaving long-term and higher levels of extension uncertain. The budget extension has not addressed the longer-term, substantial cuts that Congress and the Presidential administration are considering. The 4% PAYGO sequestration[2], deferred for several years as part of funding the Infrastructure Recovery Act, is also up in the air.

And then there’s the Ground Data Ambulances Collection System (GADCS). The Medicare Payment Advisory Commission (MedPAC), tasked with advising Congress on Medicare issues, analyzed the initial dataset resulting from the GADCS that all EMS agencies were required to participate in. We were hopeful that the data and MedPAC’s final report, due in June 2026, would result in a substantive increase in Medicare allowance amounts for ambulance transports. But given the various staffing cuts and focus on spending reductions, it would not be surprising to see a delay or end to the current efforts to seek increased/fair reimbursements from Medicare.

It’s also unlikely that a consensus will be easily obtained on how to apply the recommendations that the Advisory Committee on Ground Ambulance and Patient Billing (GAPB) made regarding ground ambulance services vis-à-vis the federal No Surprises Act. With that said, addressing surprise medical bills is a topic that the current administration has said is a priority; hopefully that is not done without some thought and review of the GAPB report.

Major Unknowns

In addition to the various areas already covered, substantial changes to the global tariff structure appear to be likely. On the surface, EMS agencies are service providers and thus would not be substantially impacted by a change in the tariff structure. However, depending on how things play out, supply costs could rise depending on from where required items (ambulances, equipment, supplies) are sourced. Additionally, there are concerns that new tariff structures will cause inflation to rise, which would put pressure on agencies to increase wages, the largest expense item for EMS systems by far.

At this point, there are many more questions than answers. One thing that appears to be certain: uncertainty.

In this industry, we react to the unexpected. From 9/11 to the opioid epidemic to Covid-19, emergency responders have adapted and moved forward during plenty of “unprecedented times.” EMS providers will undoubtedly find ways to overcome any new challenge. But it shouldn’t have to be this way. We encourage all involved in the EMS industry to get involved:

  • Build relationships with local, state, and federal legislators. Regular meetings, phone calls, and emails can build strong working relationships, allowing EMS providers to educate them on the challenges faced by the EMS community and the need for improved funding. A good start is to write to your Congressional leaders and let them know how critical federal funds are for your organizations and communities.
  • Join established organizations and advocacy groups. This list of EMS Associations hosted by NHTSA’s Office of EMS (OEMS) shows organizations with which the OEMS collaborates most frequently, giving them a voice on the federal level. A unified voice has more impact when lobbying for legislative changes.
  • Utilize digital and media outreach. EMS professionals can use social media platforms to raise awareness about funding issues, or even work with local news outlets highlight the challenges of EMS underfunding. Op-eds and opinion pieces for local newspapers or online publications can also have impact. Bringing public attention to the issues can pressure lawmakers to act.

Even small efforts and actions can make a big difference. EMS personnel and their supporters have the power to advocate for both preservation of and increases in reimbursement and funding, paving the way for more sustainable, efficient, and effective emergency medical services.

[1] Source: US Census Bureau, Health Insurance Coverage in the United States: 2023, September 2024.

[2] The 5% PAYGO sequestration refers to a mandatory spending reduction triggered by the PAYGO (Pay-As-You-Go) rules, which require offsets for new federal spending. For several years, this sequestration was deferred to support funding for the Infrastructure Recovery Act. For EMS, this sequestration could potentially reduce Medicare payments to providers, impacting their funding. However, the deferral allowed EMS services along with other federally funded services to avoid these reductions during the period when the infrastructure act was funded.

Meet Digitech at EMS Industry Events – Q2 2025

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Digitech continues its 2025 journey with a packed schedule of industry-leading conferences in Q2. These events are our chance to connect with EMS professionals, share expertise, and showcase how our billing solutions support agencies nationwide. Check out where we’ll be this quarter!

National EMS Safety Summit

Location: Denver

Date: Apr. 2-4

FDIC International

Location: Indianapolis

Date: Apr. 9-12

Booth: #745

ESO Wave

Location: Austin, TX

Date: Apr. 22-25

Booth: TBD

NC EMS Expo

Location: Greensboro, NC

Date: May 5-7

Booth: #56

EMS Chiefs Summit

Location: Ponte Vedra Beach, FL

Date: May 14-16

Midwest Fire Rescue Expo

Location: Novi, MI

Date: May 20-21

EMSAAC

Location: San Diego, CA

Date: May 28-29

Booth: TBD

PWW Clearwater Beach

Location: Clearwater Beach, FL

Date: Jun. 2-5

Booth: TBD

FTFC (Gathering of the Eagles)

Location: Hollywood, FL

Date: Jun. 9-12

Booth: TBD

AAA Conference

Location: Lexington, KY

Date: Jun. 22-23

Booth: #307

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Death and Taxes: Sustaining the Lifeline of EMS Services

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This article was originally published on EMS World in February 2025. You can check it out here.

In our previous article, Behind the Sirens: The Hidden Costs of EMS Readiness, we explored the costs involved in maintaining 911 EMS readiness with a midsize Midwestern agency called “Any Town Fire & Rescue Department” or ATFRD. In this follow-up, we’ll examine the funding sources that support municipal EMS systems.

Introduction: The Life Behind the Lights

Late one stormy night in Some Town, a 9-1-1 dispatcher answers a call about a young mother struggling to breathe. Within minutes, EMTs from Some Town Fire & Rescue Department (STFRD) arrive, stabilize her condition, and rush her to the hospital. Behind this fraught moment lies a stark reality: EMS services depend on an intricate web of funding to ensure their readiness every day, every hour.

But who pays for this critical safety net?

This article delves into the urgent matter of EMS funding, illuminating the financial gaps that pose a threat to these life-saving services. It also presents potential solutions to bridge these gaps, underlining the need for immediate and concerted action.

The Costs of Readiness: Why It’s So Expensive to Save Lives

Every EMS agency operates on two overlapping principles: readiness and response. Maintaining ambulances, equipment, medications, and staff requires funding, even when no emergencies occur. Yet readiness funding routinely falls short of covering its true costs.

In most municipal EMS systems, revenue comes from two primary sources:

  1. Direct Cost Recovery: Revenue comes from billing insurers and patients for emergency transports.
  2. Tax-Based Funding: Revenue comes from property taxes, municipal general funds, and special assessments.

However, these sources often do not sufficiently cover the needs. A staggering 80–90% of EMS transports involve uninsured patients or those covered by fixed-reimbursement government payers, such as Medicare and Medicaid. The reimbursements tied to these transports often fall short of actual costs, leaving EMS agencies to fill the financial gap through taxpayer support.

Funding Breakdown: How Agencies Like STFRD Stay Afloat

Using publicly available data, we analyzed the funding mix for EMS agencies. Here’s what we found:

  • Direct Billing Revenue: Typically covers 20–35% of total costs.
  • Supplemental Medicaid Payments: Provides additional funds in some states.
  • Tax-Based Revenue: Fills the majority of funding gaps.

For example, at STFRD:

  • 36% of EMS funding comes from property taxes.
  • 22% comes from the municipal general fund.
  • 11% comes from supplemental Medicaid payments.

Without the Medicaid program, funding gaps force STFRD to draw even more from property taxes, placing a heavier burden on the local community and forcing the municipality to make funding trade-offs.

Case Study: The Financial Gap at STFRD

Each ambulance transport at STFRD costs approximately $1,500, but they recoup just $490 per trip through billing. The remaining $1,010 must come from elsewhere—primarily from property taxes and supplemental funds.

This financial gap directly affects STFRD’s operations, potentially leading to service cuts, increased tax burden, or the need for better reimbursement rates. Additionally, if state Medicaid programs aren’t available, the same difficult decisions loom: raise taxes, cut services, or advocate for better reimbursement rates.

A Broken Model: Why EMS Funding Needs Advocacy

What if we viewed EMS funding like public utilities? Municipal water service requires an infrastructure (i.e., the storage, treatment facilities, pipes, and pipelines) to provide water to households and businesses at any moment; EMS readiness is an equally critical public service with infrastructure costs. Actual water usage fees apply to end-user usage. A household that consumes 1000 gallons of water pays a different amount on their water bill than those that use 100 gallons during the same period.

Following this analogy, taxes would cover the infrastructure of a 24/7 EMS service (like municipal water service infrastructure), and the cost of the actual ambulance transport would be covered by the patient receiving the service (like the water bill).

However, when reimbursements are insufficient, the burden shifts to taxpayers, stretching municipal budgets already allocated to schools, infrastructure, and public safety.

The question is: How do we ensure sustainability without breaking the system—or the community?

A Way Forward: Transparency, Advocacy, and Solutions

Sustainable EMS funding requires a multi-faceted approach:

  • Transparency with Taxpayers: Agencies must communicate funding needs and the actual costs of EMS readiness.
  • Fair Reimbursement Rates: A key pillar of sustainable EMS funding is the need for Medicare, Medicaid, and insurers to cover costs that truly reflect the actual expense of emergency transport. This fair reimbursement is essential to the financial sustainability of EMS services.
  • Community Engagement: Residents must understand that EMS isn’t just a service; it’s a shared responsibility. Their active involvement and understanding play a significant role in sustaining EMS funding, empowering them to contribute to the safety of their community.

Conclusion: Beyond Death and Taxes

As STFRD prepares for its next budget meeting, its leaders must weigh impossible choices: service cuts, tax increases, or sustained advocacy. They—and every municipal EMS agency—face this truth: sustainable EMS funding is not an individual task but a collective effort that requires unity, collaboration, and the active participation of all stakeholders.

Connect with Digitech today for expert advice on maximizing your EMS billing and funding strategies. Let’s build a sustainable future for emergency services.

Schedule a Demo

Webinar – The Business of Saving Lives: Balancing EMS Costs and Revenues

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Did you miss our latest webinar with JEMS and Fire Engineering? Watch the video recording below of The Business of Saving Lives: Balancing EMS Costs and Revenues, a panel discussion on the financial realities of EMS today.

In this session, industry experts examine the growing financial pressures on EMS agencies and the strategies they use to stay operationally strong. Panelists explore key funding models, whether tax-based or direct billing, while sharing insights on cost management, revenue diversification, and service optimization. Through real-world examples and a dynamic Q&A, the discussion provides actionable takeaways to help EMS leaders improve financial sustainability and navigate reimbursement challenges.

You can watch the webinar here:

Get a demo of our EMS billing platform. Schedule a Demo

Meet Digitech at EMS Industry Events – Q1 2025

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Digitech is kicking off 2025 with a packed schedule of industry-leading conferences. These events are our chance to connect, share expertise, and explore the latest in EMS and revenue cycle management. Check out where we’ll be in Q1 below.

Florida Fire & EMS Conference

Location: Orlando

Date: Jan. 8–10

Booth: #513

WFCA IGNITE Symposium

Location: Las Vegas

Date: Feb. 11–12

Booth: TBD

Mobile Integrated Health Summit

Location: Tampa

Date: Feb. 16–18

Booth: TBD

Virginia Fire Rescue Conference

Location: Virginia Beach, VA

Date: Feb. 17–21

Booth: #71

TASA Mid-Winter Leadership Conference

Location: Gatlinburg, TN

Date: Feb. 19–21

Booth: TBD

SC EMS Symposium

Location: Myrtle Beach, SC

Date: Mar. 5–7

Booth: TBD

PWW abc360 Las Vegas

Location: Las Vegas

Date: Mar. 18–20

Booth: TBD

GEMSA Directors & Leadership Conference

Location: Buford, GA

Date: Mar. 26–28

Booth: TBD

Get a demo of our EMS billing platform. Schedule a Demo

Webinar – Fueling the Future of EMS: Exploring Sustainable Funding for Mobile Integrated Healthcare

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If you missed this free webinar, we hosted in conjunction with National Association of Mobile Integrated Healthcare Providers (NAMIHP), view it here!

Join these EMS industry leaders for a dynamic webinar on innovation and sustainability in mobile integrated healthcare (MIH). Panelists will share real-world funding models and success stories, followed by a Q&A session for direct insights from the experts.

