Rising health care costs could put pressure on EMS revenue

The issue of health care costs is front and center for the Legislature in the 2017-2018 legislative session.
 
Gov. Charlie Baker’s fiscal 2018 budget proposal would direct nearly 40 percent of its $40 billion total to MassHealth. The budget also contains outside sections that propose both health care cost containment measures and new revenue proposals to support health care costs that are likely to continue to climb.
 
On March 15, the Special Commission on Provider Price Variation released its extensive report with recommendations to reduce unwarranted price variations. The commission was tasked with identifying factors that contribute to price variation and determining whether those factors are acceptable. The report provides evidence to support its recommendations.
 
It now falls to the governor, Legislature and various state agencies to consider the report’s recommendations and take action as they see fit.
 
While many cost containment measures may help municipalities directly and indirectly, any type of rate capping structure could have unforeseen consequences on municipal budgets, specifically on municipal fire departments that provide emergency medical services. EMS tends to be more costly than other medical services due to a number of factors, including the requirement for immediate response and the fact that consumers aren’t able to choose an “in network” provider. The high cost of EMS could lead to these services being reimbursed at lower rates under some of the cost containment measures being considered.
 
Lower reimbursement rates could cause significant financial problems for municipal fire departments that provide EMS, as they could lose hundreds of thousands of dollars in revenue annually.
 
Local officials and fire chiefs appreciate the importance of implementing health care cost containment measures, but worry about doing so with too broad a brush. EMS is a unique type of service and treating it the same as other services could have unintended consequences. EMS providers have limited options for reducing costs, and may need to be addressed separately rather than being included with other services.
 
Legislation has not been filed specifically addressing EMS costs, but as the session continues and health care stays at the forefront, this and other health care cost issues are likely to be considered.
 
The MMA is working with fire chiefs and other interested parties to meet with legislators on this issue and will continue to monitor the situation.
 
• Link to the Executive Office of Administration and Finance for more information and to download report