Upcoming Challenges in EMS Management

At the ESO Wave conference, several speakers highlighted the coming changes in EMS reimbursement requirements. Although this is not news, it is worth reviewing because these measures are coming, whether we like them or not, and the EMS industry as a whole is not ready for these changes. Historically, EMS has been reimbursed as a transport service: A specific rate is set based on the complexity of treatment provided, and the EMS provider is paid based on miles driven (mostly), with potentially some additional charges for specific procedures performed or medications given. As the costs of providing EMS service have risen, this structure is increasingly not sustainable. Furthermore, the trend in the larger scope of healthcare has been moving away from fee-for-service (where healthcare providers are paid based on services rendered, such as starting an IV, providing a treatment, or in our case, transporting a patient) and towards quality-based reimbursement. In a fee-for-service model, the provider negotiates a price point for each service based on the costs involved in providing that service along with a profit margin. Even in the case of a non-profit EMS agency, such as mine, a profit margin is necessary to cover the costs of improving stations, buying new ambulances, and of course, providing 911 service to those that can’t afford or don’t pay.

A more progressive approach to paying healthcare providers sets a flat fee for each patient or case. If the services rendered exceed this fee, the healthcare provider loses money; if they can cut costs, they will make a profit on that patient. By improving incentives, this approach motivates healthcare providers to cut costs. This has to be tied with quality measures; quality-based reimbursement can be applied to this per-capita payment model or to a fee-for-service model by applying discounts (or bonuses) to healthcare payments based on the quality of care provided. Under this scheme, an EMS provider may receive a 5% bonus if they can do a 12-lead EKG in more than 75% of all cases of chest pain, for instance1.

Quality Measures in EMS

The first key challenge EMS will have is demonstrating that they deserve payment based on quality outcomes, not just demonstrating a service was provided. In order to justify higher payments, EMS providers should demonstrate they deserve this. Of course, the best measure would be overall patient outcomes. However, this is hard to measure and near impossible to show a difference in (with the exception of expensive, carefully constructed clinical trials). Instead, EMS  agencies will be required to report quality metrics in order to receive payments, and the amount of payment will depend on excellent performance in these metrics.

EMS as an industry will need to overcome several hurdles in order to prepare for this coming change:

  • Documentation: These metrics will be measured automatically using data reporting from patient care documentation. In the case of the proposed pediatric seizure measure2, writing the blood sugar in the narrative will not be adequate. It will have to be recorded in the appropriate field in the chart. EMS agencies will have to improve documentation quality in order to avoid skewing these quality metrics negatively.
  • Education: Providing quality care requires education. Unfortunately, many EMS personnel have not kept up-to-date with the current educational standards and EMS organizations will have to provide additional training to help them understand what current quality standards are expecting.
  • Apathy: EMS personnel run the gamut of motivations. Many are exceptionally interested in helping their community and excel at providing great care. Sadly, many get apathetic and complacent; for them, it’s good enough to take the patient to the hospital. That will not meet clinical quality of care standards. Sadly, this apathetic attitude is commonplace in large urban fire-based EMS systems where the ambulance is seen as a drudgery on the way to a real firefighting job.
  • Clinical Performance: ESO shared some baseline performance numbers of a few measures, aggregated from several million patient contacts across EMS agencies nationwide. They weren’t great. We have a long way to go to provide quality care on a national basis.

EMS agencies can begin tracking some of these performance numbers now, and looking for ways to improve them. The EMS Compass project is working to define some industry-standard measures of quality, and the American Heart Association’s Mission: Lifeline recognition is a way that EMS providers can be recognized for their quality of care right now, as well as compare themselves to national benchmarks.

True Cost Accounting

The other challenge coming for EMS agencies is being able to demonstrate true cost accounting. CMS will require some form of demonstrating that the charges we are seeking to be reimbursed for are based on a real cost structure and not pseudo-made-up numbers. Cost accounting requires an in-depth knowledge of the labor and supplies used in providing patient care as well as how fixed costs (such as stations, ambulances, and administrative staff) are broken down between different patient care episodes. Not only does this rely on good record-keeping and a deeper understanding of EMS operations, it also requires accounting know-how that exceeds that of most EMS system managers. Developing this knowledge and expertise within EMS organizations will be essential to meet the expectation that we bill fairly.

What Happens If We Come Short?

Quality measurement and accounting requirements are coming. A few predictions:

  • EMS providers that miss the mark will see reimbursement income will decline, and as a result, will be forced to shrink operations.
  • Tax-payer supported EMS services, including fire departments, will face external political pressure to improve operations, leading to leadership changes or service model changes.
  • Non-subsidized EMS services, including some of the larger for-profit entities, will struggle financially (anecdotally, quality-driven performance has been largely absent from these organizations in the past, so they may have more of a challenge to adapt). They may require taxpayer subsidies where there were none.
  • In some cases, municipal EMS services may be privatized, with local governments contracting with non-profit or for-profit EMS providers instead of providing service themselves. Reforming the culture of large, urban, fire-based EMS systems may prove impossible.
  • Hospitals are already used to these changes, and hospital-based EMS providers may have an advantage in meeting quality and accounting benchmarks.