Penn Township, Trafford ambulance companies call for direct payment from insurers
Cash-conscious ambulance companies in Penn Township and Trafford are pushing for passage of a new state law that would require insurance companies to reimburse them directly for any out-of-network services they provide.
Officials from Penn Township Ambulance and Trafford Emergency Medical Service (TEMS) as well as many other nonprofit ambulance services in the state, say a law mandating direct payments would eliminate the hassle of chasing down payments the insurers send to policy-holders to cover out-of-network ambulance services.
The problem, they say, is the patient sometimes pockets the money instead of forwarding it to them.
But the insurers contend there already is a way to receive a direct payment — join their networks. The insurance industry wants to prevent what it calls “balance billing,” a practice in which ambulance providers, despite a direct payment for out-of-network services, could charge a patient more than what the insurer pays.
A handful of proposals in both chambers in Harrisburg set out to address what some small ambulance companies say is a reimbursement system that puts them at a crossroads.
Officials in Penn Hills would like to see the situation addressed as well.
“It's a very poor system,” Penn Hills Deputy Mayor Sara Kuhn said at council's April meeting. Kuhn said the Penn Hills emergency medical services budget has run a deficit due in recent years which can be partly traced back to the payment system.
Penn Township Ambulance and TEMS officials say joining Highmark — the predominant network in the region — isn't financially feasible for them.
Highmark's proposed rate is about 50 percent of Penn Township Ambulance's overall charge, and accepting that offer could cost the service about $35,000 to $40,000 a year from its $1 million budget, Supervisor Ed Grant said. That amount equates to a paramedic's salary, he said.
“We can't live on the fees they propose,” Grant said. “They just are not a reflection of true reimbursement and covering our costs.”
By staying out of network, officials of Penn Township Ambulance and TEMS say they miss out on some patients' payments if they aren't proactive.
Patients with strong ties to Penn Township typically are responsible and pay the $800 to $1,000 bill, but patients from outside of the area sometimes have less interest in doing so, Grant said.
In one instance, Grant said, a man whose child needed an ambulance after a bike crash told him he was keeping the payment he received from his insurance company so he could buy a new bike.
“It's just incredible to think that they're not even paying us out of pocket,” Grant said. “They're being paid by the insurance company.”
George Brown, president of TEMS, said his organization usually has to file complaints with a district judge a couple of times a year to collect some payments.
“We keep saying, ‘Why do we have to fight to get this money?'” he said.
TEMS' budget is particularly small. It operates on about $135,000 a year. Of that, about $80,000 goes toward payroll.
“Every little bit helps,” Brown said. “We're such a small organization. We're always on the edge.”
But insurers oppose the direct-payment system for out-of-network providers.
In an email, Highmark spokesman Michael Weinstein said direct-payment legislation “would dilute our networks, which negatively impacts our members and protects a select class of health-care providers at the expense of thousands of providers who voluntarily elect to participate in our networks and agree to adhere to certain quality, fraud and billing requirements.”
Sam Marshall, president and CEO of the Philadelphia-based Insurance Federation of Pennsylvania, said he thinks ambulance services are being inconsistent by wanting direct payments and higher reimbursements by balance billing.
“We have to protect our policy-holders, and we have to do what we can to hold down the cost of health care,” Marshall said.
But, Marshall said, he thinks there is a growing consensus that insurers would agree to direct payments if balance billing is prohibited.
In the state House, legislators will consider such a balance-billing amendment to a direct-payment proposal that passed in the Veterans Affairs and Emergency Preparedness Committee in February, Marshall said.
The full House has voted for direct payments before.
Heather Sharar, executive director of the Ambulance Association of Pennsylvania, called it “monumentally historic” that the House voted 195-0 in 2011. Local state representatives George Dunbar (R-56) and Joe Markosek (D-25) were among the legislators who backed it then.
Legislation also is active in the Senate, where James Brewster (D-45) introduced a bill that has 20 co-sponsors.
Brewster said his support for the change dates back five years, when he, as McKeesport mayor, helped the McKeesport Ambulance Rescue Service lobby for it.
“I think the climate is very good to get the bill moved,” he said. “I have not sensed any resistance to it, and, frankly, it's the right thing to do.”
State Rep. Tony DeLuca (D-32), who is also the Democratic Chair of the House Insurance Committee, agreed with Brewster.
“It'll move this session,” he said. DeLuca has added an amendment to proposed legislation that would prevent balance billing, something he strongly disagreed with.
“I have letters supporting my amendment from many insurance carriers,” DeLuca said. “If ambulance companies are willing to take what the insurance companies pay, that's one thing. But if they're going to charge over and above that, that's just not acceptable.”
Kuhn said she thought an even simpler solution was possible.
“I don't understand why it's such a problem to put two payees on the check,” she said, noting that if the patient's name was listed along with the EMS service or municipality, two signatories would be required and patients would no longer be able to simply take an emergency services payment check and pocket it.
Chris Foreman is a staff writer for Trib Total Media. He can be reached at 412-856-7400, ext. 8671, or firstname.lastname@example.org. Trib editor Patrick Varine contributed to this report.