A proposal adopted in early 2015 to draw down additional federal Medicaid match revenue to support increased ambulance reimbursements is proving to be a bigger challenge to implement than originally believed and is bringing out potential unintended consequences that could be devastating to communities with publicly-operated ambulance services.
House Bill 4447 became Public Act 104 in July of 2015. This legislation, among numerous other things, provided the Department of Health and Human Services with authority to develop a Quality Assurance Assessment Program (QAAP) on ambulance services as a financing mechanism to draw down additional Medicaid match from the federal government. This same financing scheme has been used within other health care industries as a way to improve reimbursement rates for providers without straining the state’s budget.
As originally proposed, this mechanism would have imposed a state tax on ambulance run revenues that the state would have used to improve reimbursement rates for Medicaid-eligible ambulance runs. In gathering the data and developing the formula needed to arrive at an appropriate tax rate, however, the Department interpreted federal guidelines as requiring that ambulance service providers needed to submit all local government revenues related to providing ambulance services, not simply revenues accrued from ambulance runs. With this interpretation in place, publicly-operated ambulance providers stand to bear a much larger burden of the proposed QAAP tax than the private ambulance providers who do not provide additional EMS or fire services.
Additionally, the complexity of dividing out costs related solely to ambulance services in communities with multiple tax revenues supporting their fire and EMS services and/or personnel serving multiple functions, including ambulance service, and applying a tax on top of those existing taxes is causing alarm bells to sound for many municipalities that operate their own ambulance services.
The League is participating in meetings with the Department, fire chiefs and other municipal fire personnel, and state legislators in an attempt to get a better understanding of the potential that this program could cause a negative financial impact on communities. While increased Medicaid reimbursement rates are a laudable goal, they cannot come on the backs of municipalities. Enough concerns have been raised that warrant this concept be re-evaluated before being implemented.
If your community provides municipal ambulance service, please contact our office to discuss this issue and the potential impact on your community.
Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and [email protected].