EMS World

NOV 2018

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PROMOTING INNOVATION IN EMS 12 NOVEMBER 2018 | EMSWORLD.com Payment for the response vs. the trans- port—Under this model the ambulance is paid for the response whether or not the patient is transported. On the surface it may seem the same as the A0998 payment for nontransport, except the payment is the same whether the patient is transported or not. Under the A0998 model the ambulance is paid $600 for a nontransport and $800 for a transport. In the response-payment model, the payment is the same. This means Anytown would have to determine the right payment for the response so it doesn't lose money under the new model, especially considering the program may need to account for the additional costs of training providers and/or implementing new technologies to facilitate triage decisions. There may also be addi- tional costs for online medical direction (if that is part of the triage process) and medi- cal oversight and QA due to the added com- plexity of patient navigation. Let's look at the numbers. Using this analysis, if Amalgamated General Insurance (AGI) offered at least $900 per response, Anytown EMS would generate the same revenue regardless whether the patient was transported. But as we explained in a previous column, Anytown should not be the one to propose the price. It's possible AGI may be willing to pay more than $900 because it's looking at potentially reducing downstream ED claim payments. Population-based payment—This model is a little more complicated, but we can use all the data generated about the cost of ser- vice delivery and payment models to help calculate payments under it. A population- based payment is generally a fixed amount per covered member of the health insurer and is typically paid per month. The pro- vider does not bill for each encounter. You may have heard this model referred to as a capitated or per member per month fee. Let's use the AGI example above, with the additional information that AGI has 5,000 insured members in Anytown's jurisdic- tion. AGI paid $420,000 for ambulance transports in 2017 for the 5,000-member population. That's an annual amount of $84 per member per year. Dividing that amount by 12 months is $7 per member per month. Each month AGI would pay Anytown $7 per insured member who resides in Anytown, or $35,000. The actual payment to Anytown EMS may change as the number of insured members changes, but the $7 is fixed. If an AGI member uses Anytown's service, no bill is generated, since the capitated amount has already been paid, although it's prob- able that Anytown would provide a monthly report to Amalgamated showing the num- ber of member encounters it had. Since it's generally difficult to predict actual ambulance utilization, most capi- tated payment arrangements include a "risk corridor" to account for significant fluctua- tions in service utilization. This amount is typically 5%. This means that if the average transport volume for Amalgamated mem- bers is 29 calls per month, the call volume per month could fluctuate between 27 and 31. If the call volume trends higher or lower than that, the monthly payments could be adjusted. If AGI desired services from Anytown that were more than just ambulance transport (MIH services, etc.), Anytown could add its costs for providing those services to the PMPM amount. For example, if Anytown estimated the MIH costs at $100,000 per year, plus a 5% risk corridor and another 5% for retained earnings, annually the charge to AGI for the MIH innovation would be $110,250, or $1.84 PMPM (110,250 ÷ 5,000 ÷ 12), for a total PMPM for ambulance and MIH services of $8.84. Response Fee Payer Amalgamated General Insurance 2017 total amount paid $280,000 Transports billed 350 Average payment per transport $800 Anytown EMS transport ratio 75% Amalgamated responses 466 (133% of the transports) Payment needed per response $601 ($280,000 ÷ 466 responses)

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