Speakers:

  • Maggie Adams, President, EMS Financial Services, Inc.
  • Michael Mason, Section Chief, San Francisco Fire Department
  • Kevin Spratlin, Division Chief, Memphis Fire Department
  • Lauren Young-Work, LCSW, MIH Coordinator, Palm Beach County Fire Rescue

Moderator:
Michael Brook, Senior VP of Client Relations, Digitech

Behind the Sirens: The Hidden Costs of EMS Readiness

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This article was originally published on EMS World in August 2024. You can check it out here.

You are the EMS Chief of a midsize Midwestern agency called “Any Town Fire & Rescue Department” or ATFRD. It’s 2 AM, and the call comes in — a 45-year-old male with chest pain. Your crew jumps into action, the ambulance’s red lights flashing through the deserted streets. This scene, a lifeline in moments of crisis, is repeated countless times across the country daily. But what does it take to keep this service available around the clock? The costs are staggering and often hidden from view. Let’s delve into the actual price of maintaining emergency ambulance services and our financial challenges.

The Hidden Infrastructure of EMS

As the crew responds, consider the intricate web of readiness behind this response. Maintaining an EMS system capable of responding to emergencies 24/7 involves substantial costs. While the spotlight is often on the staggering costs of ambulance services for patients, there’s less focus on what each EMS incident costs the provider. These expenses extend far beyond the visible efforts of our paramedics and EMTs and include the readiness of staff, facilities, equipment, and supplies.

At Digitech, we process bills for over 5 million EMS incidents annually and assist clients in reporting cost data to CMS. To provide a clear picture of the true costs of readiness, we analyzed 2023 data from 11 diverse ambulance service providers across six states, including Fire-based and EMS-only services. This analysis reveals the extensive financial demands of maintaining an EMS operation.

Breaking Down the Costs: Where Your Budget Goes

Understanding the detailed cost breakdown is essential for managing an efficient EMS operation. Here’s a comprehensive look at the categories involved:

Capital Costs – 2%

  • Depreciation of buildings, vehicles, and operational equipment
  • Leases, rental, and interest costs

Salaries – 57%

  • Regular, overtime, vacation, and holiday pay for all EMS staff, including EMTs, paramedics, chiefs, 911 call technicians, dispatchers, and support staff

Benefits – 25%

  • Employer-paid health and life insurance, retirement plans, payroll taxes, and tuition assistance

NOTE: While salaries and benefits are over 80% of an EMS agency’s costs, the industry still faces a staffing crisis; wages are simply not high enough to keep pace with the cost of living and pay in other competing fields. In New York City, EMT salaries start at $39,386 annually. That’s less than the pay for an app delivery worker making the new city minimum wage of $19.56 plus tips while working 40 hours a week.

Medical Supplies – 1%

  • Non-capital medical supplies such as medications, monitors, and consumables

Fleet Maintenance – 3%

  • Maintenance parts, labor costs, and fuel for vehicle upkeep

Other Admin – 12%

  • Professional services, contracted labor, medical director costs, training, utilities, and communications

Case Study: Any Town Fire & Rescue Department

Let’s zoom out to understand the broader financial picture. The average cost for ATFRD to run one ambulance trip is nearly $2,000. Most ambulances make multiple trips daily, so the cost of keeping an ambulance operational and ready to respond is significant.

Cost Per Transport Breakdown

Using the example from above, here’s how the cost from ATFRD breaks down:

Accounting $24.98
Administrative $15.24
Ambulance Salaries $8.61
Contracts for Equipment Service $6.07
Contracted Services – Ambulance $1.39
Dispatch Service $128.55
Dues and Subscriptions $1.05
General Insurance $43.42
Housekeeping $4.58
Legal $1.19
Medical Supplies $30.07
Minor Equipment $37.59
Minor Medical Equipment $2.45
Other A&G $4.39
Other A&G $3.02
Salaries $1,124.59
Salaries (Fringe Benefits) $458.22
Supplies $34.61
Training $9.77
Utilities $14.85
Total $1,954.60

The Financial Gap: Charges vs. Costs

Your ATFRD crew stabilizes the patient and transports him to the hospital. This vital service comes at a significant cost. The disparity between the transport cost and the patient’s charge is substantial. In 2020, the average charge for an ALS emergency ground ambulance service was $758 (report), while the Medicare reimbursement for the same service was only $463. This leaves providers like ATFRD facing a significant shortfall for each transport unless they align fee schedules to costs, a decision with many downsides.

Moreover, for uninsured patients, ATFRD often recovers very little of the billed amount — not because the patients do not want to pay their bills but because they simply cannot. The collection rate for this “self-pay” group may be 5% or lower, meaning that if 1,000 uninsured patients are charged $1,000 each for an ALS transport, it would cost (ATFRD, for example) $1,955,000, and they may only recoup $50,000 on $1,000,000 invoiced.

Conclusion: Bridging the Financial Divide

As the patient receives definitive care at the hospital, your crew is already preparing for the next call. The cost of their service is the furthest thing from their minds — they are rightly focused on responding to that call and delivering high-quality pre-hospital medical care. However, for EMS leaders and administrators, understanding the true costs of EMS services is the first step towards bridging the financial divide. We must advocate for fair reimbursement rates that support our agencies and ensure sustainability. The math doesn’t add up, and while the solution isn’t simple, acknowledging and addressing these financial gaps is crucial for the future of EMS.

By shedding light on these hidden costs, we aim to foster a deeper understanding among our peers and drive the necessary changes to support our EMS providers. Together, we can work towards sustainable solutions that ensure our readiness and capability to serve our communities effectively.

The next call is just minutes away. Are we ready?

Shock Advised: EMS Economics in Critical Condition

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This article was originally published on EMS World in May 2024. You can check it out here.

As our nation celebrates the 50th anniversary of EMS Week this month, a time when we’re honoring the profession and celebrating our country’s dedicated clinicians, there’s something we don’t seem to be talking about enough: our broken EMS reimbursement model. A model that’s still tied to EMS’ roots based on payment for transport, and classified by the Centers for Medicare & Medicaid Services (CMS) as a “Supplier of Services,” like durable medical equipment, rather than a Provider.

EMS professionals are highly trained, delivering advanced medical care. Assessing and treating physically ill, critically injured, and mentally at-risk patients. They’re more than a ride or a supplier of goods, and the outdated reimbursement model is failing private agencies and municipal EMS alike.

The good news is that key EMS organizations are working to change the broken system. The National Association of EMTs, the American Ambulance Association, the International Association of Fire Chiefs, and others are making efforts to influence key policy-makers. 

Yes, it’s complicated. The challenges with each payer are different. For Medicaid and Medicare, it’s typically very low payments that come nowhere close to reimbursing agencies for the cost of care, supplies, and transport. Commercial insurance for ambulance service varies widely from policy to policy with the “allowable” amount typically arbitrary, often tied to some multiple of the Medicare ambulance fee schedule or an opaque “usual and customary” amount. Once the insurance company sets their “allowable,” the difference between the charge and the “allowable” becomes stranded. This remaining balance ends up becoming the patient’s responsibility. Patients are further punished because any stranded amounts are typically not credited against any deductibles or out-of-pocket maximums associated with their insurance policy. This dilemma is what’s led to patient protective legislation such as the No Surprises Act (currently not applicable to ground ambulance services, but under review by the federal Advisory Committee on Ground Ambulance and Patient Billing). In the absence of federal rules, several states are taking action to pass legislation that protects patients. Washington, Indiana, Delaware, Maine, and Colorado have recently set up new protections from large ambulance bills.1

“For commercial insurance, the challenge is that some insurers will arbitrarily decide what they think is a fair payment for the service,” explains Maxine D’Agostino, Vice President of Billing Services at Digitech, a provider of EMS billing and technology services. “This leads to agencies not getting full reimbursement for the services provided, and also leads to remaining balances that are billed directly to patients, which the insurance industry has successfully labeled as ‘balance billing.’”

Jonathan Washko, MBA, FACPE, NRP, AEMD, Assistant Vice President of Northwell Health’s Center for EMS and a subject matter expert notes, “Because EMS generates revenue, people believe we have a pot of gold and that we’re reimbursed like healthcare. If they see a $5,000 ambulance bill, first there’s sticker shock, and everybody thinks we collect that $5,000, but we don’t. We may charge $5,000, but we may collect $500 if we are lucky.”

To complicate matters, costs nationwide are rising dramatically for labor, vehicles, supplies, medications, and fuel, while reimbursement rates across the board are largely stagnating.

Washko says there’s been an exponential rise in the expense of EMS services due to factors like labor shortages, COVID-19, and supply chain issues. “There’s no leveling mechanism in Medicare that’s appropriate to keep pace with expenses,” he says. “Say there’s a new drug that comes out that costs $1,000 per dose that’s going to save somebody’s life, there’s no additional reimbursement that comes with that. If there’s a new procedure or a new piece of medical equipment, there’s no additional reimbursement. We get paid our base rate plus every mile we transport and that’s about it.”

No Transport, No Dollars

Today most EMS agencies report that up to 33% of calls do not result in transport. Even when the patient is thoroughly assessed and receives medical treatment on-site, there are often zero reimbursements from most state Medicaid programs nor Medicare for these calls (and Medicare patients typically represent 40% to 50% of EMS calls).

Community paramedicine and mobile integrated healthcare (MIH) are smart, much-needed services in our country. These models are critical to a patient-centered healthcare system and will help serve the traditionally underserved. But we’ll never get them off the ground nationwide unless EMS can get fairly compensated for this type of care.

“The sad part is that in many cases, the best thing for the patient is not to go to the emergency department,” emphasizes Digitech’s D’Agostino. “But EMS agencies are only compensated for the transport, and ironically the transport is to the most expensive part of the health system–the hospital ER.”

What does it look like If agencies do not get fairly reimbursed? Eventually, if they’re privately owned, they may go out of business, and it’s happening at an alarming rate. Approximately 55 ambulance services have gone out of business since 2021, according to local and national media reports tracked by the American Ambulance Association (AAA) and the Academy of International Mobile Healthcare Integration (AIMHI).2 When an agency goes out of business, another entity is forced to step in and fill the gap. Or, worse, we end up with “ambulance deserts.”

“When COVID hit, EMS was decimated,” says Washko. “Even though we’ve been talking about the fragility of EMS for a long time, COVID brought more awareness to the funding gaps that exist. Today, many EMS systems across the country are literally failing and are having to shut their doors.”

This frequently leads to public EMS services needing tax subsidies, so taxpayers foot the bill to keep emergency medical services alive.

“From a safety net perspective, ultimately a private provider may still continue its mission,” explains Washko. “But it would have to be subsidized by the government.”

The system is undeniably broken, and we’re in dire need of a solution that protects patients and the ambulance services they depend on, as well as taxpayers. 

How Can We Shock the System?

We should start with collaboration across the healthcare space to get to commonsense solutions that benefit the patient and provide them with healthcare at the right clinically appropriate timeframe, in the right place, at the right quality, and at the right cost. This requires all parties to agree on solutions. We all need to rally behind an aligned strategy from those national organizations that represent EMS, like IAFC, NAEMT, AAA, and others.

An education effort is needed at the national, state, and local levels as to what financial resources are needed to run an EMS system, and we all need to be transparent about costs.

A major stumbling block is that EMS systems vary widely and so do their costs. Some communities opt to outsource emergency services to private ambulance organizations. Those agencies historically have low pay structures and employ more EMTs vs. paramedics. Other communities provide service through their municipal structure, such as fire-based or third-service EMS, which typically employs paramedics who are paid union-negotiated wages, benefits, and pensions. The cost structure of a municipal-based system is typically much higher than a private-based system, so it’s very difficult to define a fair cost structure across the entire industry. EMS providers would benefit from banding together to determine a baseline cost structure, and this collaboration would lead to more success in engaging with large payers.

