By Lyle Moran
The Lowell Sun
LOWELL, Mass. — Ambulance companies that are locked in a tussle with state’s largest health insurer over how the companies should be paid say that jobs will be lost and taxpayers could be the ones on the hook if legislation to solve the dispute does not pass.
Gov. Deval Patrick was the latest player to enter the conflict, blocking a proposal in a spending bill that would have required insurers to send unnegotiated payments for ambulance services directly to the companies.
“I am concerned about the impact of this section on health care costs because it lacks guidelines governing reasonable charges for ambulance services,” Patrick wrote in his amendment letter. “Such guidelines are important to my administration’s commitment to health care costs and premiums.”
The amendment Patrick wanted changed was filed in the spending bill because Blue Cross Blue Shield of Massachusetts threatened to start sending payments directly to patients and telling them to send payments to the ambulance companies.
David Daly, president of PrideSTAR in Lowell, said that if Blue Cross follows through, ambulance companies will struggle to recoup payments from patients.
“The success rate trying to collect payments is dismal,” he said. “The intent was for us to not incur more administrative and legal costs by chasing down money that is owed to us.”
Brian Connors, president of the Massachusetts Ambulance Association, estimated that the companies would recover 50 percent or less of the fees they are owed. He said this would lead ambulance service companies to seek subsidies from the communities they serve to make up for the lost revenue.
Companies used to receive these subsidies from municipalities in the past, but in recent years they have paid municipalities to contract with them. He said municipalities will need to raise taxes or lay off workers to afford the emergency services.
“If Blue Cross implements this threat, it will cost a fortune to the taxpayer,” Connors said.
Blue Cross Blue Shield of Massachusetts spokesman Jay McQuaide said the provision in the supplementary bill would cost the company $60 million, which would be passed on to its members, including businesses that provide insurance coverage for employees. He said it would cost insurers $100 million statewide.
He also said the threat of sending payments to patients normally gives ambulance companies incentive to join their network and negotiate a reasonable rate. Blue Cross will start sending payments to patients Nov. 15, McQuaide said.
The insurer has cited a nonemergency ambulance trip from Lowell General Hospital to Tufts Medical Center in Boston where an ambulance company charged $4,415 as an example of the exorbitant rates some charge. McQuaide said there is a “troublesome” trend of out-of-network companies charging increasingly high rates.
Ambulance companies argue that the legislation has nothing to do with cost and say Blue Cross cherry-picked one case from 1.2 million annual ambulance trips in the state to make their case.
Patrick has proposed that payments to an ambulance provider “shall be equal to the lower of the insurer’s usual and customary charge” or three times the current rate established by the Centers for Medicare and Medicaid Services.
“We think the governor’s action is a step in the right direction,” McQuaide of Blue Cross said.
The Massachusetts Association of Health Plans, which represents insurers in the state but not Blue Cross, is pleased with the language Patrick proposed. Spokesman Eric Linzer said it ensures that patients are not caught in the middle and that rates are not exorbitant.
“The previous proposal of this language ran counter to efforts to control costs,” Linzer said.
Connors said letting the insurance company set rates would result in ambulance companies being unable to meet their costs. The ambulance industry, as well as fire chiefs, is hoping the Patrick administration will consent to their proposal before the end of the year, Connors said.
“This is the hidden bomb in the pre-hospital care environment,” he said.
If Blue Cross is allowed to send payments to patients, other insurers could follow suit, Connors said.
Daly of PrideSTAR said the likelihood of Blue Cross reaching agreements with ambulance companies that have not joined its network is low.
“I think they think we are below them when they are negotiating with ambulance companies,” he said.
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