Obama Care Costs Ambulance Companies Over $2 Billion Since Inception

EMS Professionals Under Profit Pressure

New survey by Revenue Realization leader CDO Squared and the American Ambulance Association shows tough road ahead for ambulance companies. Since over 75 percent of Medicare and Medicaid patients now opt for a managed care plan from for-profit insurance companies, true costs are being driven down, in many cases below the actual operating costs of many ambulance companies.

​To understand the serious affect that the Affordable Care Act (Obama Care) has had on ambulance companies, CDO Squared™, the leader in revenue realization for profit-minded EMS providers, initiated a survey with the American Ambulance Association. The results were staggering when dollarized. One hundred twenty-six ambulance company executives were asked the following question: “Over the past few years, many ambulance companies have been negatively impacted by the increase in Medicare and Medicaid patients now enrolled in managed care plans run by for-profit insurance companies. What effect has this had on your operation in lost revenue since the Affordable Care Act (Obama Care) was enacted?”

The result: Overall the impact totaled $2.1 billion in lost revenue because of reduced margins due to lower fees dictated by the plan. The survey also revealed that those with revenues of $1 to $50 million (82.5% of the participants) had lost revenues between $315,000 to $730,000 with larger operations driving the averages up. According to William Stuckert, President and CEO of CDO Squared, “The results are not surprising when you consider that over 75 percent of Medicare and Medicaid patients now opt for a managed care plan. What it boils down to is that these for-profit insurance companies are driving costs down, in many cases below the actual operating costs of many ambulance companies. It’s a numbers game, as you see the larger companies with more exposure being hit the hardest.” When asked what ambulance companies can do to offset these losses, Mr. Stuckert said “Ambulance companies need to manage their commercial payers and overall costs better, and that means collecting more of the revenue they are entitled to. Since ambulance companies excel at saving lives, many lack the tools to collect revenue they are owed. In fact, on average, ambulance companies collect only 70 percent of the revenue they are due as reimbursements are lost in a sea of EMS data.”

Maria Bianchi, Executive Vice President of American Ambulance Association, echoed much the same sentiment regarding insufficient reimbursements in the industry. “The CDO Squared survey results reinforce what the American Ambulance Association has long known—ambulance services across the country are operating in a climate where reimbursement is often well below the cost of service. AAA volunteers, consultants, partners, and staff are working tirelessly across many channels to bring to ambulance services the reimbursement revenue they need to continue serving the public each and every day.” 

Maria Bianchi, Executive Vice President of American Ambulance Association, echoed much the same sentiment regarding insufficient reimbursements in the industry. "The CDO Squared survey results reinforce what the American Ambulance Association has long known—ambulance services across the country are operating in a climate where reimbursement is often well below the cost of service.

Maria Bianchi, EVP American Ambulance Association

About CDO Squared

CDO Squared maximizes revenue realization for profit-minded EMS providers by connecting data, developing processes, and optimizing their ROI. CDO Squared has been helping healthcare businesses run more profitably for over two decades. Through proven financial technology and innovative workflow tracking, CDO Squared provides the medical industry advanced software and tools for analytics, visualization, and financial management along with the industry experience of seasoned revenue realization management professionals.

About AAA

The American Ambulance Association represents ambulance services across the United States that participate in serving more than 75% of the U.S. population with emergency and non-emergency care and medical transportation. The AAA was formed in response to the need for improvements in medical transportation and emergency medical services. AAA views pre-hospital care not only as a public service, but also as an essential part of the total public health care system.

Source: CDO Squared, Inc.