GAO releases Ambulance Cost Report

By JOHN HULTGREN
Kentucky EMS Connection

LOUISVILLE — The Government Accountability Office yesterday released its long-anticipated report on the true costs of providing ambulance services to Medicare patients, officially confirming that Medicare ambulance reimbursement is 6% - 17% below the national average cost per transport.

Congress requested the GAO study in 2003. The disparity in reimbursement does not include the Medicare share of uncompensated care or bad debt on Medicare beneficiary co-pays and deductibles.

According to a written American Ambulance Association Alert by President Jim McPartlon, "The report stated that Medicare payments for ambulance services are six percent (6%) below the national average cost per transport and seventeen percent (17%) below the cost for transports originating in 'super rural' areas.  The GAO did not find significant cost differences between transports originating in urban and rural areas, other than in 'super rural' areas, or regions of the country once the rural mileage payments and the geographical price cost index (GPC) are applied."

The GAO report found that, nationwide, Medicare patients represent 40% of total transports but comprise only 31% of total revenue.

Medicare reimbursements "assumes no margins for providers to finance capital improvements in technology, communications systems, equipment and facilities and assumes no reserve capital for responding to a natural disaster or terrorist attack," McPartlon wrote.

According to an AAA study, ambulance services provide more uncompensated care than any other major healthcare provider groups. Hospitals report an average of 5.6% in uncompensated care, while physicians report an average of 4.3%. The GAO report does not address uncompensated care.

Download the GAO report: Ambulance Providers - Cost and Expected Medicare Margins Vary Greatly (PDF)

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