OVERVIEW. First Responders Tier

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1 New Jersey s Emergency Medical Services System New Jersey s emergency medical services (EMS) system is complex and convoluted in structure, involving multiple types of providers at various levels, but categorized into four main tiers. No entity in the state is obligated by rule, law or regulation to provide, or assure the provision of, EMS. OVERVIEW To provide a baseline for analysis, it should be noted that New Jersey s emergency medical services system is made up of four distinct tiers of care-givers: First Responders Tier The first tier consists of the first responders. First responders are usually police officers, utility workers, crossing guards, and other public and quasi-public officials whose duties cause them to be in close proximity to the locations where many medical emergencies occur. These first responders typically offer the most basic level of emergency care (CPR, major bleeding control, etc.). First responder care is almost universally provided without charge. Local Basic Life Support (BLS) ambulances respond to all 911 calls and transport virtually all the patients. In this tier are included New Jersey s volunteer First Aid Squads, municipally operated emergency medical services, several for-profit ambulance companies, as well as not-for-profit BLS service offered by several hospitals. At this level, care-givers called emergency medical technicians (EMT.s) who have received 120 hours of training provide both the services of first responders, and additionally a somewhat enhanced level of basic life support care, due to their additional training and the presence of certain equipment on the The BLS Tier Two-Tiered System BLS (Basic( Basic Life Support): All Emergencies Local; In Every Town First Aid, CPR, etc Town Controls Transporter Subsidized (Donations/Taxes( Donations/Taxes) Volunteer Vocational (unregulated) Summary of BLS (Basic Life Support) Tier (licensed) ambulance (i.e., bag-valve-mask respirators, specialized splints, and other implements). This tier of response is almost without exception locally based (that is, each individual town and/or

2 jurisdiction in New Jersey maintains a completely separate BLS agency, regardless of the proximity of other such agencies, or the capacity of each agency to respond). The BLS tier is provided by a mixture of unregulated, volunteer first aid squads and paid, vocation agencies. Some of these paid agencies are private, commercial ambulance companies, while others are municipally based services, both of which are partially subsidized by tax dollars. The volunteers are not licensed and, therefore, cannot bill for their services. They survive on individual donations and municipal subsidies, either by way of direct cash contribution and/or asset provision by the town. The paid services, whether commercial or municipal, must be licensed, are regulated by the state s Department of Health, bill for their services and receive some form of public subsidy. All BLS agencies, for the most part, interface with only one ALS provider, designated by the state s Commissioner of Health. The town, however, decides who and how their BLS service will be provided, either by direct action (eg: municipal ordinance) or by historical default (simply allowing the local, private, volunteer BLS agency to operate). While there are many more volunteer BLS entities in New Jersey, about half of all the emergency call volume in the state is handled by paid BLS agencies, usually located in the most densely populated regions. Mobile Intensive Care Unit (MICU) paramedic services are the third tier of response. MICU Paramedics (and their nursing counterparts, Mobile Intensive Care Nurses, or MICNs), are highly trained and skilled individuals, who have typically attended a two year college training program, and have completed a hospital and field internship in excess of 600 hours. A Mobile Intensive Care Unit brings with it into the field nearly every first line emergency medication and/or procedure that may be administered in a hospital emergency department (hence the term Mobile Intensive Care The ALS Tier Two-Tiered System ALS (Advanced Life Support): ALS ( Most Critical Emergencies Regional; Multi-Town Ivs,, Meds, Invasive Hospital Based/CN Non-Transport NOT Subsidized Vocational (licensed) Summary ALS (Advanced Life Support) Tier Unit ). In fact, paramedics practice under the delegated authority and in direct contact with a base physician. By law, MICU providers in New Jersey must be hospital based, and each MICU programs geographical response area is specified by the scope of its state issued Certificate of Need (in the case of New Jersey s two helicopter based MICUs, response areas are dictated by the proximity of each helicopter to the call). Mobile Intensive Care Units do charge for their services, but are solely the creatures of not-for-profit institutions, and, as such, care for all

