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Cities shouldn’t set own rates

EDITORIAL | ambulance fees | editorial

THIS STORY APPEARED IN

February 03, 2012

THE STUBBORN dispute between insurers and the state’s private ambulance companies has gone on for far too long. It needs to be solved, but a solution will require credible information about the real cost of the emergency service those companies provide.

Last fall, in an attempt to bridge the divide over how much insurers should pay out-of-network ambulance companies for emergency trips, Governor Patrick proposed that the health plans pay either the rate they would give in-network companies or 300 percent of the Medicare rate, whichever is less. That’s a reasonable idea. After all, those rates would reflect either the amount that other ambulance companies receive for similar trips or triple the rate those same companies get from the federal government.

The ambulance companies and their legislative advocates, however, insist that Patrick’s plan won’t work. They claim their costs are higher because they handle more emergency trips, which cost more, and because they are underpaid by Medicare and Medicaid. Thus they are once again pushing to let cities and towns set the rate for emergency out-of-network ambulance trips that originate in their jurisdiction.

But that scheme, which is gaining steam in the House, makes little sense from the perspective of cost containment. Cities and towns, after all, would base the rate on what it costs them to operate their municipal ambulance service. But that assumes that those services are efficiently run, with pay scales that reflect the prevailing market rate for emergency medical technicians or paramedics, rather than, say, the rate negotiated by the local firefighters unions. Under that plan, whatever inefficiencies exist in the municipal system would merely be extended to the private-ambulance companies as well.

If the Legislature really doesn’t think Patrick’s plan will work, then the best way forward is for the state to establish a commission to come up with a fair emergency-trip rate for a properly staffed and equipped ambulance company. Then policymakers will at least have accurate data to work with as they fashion a solution. Until then, legislators should refrain from any changes - particularly one that would cede rate-setting power to the cities and towns.