Legislation on various levels will be a big part of any real, lasting solution. There is some hope on the horizon as several states are working to require commercial insurance companies to reimburse at locally approved or regulated rates. However, state legislation only covers state-regulated plans, and commercial insurance typically represents less than 20% of an agency’s billing. The challenges with underfunding by Medicare and Medicaid still need to be addressed. Simply put, Medicare and Medicaid need to pay a fair amount and pay for all services.

Finally, there needs to be a solution to serve patients without insurance–who pays for them? It can’t be a case of EMS agencies absorbing the cost (i.e., loss) unless other parties are willing to pay more to offset the uninsured.

In reflecting on the 50th anniversary of EMS Week, Washko first asserts that EMS is undeniably essential. “In places where it doesn’t exist, morbidity and mortality rates are higher because of the life-saving work that EMS does. 50 years is not a long time and EMS is still in its infancy. We have a lot of work to do,” he explains. “We’ve been focused on developing the delivery model, the framework, and the system. Not enough time, energy, or attention has been paid to how we get reimbursed,” adds Washko. “It’s going to take a lot of work on the federal level, on the state level, at the insurance level, and at the agency level in order to get EMS the funding it needs to last another 50 years. As of right now, I don’t know that we’d last another 50 years as an industry in its current form.”

With that in mind, let’s celebrate EMS Week with a reckoning in this country. Let’s agree that EMS is an essential part of our nation’s continuum of care, one that has a growing role in serving our communities. There’s tremendous value in having lifesaving services available 24 hours a day, seven days a week, but there’s also a real and rising cost of providing those services. Most EMS agencies are not looking to drive outrageous profits, they’re simply trying to not lose money, pay their staff a living wage and benefits, and be part of a community healthcare solution.

  1. https://www.axios.com/2024/03/27/surprise-medical-bills-ambulance-health-costs
  2. https://icma.org/articles/pm-magazine/ems-economic-and-staffing-crisis-creates-opportunity-improved-system-design

Webinar – The Hype and the Hope: Exploring Artificial Intelligence in EMS

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Did you miss the webinar that we hosted through Pinnacle? Check out the video recording below of The Hype and the Hope: Exploring Artificial Intelligence in EMS, a panel discussion exploring the impact of artificial intelligence in emergency medical services.

In this session, we delve into early uses of AI in EMS, beginning with an overview what AI is – and what it isn’t. Panelists explore AI’s application in their areas of specialization: dispatch and communications, ePCR and RMS software, EMS education, and revenue cycle management. A lively Q&A with the expert panelists offers additional insights and takeaways on the emerging applications of AI in EMS.

You can watch the webinar here:

The Hype and the Hope: Exploring Artificial Intelligence in EMS

Or download the slides here.

What Will It Take to Get Fair Medicaid Reimbursement?

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Almost all Medicaid programs reimburse EMS providers for ambulance transports of Medicaid patients at a level substantially below the cost of providing the service.

That is a fundamental issue in the EMS reimbursement environment that needs to receive more attention, as it impacts the entire financial structure of the industry.

EMS isn’t the only area of healthcare where Medicaid under-reimburses. For example, many doctors cap the number of Medicaid patients they will serve in their private practices because of the inability to subsidize service for those patients. In EMS, the payment levels for Medicaid patients transported by ambulance typically only cover a small fraction of the cost of providing emergency medical services.

Let’s look at the four most populous states and what their respective state Medicaid programs pay for an advanced life support (ALS) ambulance transport:

California:

  • Medicaid reimburses the provider $119.20 for the ambulance transport. (This is the published rate, but these are subject to a mandatory 10% reduction, so the actual payment is $106.38.)

Texas:

  • Medicaid reimburses the provider $285.28 for the ambulance transport.

Florida:

  • Medicaid reimburses the provider $493.00 – $523.62 for the ambulance transport, depending on location.

New York:

  • Medicaid reimburses the provider $296.00 for the ambulance transport.

For most providers in these states, the average charge for an ambulance transport is more than $1000. We will explore the true cost of providing a 911 ambulance transport in a future article, but anyone can confidently conclude that an EMS provider transporting a Medicaid patient in the aforementioned states is not able to cover their costs with the amount that Medicaid reimburses.

What are the impacts of Medicaid severely under-reimbursing providers for the costs of providing emergency ambulance transports?

First, states have had to pursue supplemental Medicaid payment programs to secure federal drawdowns to compensate for the shortfall in upfront payments. There are a wide variety of these supplemental payment programs. Some have not pursued these funds, so providers in those states will only receive the published Medicaid rate. Other states have taken a conservative approach on their supplemental Medicaid payment programs, resulting in modest additional payments. Still other states have taken aggressive approaches, resulting in more substantial supplemental funding.

This approach is analogous to rebate and special programs that pharmaceutical companies use to help patients pay for high-cost medications. Select, savvy consumers can obtain their medications for reasonable prices, but the average person ends up paying full price. This benefits fortunate providers that are in the right geography and able to take full advantage of supplemental reimbursement programs, versus providers unable to participate in a supplemental program or only in one that pays very little.

Ultimately, the result of these approaches is a hodgepodge of funding solutions which creates an unlevel playing field in the industry. Not to mention that in many cases, private EMS providers are excluded from state Medicaid supplemental payment programs. Consequently, we see private EMS services across the country struggling to staff their vehicles adequately or to deliver response times within mandated service level agreements. Some are closing up shop or pulling out of contracts that cannot support their workforce.

When prominent payers like Medicaid underpay, other payers have to subsidize the system. Within EMS, commercial insurance companies are covering a disproportionate amount compared to what government payers pay. The result: commercial insurance companies take advantage of this dynamic to argue that they should pay an amount less than the cost of providing the service, e.g., tying payments to a percentage of the Medicare reimbursement rate, or imposing a usual and customary amount.

In fairness, commercial insurance companies have a valid argument that they should not be picking up the tab that Medicaid and Medicare fail to cover. That said, EMS agencies are seldom charging more than the cost of providing the service; in some cases, they are not allowed to charge more than the cost of the service due to municipal statutes, meaning they always come up short.

The topic of fair reimbursement becomes more complicated when uninsured patients are part of the system. It is not unusual for 10-25% of an agency’s patients to have no insurance. There is zero funding source for these patients who, for various reasons, are not covered by Medicaid – perhaps their income is above the threshold for qualifying for Medicaid, but they still cannot afford insurance, or they do qualify for Medicaid but are unwilling or unable to enroll. Who should pay for these patients if they cannot afford to pay the bill? Currently, this payment burden falls to taxpayers.

Unfortunately, addressing the issue of inadequate Medicaid reimbursement requires legislative action in 40+ states to address severe underpayments for EMS. The current use of supplemental payment programs is a bandage, but it fails to stop the bleeding. A better approach would be to remove the bandage, assess the extent of the wound, and develop a fresh treatment plan with the goal of supporting a healthy and vibrant EMS transportation system. As an industry, we must start chipping away at the root causes that leave so many agencies struggling financially.

Resources

Saving Lives for Low Wages: The Issue of Pay Equity in EMS

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Careers in Emergency Medical Services can be deeply fulfilling. But staffing and retention continue to be huge problems for the industry. Why?

EMS providers are underpaid.

There are a variety of complex forces that push salaries for EMS to the bottom of the healthcare industry’s pay scales. A primary factor is the funding structure of EMS agencies. The way EMS is currently billed and funded makes the service free to community members… until they actually need the service. As healthcare has become more expensive overall, both public and private payers have reduced what they are willing to pay for these services. This squeeze on revenues leads to an inevitable need to reduce personnel expenses, which are the largest component of EMS budgets[1].

Another contributor to the low pay of EMS providers is the resistance to formal education within the profession. This resistance can negatively affect prevailing wages[1]. The certification required to become an EMT or paramedic is relatively minimal, which can also contribute to lower wages. It only takes 120 to 150 hours of training to become an EMT, and ambulances in rural communities are often staffed by volunteers, which depresses wages for those who do pursue the role as a career[2].

Discrimination also plays a role in keeping wages low. For instance, in New York City, EMS workers have claimed that gender and racial discrimination keep their wages low and their prospects for advancement limited, making them “third-class citizens.”[3] The workforce of EMS in New York City is predominantly women and minorities. On the other hand, the FDNY (of which EMS is a division) has a predominantly white leadership. According to City data, FDNY EMS is 59% non-white, 89% male, and 12% female but women and minorities make up only 11% of the FDNY EMS workforce at the rank of Deputy Chief and above (2019 data).”[4] While these trends may not directly dictate low wages across the entire industry, the effect of discrimination reverberates throughout staffing and retention. If you may get stuck in a low-paying role, why start in the first place?

The pay structure for EMS workers is also influenced by the perceived nature of the work, which is often viewed as less high-risk and stressful than other public safety jobs. The rising number of attacks on EMS personnel indicates otherwise. According to the U.S. Centers for Disease Control and Prevention, 2,000 EMS professionals are injured every year in violence-related incidents. Despite the dangers, EMS workers are often paid less than other first responders like firefighters and police officers[5]. Again, using NYC as an example, the starting pay for a FDNY EMS EMT is just $35,000, a wage difficult to live on anywhere but nearly impossible as a living wage in NYC. Starting pay for cops is $42,500 and $45,000 for firefighters. Pay for EMS is tops out at $50,000 while fire and police can earn $100,000 or more as they advance.[6] Why aren’t EMS first responders compensated for what they do on the same scale as these other lauded first responders?

Lastly, the depth and difficulty of EMS roles is largely misunderstood, which can lead to underappreciation and underpayment. Despite efforts to raise the profile of EMS practitioners, EMTs and paramedics are still rarely viewed as integral contributors and providers within the overall healthcare system. EMS workers are often the first line of defense in keeping populations alive, especially in the face of crises like the opioid epidemic. Or take for example the Eagle Pass Fire Department in Texas, which is spending tens of thousands of dollars per day taking care of migrants who’ve crossed the southern border – without any federal assistance.[7]

The underpayment of EMS providers is a complex issue that is influenced by an equally complex ecosystem of factors, including the funding structure of EMS agencies, resistance to formal education, discrimination, widespread ignorance of the high-risk nature of the work, minimal certification requirements, and a lack of understanding and appreciation for the role of EMS workers as a vital component of public safety. It’s going to take a massive effort on the part of EMS agencies, their allies, and their constituents to change these misconceptions.

  1. EMS1.com
  2. Money.com
  3. NBCNews.com
  4. NYC.gov
  5. TheCity.nyc
  6. EMS1.com
  7. NYTimes.com

To Balance Bill or Not to Balance Bill: One Agency’s Decision to Change

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Amid the fervent chatter around the No Surprises Act and the final meeting of the federal advisory committee on Ground Ambulance and Patient Billing (GAPB), Digitech has completed an analysis on the impact on a municipal agency that voluntarily ceased balance billing practices in cases where insurance companies did not allow the full charges. Digitech found that the financial impact was modest, but would we advise ambulance providers to stop balance billing patients when commercial insurance plans disallow some of the charges? Read on.

The white paper will:

  • Analyze collections data from before and after this policy was in place
  • Provide some insight into how ceasing balance billing might impact a broader set of agencies in the EMS industry
  • …and more.

To download a complimentary PDF copy of this 10-page white paper, click here.

How Does EMS Get Truly Integrated Into Mobile Integrated Health?

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With the early end to the Emergency Triage, Treat, and Transport (ET3) pilot program by the Centers for Medicare and Medicaid Innovation, a new conversation has emerged about how EMS agencies can be reimbursed for the services they provide other than transporting patients to hospitals.

The general sentiment is that agencies should not give up on the search for systemic solutions and should seek one-off funding sources by negotiating with individual payers. The question, however, comes down to whether this is practical and results in any sort of reasonable reimbursement.

There is a more fundamental reset needed in healthcare related to the importance of the full range of services provided by EMS. Rather than being truly “integrated,” EMS is generally regarded as a mobility service – “you call, we haul.” This is far from the truth, as any basic EMT could tell you. Here are some factors that counter a “keep at it” approach.

