The House Ways and Means Committee is considering adding a new tax to its revenue bill in order to pay ambulance services more money.
The committee, which writes taxes for the Legislature, took testimony Friday on a proposal to impose a 3.3 percent tax on all of Vermont’s 79 ambulance providers. It would be assessed on their revenue from patient care.
The panel is scheduled to consider the tax again Tuesday morning.
Under the current plan, the Department of Vermont Health Access, which acts like an insurance company that facilitates Vermont’s Medicaid program, would collect about $1.2 million from the ambulance providers, according to estimates from the Joint Fiscal Office.
The state would use the revenue to draw down federal money to roughly double that amount. The Department of Vermont Health Access would then use the revenue to increase how much Vermont’s Medicaid program pays ambulance providers for treating Medicaid patients.
“Ambulance services are reimbursed at 40 percent of Medicare rates, and most other providers are reimbursed at 80 percent,” said Rep. Oliver Olsen, I-Londonderry. “I think folks are generally going to come out winners in this equation.”
The Department of Vermont Health Access is proposing to use about $100,000 to hire two full-time workers to collect the tax.
The Joint Fiscal Office estimates that the state may be able to increase reimbursement by $2.4 million across all ambulance providers — an increase of about 50 percent over fiscal year 2015, when the Department of Vermont Health Access paid $4.3 million to ambulance providers.
Ambulance services that see the highest number of Medicaid patients would benefit the most from the proposal, and those that see a low proportion of Medicaid patients may face a loss.
The 3.3 percent tax is called a provider tax. The model is similar to the current way that hospitals pay a 6 percent tax on patient care revenue and get some of their money back in the form of payments for their uncompensated care.
The administration of Gov. Peter Shumlin earlier this year proposed imposing a provider tax on independent doctors and dentists, matching it with federal money, and using the majority of the money to fill in the projected Medicaid budget deficit. That proposal is now dead in the water.
Drew Hazelton, a member of Rescue Inc., in Brattleboro, told House Ways and Means on Friday that it is important to increase reimbursement rates for ambulance services.
Hazelton said current reimbursements don’t cover disposable supplies used to treat Medicaid patients in ambulances. He said ambulance providers have increased fees on commercial payments to make up the loss, but they can’t do it any further.
“There’s no wiggle room for us to cost shift anymore,” Hazelton said. “There’s certainly questions about whether the (emergency medical service) structures in Vermont can survive without increased payments.”
