Health Systems

How MedStar Saved $25 Million by Avoiding Unnecessary Emergency Services

These days, every aspect of the medical industry is looking to find cost savings, and 9-1-1 service is part of that movement as well. MedStar Mobile Healthcare, a North Texas organization that provides emergency services, has avoided over $25 million in medical costs for residents and payers over the past seven years.

The emergency department is one of the most expensive pieces of the medical industry, especially when it is full of problems that don’t belong in an emergency room. And when emergency physicians are operating out-of-network at in-network hospitals, surprise bills are end up with those who thought they were making the responsible decision in a time of emergency. These bills have made headlines and inspired legislation to fight them in past years. Emergency service providers can play an outsized role in avoiding these costs by treating problems upstream and diverting patients from expensive and often unnecessary services.

Created in 1986 to serve the Fort Worth area, MedStar is a public authority that provides emergency services, and the organization is governed by an appointed board from the fifteen cities the organization serves in North Texas. But despite the public governance, MedStar is not funded by tax dollars, and receives all of its funding through healthcare payers, just like other medical providers.

Because they are only paid when their services are necessary and only at set rates, they are forced to look for efficiencies where they can, and avoid services that won’t be reimbursed. The entity sees itself as a key player in avoiding unnecessary medical costs, which often occur in the emergency room. “We believe that we should have always been part of the solution,” says MedStar Executive Director Doug Hooten.

Patients known as high utilizers, who sometimes call 9-1-1 up to 20 times a month, are part of the problem, and MedStar has created initiatives to make sure that only emergencies receive ambulance rides to the emergency room.

For some people, navigating where to go with what problem can be daunting, and 9-1-1 offers a simple way to ensure that medical treatment will be received, but it isn’t efficient. MedStar created curriculum to train its staff to recognize whether an emergency transport or emergency room is necessary, and providers also look at medications to make sure several different doctors haven’t prescribed the same medication. The program also looks at social determinants of health to see if housing, food, transportation or other needs can improve conditions in a more appropriate and cost-effective way than calling an ambulance with every issue.

MedStar’s High Utilizer Program sidestepped $22,986,545 worth of medical costs by avoiding ambulance payment, emergency department visits, and hospital admissions between 2013 and 2019. The program avoided nearly 6,000 ambulance rides, nearly 3,500 emergency department visits and over 1,500 hospital admissions during that time period. Over $31,000 in medical costs were saved per person through this program.

MedStar’s 9-1-1 Nurse Triage Program uses trained nurses in the 9-1-1 call center to see if alternative destinations and transportation can be used to solve medical problems. The conversation may lead to a Lyft ride to an urgent care clinic rather than the much more costly ambulance ride to the hospital. The program has avoided nearly $6 million in medical costs, with around 4,500 ambulance rides and 4,166 emergency department visits. In total, the program saved $1,298 per patient.

So why would an organization avoid more expensive service? In many situations, there is a high probability that an ambulance ride to an emergency room would not be reimbursed, says Hooten. If the service is not deemed medically necessary, payers may not reimburse for it, so MedStar has incentive to avoid unnecessary costs.

As the medical industry moves toward value-based care, payers are enforcing higher standards about treatment, making sure that providers are demonstrating value through clinically appropriate treatment. Hooten sees the initiative as ways to get ahead of the curve on reimbursing for value rather than purely fee-for-service. “This is how our niche will be able to provide that going forward,” says Hooten.

One might think that hospitals that miss out on significant emergency bills might be critical of a service that diverts patients from its services, but in the shared risk environment of ACOs, the hospital is being measured by how well it manages its patient load, limiting high utilizers of high dollar services while keeping their doors open.

While the government has led in the area of reimbursing for value, the private payer model has been slow to catch up. Often times, a Lyft to the urgent care does not have a billing code, so an organization like MedStar might not have much incentive to help in that way rather than just send an ambulance. But MedStar is participating in a five year federal pilot program that emphasizes alternative destinations for 9-1-1 calls, triaging calls up front, and bringing down back end costs. The pilot will change the payment model to reimburse for treating people on location and setting up trips and appointments to urgent care or the doctor’s office, which aren’t currently recognized or paid for in the current fee-for-service model. Around 70 percent of payers have agreed to look at the pilot, with a possibility of moving toward that model.”It’s a big deal,” Hooten says.

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