3 patients equally regardless of their ability to pay. The ALS, or paramedic, tier responds to only about a third of these calls, which are life threatening. The paramedic units are barred by regulation from transporting for the most part, and must use the BLS tier s agencies to move patients to the hospital 1. Paramedics, while permitted to provide initial care via standing orders, must eventually attain on-line medical command to continue treatment. The paramedic tier is mandated by state law to be provided by hospitals through a Certificate of Need, in order to assure quality of care and overall system cost containment. These paramedic programs are fee-for-service based, billing for their services, but receive no tax subsidy or other public funding. They must rely solely on the revenue received from their patients and their patients insurance companies. Because ALS is a highly advanced level of care, the cost of providing paramedic service is very expensive, usually four to five times as much as BLS. The Commissioner of Health designates providers to serve established regions within the state comprised of multiple towns, where they interface with many BLS level agencies. The Hospital Tier The fourth tier of this system is provided by New Jersey s acute care hospital emergency departments. Although Mobile Intensive Care Units can stabilize and provide definitive care for the lion s share of patients they are called upon to treat, nonetheless, there are some patients whose lives cannot be saved absent the treatment offered by a team of physicians and nurses, supported by the operating rooms, laboratories and other facilities which can only be had at an acute care hospital. DETAILED ANALYSIS New Jersey s Emergency Ambulance System New Jersey s Paramedic System LOCAL MICUs-A FAILED EXPERIMENT In New Jersey, a concept of home rule is the consideration in almost every government sponsored, authorized and/or regulated program. Thus, it should come as no surprise that, when New Jersey first implemented a statewide Mobile Intensive Care Unit program, many municipalities were authorized to operate their own MICUs. After analyzing data collected as a result of the operations of these local MICUs it became apparent that the operation of these units created two distinct, and unique problems. First, initiation, and maintenance of a Mobile

4 Intensive Care Unit is an extraordinarily costly endeavor. Local jurisdictions were not prepared to finance the start up cost of such local units, and were even less able to afford to fund the cost of continuing operations. Second, and of far greater significance, was the degradation in skill level of the paramedics that staffed these local units. Paramedics practice involves a wide range of emergency procedures, and requires maintenance of many very technical skills, and a vast knowledge base regarding the many medications and other therapeutic agents which may be administered to patients. Experience has shown that the only way such skills and this knowledge base may be maintained is through contact with a certain critical mass of patients. For example, one central New Jersey paramedic program s seven regionalized Mobile Intensive Care Units treat an average of 3 patients per 12 hour shift. Therefore, each full-time paramedic at that program treats approximately 468 patients per year, on average. In the local MICU model, paramedics would often treat one or less patient per shift (156 or less per year). Even with additional training requirements (over and above those required by the Department of Health) these paramedics skills and knowledge could not be maintained. Paramedics with poor skills are a danger to the community that they serve. Thus, for these two reasons, the local MICU experiment was deemed to be a failure, and only one of these local MICUs persist to this date (a unit which has had to affiliate with a local hospital in order to assist it in providing quality care). These two reasons: quality of care, and cost, are the driving force behind regionalization of this highly technical and skills oriented service across the country, and indeed around the world. Today, 100% of New Jersey s citizens are served by hospital based, regionalized MICUs 24 hours a day, 7 days a week, 365 days a year. It is important to note that this system is NOT subsidized by tax dollars, or state funds. LIABILITY The provision of healthcare services is an endeavor which brings with it a tremendous potential for liability. In particular, pre-hospital advanced life support programs must protect themselves against motor vehicle liability (enhanced coverage for ambulances and other E.M.S. vehicles), professional liability (so called malpractice" insurance), and increased Workers Compensation liability (exposure to communicable diseases, etc.). Local budgets, already strained, and further burdened by the start up cost and continuing operations cost of a low volume, local MICU would be further stretched by the cost of obtaining these new and/or upgraded coverages. New Jersey s regional MICUs are able to spread these costs over a large volume of services, and, in addition, are not subject to the increased startup reserve which would be applicable to each jurisdiction which established a local MICU. For example, a regionalized MICU program s combined insurance bill is large, but marginal increases are very small. To provide a similar level of service by multiple local MICUs, the new and enhanced insurance bill for each municipality, in total, is likely to exceed the regional programs total cost by a factor of ten or more. In addition, there are only two providers of medical malpractice insurance in New Jersey. In the event that these providers, who are extremely proactive in efforts to control the exposure of their insureds, should determine that the low volume of the local MICUs is insufficient to maintain the skills of the paramedics employed thereupon, then it is likely that the jurisdictions which establish such local MICUs would be unable to obtain malpractice coverage at all exposing their tax coffers and assets to liability. (it is relevant here to note that, even though New Jersey s currently authorized MICUs are immune from certain liability due to New Jersey s good Samaritan and other immunity statutes, nonetheless, New

