Navigating the Maze of EMS Funding, Staffing Shortages, and the 'Essential' Label in America

From urban to rural agencies, EMS services across the country are facing challenges, threatening response times, staffing, care levels, and even survival. Acute funding shortages are leading to financial strain, workforce shortages make it increasingly challenging to recruit and retain trained personnel, and billing complications have underscored the need for systemic reforms. These challenges are prompting calls for legislative measures to reclassify EMS as an "essential" service eligible for state funding, similar to both police and fire departments. These interconnected challenges demand a nationwide system overhaul to ensure sustainable and effective emergency medical services.

The Funding Challenge

EMS response in the United States is typically paid for in one of three ways: through local taxes supporting a municipal or county-based EMS system, through voluntary donations by the folks who utilize a not-for-profit system, or through insurance billing and reimbursement either through private insurance, Medicaid, or Medicare. The majority of EMS services majority depend on the latter, however, reimbursement rates from Medicare fall below the actual cost of delivering appropriate EMS care, and this gap between Medicare reimbursement and service expenses is widening.

A recent assessment conducted by the Minnesota Emergency Services Regulatory Board revealed that 62% of all ambulance service billables in the state are invoiced to either Medicare (42%) or Medicaid (20%). In Minnesota, ambulance services faced challenges in collecting over $380 million in billed charges, primarily attributed to the disparity between ambulance service rates and Medicare rates.

In Colorado, funding for ambulance services varies. Some are private businesses, nonprofits, or part of hospital systems. Others rely on property taxes, similar to schools and libraries. This means residents may need to vote for higher taxes to increase ambulance funding. Many agencies also receive grants, but the lack of statewide standards limits access to additional federal funding.

Several services in the Berkshire Mountains in Massachusetts are encountering similar situations. Several services are slated to close at the end of 2023, and so the all-volunteer Southern Berkshire Volunteer Ambulance Squad is seeking taxpayer funding to address an annual operational deficit exceeding $350,000.

In all of these cases, EMS leaders point to identical issues: escalating personnel costs, difficulties in securing and retaining certified and trained staff, insufficient reimbursements from Medicare and Medicaid, unmet government mandates, and even questionable maneuvers by insurance companies.

“We're already in a county that is not overly staffed with ambulances,” says Brian Andrews, president of for-profit County Ambulance based in Pittsfield, Massachusetts. “There are ambulance deserts here — towns lacking their own services and relying on others. This situation has the potential to exacerbate those challenges."

The Human Resources Issue

Many would say that the pandemic demonstrated the importance of EMS for the country. Since then, the country faced an onslaught of resignations in the EMS field due to burnout, a field that had been already facing a high turnover rate.

My EMS providers switch to fire or police positions for improved pay, conditions, and benefits. The consequences of this move away from EMS have led to even further burnout for providers left behind, delayed response times, and a compromised ability to provide timely and effective care.

And EMS organizations hiring on a volunteer basis are seeing an even further decline, with dozens of agencies closing their doors every year. In Minnesota alone, the EMS Regulatory Board estimates that EMS volunteers contribute over $50 million in unpaid labor to their EMS system. While these volunteers are crucial for emergency response, sustaining such a high level of volunteer support becomes unsustainable.

In New Jersey, there are there were over 600 volunteer ambulance squads. Today, there are well under 400, and that number continues to decline.

PJ Ringdahl, regional adviser for the North Dakota EMS Association and paramedic, echoed the need for more EMS providers.

“We're all in crisis mode,” Ringdahl explains. “We're all short-staffed. And we really have to try to figure out an appropriate model to be able to deliver health care to those communities.”

In Berkshire County, Massachusetts the ambulance services have had to to boost salaries and benefits to attract and retain providers.

"Staffing is our largest expense,” shares James Santos, President of the Southern Berkshire Volunteer Ambulance Squad. “Securing paramedics and EMTs is extremely challenging, with a severe shortage of both. To retain personnel, we find ourselves continually increasing salaries and benefits."

Competitive wages, effective healthcare and retirement benefits, and supportive work environments are needed to attract and retain skilled EMS professionals. They also need growth opportunities, whether that’s through a promotion or advanced certification. These are some possible fixes for the future, by the crisis remains now.

Legislative Measures on the Rise

Several states have recently considered or passed legislation to help better fund EMS.

The Minnesota Legislative Task Force on EMS was established to examine ways to improve EMS services in the state. The task force is reviewing the regulatory structure in the Minnesota Statute to assess the financial stability of the EMS system.

In New York, many cities and communities are grappling with challenges in delivering emergency services to their residents, primarily due to issues in the EMS reimbursement process where the ambulance provider doesn’t receive payment directly. This has led to significant financial setbacks for our EMS providers.

For volunteer ambulance services, two factors complicate this financial challenge even further: there is a misconception regarding whether or not volunteer ambulance services are free or funded by taxes, and there’s a lack of transparency from insurance companies on transport bills.

However, Bill A00250A, also known as the “EMS Direct Pay Bill,” will now force insurance companies operating in New York to reimburse EMS providers for transporting their patients, even if those providers don’t have a formal relationship with the insurer. This bill was signed into law by Governor Kathy Hochul in November of 2023.

In Wyoming, members of a legislative health panel opted not to advance a preliminary bill last week that would have made EMS an essential service in the state. The draft bill also sought to mark the state's inaugural direct contribution to ambulance care. The unsuccessful initiative to establish a state-supported funding program for EMS showcases the fragile EMS system. The key issues lie in unstable funding and a diminishing workforce, with stakeholders acknowledging that there are no evident or immediate solutions to address these concerns. 

“In order to move this bill forward we would need to know what the fiscal impact would be,” says Rep. Ben Hornok, R-Cheyenne. “And we don’t have that.”

In Massachusetts, the legislature has two bills in committee: S.717 and H.992. These bills seek to mandate full reimbursement. S.717 proposes the implementation of locally determined reimbursement rates. The pending legislation has become a focal point of debate and advocates argue that the state should categorize emergency medical service as an essential service and subsequently receive state funding.

In Colorado, lawmakers passed legislation last year, Senate Bill 225, which will consolidate ambulance licensing at the state level starting in January. Additionally, State Senator Mark Baisly thinks that tourists should be used to pay for EMS.

“I intend to rethink the entire manner of how this is funded,” Baisley says. “Obviously, it's always going to be through taxation. But since our tourism industry creates a lot of the cost and demands a lot of our responsiveness and appropriate care, then we will look at that.”

Final Thoughts

As EMS faces a critical juncture, legislative measures offer a glimmer of hope. Reclassifying EMS as an essential service, standardizing funding mechanisms, and addressing workforce shortages are steps in the right direction. However, the road ahead requires collaborative efforts from policymakers, communities, and EMS leaders. Balancing financial sustainability with the provision of high-quality care is paramount. The path forward demands collective action to ensure the continued existence and growth of emergency medical services.

Sources

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Sukiennik, G. (2023, December 4). “there are ambulance deserts here.” what happens when a broken economic model puts emergency services at risk in Berkshire County? The Berkshire Eagle. https://www.berkshireeagle.com/news/local/ambulance-services-berkshire-county-financial-problems-who-will-pay-for-the-ambulance-massachusetts/article_077f6ec6-9069-11ee-99cf-fb1687c654dc.html

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Barry Bachenheimer, Ed.D, NREMT/FF is a frequent contributor to EMS World.