Expert EMS Billing

Checking the Numbers: How Federal and State Regulatory Changes Cause Subtle Shifts in EMS Reimbursement

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When you glance at your smartwatch at the end of a shift, the numbers often look fine. Heart rate steady, steps hit, oxygen levels normal. The real story is in the trends. A resting heart rate that inches upward week after week or a sleep score that keeps sliding may not set off alarms right away, but they are signals worth paying attention to before they turn into larger problems.

The same is true for the One Big Beautiful Bill Act (OBBBA) and recent Medicaid changes. They’re not collapsing EMS budgets overnight, despite what the loudest headlines claim. Coverage and reimbursement patterns are shifting gradually, and the effects vary from state to state and community to community. For EMS leaders, the challenge is to keep an eye on those signals, track how they develop, and prepare for the direction they point to over time.

History Shows the Pace

Digitech believes that looking at historic changes in healthcare coverage offers a clearer picture of what OBBBA’s impact might actually look like. Two examples stand out: the Medicaid unwinding process after COVID when states resumed normal eligibility requirements, and the enhanced subsidies that made Affordable Care Act (ACA) Marketplace plans more affordable. These show that changes are likely to occur relatively slowly, can shift direction over time, and impact states and communities in very different ways.

Medicaid Unwinding: A Patchy Drop in Coverage

Medicaid “unwinding” is the term for states returning to normal checks after the COVID-era continuous enrollment provision that let people stay enrolled without reapplying. That provision ended in March 2024, and ten months after that, only about half of those originally covered had been re-enrolled. Nationally, this resulted in a 10% drop in Medicaid enrollees.[1] The decrease, however, was far from even: Texas saw enrollment fall by about 20%, while California’s net enrollment decline was just 5.8%. 

There was a correlation between the size of the drop and whether a state had expanded Medicaid coverage under the Affordable Care Act or not. Non-expanded states tended to be more aggressive in pursuing Medicaid unwinding, but even within those states, the approach varied. According to another Kaiser Family Foundation analysis, a year after unwinding began, 17% of people in non-expansion states were uninsured, compared to just 8% in expansion states.[2] In other words, where you live plays a major role in whether losing Medicaid means getting other coverage or going without coverage entirely.

By 2025, the Gaps Are Clear

By mid-2025, the trend lines are hard to miss. In just two years, Texas lost 29% of its Medicaid-covered population from March 2023 to April 2025. During that same period, California saw only a 7% decrease. For EMS providers, that gap represents how many of your patients show up with coverage and how much of your run volume gets reimbursed.[3]

Major Unknowns

That statewide drop in Medicaid coverage shows up clearly in local EMS billing data. Here’s a snapshot from Digitech’s client agencies[4]: 

Texas – Medicaid

Municipality Type Effective Change
Large metro city -12%
Mid-size city -22%
Mid-size city -27%
Mid-size city -26%
Rapid-growth suburb -19%

Whether it’s a large metro system or a fast-growing suburb, agencies in Texas saw noticeable declines in Medicaid-covered patients between 2023 and 2024.

California – Medicaid

Municipality Type Effective Change
Large city -4%
Large county -2%
Medium county 8%
Mid-size city 5%
Rapid-growth suburb -7%
Mid-sized city 1%
Small town -13%

In California, the results were more mixed based on locality. For this set of agencies, the combined total Medicaid transports were down 4.5%. 

A small percentage of people who lost Medicaid nationwide did manage to get other coverage. About 4% obtained employer-sponsored insurance, 2% through the ACA Marketplace, and another 2% through Medicare[2].

Even so, Medicaid unwinding meant fewer patients with Medicaid in nearly every state, which put downward pressure on reimbursements for EMS agencies (and all healthcare providers). As the Texas-California comparison shows, the size of that drop, and the associated budget impact that follows, depends heavily on where your agency operates.

Enhanced Subsidies: Another Force in Play

At the same time Medicaid enrollment was dropping, another federal policy had a counterbalancing impact on the Medicaid reductions. The American Rescue Plan Act of 2021 (ARPA), later extended through the end of 2025 by the Inflation Reduction Act of 2022 (IRA), enhanced subsidies for ACA Marketplace plans, making them more affordable for millions of Americans.  

The result was a substantial increase in Marketplace enrollments. Per Kaiser Family Foundation, enrollment doubled nationally from 2021 to 2025.[5] That growth helped offset some of the Medicaid losses, though the impact varied by state.

