Policy shift will affect emergency responders' bottom lines

Posted
Saturday December 25, 2010

BRATTLEBORO -- The already razor-thin profit margin at Rescue Inc. is going to get a little thinner next year.

Starting Jan. 1, Rescue, Inc. and every other ambulance company in the country, will receive less money from the federal government for the Medicare and Medicaid patients they transport.

Starting the first of the year, ambulance companies will have to log their mileage to the 10th of a mile.

Companies are currently allowed to round up, but in an effort to trim costs at the federal level, the government will now be asking the drivers to keep a more accurate accounting of the time spent on the road.

Mark Considine, who is chief of operations at Rescue, Inc., said the change will mean a hit of tens of thousands of dollars to the company's bottom line.

"The federal government is trying to trim their expenditures and this is something they are telling us we have to do," Considine said. "It is something we have to accept. Every company out there is going to see a blow to their revenue."

While the change might look slight at first glance, Considine said it is one more financial challenge that ambulance companies have to contend with.

The federal government pays $10.41 for each mile for the first 17 miles, and then $6.87 per mile after that.

On top of rising fuel prices, insurance spikes for employees and an increase in the cost of disposable medical supplies, he said even a small change like the one that is going into place on Jan. 1 is going to be felt on the company's financial statement.

And he said the company is doing what it can to prevent a significant rate increase for the member towns

"We are trying to be careful. Everyone is having trouble in this economy," Considine said. "We are being very careful not to put too much of a strain on the local economy. We are trying to live on a tight budget while still providing good service."

Jim Finger, president of the Vermont Ambulance Association, said the change in mileage reimbursement comes on top of the already low rate that the federal government provides to ambulance companies for Medicare and Medicaid transport.

Finger said the federal government pays companies between 6 and 17 percent less than what it cost to transport patients.

There has also not been an increase in two years and he said that when the rates were established the government, in a sense, said that at least companies were allowed to round their mileage up to make up some of the difference.

Now that too is being taken way.

"The federal government already does not pay what it costs," said Finger. "It might sound like the right thing to do, to track the mileage accurately, but it means companies are losing more money for every mile they drive. It is not a good situation."

The change is expected to save the federal government between $40 and $80 million a year.

And while that might make an impact on the federal budget, rural ambulance services in Vermont are also going to see the effect on their budgets.

"Companies are already working from the perspective that they are not earning what it cost to deliver patients," said Vermont Department of Health EMS Director Dan Manz. "At the end of the day it all comes off the bottom line."

Howard Weiss-Tisman can be reached at hwtisman@reformer.com or 802-254-2311, ext. 279.


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