THEY’RE CHASING after ambulance money again on Beacon Hill. The House supplemental budget passed last week contains language that would change how out-of-network insurance rates and payments are set for private ambulance services. The provision, sponsored by Representative James Cantwell, a Marshfield Democrat, is now before the Senate. It has come up several times in recent years, and failed. The measure should meet the same fate this time around.
By allowing cities and towns, not insurers, to decide how much an out-of-network ambulance run should cost, the provision would enable private ambulance services to gain at the expense of consumers, and to the detriment of a health care system in Massachusetts that is struggling to contain rising expenses. It would be akin to giving communities the authority to decide how much local doctors can bill for certain procedures. Any rate a city or town established also would apply to municipally owned and operated services, creating an incentive for cities and towns to raise their prices to generate revenue. At the same time, ambulance companies would have little reason to sign up to an insurer’s lower-priced in-network agreement.
Making matters worse, the change would deepen the health care system’s murkiness at a time when it seems everyone is demanding greater transparency — imagine the confusion caused by hundreds of different ambulance rates across the state.
The legislation also would mandate that insurance companies send payments directly to private ambulance companies, as they already do for community-run ambulance services. That change, too, could lead to higher overall health care costs. Many insurance companies mail checks for private out-of-network ambulance rides to members, who, in turn, settle with an ambulance service. The intent is to force ambulance services to become bill collectors, and — insurers hope — spur them to dispense with the aggravating process by negotiating in-network prices. The tactic has, in fact, worked in some cases. Taking that motivational tool away from insurers would be a mistake.
In 2011, then-governor Deval Patrick floated a compromise to the billing dispute that sounds just as reasonable today. Patrick’s proposal, which was rejected, called for health insurers to compensate out-of-network services at the same rate they reimbursed in-network providers, or at 300 percent of what Medicare paid, whichever turned out to be less. Backers of the recycled plan tucked into this year’s supplemental budget still balk at that formula, saying Medicare reimbursements aren’t enough to cover the full rate of emergency ambulance trips. They have complained that insurance companies don’t appreciate how much it costs to operate a high quality ambulance service. Even if that were true, it assumes local officials understand the intricacies of providing health care. In this case, insurers are better equipped to balance price with performance.