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.
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