1. Funding Mobile Integrated Health (MIH) Programs Overall

Running alternative programs (Mobile Integrated Health, Community Paramedicine, treatment in place, transport to alternative destinations such as urgent care or mental health facilities –collectively referred to as MIH) is expensive. These programs require additional training, protocols, medical oversight, and sometimes additional vehicles and personnel.

Digitech has numerous clients that have some form of MIH in place, some with extensive programs and others with narrowly focused programs. In all circumstances, funding is challenging. Typically grants are the core funding source, sometimes supplemented by direct arrangements with select private insurance companies, hospitals, or physicians’ groups. As noted by Dr. Allen Yee, medical director for Chesterfield County Fire and EMS’s award-winning MIH program, other agencies have employed a cost savings model to direct resources toward preventing future needs for service expansion, thus preserving the agencies’ finances.

2. Percentage of Medicaid/Medicare Patients Receiving MIH Services

At least two-thirds of patients receiving alternative services and treatments from EMS are covered by Medicare or Medicaid. Because Medicare has now withdrawn the ET3 program, there are no current avenues for reimbursement for the largest group of users of alternative EMS services.

Even when ET3 was in place, the requirements were so restrictive that very few EMS provider agencies were able to take advantage. For example, most municipal departments did not have the ability, in a cost-effective way, to ensure an advanced level practitioner was involved in every treatment in place. Dr. Yee also reminds us that medical necessity was still a required component of that program.

With rare exceptions, Medicaid programs do not cover alternative services by EMS. This is unlikely to change quickly or easily, especially when it is up to individual EMS agencies to band together to lobby their State Medicaid and State legislatures to expand Medicaid coverage. Medicaid programs are notoriously slow to make changes.

3. The Challenge of Engaging Commercial Payers

A piecemeal approach to engaging commercial payers creates uneven results and favors the savviest payers. EMS providers are not typically experienced in negotiating contracted rates for services, particularly services they have never provided before. Municipal providers are not equipped to navigate multiple payers to negotiate rates for alternative services. Municipal agencies are also disadvantaged in negotiations, as commercial payers can push providers to the lowest negotiated level since they have full transparency into their numerous contracts (e.g., if one agency agrees to be reimbursed for a particular service at $100 that really costs $200, other agencies are unlikely to get the payers to negotiate above $100).

What would be a preferred approach?

First, there needs to be an acknowledgement that MIH benefits all participants in the healthcare system – patients, payers, and downstream providers.

The benefits need to be quantified, and the downstream providers need to pass along a substantial portion of their savings. Some of those savings include:

  • Insurance companies save thousands of dollars per emergency encounter when a patient does not end up in the Emergency Room or the hospital.
  • Hospitals avoid overcrowding ERs with low-acuity patients. This allows hospitals to focus on high acuity patients, as well as avoiding long wait times and poor patient experiences – today, low acuity patients often end up with long waits as higher acuity patients are triaged ahead of them.
  • Other providers (urgent care, physicians, etc.) improve their utilization by seeing patients they can treat.
  • Patients get the right care at the right time and the right place, all of which saves substantial money for all parties and improves the overall quality of the healthcare experience.
the right care at the right time and the right place

Second, there needs to be a concerted effort to engage Medicare and Medicaid about the benefits of MIH to their programs and to patients. Judging by the setup of ET3, which required an advanced level practitioner to “see” the patient prior to allowing them to be released without a transport, there is a clear concern about patient safety; however, this overlooks the fact that EMS already operates under medical direction and oversight.

Stakeholder concerns need to be identified and addressed prior to setting up these reimbursement models. There needs to be true stakeholder buy-in that MIH programs can and will provide safe and effective clinical treatments to individuals. After that is achieved, reimbursement levels should be established that appropriately compensate EMS for their services. Downstream providers and patients’ payers should share a large portion of savings derived from delivering cost-effective treatment back to EMS, which will encourage agencies to enter the space.

Over time, as upfront investments are paid for and efficiencies are developed, there will be an opportunity to lower reimbursement levels. CMS and other payers should promote ways to optimize this space, not entrench the status quo. Additionally, downstream providers – hospitals, physicians’ groups, urgent care facilities, mental health treatment centers, skilled nursing facilities – need to invest real dollars into MIH reflective of the substantial savings and benefits that MIH services deliver. 

The EMS industry is experiencing a fundamental shift in how out-of-hospital care is delivered in our country. EMS providers play an important role in the health and safety of their communities and many EMS agencies have built innovative programs to better meet the needs of those they serve. Just as EMS has evolved, the reimbursement model must also evolve.

-Kevin Spratlin, Division Chief of EMS Administration at the Memphis Fire Department

A holistic approach that incorporates how timely and vital MIH services fit into the broader healthcare spectrum is needed, an approach that breaks the status quo and jump-starts investments. This is how we will provide superior patient care to our communities. This is how we get more than just the sum of Mobile + Healthcare and, instead, evolve toward true Mobile Integrated Healthcare (in its many forms) as a critical healthcare service.

Pros and Cons of Aligning Ambulance Fee Schedules to Costs

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Setting ambulance fee schedules can be challenging and complex.

On one hand, governing bodies and EMS providers do not want to place an undue burden on patients who require an ambulance for an emergency medical need. On the other hand, providers need to try to optimize revenues for their agency to maintain operations and provide the highest level of care.

Another complexity of ambulance fee rate setting is that transport fees are considered a healthcare service; because of this, the amount a provider charges for transports is completely disconnected from the amount payers will pay.

Governmental payers – Medicare and Medicaid primarily – pay based on a set fee schedule which is not connected to the actual cost of the individual entity providing the service. Medicare and Medicaid transports typically represent two-thirds to three-quarters of an EMS agency’s transport volume, which results in a substantial gap between the cost of providing the service and the reimbursement they receive.

Only with commercial payers – insurance carriers – do EMS providers get close to what they charge in payment.

So, especially for municipal providers with relatively high cost structures, there is no amount that could be charged that would result in full cost recovery. An agency would need to charge some astronomical amount, such as $10,000 per transport, and be able to recover 75% of those charges from the 10-20% of the patients that have commercial insurance coverage, to come close to recovering their costs. Of course, charging $10,000 per transport is unlikely to get either governing body approval or community support!

Here are some of the pros and cons of aligning ambulance transport fees to costs in 911 systems:

Pros

  • Accurately reflects the cost of providing the service
  • Can objectively be measured and adjusted periodically
  • Promotes awareness within the community of the cost of providing 24/7, immediate response services
  • Creates awareness for the various involved service providers (labor, management, governing bodies) of the contributors towards overall costs
  • Likely is the best-case scenario for maximizing revenue and offsetting a substantial portion of the cost of providing the service

Cons

  • Charging the cost of the service, especially for municipal providers, may result in a charge level that exceeds what the governing body and the community feel comfortable supporting
  • Places an undue burden on uninsured or underinsured patients
  • Creates a subsidization scenario in which commercial insurance providers are “subsidizing” the system since governmental payers do not adjust their payments based on costs or charges
  • Increases the patient responsibility for patients with commercial insurance because co-pays are often tied to a percentage of charges (e.g., 20% is typical)

There are substantial and significant cons. But from an industry perspective, agencies are doing a disservice to their fellow providers by not charging at least equal to costs.

Undercharging reinforces the insurance practice of paying at a usual and customary level that is completely detached from the cost. The case needs to continue to be made through available avenues to Medicare and Medicaid that providers deserve to recover their cost of providing the service. For patients, agencies can establish hardship policies to mitigate some of the excess burden put on uninsured and underinsured individuals. As for patients with commercial insurance who get hit with high co-pays, the burden can be lessened by making sure hardship policies provide relief for people who truly cannot afford the payments.

In the end, the EMS community cannot “fix” the growing burden on patients. Patients do have protection once they reach a total out-of-pocket amount, but there is no doubt the financial burden is heavy when a patient experiences a medical emergency – of which the costs related to ambulance services is only a small piece.

The Surprise Factor: Why EMS Deserves to be Reimbursed for Costs in the Midst of Balance Billing Regulations

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The recent federal budget proposed by the Biden Administration for FY 2024 had an unwelcome surprise in it for the EMS industry. The proposed budget extends the No Surprises Act (NSA) to cover ground ambulance services, a category that was previously left out, starting in 2025. Let’s look at where we are right now and how we got here.

No Surprises Act Overview & How Ambulance Services Fit In

The NSA was passed in 2021 with the stated goal to end surprise medical bills for patients. The Act applied regulations to emergency services in hospitals and air ambulance, but Congress kept ground ambulance services as an area that a separate committee (Ground Ambulance Patient Billing Advisory Committee) would review to determine how the NSA should be applied.

Specifically, the NSA prohibits providers from balance billing patients, which occurs when the payer (insurance companies) refuses to allow the charge from the provider (hospital, doctor, air ambulance). For patients, this usually occurs when there is no knowledge or choice of care options and the patient receives care from an out-of-network provider, leading to a surprise bill. The situation forces the provider to file a case with an arbitrator (federal independent dispute resolution process) if it feels the payment made by the payer is insufficient. The arbitration is “baseball style arbitration,” in which the arbitrator chooses one side or the other; there is no settlement in between. The idea behind this is that both provider and payer are more likely to submit a realistic number to avoid the other party being deemed to have provided a more reasonable amount. Additionally, the arbitrator is supposed to consider the good faith efforts each party has made to reach a fair reimbursement through a negotiation and contracting process as part of the determination. For example, if a provider shows multiple attempts to negotiate a reasonable reimbursement through contractual outreaches, only to have the payer reject all efforts, that would benefit the provider.

Unfortunately, the NSA is off to a bumpy start. When the legislation was passed, it was estimated that there would be 17,000 cases of arbitration in the nine-month period for which it was in effect during 2022. That period actually produced 275,000 cases. The U.S. Administration weighed into the arbitration process with guidance that when in doubt, the arbitrator would consider the amount of payment made by the payer as the presumed correct amount. Many feel this was tipping the scale too far in favor of payers.

In 2022, a judge ruled that the overweight consideration of the payer’s “qualifying payment amount” was unfair. The Biden Administration revised the rule in September, and it was immediately challenged again by the Texas Medical Association (TMA) as being overly partial to payers. In February, a judge agreed with the TMA that the guidelines around the arbitration were unfairly biased towards payers. The arbitration process is on hold.

Another awkward aspect of the proposed FY 2024 budget is that the Ground Ambulance Patient Billing Advisory Committee Congress formed to make recommendations on how to apply the NSA to ground ambulances had already been formed and is pending its first meeting. The proposed extension of the NSA to ground ambulance undermines the process that Congress established to provide thoughtful consideration of what is fair to all parties.

Putting aside the growing drama around this topic, what does this mean and where do ambulance providers go from here?

Where Ambulance Providers Go From Here

In addition, messaging to the public on this topic is an area where there is an uneven playing field. Insurance payers have the deep pockets and can influence the message. Payers have hammered on messaging that the issue is about greedy providers, and that the providers are solely driving up healthcare costs. Compared to the insurance industry, ambulance providers are numerous, less financially endowed, and relatively unorganized.

What do we need to push for? The EMS industry needs to continue to make the case that ambulance providers must be allowed to get reimbursement for the costs of providing the services. On the municipal side, cutting insurance payments just means that tax subsidies will need to increase to cover the cost of the services. For private providers, companies will have to charge their public constituents more – and typically that burden will fall back on the municipality that has contracted for the services – or exit the market. This is just a shell game of placing the burden elsewhere.

Where insurance companies do have a fair argument is that they are subsidizing an unfair payment system in which governmental payers are not paying their fair share of the costs. Medicare should be addressing this through the CMS cost reporting process that is underway via the Ground Ambulance Data Collection System. But we are still several years away from the results that consider potentially increasing what Medicare pays for an ambulance transport. In most states, what Medicaid pays for an ambulance transport is a small fraction of the cost. There really needs to be a coordinated effort across all payers. Forcing a change favoring the commercial insurance payers starting in 2025 is not the answer.

The more fact-based we can be, and the stronger we can appeal to the sensibility of the general public about the value of EMS, the better the outcome will be for the industry. We cannot let ourselves be placed in a situation that will force tremendous infusions of money from municipalities’ general funds that are already stretched thin. We cannot allow private providers to be forced out of the industry because the financial model is stacked against them.