5 Jersey s courts have had no problem in assigning liability outside of the bounds of the protection offered by these statutes -- thus, the need for such liability coverage is more imperative). MEDICAL OVERSIGHT AND QUALITY ASSURANCE PROBLEMS In any pre-hospital healthcare provision system, oversight by a physician, and a quality assurance program are universally accepted requirements. All of New Jersey s currently authorized Mobile Intensive Care Units are ultimately overseen by a board certified emergency physician, who has ownership in the success of the program, due to a staff relationship with the hospital that is providing the service. Furthermore, each of New Jersey s currently authorized Mobile Intensive Care Units is subject to strict quality assurance requirements. A percentage of all charts are reviewed (including ALL cardiac arrests), by the physician medical director, and the taped audio record of each call is audited against the written chart record. Experience has shown that it is difficult and extremely expensive to entice specialized emergency physicians to perform these duties, absent specific ownership in the program in question. Thus, this will be an additional expense, (at a higher cost rate than for currently operating hospital based MICUs) for jurisdictions which establish local MICUs. MEDICAL CONTROL Paramedics in New Jersey are required to contact a medical control base physician during each and every incident of patient treatment. Unfortunately, the provision of such medical control comprises a small portion of an emergency department physician s total duties. Thus, in order for a physician to become proficient at the provision of such on line medical control, they must handle a certain minimum volume of patients per shift. Currently, because no reimbursement is available for the provision of medical control, New Jersey s emergency medicine community is unwilling to provide any additional medical control services, or to provide such services for agencies in which they do not have an ownership interest (except in dire emergencies). Therefore, local MICUs may not be able to obtain necessary medical control, or may have to directly purchase such services (currently estimated by one New Jersey Emergency Physician contractor at more than 1,000,000 per year!). MUTUAL AID New Jersey s currently authorized, regional Mobile Intensive Care Units have well defined response areas, that are based on reasonably established boundaries, and not upon arbitrary municipal lines. Furthermore, each MICU has developed mutual aid agreements with surrounding programs, to ensure that care is always available. In a municipality based system, the concept of mutual aid is less likely to be given effect to the extent that it is now, due to concerns of territoriality, home rule, and the matter of ownership of the MICU. Towns which have gone to the expense and difficulty of establishing a Mobile Intensive Care Unit with their taxpayers hard earned money, in all likelihood, will be loath to send that unit to a neighboring town s emergency. Furthermore without a coordinated mutual aid program a town that is reluctant to send its Mobile Intensive Care Unit to a neighbor will find itself in the unenviable position of being unable to call upon neighbors for assistance when it is needed.

6 THE PHENOMENON OF CHERRY PICKING One tremendous benefit of a regionalized MICU program to the citizens of New Jersey is universal access to the system. New Jersey is the only state in the United States where 100% of residents are covered by a designated MICU response area. Such 100% coverage is enabled by the fact that these units are regionalized, and as such, costs for serving high volume, high risk and low reimbursement areas can be spread across the entire region. In other states, where MICU services are not regionalized, the phenomenon known as cherry picking occurs. In this insidious practice, providers (usually for-profit or non-hospital entities) position a majority of their resources in those areas known to be populated by patients with the best payer mix. Other areas, where the need is high, but the possibility of reimbursement for services is low (inner cities, rural areas, etc.) are left to not-for-profit hospital based providers, who are, often times unable to provide services to these populations in a fiscally responsible manner, and ultimately, these populations (which are typically the ones most in need of Mobile Intensive Care Unit services) become underserved, or even lose access entirely, because of the lack of regionalization. MANAGEMENT Management of a pre-hospital mobile intensive unit is a highly specialized task. In most cases, experienced and innovative management can significantly improve the productivity and quality of a mobile intensive care unit. Conversely, inexperienced and/or unskilled management directly impacts the quality of Mobile Intensive Care Unit services. New Jersey is currently suffering from a significant shortage of paramedics. There is no end in sight to this shortage due to : 1) the inability of many states paramedics to obtain reciprocal certification in New Jersey, and; 2) the relatively low volume of New Jersey State certified paramedics (due in part to the length of the educational process necessary to obtain such certification, the relatively low pay offered for such positions, as compared to the nursing profession, etc.). A shortage of professional paramedics only exacerbates this shortage of management personnel. Thus, it is unreasonable to suspect a multitude of newly established local MICUs will be able to obtain appropriately experienced management staff (or for that matter paramedics at all to staff each unit). FINANCES For many years this structure worked well because essentially all the BLS service in the state was provided by non-billing, volunteer first aid squads. In this scenario, the paramedic programs were able to bill Medicare and retain all the reimbursement revenue. New Jersey intentionally designed its EMS system this way, with a prohibition on ALS transport, to assure that the volunteer BLS agencies would not be supplanted by the paramedic services, clearly recognizing that all the funds from Medicare would be used to reimburse the ALS providers only. However, with volunteer squads being replaced by billing BLS agencies more and more often, an ever increasing conflict has surfaced in New Jersey over the years. Unfortunately, under New Jersey s EMS structure, the paramedic providers and the paid, billing BLS ambulance agencies must fight over Medicare reimbursement. That s because Medicare, by federal regulation, only pays one bill, and that bill is for the level of medical transport, not the

