New state EMS payment rules went into effect Jan. 1 to try and solve long-standing financial strains on the ambulance service industry, but some services say they don’t attack the heart of the problem.

The rules in Pennsylvania’s Act 84 allow ambulance services to directly bill out-of-network patients’ insurance companies rather than request payment from the patients themselves.

Before the new rules took effect, insurance companies often paid patients, not EMS services, for any ambulance rides patients received from services the insurance companies didn’t already have an agreement with.

That practice often resulted in EMS companies losing out on payment, with patients unsure of what to do with the checks from their insurance company or cashing the checks for themselves.

As a result, many ambulance services began going after patients directly to pay their bills. Many have outsourced those efforts to debt collection firms, and some bring delinquent patients before district judges to force them to pay up.

Under Act 84 those practices can still continue, but ambulance services have the option to sign direct pay agreements with insurers, cutting patients out of the equation. That comes with a catch: the services have to give up their ability to request full reimbursement from patients if they choose to take direct payment from their insurance companies.

That’s significant because insurance companies won’t pay the full cost of an ambulance run. EMS directors say because of that, the new rules won’t help everyone.

“I think a lot of people see this as the pot of gold at the end of the rainbow, and for some people that have had difficulties getting paid from patients, I think this will help,” said Doug Dick, executive director of Superior Ambulance Service in Grove City.

“But they need to weigh what option’s best: try to collect 100 percent or accept whatever the insurance company sends them.”

At the center of EMS services’ concerns are reimbursement rates set by Medicare and Medicaid, on which most insurers’ rates are based.

Many insurers pay more than those government benchmarks, said Jeff Kelly, the director of Cranberry EMS, but the rates themselves haven’t been adjusted in years. The state’s Medicaid rate in particular, which hovers around $200, has gone for more than a decade without being changed. That represents a fraction of the cost of an ambulance run, which costs nearly $700 for Cranberry.

So accepting lower in-network rates from insurers doesn’t make financial sense for directors like Kelly.

He says bill collection efforts in Cranberry are “robust” and successful, but the service still ends up writing off $90,000 to $120,000 in bad debt each year. Accepting lower reimbursement rates from insurers would only exacerbate that problem.

“When we run the numbers, it doesn’t make sense for us to accept the current rate structure they (insurers) have in place,” Kelly said.

State Sen. Don White, R-41st, who chairs the Senate Banking and Insurance Committee, which recommended the rule changes, acknowledged that some EMS directors remain unhappy with the rules. But he said the changes help protect ambulance services that had previously been completely cut out of in-network payment arrangements with insurers.

Those issues were concentrated in the state’s northeast and southeast regions, according to the Ambulance Association of Pennsylvania.

“Is it perfect? In the minds of some people, maybe not necessarily,” White said. “But I spent a lifetime in the insurance business, and I know how squeezed these EMS services are at many levels, and I agree with the notion that this ... is going to relieve a lot of pressure.”

White said the government benchmarks are a particular concern for him, given the state’s aging demographics, but that’s a different conversation.

“We’re getting older, (and) the Medicaid reimbursement hasn’t been raised for EMS is 10 years. That’s a serious problem,” White said.

There are other issues for EMS services as well — including so-called “treat no transport” runs, which most insurers won’t pay ambulance services for at all. That problem hits some services more than others.

It’s a sizable issue for Butler Ambulance, which said last year that about 1,000 of its 8,000 emergency calls did not result in transport to a hospital.

The association, in a Dec. 22 announcement on its website by executive director Heather Sharar, called the rule changes “a huge win” because they allow services to choose whether or not to participate in direct pay arrangements — though it acknowledged the changes aren’t an improvement for some services.

“This legislation is just the beginning of the dialogue in Harrisburg to improve reimbursement to ambulance providers — not the end,” Sharar’s post states.