The lifesaving EMS providers in our community deserve to receive reasonable reimbursement to sustain a vital part of the United States health system.

Three Tactical Strategies to Improve Reimbursement While Maintaining Quality Clinical Care

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Have you ever been asked to “do more with less”?

It’s not easy to be an EMS provider these days. Whether it’s increased expenses, decreased funding, or payers taking a harder stance on reimbursement, EMS agencies across the nation are faced with challenges when it comes to maximizing revenues. In this whitepaper, we focus on three strategies that aim to improve your organization’s revenue cycle without cutting staff or changing your patient care processes. Download the complimentary whitepaper here.

Why Should You Outsource EMS Billing?

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EMS billing isn’t for the faint of heart. While patient care is the core mission of any EMS organization, it’s impossible to provide adequate care without resources provided by a healthy revenue stream.

Billing Isn’t Just Paperwork

Agencies that handle their billing in-house, rather than outsourcing EMS billing to a third-party vendor, are in fact running two business. Ambulance transport and EMS billing are different enterprises with different requirements for staffing, IT infrastructure, compliance, operational costs, analytics, and more.

This leads many EMS agencies to outsource their billing. Smart decision. The fee that a billing service will charge will certainly be less than the cost of running a second internal business. Let a specialized company handle the specialized work of billing so that the EMS agency can focus on patient care and other operational priorities.

Here are five main reasons why EMS agencies have made the switch to outsourcing. 

1. Reduced Costs

An established third-party billing company has a head start on infrastructure that an in-house department may never catch up with. Staffing, workspace, IT, hardware, training, software licenses, maintenance, even office supplies and equipment – these essential elements create burdensome ongoing fixed costs. Letting the billing provider handle these costs allows the EMS organization to direct resources to other essential budget items. Meanwhile, if the billing company invests in scaling their operation, building technology, and attracting top-tier staff, those benefits will be passed along to clients.

2. Industry Expertise

Billing companies deal with hundreds of providers, payers, and facilities – far more than a single EMS organization with an in-house billing department ever will. You may transport to a few different hospitals, but a billing firm may have connections to hospitals across an entire region and access to databases of patient data that your in-house billing team will not have. Outsourcing EMS billing allows you to take advantage of these economies of scale and collect every dollar.

Billing vendors also have the benefit of a broader range of resources and staff who can engage with industry associations, attend events, and stay abreast of trends in the changing healthcare environment. A good partner will keep you informed of new developments when necessary and will make sure that changes are incorporated into technology and policy as needed.

3. Top-Tier Technology

All billing companies rely on claims processing software to manage their operations. Good billing companies develop their own claims processing software to manage their operations with efficiency, opportunities for customization, and automated processes balanced with manual oversight.

Simply put, it would be impossible for an in-house billing department to develop and scale the technological expertise needed to maximize the potential of technology for billing.

4. Customer Service for Patients

After a traumatic 911 event, the best customer service may be no customer service at all. In other words, the best thing for a patient is not to have to worry about how to pay for their emergency transport.

Often, individuals are confused about their insurance coverage for EMS services. Third-party billing companies have advanced technology solutions designed to identify patient insurance information quickly and efficiently – more so than an in-house billing department could do alone, even armed with the best software. If your billing company processes millions of claims annually, they have established manual and automated processes to uncover patients’ insurance information through clearinghouses, demographic databases, admitting hospital data access, and sheer manpower.

Patient inquiries and other sensitive customer service touchpoints will inevitably still arise, so it’s important to look for a third-party vendor with high levels of professionalism and sensitivity to your organization’s reputation.

5. Increased Collections

The results of the combination of cost reduction, industry expertise, targeted technology, and great customer service? Increased collections for your organization. A billing company has one goal: maximizing the return on every claim submitted. To keep the business viable long-term, they must do so compliantly and direct resources toward infrastructure and technological innovation. This results in increased collections for clients.

Third-party billing companies should also have the capability to perform sophisticated analysis by looking at the right metrics to measure performance. Your billing partner should help you understand the right data at the right time for the right reasons. Then, you’ll be able to monitor and assess your billing company as well as project revenues.

Deciding how to handle your agency’s EMS billing takes analysis and careful consideration, with plenty of pros and cons to weigh. We’ve provided a handful of good reasons to outsource EMS billing. What are your reasons to keep doing your own billing? 

Webinar: The State of Mobile Healthcare 2022

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This free panel discussion with Pinnacle explores the current state of affairs in Mobile Integrated Health: the ET3 rollout, the regional and local disparities in the execution of mobile integrated healthcare, and how providers are overcoming the many challenges to efficient delivery of mobile health services. The expert panelists also share perspectives on where we’re headed and provide some guidance.

View below: 

Speakers:
Michael Brook, MBA
Jonathan Washko, MBA, FACEP, NRP, AEMD
Dr. Allen Yee
Dr. Victoria Reinhartz, CPh
Dr. Marc Eckstein, MD, MPH, FACEP, FAEMS

Check out this page for some Mobile Integrated Health Resources.

Webinar: Ethical Partnerships With Third-Party EMS Vendors

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The business world is built upon relationships. Relationships are the building blocks of the partnerships and contracts that keep all businesses running.

EMS is no different. You can’t do it alone. From medical equipment to apparatus to outsourced billing, partnerships with third-party businesses are essential to EMS agencies. But if those relationships aren’t built upon an ethical foundation, neither party will truly thrive.

We recently covered this important issue in a webinar hosted by Pinnacle’s Webinar Series. Our Executive Director of Analytics and former Battalion Chief at Gwinnett County Fire and Emergency Services in Georgia, Mitchel Holder, was joined by Nathan Sweet, Director of EMS at Anderson County, Tennessee, to discuss forging ethical partnerships with third-party vendors. Watch the webinar for key strategies and food for thought on this important topic in EMS.

EMS Third Party Vendors Forging Ethical Partnerships

 

Here’s what you can expect to see:

  • What does an ethical relationship with a vendor look like?
  • How do you prepare to solicit a new vendor partner?
  • How do you establish ethical relationships with vendors?
  • What are the standards for ethical business relationships?
  • How do you assess a potential partner’s commitment to ethical behavior?
  • How does an ethical partner behave when something goes wrong?
  • What are the qualities of ethical partner relationships?

 

50 Questions to Ask on Your EMS Billing RFP

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Issuing an EMS billing RFP this year? Selecting the right partner for EMS billing is a crucial decision for every EMS organization that outsources billing services.

Determining the best fit can be daunting. Choose wrong, and it could have devastating consequences to revenue and reputation. Choose right, and you could develop a mutually beneficial relationship with a vendor that helps your agency flourish for decades to come.

Many agencies go through a request for proposal process to find a billing partner, either for convenience and assistance with the search or because they are required by their governing body. Our team here at Digitech is highly experienced in creating proposal responses to these RFPs; we’ve read more than we care to admit over the years. In doing so, we’ve identified a standard set of questions that we believe should be in your next EMS billing RFP, whether you’re considering outsourcing for the first time, you know your department needs a change, or you are seeking to determine if your current provider is still the best fit.

This list arms you with 50 questions in six major areas to include in your EMS billing RFP. Answers to these questions will give you a deep understanding of the proposing vendors so you can make an informed choice.

Want a printable checklist? —> click here

Company Overview

  1. How many years has your company been in business?
  2. How many years has your company provided third-party EMS billing services?
  3. Disclose any key business partners, subsidiaries, and/or contractor relationships.
  4. How many EMS billing clients do you have and what type are they (e.g. municipal, hospital-based, private)?
  5. How many EMS claims does your company bill annually?
  6. How many employees to you have dedicated to EMS billing services?
  7. Provide an organizational chart providing the roles and responsibilities of the employees who will manage and/or be assigned to perform services.
  8. How many offices do you have dedicated to providing EMS billing services? Where are these offices located?
  9. Provide information about your customer service policies and procedures, including escalation and issue resolution processes.
  10. Describe how your company is notified of changes in legislation and how that information will be incorporated into your systems and processes in a timely fashion.
  11. List any professional EMS associations that your company belongs to.
  12. Provide a list of all award protests that your company has filed in the last five years, including the reason for the protest and the outcome.
  13. Provide contact information, start date, annual transports, and a brief narrative covering implementation and services provided for three current EMS clients of similar size, complexity, and scope.

Compliance and Regulatory

  1. Does your company have a compliance plan that is updated regularly?
  2. Is a copy of your compliance plan available for inspection upon request?
  3. Has your company, its parent, or a subsidiary ever been investigated for suspected fraud and abuse by any department or agency within the federal or state government such as OIG, Medicare, Medicaid, CMS, or Recovery Audit Contractor?
  4. Has your company, its parent, or a subsidiary ever been required by a department or agency of the federal or any state government to follow a Corporate Integrity Agreement?
  5. Has there been an investigation where the final determination resulted in a client paying a fine or penalty due to coding and billing actions that were related in any way to your provision of services?
  6. Are you able to furnish evidence upon request that all current employees are not excluded from participation in state and federal healthcare programs?
  7. Please provide a brief description of your company’s quality or audit process.
  8. Is any auditing process provided by an external vendor or source? If yes, briefly describe these audits.

Technology and Security

  1. Is the EMS claims processing and billing system you use proprietary to your company or is it software developed by a third party?
  2. Provide a general overview of the billing and records management solution. Describe the billing software used, who owns it, who supports it, how many clients use it, and describe the process by which required programming changes are made.
  3. List any additional licenses that are necessary to fully operate all available aspects of the proposed billing software, including reporting software.
  4. What level of access will be provided into the billing system? Will it include full visibility into all actions, notes, documents, etc.?
  5. Does your system provide logging of all activities on a patient account for all dates of service, and do you provide access to these logs?
  6. How is patient information stored, and for how long is this data retained? Are these records retrievable by the client?
  7. Please provide a brief description of your business continuity plan or disaster recovery plan.
  8. Provide a detailed listing of all data breaches including volume of patients affected and current status.
  9. Provide evidence of at least three years of annual SOC 1 Type 2 audits.

Coding and Billing Process

  1. What is your preferred method for receiving ePCR information?
  2. Explain the format that the ePCR data will be uploaded into the billing software, and what fields will be included, e.g. patient demographics, insurance, guarantor, medical procedures performed, chief complaint, dispatched as, and found to be.
  3. Briefly describe the training process for a new coder that starts with your company.
  4. How are coding personnel audited?
  5. How are claims assigned to coders? Are specific coders or groups of coders assigned to certain clients?
  6. If there is not enough information to code the claim, what is the process for obtaining the necessary information?
  7. Please describe the circumstances in which a claim would be returned to a client.
  8. What is the typical length of time required to bill a claim once the necessary information is received?
  9. What is your standard invoicing process and timeline?
  10. Describe the appeals and review processes for denied claims and the process for limiting denied claims. 
  11. Describe the cash posting process.
  12. Describe the refund process.
  13. Please describe your process, including the frequency, for providing documentation feedback to providers.

Implementation and Onboarding

  1. Describe the initial phases of this project, including a proposed implementation plan.
  2. Describe how you ensure that implementation and the transition to your system does not negatively impact the billing and collections processes for our organization.
  3. What resources will we need to provide during onboarding and implementation?
  4. Describe the support and training you provide during the onboarding process, and describe the ongoing support and training for our administrative personnel that you will provide once onboarding is complete.

Reporting

  1. Please provide sample of weekly or monthly client reports that are part of your standard client reporting process.
  2. How are requests for non-standard reports handled? Is there a cost for these types of reports? If so, how is pricing determined?
  3. Please include any additional information regarding your reports and the data analysis tools provided to your clients.

We hope this list helps you get started in your endeavor to create or revise an RFP related to your organization’s EMS billing and coding process.

Three Critical Questions About EMS Revenue and Performance

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Action is at the heart of EMS: making quick decisions in the heat of the moment that are often truly a matter of life and death.

In the field, the business maxim of “if you can’t measure it, you can’t manage it” doesn’t exactly apply. You don’t expect a medic to pull up an analytical dashboard between calls and begin crunching numbers.