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Just as we saw with Medicaid unwinding, the ACA enrollment surge did not hit every state the same way. From 2020 to 2025, Texas saw a huge jump with a 255% increase in Marketplace plan enrollment. California’s enrollment growth was smaller at 29%.[4]

Digitech’s client data again mostly validates this trend. In a sampling of Texas agencies, we saw strong growth rates in the commercially insured population as more residents moved onto ACA plans thanks to the expanded subsidies. 

Texas – Commercial Insurance

Municipality Type Effective Change
Large metro city 14%
Mid-size city 16%
Mid-size city 16%
Mid-size city 19%
Rapid-growth suburb 0%

California did not see the same uplift in insurance coverage per Digitech’s agency-level data.

California – Commercial Insurance

Municipality Type Effective Change
Large city 5%
Large county -2%
Medium county -5%
Mid-size city -6%
Rapid-growth suburb -9%
Mid-sized city -8%
Small town -1%

Why was this the case?  California had been aggressive in enrolling people within their state exchange, Covered California, prior to COVID and individuals who do not have healthcare coverage throughout the year are subject to a penalty on their tax return. The Texas gains for EMS agencies were strong, but not as much as the overall healthcare numbers. Digitech believes this is primarily due to the fact that EMS services skew toward the elderly and underinsured. That means macro changes in Commercial insurance coverage have a muted impact on EMS providers. 

Enhanced subsidies are a good example of a federal policy change that took years to roll out and gradually but steadily increased the number of people with coverage. Additionally, it highlights just how differently the same policy can play out from state to state and locality to locality.

What This Means for Your Agency

Federal and state policy changes have an impact on the number of insured patients in your community, but the effects usually play out over years, not months. Multiple initiatives, sometimes moving in opposite directions, make it difficult to isolate immediate impacts. 

OBBBA’s tighter Medicaid rules will push some off the program, mostly to the uninsured category. Because those changes are phased in over several years, the impact will be gradual and different in every state and every municipality. Meanwhile, the ACA subsidies are currently slated to lapse unless Congress takes action. If that occurs, enrollment in the marketplace exchanges is likely to drift downward, with more patients falling into the uninsured bucket. 

It will take a decade for Medicaid cuts under OBBBA to fully take effect, with the steepest reductions coming in years 5-10. Immediately after the bill passed, some of the lawmakers who supported it were already exploring ways to soften the impact of those cuts. And over the next nine years, political shifts are inevitable, making it nearly impossible to predict the exact long-term outcome. 

For now, Digitech expects EMS agencies to experience a gradual decline in reimbursements over the next few years related to recent federal legislative action/inaction. It won’t feel like a sudden budget crisis, but the trend is there and worth monitoring. The key is to treat these shifts the way you’d treat a patient’s vitals or your own smartwatch readout. Day to day, everything may look steady, yet the numbers may drift in ways that matter down the road. If you track them early and plan for the direction they’re heading, you’ll stay in control. If you assume stability, you risk being caught off guard by shifts that could affect staffing, equipment, or service levels. 

[1] Source: Kaiser Family Foundation. Three Questions About Medicaid Unwinding: What We Know and What to Expect by Robin Rudowitz, Jennifer Tolbert, and Larry Levitt. February 28, 2024 

[2] Source: A state-by-state comparison can be found in this analysis: Kaiser Family Foundation. KFF Survey of Medicaid Unwinding by Lunna Lopes, Grace Sparks, Marley Presiado, Jennifer Tolbert, Robin Rudowitz, Amaya Diana, and Ashley Kirzinger. April 12, 2024

[3] Source: Kaiser Family Foundation. Medicaid Enrollment and Unwinding Tracker. July 28, 2025 

[4] Data for both States represents more than 100,000 transports for agencies where comparable Digitech data existed for both 2023 and 2024. The Effective Change normalizes for changes in transport volume occurring at each agency.

[5] Source: Kaiser Family Foundation. Enrollment Growth in the ACA Marketplaces by Jared Ortaliza, Justin Lo, and Cynthia Cox. Apr 02, 2025

Inside FRI 2025: Innovation, Trends, and the Road Ahead

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At FRI in Orlando, our team set out to capture the conversations happening on the floor. Beyond the booths and sessions, we wanted to hear directly from Fire Service & EMS leaders about what’s shaping the future of the industry.

We asked them four critical questions:

  1. What are your priorities in the coming year?
  2. What new clinical innovations are your agencies deploying?
  3. How are you navigating this tumultuous year as it relates to funding and reimbursement?
  4. What gives you hope for the future?

Their answers provide a candid look at the state of EMS today — and where it’s headed next.

Watch the highlights in our Roving Reporter video below. ⬇️

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.

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

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.

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.

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.