Ambulance companies are suffering major financial losses in the coronavirus pandemic because of an interaction between state government regulations and Medicare payment policy.
In an effort to combat hospital overcrowding during the coronavirus pandemic, states have required ambulances to treat patients at home if possible. Yet Medicare only reimburses ambulances when they transport a patient to a hospital, and most private insurers follow Medicare’s lead. This Catch-22 has cut deeply into ambulance companies’ revenues during the pandemic.
“Treatment at home has cost us $700,000 since the pandemic began,” said Hanan Cohen, director of corporate development at Empress EMS, an ambulance company that serves parts of New York City.
In recent years, healthcare payers have pushed for more treatment of patients at home by ambulance paramedics, as such services cost less than emergency room visits. Normally, the number of patients treated at home instead of being transported to the hospital is small. That number has exploded during the pandemic due to state regulations.
“In one month period [during the pandemic], we had over 1,200 treat-at-home patients,” said Cohen. “During that same period in 2019, it was only 149.”
The number of treat-at-home patients has also risen because more people are reluctant to go to the hospital for fear of contracting the virus.
“Since the pandemic, we have seen an 18% increase in people refusing to go to the hospital after being advised by our paramedics to do,” said Asbel Montes, a senior vice president at Acadian Ambulance Service based in Louisiana. “We have seen a substantial decrease in revenue while our costs have increased by 17.4%.”
Ambulance companies are also feeling the financial pinch in other ways.
“If we are not getting calls, then we are not getting reimbursed,” said Rob Lawrence, executive director of the California Ambulance Association. “Our members are seeing a 25%-30% reduction in call volume.” He said that fewer people are calling for an ambulance for fear of going to the hospital and that stay-at-home orders have greatly reduced the number of traffic collisions. Montes said that Acadia had experienced a 27% drop in call volume.
The Centers for Medicare and Medicaid maintains that it does not have the discretion to authorize payments for ambulance services provided at home and that Congress would have to change the law. Yet, some experts say that is wrong.
“We have always said that CMS could waive or suspend the requirement to transport the patient to the hospital,” said an attorney who spoke on condition of anonymity because she works closely with CMS. She pointed to section 1834 of the Social Security Act, which establishes payment for ambulance services under Medicare. That section does not state that ambulances must transport a patient to receive reimbursement.
She also pointed to a pilot program CMS announced in 2019 that would pay ambulance companies for at-home treatment. The program was supposed to begin in spring 2020 but was delayed until the fall because of the pandemic.
“CMS had the authority to waive the transport requirement in order to move that program forward,” she said. “It’s not clear to us why in that instance they would have the authority, but then they wouldn’t have the authority during a public health emergency.”
