Are You Leaving Money On The Table?

By David Mead, Sr. Consultant – Public Consulting Group

Ambulance providers have a long history of having to deal with inadequate Medicaid reimbursement rates. The impacts of COVID-19 have only exacerbated those issues. Now, more than ever, providers are relying on new revenues generated through supplemental payment programs. If you are not already taking advantage of a supplemental payment program in your state, you are probably leaving money on the table!

What are supplemental payments?

The federal government provides states with flexibility in financing and reimbursement for Medicaid programs. Medicaid reimbursement rates, as established through each state’s unique fee schedule, typically cover ≤50% of the actual cost of providing transports to Medicaid patients. This means that providers must find alternative funding sources to supplant the costs incurred for the provision of these services. This is what led to the development of supplemental payment methodologies for ambulance services.

Supplemental payments, separate from and in addition to base payments, have been made by state Medicaid programs to hospitals for more than 30 years. In the last decade, supplemental payment or “cost recovery” programs have become more widely available for ambulance services. These programs go by a variety of names and acronyms (because you know the healthcare industry loves acronyms!):

  • Ground Emergency Medical Transportation (GEMT)
  • Public Emergency Medical Transportation or (PEMT)
  • Ambulance Supplemental Payment Program or (ASPP)
  • Emergency Service Transporter Supplemental Payment Program (ESPP)
  • Federal Reimbursement Allowance (FRA)
  • Ambulance Provider Assessment Program (APAP)

How do supplemental payments work?

There are three different approaches – Certified Public Expenditure (CPE), Intergovernmental Transfers (IGT), and Provider Assessment – for supplemental payment programs. While the mechanics for each approach are unique, they all share the common thread of creating or utilizing state share to draw down federal matching funds.

While federal matching rates vary by state, the matching rate is never less than 50%. This means that for cost recovery programs, the federal government will reimburse you no less than $50 for every $100 in uncompensated care costs for Medicaid patients. Typically, cost recovery programs generate more in reimbursement per trip than is generated through the standard filing of the Medicaid claim.

Below is a brief summary of the different approaches and how each can work for your agency.

Supplemental Payment Program Approaches

Approach Certified Public Expenditure (CPE) Intergovernmental Transfers (IGT) Provider Assessment
What are the mechanics for generating revenues through this type of supplemental payment program? For Medicaid services paid on a Medicaid Fee-for-service (FFS) basis, eligible participating providers may receive a cost settlement payment through a CPE. Requires submission of an annual cost report and signed CPE form. For Medicaid services paid through a managed care service delivery system, increased payments are made through managed care entities equivalent to cost-based reimbursement by funding the state share through intergovernmental transfers (IGT). A “tax” is applied to provider patient revenues. Tax funds are pooled by the state and used to draw down federal funds. Revenues cycle back to providers in the form of rate increases.
Who is eligible? Publicly owned or operated entities only.

Entity must be enrolled as a Medicaid provider and provide Medicaid services during the specified reporting period.

Publicly owned or operated entities only.

Entity must be enrolled as a Medicaid provider and provide Medicaid services during the specified reporting period.

Depending on state-specific program rules, private and/or public entities may participate.

Entity must be enrolled as a Medicaid provider and provide Medicaid services during the specified reporting period.

Is participation voluntary or mandatory? Voluntary Voluntary Mandatory

Where do supplemental payment programs exist?

Just one decade ago, the first supplemental payment program for ambulance services was developed for public providers in Texas. Since then, programs have been introduced in nearly 20 more states. As shown below, another dozen states currently have proposed programs under development.

States with Active and Proposed Supplemental Payment Programs

Are You Leaving Money On The Table

How can you optimize revenues through a supplemental payment program?

If you are in one of the states with active programs…
You should be participating! This likely means that you are submitting a Medicaid cost report each fall/winter. If you are not currently participating or are not sure that you are really optimizing your revenues, you are not alone! More than 500 providers across the country contract out Medicaid cost reporting to their billing vendor and/or consultants with expertise in federal reimbursement.

If you are in a state that doesn’t have an active program…
Engage with your state’s EMS or fire association and start advocating. You may also want to reach out to your billing vendor and/or consultants who have the expertise to help you establish a supplemental payment program in your state. The process to establish a new program can be time and labor intensive, and your billing and consulting partners can help guide you over any legislative or regulatory hurdles.

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