Ambulance company to cut some rides in Southern California, citing reduced Medicaid

For 23 years, California’s private ambulance industry went without an increase in the base rate the state pays it to transport Medicaid enrollees. Earlier in the year, it asked the state legislature to more than triple the rate from about $110 to $350 per ride. The request fell on deaf ears.

In September, American Medical Response, the largest U.S. provider of ambulance services, announced it had “made the difficult decision” to end any emergency transport in Los Angeles County and blamed the state for having one of the lowest Medicaid reimbursement rates in the country. “What’s more,” said the company, which was sold to private equity firm KKR in 2017 for $2.4 billion, “we are not subsidized by taxpayer funds like public agencies, and about 80% of our patients pay nothing or less for our services. does not give “

The company, which also cited higher operating costs, said its non-emergency division in the area was on track to lose $3.5 million in 2022.

The California Department of Health Care Services, which administers the state’s Medicaid program for low-income people known as Medi-Cal, has not contested that the base rate has not increased since 1999, but said reimbursement has increased through add-ons to cover supplemental costs and emergency travel. payment

In its initial announcement, AMR only mentioned the phaseout of non-emergency services in LA County. However, the company told KHN it will stop serving five hospitals in Orange County in addition to the seven hospitals in LA County.

Jason Sorick, vice president of government affairs at KKR-owned Global Medical Response, which is now AMR’s parent company, said AMR will exit within the next six months and transfer as many of its vehicles and 170 crew members as possible to its core emergency services. .

AMR’s withdrawal equates to the loss of 28,000 non-emergency transports a year and could create a crisis for hospitals that contract with the company. L.A. County said it does not track the total number of non-emergency rides provided by ambulances in the county, while Orange County was not immediately able to share its figure.

Although ambulances are typically associated with 911 calls, many are used to transport frail or frail patients between health care facilities. A patient may need to go to a rehabilitation facility after hip surgery, or someone who has attempted suicide may need to be transferred from the emergency room to a psychiatric facility. This type of transfer, known as interfacility transport, enables hospitals to free up beds and maintain patient access.

There is no consensus on what the effects of withdrawal of AMR will be. The state told KHN it will review and address access issues “on a targeted basis” if it becomes aware of any. Patient advocates say it’s too early to judge the impact on patients, especially those covered by Medi-Cal. The California Ambulance Association has expressed concern that agencies are already stretched thin by staffing and vehicle shortages.

Although the two counties and the insurers that serve their Medi-Cal populations did not express immediate concern about AMR’s decision, some hospitals may have trouble coping with the loss.

“Closing these services will undoubtedly affect hospitals’ ability to efficiently manage” the flow of patients from arrival to discharge, said Adam Blackstone, senior vice president of communications for the Hospital Association of Southern California.

AMR said its withdrawal would primarily affect Providence, a Catholic health system that operates in several states, including California. It did not respond to requests for comment.

AMR now also attributes its exit to avoiding labor disputes. Sorrick said that because of Medi-Cal rates, AMR could not staff both emergency and non-emergency ambulances and raise wages for unionized emergency workers who were threatening to strike. So it closed its low-priority non-emergency department, which was not unionized. It plans to use the savings to raise wages for emergency workers.

Michael Diaz, an EMT and president of the International Association of EMTs and Paramedics Local 77, which represents 350 EMTs and paramedics for AMR emergency services in L.A. County, confirmed that AMR’s announcement comes before the union plans to march to protest higher wages. The day came. .

Diaz, whose national union joined the industry in lobbying the California Legislature for higher rates, said AMR’s announcement could also be politically motivated. “They are sending a message,” he said.

So far, it’s unclear whether elected officials have noticed the recall. Leaders of the Legislative Budget Committee declined to comment or did not respond to inquiries.

According to data from the Department of Health Care Services, Medi-Cal spending on all medical transportation services in fiscal year 2021-22 was about $975 million.

The department said Medi-Cal’s insurers are ultimately responsible for maintaining an adequate network of medical transportation providers and noted that insurers are allowed to pay above the base rate. The ambulance industry said it was unusual for insurers to overpay.

Jimmy Pearson, president of the California Ambulance Association, said other ambulance companies usually get a kick out of the market. But he warned that competitors won’t be able to cover all of AMR’s non-emergency ambulance rides this time, given unprecedented labor and supply shortages — including a two-year wait for new ambulances — and rising Medi-Cal enrollment and inflation. A recent national survey found that EMTs turn out at a rate of 36% annually.

“How do you find 170 workers in a labor shortage?” Pearson asked. “How do you find this ambulance?”

Ambulance companies say recruiting and retention have been hurt by low wages, burnout, and the lingering effects of EMT school closures during the pandemic — and low Medi-Cal reimbursement makes it difficult to pay EMTs competitively.

Several other agencies in the state have already stopped or scaled back services, Pearson added. In 2016, AMR closed emergency and emergency services in Tulare County, an area in the Mid Valley with the largest share of Medi-Cal residents.

Sorrick said AMR believes that not enough companies provide emergency transportation to absorb the volume.

Chad Drutten, president of the Los Angeles County Ambulance Association, said the county has about 1,200 licensed private ambulances operated by about 35 companies, most of which are small to medium-sized and focus on non-emergency transport. A few major companies cover emergency calls, including AMR.

Melissa Harris, who owns Ambuserve Ambulance Service in L.A. County, said she plans to compete for a smaller portion of AMR’s contract, focusing on less Medi-Cal patients. Harris said he loses money on every Medi-Cal-covered transport and can’t easily buy and staff a new ambulance. If he wins a contract, he will likely have to “trade” his existing contracts to those that serve the highest share of Medi-Cal patients.

The consequences will hit low-quality patients the hardest, Harris said.

This story was produced by KHN, which publishes California Healthline, the editorially independent service of the California Health Care Foundation.

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