And yet, data analysis plays a huge part – not only in improving patient care and outcomes, but crucially, in the performance of the entire EMS organization. It is critical to understand the available data about challenges, opportunities, and strategy in order to make the best decisions for your agency.

In this whitepaper, we focus on three critical questions for EMS billing. You can use these questions to guide your analysis and assessment of revenue collection performance of your billing department, billing vendor, or billing solution.

  1. How are you calculating collection percentage – and why?
  2. How are you analyzing collections per trip?
  3. How are you measuring efficiency?

Click here to keep reading or download the PDF.

Embracing Change: Writing the Next Page of Digitech’s Story

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Today marks a milestone for Digitech. We’ve finalized the merger between the R1 EMS business and Digitech that was announced earlier this year, and we are now moving forward with operations as a combined business under the Digitech name.

As a 36-year-old company, we’ve seen a lot of changes that have impacted our organization in one way or another: the shift from paper dispatch systems to CAD. The creation of NEMSIS. Changing EMS education standards and compliance requirements. Revisions to Medicare’s national ambulance fee schedules. The Affordable Care Act. Advancements in mobile integrated healthcare. The still-evolving response to the COVID-19 pandemic. While some of these occurrences have been more challenging to deal with than others, Digitech thrives on these kinds of changes. Constant adaptation to the continuously changing environment of EMS is at the heart of our success.

Now we embark on a unique milestone for Digitech. Throughout our history, we have added clients and even employees carefully and selectively. Our growth can be attributed largely to strong references and referrals, and we are proud of that strong reputation. Moving forward, we will continue to build upon the mission and vision that R1’s EMS division (formerly ADPI/Intermedix) and Digitech share: compliantly maximizing collections for customers through time-tested processes and powerful technology, keeping revenue flowing so EMS providers can focus on keeping their communities safe and healthy.

This shared dedication brings together two companies that have been competitors for a decade. As we continue under one metaphorical roof, we have a great opportunity to bring the best, most trustworthy ambulance billing services to even more Fire and EMS agencies across the country.

As one business, we bring a deep level of expertise to the marketplace. At Digitech, EMS billing is all we do. We are not part of a larger revenue cycle management company, and we do not have other divisions that focus on different lines of business such as physician billing. This allows us to specialize like no other company can. Our staff is made up of former Fire chiefs, EMS directors, paramedics, EMTs, and other first responders and public safety professionals. We know EMS.

We’ve also always been a technology company. Ambulance Commander will remain the same efficient processing platform that has powered our EMS billing services for years. We’ve always invested heavily in this area, directing our time and resources to improving our proprietary platform’s speed, availability, and transparency. Our in-house teams have spent countless hours on research and development. Digitech’s developers not only continuously incorporate client feedback and fine-tune processes with client goals and needs in mind, but also react instantly to the unexpected, like legislative mandates, reimbursement changes, and public health emergencies. Now, we will be able to dedicate even more of our efforts to Ambulance Commander. We’ll be rolling out more user-friendly features, careful automations, and informative reports.

As we launch into the first merger or acquisition in Digitech’s history, we more than double our staff and customer base. We have a tremendous opportunity ahead of us to expand our reach in the EMS community, to innovate more, to continue our tireless dedication to our mission. Among the many compelling strategic reasons for this transition, we pledge to maintain the same goal we’ve had since 1984: make every client feel like they’re our only client.

The Price of a Pandemic: The Economic Impact of COVID-19 on Emergency Medical Services

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The overwhelming impact of the COVID-19 pandemic has not spared EMS. Quite the opposite—EMS and Fire departments continue to deal with grueling challenges since Severe Acute Respiratory Syndrome Coronavirus 2 exploded into the public sphere in early 2020.

While the health impact of COVID-19 has been destructive in many communities across the globe, the economic impact has hit EMS especially hard as well. Per an ongoing survey administered by the International Association of Fire Chiefs (IAFC), Fire and EMS agencies increased spending nearly 30% on COVID-related expenses.

And increased spending is just the beginning.

Click here to continue reading and download the full whitepaper.

Price of a Pandemic

Innovative Technology in the Face of Crisis

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As the first line of defense in our communities, EMS personnel need support now more than ever. Agencies and organizations across the country are pooling their resources to help serve and make a positive impact during this crisis. 

Sullivan County Emergency Medical Services, the primary EMS provider for Sullivan County, TN, provides aid to about 150,000 citizens and visitors, as well as those in surrounding communities. A number of ambulances and first responder agencies spread across Sullivan County are ready to respond at a moment’s notice, as their mission is to provide “the best emergency and non-emergency care to patients and their families at the worst times in their lives.” 

The progressive care provided by the service personnel of Sullivan County EMS (SCEMS) is often described as an “extension of the emergency room,” where the years of experience offered by the County’s personnel of highly-trained Medical Directors, Paramedics, and EMTs allow them to maintain a “continuity of care from the place of origin to the hospital.” Since 1970, it has been their prerogative to have as many trained personnel on scene of an emergency as soon as possible. 

In this particular line of work, “seconds count,” and Sullivan County EMS has committed to having the right systems in place in order to lower response times to medical emergencies within their growing communities. Part of their ability to provide such timely service is due to Sullivan County’s tiered response system, which allows for readily-available, localized teams to respond preemptively:

“These response teams bring manpower and multiple levels of training –from Medical Doctors to First Responders– to the crisis environments faced by our  Paramedics and EMTs quickly and efficiently. These teams are highly lauded amongst emergency medical personnel for their selfless acts.  With their short response times, they have repeatedly induced appropriate care and –most importantly– prolonged viability of life in the field prior to our arrival.” – Gary Mayes, Regional Director

Sullivan County EMS is not alone in providing care and support for their people. In this rural community, EMS is a third service for the County, acting as an extension of the Sullivan County Regional Health Department (SCRHD). The SCRHD also helps to prepare the County for public health emergencies. Their Public Health Emergency Preparedness Department, recognized by NACCHO Project Public Health Ready, uses “an all-hazards approach for emergency planning, focusing on situations that specifically affect the health of the public.” The SCRHD serves the communities of Kingsport, Bristol, Bluff City, and Piney Flats within Sullivan County. Their department’s workforce of around 90 personnel also works closely with the Northeast Tennessee Healthcare Preparedness Coalition in preparing their response to public health emergencies like the one we are experiencing today.

The collaboration between Sullivan County EMS and their Health Department combined with their support from Digitech as an EMS billing partner has inspired inventive measures to combat the COVID crisis. As technological innovation is at Digitech’s core, the evolution and design of new tools in the Ambulance Commander software system ensures that partners will have access to such timely solutions. With data gleaned from Digitech’s recent COVID-19 Symptom Map, Sullivan County has been able to identify the areas within their community in the greatest demand of care. This insight allows them to strategically place future COVID-19 testing sites, so Sullivan can continue to support their most vulnerable populations. 

“The COVID Symptom map can be a helpful tool in mitigating the virus by determining specific communities that may need testing, quarantine, or treatment. It allows EMS and Health departments to work collaboratively during the COVID Pandemic.” – Brandon Alley, Sullivan County EMS

The gears continue to turn in Sullivan County as leaders look to this new Ambulance Commander tool for even more creative solutions in the future, like tracking flu-related incidents. 

Between these partnerships and updating their Facebook page with information and guidelines on COVID-19, mental health tips, and to thank individuals making donations to support their emergency service providers, Sullivan County EMS continues to commit to their mission of looking out for every single one of their neighbors in need. 

 

Sources:

New Utilities in Ambulance Commander

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Coronavirus Incident Tracking Tools

Our ability to adapt to an ever-changing EMS landscape is a benefit to our clients. We’ve released new tools to help track Coronavirus-related incidents in your service area. 

With this latest development, Incident Mapping allows you to:

• Isolate incidents by diagnosis code
• Get a color-coded visual map of your service area’s hotspots
• Interactive maps allow you to drill down to the individual call record
• Adjustable settings to scale heat map coloring based on call volume and service area geography
• Built in integration with Triage utility to display COVID-related pickup locations regardless of provider’s impression

Reach out to your account manager for detailed training by clicking here.

Important COVID News

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From all of us at Digitech,

For the duration of this Public Health Emergency, we remain committed to assisting the EMS community by sharing important, up-to-date information with all of our friends and partners. Keeping our clients informed on the most recent updates related to COVID-19 continues to be a top priority. Below is a list of important COVID-19 related industry changes:

  1. CARES Act Provider Relief Fund – legislation has passed that provides $100 billion in relief funds to healthcare providers on the front lines of the coronavirus response. Due to the importance of delivering the funds expeditiously, the Department of Health and Human Services (HHS) is distributing $30 billion of the relief funds immediately. Please find a summary of the program below. Click here for more details.
    1. The payments are not loans and will not need to be repaid.
    2. Payments will automatically be received if your organization received Medicare (FFS) reimbursement in 2019.
    3. The payments will be received via ACH with a payment description of “HHSPAYMENT”
    4. Within 30 days of receipt of payment, providers must either accept the payment by signing an attestation and accepting the Terms & Conditions or contact HHS and remit the payment as instructed
    5. HHS has provided a formula for an estimate of the amount expected which is the amount paid by Medicare in 2019 divided by $484 billion and multiplied by $30 billion. Please contact Digitech if you would like assistance with calculating your estimate.
    6. The CARES Provider Relief Fund Payment Attestation Portal is now available through hhs.gov/providerrelief.
  2. Medicare FFS Sequestration Suspension – The CARES Act has temporarily suspended the 2% payment adjustment currently applied to all Medicare FFS claims due to sequestration. The suspension is effective for claims with dates of service from May 1 through December 31, 2020. Providers can expect to receive an increase of 2% more in their Medicare payments during this time period as compared to prior to the suspension.
  3. Beneficiary Signature Rule Change – Crew members can now obtain a “verbal consent” from the patient to sign on behalf of a suspected or known COVID patient. It is important to note that an actual patient signature is still required in the event the patient is physically or mentally capable of signing and is not a suspected or known COVID patient. Click here for more details, and here for an updated signature form.
  4. Alternate Destination – CMS has temporarily expanded the list of allowable destinations for ambulance transports to include any destination that is able to provide treatment to the patient in a manner consistent with state and local EMS protocols.
  5. Accelerated Payment Process – In order to increase cash flow to providers of services impacted by COVID-19, CMS has expanded the current Accelerated and Advance Payment Program to a broader group of Medicare Part A providers and Part B suppliers. The expansion of this program is only for the duration of the public health emergency.  It is important to note that these payments are subject to recoupment. Click here for more details.
  6. CMS Relaxes Physician Certification Statement Signature Requirements – The Centers for Medicare & Medicaid Services (CMS) has released guidance that recognizes the difficulty ambulance service providers and suppliers may have during the COVID-19 Public Health Emergency (PHE) in obtaining a physician certification statement (PCS) signed by a physician or other authorized professional. CMS and its contractors by extension will not deny claims during a future medical audit even if there is no signature for non-emergency ambulance transports, absent an indication of fraud or abuse. Ambulance service providers and suppliers should indicate in the documentation that a signature was not able to be obtained because of COVID-19. The AAA advises completing the PCS form and then indicating if a physician or other appropriate person has not signed it by writing “COVID-19 Public Health Emergency” on the signature line. CMS also reminds providers and suppliers that medical necessity still needs to be met. The full Q&A document can be accessed here.
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If you have any questions at this time, please reach out to us.

Where in the World is Digitech – Q1 2020

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Tradeshows and Events

Digitech’s road warriors are starting 2020 with a busy schedule full of industry conferences. These events are great opportunities for us to stay at the forefront of the latest trends in EMS and revenue cycle management, and we always look forward to meeting our clients and new contacts on the exhibit hall floor or over a meal after hours. Here’s where you can catch up with us for the first few months of 2020.

