Published in the November 16, 2016 edition


LYNNFIELD — A change in the method used to set the town’s ambulance rates and its collection practices on past-due bills has been proposed by Fire Chief Mark Tetreault.

Tetreault’s proposal to abandon the current “a la carte” pricing system in favor of a “bundled” pricing system was taken under advisement by the Board of Selectmen Nov. 7 and is expected to be revisited at the board’s next meeting on Nov. 28.

Tetreault provided the selectmen with a detailed report outlining his proposal and comparing the town’s current pricing system to ambulance services in similar communities, both public and private.

The proposal arose out of a request by Town Administrator Jim Boudreau for the chief to evaluate the town’s billing rates for its Emergency Medical Services (EMS) and is based on recommendations provided to him by Pro EMS Solutions.

The a la carte system uses a base billing rate plus charges for specific treatments or procedures, the chief said.

“It is the recommendation of our billing company to go to a bundled billing system,” Tetreault said.

Under bundled billing, patients are charged for the level of care they receive rather than the number of machines that are used or procedures that are performed by the EMTs and paramedics.

There are three levels of service under a bundled plan – basic life support (BLS), advanced life support 1 (ALS1) and advanced life support 2 (ALS2) – with a flat rate for each level of service.

“If we transport someone with chest pain and we put him on a cardiac monitor and we find out at the hospital that it’s indigestion, the insurance company is going to say ‘we don’t pay for a cardiac monitor for indigestion,’” Tetreault explained.

“Bundled billing makes it a much smoother process,” he said, explaining that most insurance companies prefer it and Medicare already requires it.

Tetreault’s proposal included a comparison between the rates charged by Lynnfield EMS and 13 area communities or private ambulance services that serve multiple communities.

Proposed bundled rates

The chief’s proposed bundled rates would be as follows: BLS: $1,650; ALS1: $2,150; ALS2: $3,150 plus a mileage fee of $50 per loaded mile, (mileage accrued while the patient is on board the ambulance).

The new rates as proposed “would allow us to more accurately reflect” the cost of the services provided by Lynnfield EMS in the 21st century, Tetreault said.

Existing a la carte rates

The current ambulance billing rate is: BLS: $1,000; ALS1:$1,500; ALS2: $2,000; mileage fee: $50 per loaded mile. A la carte fees range from $250 for oxygen administration; $300 each for IVs, medications and an extra EMT; $350 each for C-spine, defibrillation and cardiac monitoring, and $400 for an airway intervention.

Medicare rates

Medicare rates would remain unchanged, Tetreault said, because those reimbursement rates are fixed by the government as follows: BLS: $401.35; ALS1: $476.61; ALS2: $689.82 plus a mileage rate of $7.24.

“We do not balance bill for Medicare patients,” Tetreault said, nor does the town “balance bill for coverage not provided by the insurance provider except for, in some cases, deductibles and co-payments. Bundled billing reduces the discrepancy between the insurance company and Lynnfield billing,” he said.

In a comparison chart of rates used by 11 area communities, two private ambulance companies (Cataldo and Comstar) and CMERA (a 9-town collaborative) Lynnfield’s bundled rate proposal was approximately the fifth highest while the mileage rate is the second highest as Cataldo charges $60.

Billerica had the highest ALS1 ($2,185) and ALS2 ($3,565) rates while North Reading had the lowest ALS1 ($1,650) and ALS2 ($1,850).

When a patient receives ambulance services in Lynnfield through mutual aid response from a neighboring community, such as North Reading, the patient would be billed by that town under its rates, not Lynnfield’s, the chief told the Villager after the meeting. He added it would not be unusual for other communities to re-evaluate their rates when those around them rise.

Impact on patients

Selectmen Chairman Phil Crawford asked when the last price increase had been done. The chief said it would have been at least three years and the rates have not been increased during his tenure.

Selectman Chris Barrett asked how residents with insurance would be affected by the rate changes. Tetreault said they likely would not notice the change.

“Then an individual who doesn’t have insurance will see the increase?” Barrett asked. Tetreault said the patient would, but added in such cases the town can evaluate whether the charge is “unreasonable or should we forgive part or all of the debt. We’ve always done that.”

Barrett asked if the bundled rate change would “affect the insurance companies themselves?”

Tetreault said it would, but it also makes it easier for them. “They don’t need to nickel and dime everything and second guess – did they need a cardiac monitor? Did they need an IV? Did they need oxygen?” the chief said, adding most companies prefer a bundled rate. “They will probably pay the bill much faster than they do now,” he said.

