By Kyle Cheney
The Lowell Sun
BOSTON — A drug addict who admitted to police that he had defrauded ambulance companies of thousands of dollars has touched off a renewed lobbying effort for a bill cracking down on an insurance-company practice that ambulance providers say promotes abuse.
Ambulance companies are urging lawmakers to restrict a practice instituted by Blue Cross Blue Shield of Massachusetts last year, and recently mimicked by other insurance companies, in which the carriers pressure ambulance companies outside of their networks to sign contracts that lock in reimbursement rates.
To apply pressure, the insurers send reimbursement checks for ambulance rides to patients, rather than directly to the ambulance companies. The patients are required to then relay those checks to their ambulance provider.
Since Blue Cross adopted the policy, Fallon Community Health Plan and Tufts Health Plan have adopted the practice as well.
Insurers say the policy is intended to combat wildly varying prices charged by out-of-network ambulance companies, particularly at a time when policymakers are intensely focused on bringing down health-care costs. They have also pledged to exempt public ambulance providers from the practice after concerns among regulators and elected officials about impacting taxpayers.
But ambulance companies and fire chiefs have long argued that the insurers’ policies would lead to abuse by patients who would simply pocket the reimbursement checks, knowing that ambulance companies have little recourse — and, in some cases, no infrastructure — to collect them.
Now, ambulance companies think they have anecdotal proof that their fears are real.
Backers of a proposal to force insurers to pay ambulance companies directly released a Chelmsford police report yesterday in which a drug addict apprehended for allegedly driving under the influence acknowledged supporting a prescription addiction by taking ambulance rides to hospitals and cashing the reimbursement checks.
The suspect, a man named Sean, is a member of Blue Cross Blue Shield of Massachusetts HMO plan.
“Sean advised that he makes numerous trips to different hospitals regularly to receive painkiller prescriptions,” a Chelmsford police sergeant wrote in a report filed on Aug. 3 that referred to the suspect by his first name. “Sean indicated that he now gets transported to the hospital by ambulance because the insurance company sends him a check to pay for the ambulance. Sean stated that he just cashes the check and doesn’t pay for the ambulance service. Sean then stated proudly that there is nothing the ambulance company can do about it because (they) have to respond and transport him when he calls because they can’t deny anyone service.”
After further review, the officer ascertained that the suspect owed about $5,000 to Trinity EMS, a Lowell-based ambulance service that also has an office in Chelmsford Center.
A spokeswoman for Blue Cross said the company is “taking action ... and will immediately stop sending checks” to Sean but stopped short of suggesting that the incident is a flaw in its policy.
“It is unfortunate this individual chose to leverage a check intended to pay for ambulance services for other purposes,” spokeswoman Tara Murray said. “We believe this is an isolated incident and are pleased the authorities have uncovered the matter and taken action.”
Kevin Robinson, Marshfield’s fire chief and immediate past president of the Fire Chiefs Association of Massachusetts, said the Chelmsford incident is “clearly not an isolated incident.”
Robinson said municipalities that contract with private ambulance services are getting hit with higher costs because ambulance providers are factoring in the cost of lost reimbursement checks.
Even if “Honest Abe Lincoln” receives a reimbursement check, Robinson said, ambulance companies must still wait longer to receive payments than if they were being paid directly.
“If they send it to anybody else who’s not as honest, they’re never going to see that money,” he said.
John Chemaly, who runs Trinity EMS and is president of the Massachusetts Ambulance Association, a coalition of private providers, said the Chelmsford incident is an example of why the Legislature needs to curtail the insurance companies’ practices.
“We have brought this forth as an ambulance association, that this policy was ripe for fraudulent actions by some people, and this is a perfect case of it right here,” he said.
Ambulance companies say they hope lawmakers include in a spending bill a provision requiring insurers to pay ambulance providers directly. Legislative leaders said the bill may be released within a week or two.
Supporters of the proposal say it may also include caps on out-of-network ambulance-company charges. Iterations of the plan have failed during previous proposals on spending bills and the state budget.
Insurers and business groups have ripped the proposal for prohibiting a practice they say is aimed at cutting health-care costs.
In a letter to legislative leaders yesterday, the groups — Associated Industries of Massachusetts, Massachusetts Association of Health Plans, Retailers Association of Massachusetts, Blue Cross Blue Shield of Massachusetts and others — argued that the policy backed by ambulance companies would result in “excessive rates.”
“Such provisions would increase the cost of health care for Massachusetts businesses and run counter to efforts to make health-care more affordable for employers, particularly small businesses,” they wrote.
Eric Linzer, a spokesman for the Massachusetts Association of Health Plans, said the group supports a “very reasonable compromise” offered by Gov. Deval Patrick that would have capped ambulance rates at three times the Medicare reimbursement rate or their customary rate, whichever is lower.
“We don’t understand why they find this to be so unreasonable,” he said. “In addition to that, the concern we have about this proposal is that at a time when health plans are expected to reduce the rate of growth in premiums, taking away the tools they use to negotiate with providers is only going to result in increased premiums.”
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