EMS funding: 6 alternative sources

EMS systems across the United States, regardless of their clinical sophistication, deployment strategies, performance standards and governance, are challenged to obtain or maintain adequate funding.

Since its inception, the primary revenue stream for many EMS agencies has been user fees — billing patients for service — and in some places, local tax subsidies offset costs.

A reduction or elimination of local tax subsidies following the Great Recession of 2008 and inadequate Medicare and Medicaid reimbursement further the strain on EMS agencies. Here are six alternative-funding sources paramedic chiefs and EMS leaders need to consider for their agency.

1. Insurance reimbursement
Chesterfield County (Va.) Fire and EMS Department — where I served for 26 years — didn’t start third-party billing for ambulance transportation until July 2002. Since then, the department has received more than $40 million in reimbursements from Medicare, Medicaid and insurance companies.

Those funds provided personnel with new ambulances and bio-medical equipment on a regular replacement schedule. Funds were also used to refurbish ambulances, which also saves the department money.

2. Cost recovery
If your EMS agency responds to motor vehicle crashes, car fires, structure fires or hazardous materials incidents, there may be insurance funds available to reimburse your agency for these services.

When your department responds to an incident, furnish your cost-recovery provider — a third-party company — with the standard information from your run or incident report. This information can usually be submitted via email, fax or on their website. Your cost recovery provider then works on the department's behalf to process a claim with the appropriate insurance companies.

The provider commonly receives a percentage of the total amount collected as their professional fee. If no collections are made on a reported incident, no professional fees are collected [3].

3. Grants
Usually the first alternative funding source that comes to mind is grants. Therefore, the competition for available grants is high. One strategy is to attract multiple funders for a single project. Here are additional tips to enhance your EMS agency’s applications by showing [4]:

• Collaboration: A track record of collaboration should show groups of agencies working together to address a significant community need.
• Financial and programmatic capacity: A successful project with multiple funders is evidence of a solid financial organization and gives potential funders confidence that the work will be sustained beyond their initial investment.
• Leadership: Organizations that have been previously funded should have executive leadership that is collaborative and knowledgeable about the community and the field in which they operate.
• Measurable results: Multiple funders on a single project highlights that your agency is clearly able to articulate organizational goals, can present a clear plan for achieving results, and has an ability to track outcomes and impact on the community you serve.

4. Charitable contributions
Approximately 80 percent of charitable giving comes from individuals, living or dead. You read right, that’s charitable giving from individuals or private foundations established by individuals before their death.

In 2014, the largest source of charitable giving came from individuals at $258.51 billion — or 72 percent of total giving — followed by foundations ($53.97 billion/15 percent), bequests ($28.13 billion/8 percent) and corporations ($17.77 billion/5 percent) [5].

If your EMS agency is not a registered 501(c)3 non-profit organization, perhaps you should be. Even municipal agencies can set up their own foundation so that it can apply for and accept charitable contributions.

Visit EMSGrantsHelp.com or FireGrantsHelp.com for information on how-to apply for grants and to find funding opportunities specific for EMS agencies and fire departments. Grant Space is another on-line resource for searching out those charitable giving opportunities and how to apply for them [6].

5. Crowd funding
Online fundraising is one of the most popular internet features. The Bodega Bay (Calif.) Fire Protection District conducted an online crowd-funding campaign with hopes to raise $50,000 toward the purchase of a new ambulance, with special incentives for the most generous donors that included the right to advertise on the vehicle. Although the campaign didn't reach its goal, the agency embraced a creative funding strategy after a tax measure failed [7].

By using your department's social media platforms — Twitter, Facebook, Instagram — to market your fundraising efforts, you can greatly expand your crowd funding initiative’s target population of givers.

6. Membership programs
A membership program is similar to an insurance policy. The incentive for people to join is to avoid out-of-pocket costs, such as insurance policy deductibles, in the event they need paramedics.

Residents who become members are exempt from any out-of-pocket costs for the paramedic response fee when the EMS agency responds. Their insurance policies would be billed for the paramedic-level response and any balance due would be waived.

An effective and efficient way to encourage people to join is to partner with the local utility company to offer a discounted opt-out subscription that is attached to their utility bill. For example, the residents receive notice that a $3 per month fee will be added to their bill unless they call the utility company to opt-out.

Most people won’t have a problem this, especially given the benefits of the membership. But people also don’t like surprises, so make sure that you communicate with the folks in your community early and often before you launch a membership program.

Which one of the above is best for your EMS agency? All of them. Use them to build a financial portfolio for your organization that includes a diversity of revenue streams that will help ensure your agencies fiscal future.

Do you know of other revenue sources being used by EMS agencies? Share them with EMS1.com and we’ll help get the word out.

 

References

1. National EMS Advisory Council. EMS System Performance-based Funding and Reimbursement Model. p. 1. [Available on-line] http://www.ems.gov/nemsac/FinanceCommitteeAdvisoryPerformance-BasedReimbursement-May2012.pdf

2. California Ambulance Association. Impact of Health Care Reform on California’s EMS System. September 2012. [Available on-line] http://www.emsa.ca.gov/Media/Default/PDF/5_Impact_20of_20HCR_20Slides_209-19-12.pdf

3. Cox, Kristen. Personal communication via e-mail. February 15, 2016.

4. National EMS Advisory Council. EMS System Performance-based Funding and Reimbursement Model. p. 1. [Available on-line] http://www.ems.gov/nemsac/FinanceCommitteeAdvisoryPerformance-BasedReimbursement-May2012.pdf

5. FireRescue1.com. EMS Grants Help. 4 tips to fund an EMS project through multiple grant sources. [Available on-line] http://www.firerescue1.com/fire-grants/articles/2156131-4-tips-to-fund-an-EMS-project-through-multiple-grant-sources/

6. At the Ready Magazine. Should Your Agency Form a Non-Profit Organization? [Available on-line] http://www.atthereadymag.com/site/agencynonprofit

7. FireRescue1.com. Calif. fire district uses crowdfunding for new ambulance. [Available on-line]