Legislative Pressures

As financial pressures impinge the health care system, the various players sometimes seek legislation to protect their interests.  I have heard of two such situations in Massachusetts, and I offer them for your consideration and your comments.

The first involves emergency ambulance service.  Earlier this year, several of the major insurers in the state stopped reimbursing out-of-network ambulance providers, and instead started to send the checks to patients who used those ambulances. Those ambulance companies now have to try to collect from people for payments, and they are losing hundreds of thousands of dollars.

(This only relates to emergency calls, not routine transfers. For routine transfers, ambulance providers already agreed to be reimbursed at agreed-upon rates with insurers and municipalities.)

I can understand why the insurers want to use lower cost ambulance services, but I have trouble imagining a more cruel thing than approaching a patient or a patient’s family after an emergency situation (which perhaps led to long-lasting disability or death) to collect funds that the insurers have sent to the family.  It is also inherently inefficient and adds costs if the ambulance companies have to try collect funds from hundreds of individual patients rather than the few insurance companies.

Rep. Jim Cantwell of Marshfield has filed a bill to force insurers to pay EMS providers, and it has a cost-control provision that would give ultimate rate-setting power to local selectmen.  The Fire Chiefs Association, Massachusetts Municipal Association and Massachusetts Hospital Association support this bill.  This sounds like one that, in legislative parlance, “ought to pass.”

Then there is a proposal that comes out of the growth of tiered networks, in which insurers charge higher co-pays or otherwise limit coverage to patients who choose higher cost providers.  Well, it turns out that some of those high-cost providers are seeking legislation that would require insurers to include them in the low-cost tier of the network.  The two fields at play are pediatrics and cancer care.  The providers’ argument is that they offer essential services not available at other providers, or that they offer similar services but at higher quality.

Given the current absence of current and publicly available quality and outcome data, it is hard to make a persuasive argument for this exemption from the tiering system.  If I were a legislator, I would want to see the numbers and be assured that the stated services are indeed not available from other lower-cost providers or that they are not the same quality. And, yes, if then persuaded that these are essential and of higher quality and are being allocated away from poorer people because of the pricing regime, legislation might be warranted.  But the burden of proof should lie with the providers requesting such an exemption.  Also, since things change over time, the process for such exemptions should rest with a regulatory agency rather than having specific providers’ names being written into the law.

I welcome your thoughts on both of these matters and wonder, also, if people are seeing similar issues arise in their states.

Paul Levy is the former President and CEO of Beth Israel Deconess Medical Center in Boston. For the past five years he blogged about his experiences in an online journal, Running a Hospital. He now writes as an advocate for patient-centered care, eliminating preventable harm, transparency of clinical outcomes, and front-line driven process improvement at Not Running a Hospital.

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2 replies »

  1. The solution to the ambulance payment problem is the same solution that should be applied to all forms of emergency medicine —

    namely, a fixed national fee schedule, with no deductibles or coinsurance, for any form of medical care that is totally non-discretionary.

    If the fixed fee is set at $1000 for an emergency ride and the care that goes with it, then every insurance company must adopt the fee schedule and pay $1000. Medicare and Medicaid would also pay $1000. A cash customer could not be charged more than $1000.

    No balance billing would be allowed for this kind of ‘desperate exchange.’

    Private companies will find a way to make money at $1000 per ride.

    This is essentially what has happened with Japanese MRI machines. The national fee was set at $98 or some equivalent, and so private companies came along with cheaper machines and cheaper technicians.

    We should discourage all private profits when it comes to involuntary medical care. These are gift relationships that should involve as little exchange of cash as possible.

    I hold with Prof Robert Evans of Canada that user fees are a curse in many parts of medical care.

    Bob Hertz, The Health Care Crusade

  2. Paul, I agree with qualifications. You say it is cruel for an ambulance company to have to reach out to an afflicted family and tell them they need to pay additional money. Sure, but didn’t those ambulance companies make the choice to not accept in network rates? If it was by choice, in order to get higher reimbursement, why on earth would we want to shield them from having to face the cruelty, and dissatisfaction, that results? It isn’t just the insurers who save money with lower cost ambulances, but everyone who pays for insurance. That said, if there is real cost control built in, an all payer approach can work. I would like to know more about how those rates are set, and by whom.

    For tiering, it isn’t just about the fee for service rates or outcomes, but also about practice intensity. My guess is that the insurers see these higher tier docs as wasteful- they use more health care resource to achieve comparable results as tier one docs. That might also explain why the high tier docs believe they are higher quality: they use the latest expensive equipment and drugs. But we have seen too many examples where the bleeding edge does not translate to better outcomes and you are right that the onus is on the provider to prove otherwise.

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