FAYETTEVILLE -- Ambulance service fees are increasing across the board in Washington County because fewer people are paying their bills and Medicare and Medicaid payments are slower to arrive.
Central Emergency Medical Service officials decided July 18 to increase charges 15 percent to avoid a possible cash shortfall of $510,000 in its $12 million budget.
The service is paid for by membership fees from 11 cities and the county, payments for services and grant money.
Collection rates fell to around 55 percent in the first five months of this year, down from 80 percent for the same time in 2017, a reimbursement analysis shows. The analysis includes payments from Medicare, Medicaid, individuals and insurance providers.
The result has created a cash-flow problem, despite an increase in billing. The problem could worsen as more people opt to go without insurance next year, Central Emergency Medical Service Chief Becky Stewart said. The federal government plans next year to drop the requirement that individuals who don't have health insurance pay a penalty.
In Springdale, plans are underway to increase the city's ambulance service charges by a yet to be determined amount by Jan. 1, Fire Chief Mike Irwin said. Springdale is also starting to see a cash-flow decrease, Irwin said. Numbers aren't yet available, he said.
An average of 22 percent of Central Emergency Medical Service's bills from 2010 to 2013 went to people who did not have insurance or had a balance due after their insurance paid part of the bill. That average for the past four years has risen to 29 percent with the sharpest increase in the past year, records show.
About 80 percent of people in that category fail to pay, officials say.
The collection rate for people who pay the bills themselves fell to 15 percent from January through May this year, down from 32 percent for the same time a year ago.
Fire and ambulance service chiefs say they are getting more and more calls for service, but payments aren't keeping up with demand. That lag includes payments from the government.
Stewart said reimbursements for services to people with Medicaid and Medicare are coming in later this year than a year ago. Federal payments arrived about every two weeks last year but are now taking months in some instances, Central EMS Finance Officer Owen McAdoo said.
"Our funding has got to come from somewhere," McAdoo said during an Executive Committee meeting in June.
Medicaid and Medicare were already a problem for ambulance services because the programs don't cover costs of service, said Tom Jenkins, Rogers Fire Department chief and International Fire Chiefs Association president. The association represents firefighters and emergency responders worldwide.
The Rogers Fire Department runs the city's ambulance service, which is funded partly by the city's general fund, Jenkins said. Emergency service agencies nationwide are already inadequately funded and are experiencing cash flow problems, Jenkins said.
On paper, Central EMS's $6 million in revenue is a little above expectations, but budget revenue is the amount billed, not cash received, Assistant Chief Steve Harrison said.
McAdoo said he noticed money was dwindling faster than expected a couple of months ago. Readily accessible cash was at $162,817 as of the end of June, down from a high of about $1.8 million about a year ago, said Glenn Morgan, Central EMS Executive Committee member.
Some decline was expected after Central EMS expanded its coverage area in 2016.
That and area growth have meant more customers and more bills going out, but have not translated into more money coming in, records show. The service completed construction on a station in 2017 to keep up with growth, Stewart said.
Planned expenditures also included $175,000 to buy a new station on Crossover Road and renovations are continuing.
The biggest increase in costs this year is for about $600,000 for 17 additional employees, according to records.
Stewart and McAdoo notified the executive committee in June something was amiss. Last week, the committee agreed to make immediate changes. The fee increase, which includes everything from patient transfers to oxygen administration and stand-by services, is expected to generate about $550,000 this year.
The largest increase in fees is $129 for the highest level of ambulance care, which includes a paramedic. That means, for example, an ambulance going to help someone in cardiac arrest is now $989, up from $860.
The committee also decided to use Station One as collateral to extend a credit line. The building in south Fayetteville was recently appraised for $660,000. Stewart signed documents after the July committee meeting for $528,000 in credit, up from $300,000 last year.
The money is a safeguard that would cover two months of payroll expenses, should something happen, said McAdoo.
Nationwide, ambulance services are struggling with reliable and adequate funding, chiefs said. The problem Central EMS faces is not unique, Jenkins said.
"It's a crisis," he added.
The problems are multipronged, and ambulance services already don't make a lot of money, Jenkins said.
"Ambulance services across Arkansas and nationwide have struggled with decreased reimbursement from Medicare and other insurance companies," said John Gray, president of the Arkansas Ambulance Association in an email. "High deductible plans have helped to contribute to financial difficulties experienced by ambulance services."
The association is working to come up with solutions to improve reimbursement, he said.
Even though Central EMS raised its fees for everyone, Medicaid and Medicare can only be billed for what those programs have agreed to pay, not the actual cost of the services, Stewart said.
Metro on 07/30/2018