Fire-Rescue East

Where: Hilton Daytona Beach Convention Center, Daytona Beach, FL

When: January 22-25, 2020

How to Find Digitech: Exhibit hours are on Thursday, January 23 from noon to 6 PM; Friday, January 24 from 10 AM to 4 PM; and Saturday, January 25 from 9:30 AM to noon. Find us at Booth #1027 in the Exhibit Hall.

Fire-Rescue East - Digitech Booth

 

TASA Mid-Winter

Where: Park Vista Resort, Gatlinburg, TN

When: February 19-21, 2020

How to Find Digitech: Our team will be exhibiting and mingling in the Park Vista Resort for the duration of the conference. You can find us in the vendors’ exhibit area, or catch us at breakfast or lunch.

TASA Mid-Winter - Digitech

 

Virginia Fire Rescue Conference

Where: Virginia Beach Convention Center, Virginia Beach, VA

When: February 19-23, 2020

How to Find Digitech: We will be exhibiting on the show floor at Booth #15 during the exhibit hours of 2-6 PM on February 20, 10 AM – 5:30 PM on February 21, and 9 AM – 1 PM on February 22nd.

 

ESO Wave

Where: Hilton Austin, Austin, TX

When: February 24-27, 2020

How to Find Digitech: We’ll be spending time with our clients and ESO friends during this conference. You’ll see us as both a conference sponsor and an exhibitor at the conference hotel. 

 

EMS Today

Where: Tampa Convention Center, Tampa, FL

When: March 2-6, 2020

How to Find Digitech: Visit us on the exhibit hall floor at Booth 412. We’re also one of the sponsors for the the $10,000 cash giveaway – good luck!

 

GEMSA Directors and Leadership

Where: Legacy Lodge & Conference Center at Lake Lanier, Buford, GA

When: March 23-25, 2020

How to Find Digitech: We’ll be at our exhibit booth in the hotel lobby – see you there.

 

PWW abc360 – Las Vegas

Where: Planet Hollywood Resort, Las Vegas, NV

When: March 22-26, 2020

How to Find Digitech: One of our experts will be speaking at the XI session, and we’ll be at our exhibit booth during the show.

Solving the Deductible Dilemma with Automation

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At Digitech, we don’t see problems—we see opportunities. When a client brings us a question or a problem, we turn it into a challenge. How can we develop a solution that will become a benefit to all who we serve? Can we increase efficiency? Can we write new software that eliminates a roadblock? Can we chart a path through the maze that will lead others out of the same trap?

Take the problem of increasing deductibles in healthcare insurance programs. With costs for health insurance pushing a greater portion of the burden onto the patient, it’s naturally gotten harder to collect ambulance billing claims. Some billing companies might shrug and say, “Well, we’re just going to have to live with a reduction in insurance collections and an increase in self pay claims.”

Not here.

At Digitech, we got to work. We’ve rolled out new automation that enables our verification process to check the deductible information on commercial insurance coverage on a case-by-case basis. For those payers that provide this information, it will be captured in the claim record and will allow us to see whether that claim will hit the patient’s deductible. When a significant portion of the bill may get pushed to the patient, we can hold the claim for a period of time to allow for a greater chance for the deductible to be met. This process is in addition to our standard process of holding Medicare and some Medicare HMO claims for deductibles.

The goal here is the one that Digitech always pursues, while keeping a sharp focus on compliance: Maximized revenue for clients and minimum distress for patients.

Going forward, all Digitech clients can opt in to this program. We’re ready for you! Please reach out to your account manager at Digitech to opt in to deductible eligibility checks and we will get the ball rolling for your service.

You may also contact the Digitech team at accountmanagers@digitechcomputer.com.

Ambulance Cost Data Collection Update

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The ambulance industry has been abuzz about cost data collection requirements set forth by the Bipartisan Budget Act of 2018. As the system continues to develop, we will provide updates about the timeline, any modifications to the requirements that may arise, and how you can take action. Read on, or download this information as a PDF.

What is the purpose of H.R. 3729, the “Comprehensive Operations, Sustainability and Transport Act of 2017?”

  • Medicare Ambulance Add-On Payments, an important supplemental reimbursement source from Medicare, expired on January 1, 2018.
  • Congressional action was needed to restore the add-on payments and they were extended with some reductions by the Bipartisan Budget Act of 2018 until December 31, 2022).
  • There is a current lack of cost reporting data among suppliers of ground ambulance services.
  • This legislation would help CMS understand how much it costs to provide ground ambulance services to Medicare beneficiaries.
  • This act would reauthorize the add-on payments for five years as well as create a cost-reporting system that will lead to improvements in the Medicare Ambulance Fee Schedule and adequate payment rates for Medicare transports.
  • H.R. 3729 will authorize CMS to design and launch a cost reporting system.

What does the implementation look like?

  • Pre-Rulemaking — CMS will engage stakeholders to solicit recommendations.
  • Rulemaking — CMS will publish a proposal for collecting cost data then seek public comment.
  • Final Rule — CMS will issue a final rule after reviewing public input.
  • Launch — CMS will select ambulance services to submit data.
  • Phase One — All ambulance service suppliers will provide data on the characteristics of their operation such as the type of supplier (e.g. volunteer rescue squad, private company, third service, etc.).
  • Phase Two — A survey will collect cost data from a statistically significant number of each group of supplier and provider to obtain costs and other data.

What will this mean for ambulance service providers who are selected to provide data?

  • This is not like Medicaid cost reporting, state reporting, or GEMT reporting.
  • Costs for providing services vary greatly due to differing state, local, and agency protocols like bundling.
  • Different providers have different fee structures and CMS needs the whole range.
  • A representative sampling of providers will be selected to report cost, revenue, utilization, and other information as determined by CMS.
  • Data will be collected each year from 2020 through 2024.
  • Cost reporting will continue at least every three years from 2025 on.
  • Future reimbursement will be dependent on the accuracy and completeness of the data compiled.

How can you take action?

How can Digitech help you?

If you are selected, Digitech will support you through the cost data collection process by providing relevant revenue data and other resources and tools. Our reporting and data mining systems will ease the delivery of required revenue data for our clients. If you have questions about what this all means and how it may affect you or your service, do not hesitate to reach out to us.

Same Dashboard. Better Results.

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You asked, we delivered. 

All New Features on Digitech’s highly acclaimed  

Digitech’s development team has added some cool new features:

  • Multi-select Filtering – Drill down on multiple data points at once
  • Zooming and Scrolling – Zoom in your horizontal view to better view large numbers of data points
  • Legend Quick-Filter – Hide or show data points with a checkbox in the legend
  • Cross-hair – Show a vertical cross-hair to make reading line graphs easier

Let us know what you think! Reach out to our Account Managers if you have any questions.

Using Data Analytics to Build Business Acumen

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Budgets, reports, revenue cycle management, cash flow, forecasts – there is a mountain of financial data that the modern EMS provider has to track to be an effective organization. What should the Operations Chief or Chief Financial Officer expect from their billing company? Here, we explore the analytical solutions developed by Grady EMS that have helped the 911 service provider for the City of Atlanta to stay ahead of the game.

Presenters:

  • Tamara Nilmeier, Director of EMS and Physician Revenue Cycle for Grady Health System, Atlanta, GA
  • Michael Colman, VP – EMS Mobile Advanced Practice at Grady Health System
  • Mitchel Holder, Executive Director of Analytics at Digitech, former Battalion Chief of Business Services for Gwinnett County Fire and Emergency Services

In-House Billing Is Out of Control

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It’s been argued that in-house billing affords ambulance companies more control. You can, after all, walk into your billing manager’s office and ask questions. But don’t confuse proximity with getting the answers and information you need to increase billing productivity. We’re long past the time where geography is meaningful when it comes to data. That’s why companies got rid of their servers — server farms do the job better.

So it is in billing services. Location is irrelevant; concentrated billing expertise and infrastructure are essential. One call to a billing service gets you more help than someone down the hall — even someone with a lot of experience. Reason? An internal billing manager processes 25,000 or 50,000 transports a year while a billing company expert processes a million transports a year for 100 different entities while surrounded by experts in government compliance, insurance industry regulations, and Information Technology. Where are you more likely to get the best information?

You could say control is your access to information that is critical to your decision-making, in which case you have less control than you think. You have some flexibility, assuming you have someone in-house who has some skill with running reports, or you pay the software vendor to produce the reports. Compare that with a billing service with proprietary software and a comprehensive and customizable reporting system. The billing service has an analytics team of IT pros and industry specialists who can produce any report you can imagine for little or no cost. They’ve also gone up the learning curve, so you don’t have to. In fact, they may have already solved your problem because they’ve worked on it with other clients.

Or perhaps your definition of control is the ability for management to make changes to the billing process or personnel as needed. That’s a bit more difficult to tackle. When does the owner of an ambulance company realize she needs to make a process or personnel adjustment? Probably when cash flow is crippled or an audit reveals errors that entail a sizable pay back – in other words, when it’s too late. And when the decision has been made that change is required, how does that get done? Do you now dig into the billing process, hope you can understand it better than the current manager, and then implement the change yourself? Or do you replace the billing manager? If so, where does that new manager come from? It’s not as if experts in ambulance billing with strong management skills are on every street corner. And what of the people in that department that might be loyal to the old manager?

While we’re on the subject of change, let’s assume you can sense the financial benefit of a software change. You know in your bones that you can save $40,000 a year in payroll if Utility X can be developed or modified. Who do you think is more likely to deliver that development? Hint: probably not your software vendor. They avoid software modifications like the plague because every change made for you has to be transferred to 100 other clients. The vendor also knows that every now and then a client will be lost because they hate a change so much. Billing services are built for change because continuous improvement is a basic component of their proprietary software. They understand they will likely benefit from change because it will also make their job easier.

Maybe control is the ability to have an external auditor conduct an audit at will. Engaging an industry expert to audit a claim sample is pretty easy if you have the budget. Realistically, ambulance company owners rarely do, because it’s distracting, it’s time consuming, and it may test morale. Billing services, on the other hand, do these things as a matter of course and will often send you summaries of the reports. They thoroughly understand the process in that they probably go through more audits in a year than most ambulance companies go through in a lifetime. They have a verifiable track record. And you have control in knowing you can push the audit button at any time, even if you rarely do. 

Ultimately, control is about the ability to make changes seamlessly whenever circumstances dictate change is necessary. The ultimate control is being able to replace a billing service without causing too much disruption. You simply start talking to other billing services, give them some data, and ask them to show you how they can solve whatever problems you have and provide better solutions. The conversion process may be a bit stressful, but it is manageable — assuming the service has a decent transition process. That part you can verify from references.

It may seem odd to suggest that billing services are interchangeable parts. They’re not. Some are better than others. But being able to replace them quickly gives the ambulance company operator the ultimate control: You’re never stuck with an underperformer.

The Dirty Secret Your Software Vendor Won’t Tell You

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Companies that sell billing software to the ambulance industry never fail to promise that their software will increase efficiency and profits. What they haven’t mentioned is that their software improves their efficiency and profits, not yours. To achieve that, they sell software that is inferior by design. There. We said it.

To be fair, they have no choice. Software companies can’t make money selling billing software to the ambulance industry – at least not real money as defined by the technology industry. So they have to sell low performance products to maintain their bottom line. How can this be, you ask?

Let’s say a software company somehow captures the entire New York City non-emergency medical transportation market, one of the largest non-emergency medical transportation markets, at approximately one million transports per year. Say that software company wins a killer deal by charging ambulance companies $2 per transport to use their software (about four times the current market rate). Ultimately, after snagging an impossible share of the market and charging an outrageous rate, the software company generates $2,000,000 in annual revenue – less than the annual revenue generated by the average McDonald’s franchise. Consider that for a second: a software company dedicated to the ambulance industry can’t survive by dominating the largest market on the planet and overcharging.

Given this limited revenue potential, the software companies can only afford to build mediocre, fairly generic products, and they can’t afford to market them as anything less than cutting edge. These vendors will point to their software’s well-organized process flow – but that’s exactly the flaw in the argument. In this system, claims are moved from bucket to bucket within measurable time frames. The system just has to keep track of the claim, and all the biller has to do is manually move the claim from one bucket to the next. How’s that for automation? It’s not particularly efficient, but the software provider benefits because the client needs more seat licenses to keep the volume of claims moving. The software system stays simple and cheaper to maintain, which improves the software company’s profits.