7 level of clinical care, provided to a beneficiary. Thus, when New Jersey s paramedic units answer a Medicare patient s life threatening emergency with a paid BLS agency, the paramedic unit automatically incurs an extra cost. The ALS provider must pay the BLS agency the latter s Medicare rate in order to retain the ability to bill Medicare at all. In other words, if the paramedic unit wishes to bill Medicare for its services, it must agree to split the reimbursement with the BLS agency. This has siphoned an ever growing amount of money from the paramedic programs in New Jersey to the benefit of the billing BLS agencies. Even this was not too much of a concern ten years ago, when Medicare reimbursement for ALS service was much higher and the number of billing BLS agencies was much smaller. However, over the last decade many volunteer squads have been replaced with billing BLS ambulance agencies i. In addition, since 2002 with implementation of its national fee schedule, Medicare has dramatically reduced the rate it pays for ALS service while simultaneously increasing what it pays for BLS transport. In 2006, the net reimbursement a paramedic program retained on each case after billing Medicare and paying the transporting BLS agency, was between $50 - $100. Medicare Reimbursement Base Rates Comparison; Part A MICU(ALS1-E) versus Part B BLS-E $700 $600 $500 $400 $63 $64 $65 $300 $200 $100 $ BLS-E Base Rate MICU Net Revenue Since the average paramedic program s cost to provide care is between $500 and $700 per case, the ALS providers in the state are losing significant amounts of money on every Medicare patient treated when interfacing with billing BLS agencies. And, since roughly half of all the patients paramedics care for are covered by Medicare, the ALS providers in New Jersey are losing millions of dollars a year. In fact, the New Jersey Association of Paramedic Programs (NJAPP) now estimates the annual drain on the state's MICU services exceeds $13 million ii. The number is so large now, that cost shifting to other payors, such as insurance companies, can no longer subsidize these losses. The only alternative paramedic services have to generate more revenue under these circumstances, is to forfeit the right to bill Medicare, pursuing the elderly patient for the full cost

8 of service. Instead of a senior in the state paying about $80 in co-pay cost associated with their Medicare paramedic bill, they would be forced to remit over $500 to $2,000, or more iii. These are the most vulnerable in society, living on fixed incomes and needing paramedics the most. It is not likely they will be able to easily pay such out-of-pocket costs. In fact, a growing number of cases are documented each year in New Jersey where elderly patients are refusing ALS care due to cost. As of January, 2007, the largest paramedic provider in New Jersey (MONOC) began curtailing portions of its operations, directly affecting twelve towns in three counties. They found this action necessary because their warnings of this growing Medicare shortfall crisis and pleas for resolution over the last ten years, failed to result in any corrective action by government. Since the alarm bell was raised in 1996, only sporadic calls for some future, non-specific, compromised solution, by a so-called EMS Coalition, has been made by the industry s constituent groups. Sadly, such an answer has never been crafted, proposed or implemented. Even more onerously, the paramedic system has already begun to collapse. Thousands iv of calls for MICUs go unanswered every year in New Jersey because paramedic programs have been unable to afford placing needed additional units into service. These patients are denied state-of-the-art pre-hospital advanced medical care, now known to be vital in the survival of trauma, cardiac and stroke patients, and must settle for a rushed BLS ambulance ride, in unstable condition, to an overburdened hospital emergency department. Since 2002, more than seven paramedic programs in New Jersey have failed. In those cases, other ALS providers stepped in and absorbed their services and continued operations without interruption. This expansion of some providers, fueled by insolvent, smaller programs, acted initially as a hedge against the overall deteriorating reimbursement structure described. By increasing their economy of scale, reducing some operating expenses and spreading remaining fixed costs. Unfortunately, it is now clear, no amount of expansion can forestall the losses inherent in the state s paramedic system structure. Worsening this crisis is the continuing series of hospital closures in the state. As more and more hospitals shutter their doors, the resulting elimination of needed Emergency Departments deepens the paramedic crisis. Less EDs means longer transport times for mobile intensive care units caring patients with life threatening medical problems and much longer waits for physician intervention when those units finally to arrive at a hospital. This combination of fewer Emergency Departments and fewer paramedic units is destroying a necessary health-safety net we all rely upon and expect to be there when we are faced with serious illness or injury. Lives are now being adversely affected every day in New Jersey. It is reasonable to conclude that some have already suffered untoward health outcomes and disabilities, or even died, because our EMS system has been permitted to erode to this dangerous level.

9 i The most recent data from the NJ DHSS indicates that more than half of all ALS cases in the state are transported to the hospital in billing BLS agency ambulances. ii From study conducted in December, 2006 by the NJAPP (New Jersey Administrators of Paramedic Programs): iii Paramedic service per case gross charges in NJ range from about $500 to over $3,000. iv State reports reveal that paramedic units in New Jersey were unable to respond to 14,862 cases in 2004 and 13,435 in Data for 2006 was not available at the time of this article.

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