Following up on the point raised by Barrett, Selectman Dick Dalton was concerned about the impact of the rate changes on the patient and the comparison rates with other communities. He said it appears the proposed rate of $1,650 for BLS would be “about 20 percent above the average” cost. Dalton pointed out that only Melrose ($1,750) and Cambridge ($1,695) had a higher BLS rate than the rate being proposed for Lynnfield.

“I’m not so certain because you have insurance that this is still irrelevant to you because different plans will have different deductibles,” Dalton said, regarding the cost to the patient.

Tetreault said the impact is limited to “private payer” insurance because programs such as MassHealth use contractual rates that the town cannot change, similar to Medicare.

Tetreault said the percentage increase was based on the fact that “we don’t adjust these rates very often. I would assume a lot of these other communities are going to adjust their rates as well. You can pick out the ones that have already adjusted their rates. They’re the ones that are higher than us.”

Crawford said, “I think the bigger question is how many of our bills are already over this? Because we’re looking at a bundled rate as compared to an a la carte rate, we don’t know what the middles are, so that’s why I asked earlier, what is the average bill?”

“If you start at an ALS2 at $2,000, you only need a couple of other items to get you above the bundled rate. And if almost every ambulance billing has two or three of these items, it might be the average, it might be less, than what you had been billed before. That is the information we really don’t know,” Crawford said.

Tetreault said, “I won’t lie to you. I think this does represent a slight increase of what we are currently doing. But I think that’s tempered by going to the bundled rate as opposed to the a la carte where you can run up quite a hefty bill very quickly.”

Crawford said, “We would also expect a better collection rate with the new bundled rate.” Tetreault agreed.

Dalton said he believes they are going in the right direction but added, “I don’t think we have all of the information here tonight for us to make a decision on it.”

Dalton recommended taking “a step back until the next meeting (to) get all of the data that we really need to make a good decision. I think to the chairman’s point, some sort of analysis of what an average call is now with this a la carte billing compared to what it would be going forward” is needed for him to have a level of comfort with it.

Crawford agreed he’d like a breakdown of an average bill and the average services received. “We’d like to see what effect it is really going to have on the residents,” the chairman said, adding that it is now common for people to have both an individual and a family deductible on their insurance plans. “And people are increasing those to keep the costs down of their insurance, so it will have an effect on them,” he said.

Financial hardship policy

The board members were also concerned with how financial hardship requests would be handled and the amount of bills the town currently writes off. Tetreault has proposed a revision to the department’s financial hardship policy because the existing policy is based solely on the national poverty rates.

“This policy goes into a little more detail,” he said, such as if the insured patient has needed multiple ambulance rides and has reached the limit allowed by the policy. “We propose we would waive those fees for someone who is really sick,” he said.

The chief also recommends waiving insurance co-payments for town residents “due to the assumption” that patient has paid real estate taxes to the town, he said. He added, “We would recommend we still bill for deductibles,” he said.

Bills are also generated “when there are no collections,” such as for an injured firefighter on the job, in which case the fee for that service would come out of another town account, he said.

Tetreault said “contractual write-offs” with specific insurance companies will continue to be accepted. Some bills are eventually referred to collection after multiple attempts have been made to contact the patient. “If it’s over $200 it goes to collection; if it’s under $200, it’s written off as bad debt,” Tetreault said.

Tetreault said the billing company “screens” requests for financial hardship and those that meet the town’s criteria for “hardship” are automatically approved. “If it doesn’t meet that criteria, they send it back to me and I’ll look at it further,” Tetreault said. “If I feel it is probably warranted, I’ll forward it either to the town administrator or to the selectmen for review.”

Tetreault did not have a dollar amount on the bills written off annually. “We’re only collecting 50 percent of what we’re billing,” he said.

Dalton asked if collections had changed under the new company. Town Administrator Jim Boudreau said, “Debt collections are much higher as a percentage since the first of July. It is still too early to say if this is a trend or not, but it has been much more efficient with the new company.”

Boudreau said when he was the T.A. in Norwell they started using bundled rates five or six years ago. “We were the highest around when we went to them and it was fairly seamless. We set up a similar system but we had an Ambulance Abatement Committee,” he said, which consisted of himself, the fire chief and the treasurer/collector.

“We didn’t chase people unless we absolutely had to. But from the residents’ point of view I don’t remember getting any complaints in terms of ambulance billing. If we did, as the chief said, we were able to take care of it,” Boudreau said.