Item B: Ambulance Fund Stabilization

Home Browse Search

ATTACHMENT 1 County Fire Defense Board. The ATTF also reviewed a high-level presentation on projected costs and estimated rate for the regional service. In planning for formation of, or annexation to, a special district, a feasibility study highlighting proposed district legal boundaries, changes to the Metro Plan, sustainable tax revenue requirement, and taxing issues such as uncollectible percent and compression, both a reduction to gross tax revenue would need to be completed. Because implementation of district options will take a considerable period of time, we recommend the immediate formation of an intergovernmental staff team to fast track the study of the feasibility of implementing this solution. BACKGROUND Throughout our region, the majority of patients transported are covered by Medicare. Before the implementation of the Ambulance Fee Schedule on April 1, 2002, ambulance suppliers received payment from Medicare on a “Reasonable Charge Basis.” Medicare would pay 80 percent of the allowable amount and the remaining balance was the responsibility of the patient. This allowed transport providers broad flexibility in setting rates and assured recovery of costs. The Balanced Budget Act (BBA) of 1997 added a new section 1834(1) to the Social Security Act, which mandated the implementation of a national fee schedule. This section also required ambulance providers and suppliers to accept the Medicare allowed charge, which includes the patient’s co-payment, as payment in full and transport agencies were no longer able to bill the patient or another insurance provider for the balance of the reasonable charge. The new fee schedule took effect in 2002 and was phased in over a five-year period, with full implementation on January 1, 2006. Year one (4/1/02-12/31/02) provided a blending of 20 percent fee schedule and 80 percent reasonable charge. The reasonable charge portion was then reduced by 20 percent in each of the four subsequent years, so that as of 2006 only the fee schedule amount was payable. Since 2006, jurisdictions have received small, incremental increases in reimbursement. However, current reimbursement levels remain well below the cost of the service. Put simply, the national fee schedule, which covers 60 to 70 percent of all transports, does not allow ambulance providers to recover the cost of providing the service. Instead, where we once had the ability to collect the full reasonable charge (which has risen over the years from $535 to $1,600 per transport), we are now reimbursed between $200 and $400, depending on the type of call. Medicaid, the state of Oregon’s health insurance program, reimburses similarly. While Medicare and Medicaid reimbursement reductions are the primary reason that emergency medical transport in our region has become a revenue-negative enterprise, two national trends are also contributing to the problem. One is the growing number of individuals eligible for Medicare. The other is the economy. Ambulance transport providers in our region do not refuse transport because of inability to pay and are being forced to write off more and more bills as uncollectible. May 24, 2012 Page 3 of 7