A software manufacturer will similarly avoid adding features that maximize collections because those features require additional system complexity, which increases development costs and complicates implementation, training, and maintenance. In other words, it’s a loss for them to help you collect more.

Here’s the good news: Given that the billing software sold to this industry is weak, at best, there is a significant opportunity to improve collections and efficiency with the right technology and the right partner. You need a vendor whose goals are in line with yours.

The only entity incentivized to develop the technology that will maximize efficiency and collections is a billing service that lives for the challenge of continuously evolving new solutions – because really, they’re the only ones who can afford to. They know that the more automated the process, the more code is required, which increases development and maintenance costs. But they also know that extra development expenses result in improved labor efficiencies, allowing fewer people to handle more claims, collect more dollars per claim, and collect on a higher percentage of claims.

Effective billing companies improve by analyzing exceptions, not ignoring them. When enough similar exceptions are found, the truly efficient billing company is able to build a new automated process flow to capture and properly handle those claims. This kind of company sees agencies’ problems as opportunities instead of obstacles, which creates a rewarding partnership.

So if you accept the notion that technology is the key to maximizing efficiency and collections, the answer should be clear: You need a complete billing service with proprietary software.

Finding Money Ain’t Cheap

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Should your ambulance billing service collect $16 million in billings for you or $20 million? Seems like a stupid question. But what if the service knows they will make a profit of $240,000 on the $16 million but only $140,000 on the $20 million?

It’s more expensive to process claims that involve denials, appeals, and multiple phone calls. If your billing service collects an average of $250 per transport and charges 5% of collections, they make $12.50 per claim. What are they supposed to do with claims that need a $20-an-hour-employee to stay on the phone for an hour? Some billing services will ignore these claims; it’s more profitable to write them off and send them to the collections graveyard. And if you’re the EMS client, it’s your agency that loses, not the billing service.

Perhaps you are thinking your billing service has an ethical obligation to work every claim, and if you agreed to pay a set fee per claim, they clearly do. But when the fee structure is an incentive-based percent of collections, things get a bit murky. When paying a percent of collections, you’re basically telling your billing service, “We want you incentivized such that the more money we make, the more money you make – and if we make no money, neither do you.” If that’s the case, is it really a violation of the deal for the billing service to choose not to make money for you on the claims that are not profitable for them?

Everyone in government and business is looking for the best price. EMS chiefs and finance officers have to consider the lowest-price option when seeking bids for goods and services. That’s not only logical, it’s the law in many cases. But low cost and cost effective are not the same thing. Every good manager knows this. Yet when purchasing decisions face the scrutiny of an elected board of commissioners or a finance director or a purchasing office, managers need to have a strong justification for not buying the cheapest available product. Municipalities need to keep two things in mind: First, the profit-oriented private sector does not think like the politically accountable public sector; second, it’s really difficult to beat people at their own game.

For manufacturers and service providers, lowering the price has a number of ramifications, not all of which are pleasant. On the plus side, a low price:

  • Forces efficiencies
  • Makes a business clarify what’s essential
  • Fosters competition

But there are negatives too, including:

  • Forces cost cuts that affect training, support, and the quality of life you can provide to your employees
  • Quality gets compromised
  • The safety and security of your people, your PHI, and your investments may suffer

Any seller can cut price, but great brands offer something beyond low price – convenience, dependability, service, or innovation, for instance. Consider Jet Blue in the airline industry or Amazon in retailing. In the world of EMS billing, that “something beyond” is the ability to process every claim profitably while charging a competitive fee. Few ambulance billers can do that.

The math of collections is worth doing. You may be able to realize double digit collection increases with a single digit fee increase. The higher fee will cover the costs of the technology and advanced processes that can increase collections far beyond the difference you may be paying out. While initially more expensive, applying advanced technology to pursue every dollar on every claim will produce a substantial amount of incremental revenue.

Fire chiefs, revenue cycle managers, finance directors, and municipal officials need to consider their options carefully when making decisions about which billing company offers the best value for their organization. You might think you’re getting a bargain with a billing service that offers a low cost per claim, but just because something is cheaper doesn’t mean it’s a better value. When you’re paying people to find you money, don’t be surprised if they find more when you pay more.

The Right Partner

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optimizeEvery growing business is faced with critical, make-or-buy decisions. Accounting, tax, customer service, office management, maintenance — at some point these functions suck up too much time and resources to be handled internally. They distract you from your company’s main task: delivering a valued service to customers.

That’s especially true for billing: Outsourcing your billing with the right partner will outperform in-house billing every time. That partner will collect more, cost less, maintain a higher level of compliance, and often provide better reporting and analysis.

Why? Because the right partner’s collection software is better than your collection software — even if you’re buying from a third-party software “specialist.” You’d like to think that buying from a third-party vendor will give you the best-performing software available. But that’s not the case. In fact, using a third party vendor can almost guarantee that you won’t have best-in-class collections. That might seem contradictory. After all, wouldn’t a software specialist strive to provide the best product out there? The answer is no. The specialist’s business model doesn’t work that way.

A company that bills in-house must do two things to maximize profit: 1) collect everything it’s entitled to; 2) be as efficient as possible – that is, minimize the number of billers in the department. To try to accomplish that, the firm purchases billing software from among the small group of vendors that specialize in ambulance billing software.

This is where the economics get interesting, and not necessarily in a good way. The third party software companies are similarly striving to maximize profitability, which turns the vendor-client relationship into a zero-sum game. That means the more you get, the less they get — and vice-versa. Some partnership. To enhance their own profitability, software companies have an incentive to minimize the efficiency of their own product and pay less attention to helping clients maximize collections.

And therein lies the rub that has cost ambulance companies millions over the years. The contemporary software model is to sell by the seat license. The more seats a software vendor sells, the more revenue it earns and the higher its long-term (forever) monthly support fee. That system has worked pretty well for Microsoft, a company never accused of being customer-centric. If a billing software company boosts efficiency, it will sell fewer seats. Even worse, increasing the software’s efficiency also increases its complexity, which in turn raises costs for development, implementation, training, and support. Overall, that’s a really bad deal for the software company — inflating costs to reduce revenue has never been a good long-term business strategy.

Somewhat perversely, the software company is similarly incentivized to resist helping its client improve collections. To improve collections requires developing and testing new modules, upgrading a working system, re-training billers, and adding support costs. As firms rarely like to upgrade their software, even less so if they have to pay for it, the upgrade cycle becomes difficult. And if conscience, competition, and pride force the vendor forward (damn those torpedoes), losing a client for making that effort will likely recalibrate the conscience instantly.

Why would you lose a client for doing good, you might ask? Change creates frustration at the client’s company, wherein the software company has to deal with the ire that comes with upending the daily routine of billers who benefit naught from the improved collections. That sometimes leads to complaints to the owner who, aware of his complete dependence on his billing manager, may utter something like, “If you don’t like our vendor, go find one you do like.” SURPRISE! The billing manager likes the one that doesn’t need or require continuous upgrades.

The solution is to find the “right” billing partner, meaning not just any billing partner. You’ll need to do a bit of digging. Take a look under the hood. Develop a set of requirements. The good news is that choosing is less subjective than you might think as it revolves around the technology in use – or rather, that technology’s origin.

For starters, any billing service that uses someone else’s technology is in the same position as the entity that bills in-house. In fact, this partner could underperform the in-house group because it’s savvy enough to know which claims are profitable to collect and which aren’t and may decide to focus on those that are profitable. It’s classic Low-Hanging Fruit Syndrome. If they use someone else’s software, remove them from your list.

Identifying the right partner begins with the right technology. You’ll recognize it if they own their own processing software and have made a long-term commitment to improving its efficiency and ability to maximize collections. You’ll know this is the case if:

  • They have a staff of full-time programmers who work exclusively on this software. It’s a bonus if those programmers have a ton of experience with the company.
  • They upgrade their software regularly (weekly) and every client receives the benefit of those upgrades.
  • They can point to specific modules they have released in the last year that have improved collections or efficiency or both.
  • They offer full transparency. In other words, the service allows the client to access the billing system 24/7, produce a list of claims on screen that represent every transport done for a specific date range, and enables the client to drill down into each claim and find out everything that was done to collect that claim.

Those capabilities are a healthy start. You’ll know you have a partner who shares your priorities and has committed resources to achieve them. And you’ll know you have a partner that does not fear transparency. They won’t be trying to hide anything.

But there’s more you can do. If your partner has large municipal clients, you’ll know it has the following qualifications as these are required by many municipalities:

  • The firm has a solid IT infrastructure with good Disaster Recovery systems.
  • The firm has been audited by independent external auditing firms that are experts in the field.
  • The firm has audited, publicly available financial statements.
  • The firm has SOC 1 Audit results, which are reports by external auditor who insure this company meets its contractual obligations.
  • HIPAA and PHI breach data is publicly available.

References should be at the heart of any evaluation. While there are many companies that do ambulance billing, there are only a few that do it on a large scale. And in most cases, clients have moved from one of these top-tier companies to the other. Ask potential vendors to speak to clients that they have taken from competitors and then ask the clients about the circumstances under which they left. Who collected more, who responded better, how did their implementations compare, whose reporting was better? If one company’s name keeps popping up, and that company meets the criteria above, then maybe you’ve found the right partner.

 

 

Apples and Oranges: The Problem with Comparing Collection Percentages

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In completing over 500 responses to RFPs over the past 10 years, Digitech has encountered the requirement of a collection percentage guarantee multiple times. The municipality’s goal in including this requirement, we suspect, is to identify the agency with the higher collection percentage because that agency will collect more money. While intuitively this may seem inevitable, in reality and where medical billing is concerned, it is not.

Experience has shown us that collection rates for ambulance transports are dependent on several factors: the payer mix and demographics of the area, the speed of claims processing, the agency’s rates, treat-no-transport billing or not, and a number of other inputs that are variable across different types of agencies and different geographic locations. What applies to one emergency transport provider may not apply to the next. Even with reasonably accurate carrier mix data, using collection percentages as a means of comparing billing companies can be misleading. Comparing one service’s collection rate to another’s is often a futile attempt to make the apple taste like the orange.

Given the relationship between actual collections and collection percentages, a collection percentage guarantee is often not advantageous to the provider agency. Think about it: Would you prefer a vendor that collects 100% of a $400 charge or 50% of a $1000 charge? Increasing collections often means suggesting that you bill higher ambulance fees that will generate more revenue and, in the process, lower collection percentages.

On average, Digitech collects approximately 99% of the Medicare and Medicaid allowed amounts, between 80% and 93% of insurance, and anywhere from 1% to 8% of private pay. The overall collection percentage depends on the client’s payer mix. For instance, if all claims were Medicare claims, Digitech’s overall collection percentage would be 99%. If the payer mix is comprised completely of private pay claims, our collection percentage would be 8% or below. These are obviously extreme examples, but they illustrate the impact of carrier mix on overall collection percentage.

So if collection percentage analysis is not the best way to compare vendors, what is the alternative? We recommend looking at collections per transport (CPT) because it is generally a clearer measure of collections as it removes variance due to volume. This makes it easier to compare vendors’ performance. Ask the billing companies you’re considering for examples of where they have taken over from other companies and compare CPT. Then call those entities and ask specific questions.

Another way is to look at the technology that each prospective billing company is using and dig into its capabilities. Superior technology is the most significant determinant of success in ambulance billing. The best companies will have mature, well-conceived, customizable software that is specifically designed for ambulance billing.

Finally, references should be at the heart of any evaluation. In many cases, clients have gone from one billing company to another. Ask the clients about the circumstances under which they left their previous vendor. Who collected more? Who responded better? How did their implementations compare? Whose reporting was better? Answers to these questions paint a much more complete picture of prospective companies than collection percentages will.

Collection Improvement Examples

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Digitech has increased revenue recovery for our clients every time we have been contracted. Click on “Before” and “Digitech Year 1” to see how much.