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July 22, 2013 How Connecticut Works: Ambulance Services

Power play

Photo | Pablo Robles Mary-Ellen Harper, director of fire and rescue services in Farmington.
Photos | Pablo Robles EMTs, pictured above, load a stretcher into an ambulance owned by Campion Ambulance Co. in Waterbury, whose CEO William Campion (pictured above, bottom left) opposes regulatory changes to the emergency medical services industry. Meanwhile, Farmington firefighters (bottom right) are the first responders in town.

A power struggle has emerged over how emergency medical transport services are provided in Connecticut, pitting state and local government interests against each other, and leaving private ambulance companies fighting to protect their market share.

The tension arises from a centralized regulatory structure that gives state government the authority to decide which company or organization can provide ambulance services in a city or town.

Municipal leaders argue the current system is anticompetitive and limits their ability to decide how best to provide emergency medical services to residents. Once an ambulance company is granted rights to operate in a municipality, officials say, changing providers is nearly impossible.

Some city and town leaders have pushed for an overhaul of the regulatory system, in an effort to obtain more control.

That stirred resistance from the state Department of Public Health, which regulates emergency medical services in Connecticut and wants to maintain oversight over the industry.

Major business interests are at stake as well.

Private ambulance companies, like Aetna Ambulance Service Inc., American Ambulance Service, and Hunter's Ambulance Service, want to protect the status quo to defend coverage territories.

“The current system protects business interests because once a company is granted rights to operate in a city or town, it is essentially theirs for life,” said John Oates, East Hartford Fire Department chief. “It makes it difficult to make changes to improve your system.”

Under current law, the state Department of Public Health, through its Office of Emergency Medical Services, grants rights to providers to offer emergency medical services in a town or city under a Primary Service Area agreement, or PSA. Those rights can be granted to a private, municipal, volunteer or nonprofit ambulance provider.

Municipal leaders say the PSA has no periodic renewal process, which limits their ability to change providers if they are dissatisfied. Issues like contract costs and 911 call response times can often lead to disputes over quality of service, officials say.

Mary-Ellen Harper, director of fire and rescue services in Farmington, said the regulatory system essentially allows ambulance providers to operate as monopolies in certain cities and towns. American Medical Response (AMR), for example, is the only ambulance company doing business in Farmington.

“It's not that we have an issue with the ambulance company, but we feel it is our responsibility to get the best deal we can,” Harper said. “Right now we can't go out to bid for a new company if we wanted too.”

During the recent legislative session, several cities and towns pushed a bill that would have turned the current regulatory environment on its head. It called for allowing municipalities to assign their own PSAs. It also stripped DPH of its power to set reimbursement rates ambulance providers can charge patients and insurers.

The bill did not pass in its original form, but lawmakers agreed create a 15-member task force to review the current process for designating and changing primary service areas.

DPH officials, however, say the system works because it helps ensure adequate coverage of emergency medical services across the state.

Raphael Barishansky, director of the Office of Emergency Medical Services, said the PSA system was put in place to minimize 911 call response times and to better coordinate services between towns, which often share services and transport vehicles.

Reverting PSA decision-making power to local governments could create gaps in coverage, he said.

“We feel what is already in place is a good system,” Barishansky said. “But we do recognize there are some improvements that can be made.”

Barishansky said his agency is considering a local performance review option that would give cities and towns greater ability to ask for a change in providers if there is inadequate service, he said.

Significant business interests are at stake as well.

Almost every commercial ambulance provider in the state lined up against efforts to change the regulatory environment.

There are 10 or so private ambulance companies that operate in Connecticut. AMR is the largest player employing over 1,000 paramedics or EMTs across the state.

Most private companies operate in densely populated urban areas near hospitals. Like other medical providers, they make money from reimbursements charged to patients or insurers.

Reimbursement rates are set by the state and can range anywhere from $563 to over $1,000. Medicare also reimburses ambulance providers for certain services.

If municipalities were allowed to go out to bid for emergency medical services, private companies could face more competition and lose market share, experts said.

But that isn't the only issue.

William Campion, president and CEO of Campion Ambulance Co. in Waterbury, said reverting PSA decision-making power to municipalities would create long-term uncertainty for companies and potentially sap their ability to make capital investments needed to maintain quality services.

Campion Ambulance Co., for example, which operates 21 ambulances in Greater Waterbury, has made several hundred thousand dollars worth of IT investments over the last 10 years. If a city or town is able to take away their PSA overnight, it would be hard to make those long-term capital commitments in the future, Campion said.

“From a business perspective that doesn't give you the ability to plan long-term or calculate a reasonable return on investment,” Campion said. “PSAs give us the ability to plan ahead.”

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