Sirens Ablaze In Insurance Fight | Ambulance cos. seek legislative fix in billing disagreement with Blue Cross
It’s a case of unnecessary medical spending, millions of dollars taken out of families’ and employers’ pockets without making anyone healthier.
Or, it’s a case of big, powerful companies squeezing little guys that are already operating in a low-margin, highly regulated business.
The ambulance industry and its relationship with health insurance companies is being scrutinized these days, thanks to a bargaining chip the insurance industry is trying to use to drive down ambulance fees and a legislative move that would eliminate that chip.
The debate began more than a month back, when Blue Cross Blue Shield of Massachusetts announced that when one of its members gets transported by an ambulance company or a municipal ambulance service that isn’t in the Blue Cross network, it would send payment not to the ambulance company but to the patient. By forcing ambulance companies to bill their patients and track down those who don’t pay, the insurer planned to pressure the companies to join its network.
Gorillas vs. Price Gougers
Brian J. Connor, president of the Massachusetts Ambulance Association and president and CEO of Lifeline Ambulance Service in Woburn, said the Blue Cross is using its powerful position as the largest insurer in the state to push companies to accept impossibly low rates.
“Blue Cross is a gorilla and they’re picking on the private providers and the public providers because they know they can get away with it,” he said.
But Blue Cross Blue Shield spokeswoman Tara Murray said the purpose of the move was to foil ambulance companies that sometimes charge three to five times the in-network rate, adding $60 million to the costs that the insurer must pass on to its customers.
“The customers, the communities, the governor, they’re all asking us to do more to address rising health costs,” Murray said. “There’s $60 million of unnecessary spending in the health-care system that we’re hoping we can address.”
Kate C. McEvoy-Zdonczyk, senior director of government and community relations at Fallon Community Health Plan of Worcester, said ambulance providers are increasingly willing to let their contracts with the insurer expire. That could point to higher costs in the future.
“I think the reality is, that number is, if no controls are put in place, probably going to skyrocket,” McEvoy-Zdonczyk said.
Direct Billing
In response to the Blue Cross move, and the possibility that other insurers would follow suit, the Legislature included a measure in a new spending bill that would have required insurers to send medical transportation payments directly to the ambulance companies. But Gov. Deval Patrick sent that portion of the bill back to the Legislature, with proposed changes that would limit how much out-of-network ambulance companies can charge.
So far, insurers seem to like the governor’s language, and ambulance companies seem disappointed, and both are waiting to see what the Legislature will do next.
To James Wood, president of Wood’s Ambulance Service in Gardner, the status quo is already difficult to deal with. Wood said his 70-employee company gets about half its business through contracts with the town of Royalston and the city of Gardner, responding to 911 calls and the like. The other half comes from calls from nursing homes and other medical facilities, some for emergency situations and others for routine medical transportation.
Wood has contracts with four of the largest insurance companies, which, he said, should mean that medical facilities check what insurance their patients have and then call his company to keep their treatment in network. But that doesn’t always happen.
Wood said he’s seen some of his competitors without contracts charge excessive fees. But, then again, he isn’t thrilled with the behavior of the insurers.
“We agree on a rate, and most of the time they beat us up pretty bad trying to get it,” he said.
Part of the problem, Wood said, is that he has to charge private insurers enough to cover a shortfall created by the low rates paid by Medicaid and, to a lesser extent, Medicare. Because of legal restrictions, he said, he can’t refuse to pick anyone up no matter what their insurance situation.
To the insurance companies, though, everyone is suffering from the high costs of health care. Eric Linzer, vice president for the Massachusetts Association of Health Plans, noted that the Legislature passed a bill in July that aimed to offer small businesses relief from high health-care costs and then threw its weight behind the provision requiring direct payments to ambulance companies.
“This runs in the exact opposite direction,” he said.
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