The EMS industry is still at the beginning of an evolutionary journey in the dynamic between ambulance providers and the sources of payment. In the long run, the impact of mobile integrated health and the push toward value based payments are still unknown in the context of traditional 911 services. With two years of health care reform behind us, we are seeing some interesting trends that the industry is slowly adjusting to.
The promise of a greatly expanded and insured population has not evolved quite the way most of us thought it would. The National and State statistics show that more people have health insurance than any time before. On the surface this would appear to create windfall opportunities for 911 service providers, but the data show that the people using 911 services, who have Commercial insurance coverage, have stayed flat as a percentage of total transports and in some cases have decreased slightly. Why are we seeing this counterintuitive trend?
There are really two answers. The first reveals itself predominantly in the states that decided to expand Medicaid. In those states, transports have increased, but as a percentage of transports, there is almost 1-for-1 shift from the uninsured to Medicaid. Since Medicaid patients have no out-of-pocket responsibility, their likeliness to utilize ambulance services is greater. This has resulted in a disproportionate growth in calls from the Medicaid insured. The fact that Medicaid pays more than someone without insurance is a financial benefit, but not as big as if that growth was coming from thecommercially insured. This growth in Medicaid coverage is also driving the expanded focus of most states on supplemental Medicaid funding for the municipal based provider.
High Deductible Insurance Plans
The second phenomenon took a little bit longer for the industry to figure out and is not purely driven by the ACA. In order for employers and insurance providers to keep premiums down there has been a seismic shift to high-deductible insurance plans, known as HDPs, which now represent more than half of all commercial insurance products. The significant majority of the health tiers selected by individuals in the ACA State insurance exchanges are HDPs. Why does this matter? On the surface, more people have commercial insurance coverage; however, the prevalence of HDPs is changing individual behaviors.
Since HDPs result in large out of pocket responsibility for individuals, they have been avoiding expensive medical services. Even for those people who use the expensive services, the ability for providers to collect those funds is significantly more challenging. The impact on revenues for agencies is most pronounced where they have an in-district billing policy and do not balance bill their resident patients. Those agencies are seeing declines in revenues and many are rethinking long-standing policies that were established before the health insurance companies expected their members to pay a substantial portion of their costs.
So where is the reimbursement climate heading? Nobody knows for certain, but we know that Medicaid coverage and high deductible plans will continue to be key factors to examine. As a team, we are paying very close attention to these and other factors, and one thing we know with certainty: the reimbursement climate will certainly look much different in three to five years than it does today.
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