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TACIR draft: ambulance services face rising costs; staff urges recurring equipment grants and local cooperation
Summary
TACIR presented a draft study finding county ambulance expenditures rising, workforce and equipment costs stressing local budgets, and recommended making the state ambulance equipment grant recurring while encouraging voluntary city–county cost‑sharing rather than imposing mandatory municipal reimbursement rules.
TACIR staff presented a draft report examining required ambulance services and county fiscal impacts, finding rising expenditures and several policy options counties and the General Assembly could consider to stabilize services.
Research Associate Nathaniel Pettit summarized staff findings: Tennessee designated ambulance services essential in 2021 and counties are responsible for ensuring at least one licensed ambulance provider operates in the county. Of 95 counties, 63 provide services directly, three use county hospitals, and 32 contract with third parties (other governments, for‑profit or nonprofit providers). Excluding counties with extreme values or missing data, the average county expenditure for ambulance services increased from about $1.88 million in FY2020–21 to about $2.7 million in FY2023–24.
Pettit told commissioners the largest ambulance cost components are labor and equipment; equipment grants from the General Assembly have helped but are not recurring. Staff recommended converting the equipment grant into a recurring funding program to help ambulance services plan for vehicle and equipment replacement.
The draft also reviewed reimbursement pressures: Medicare, TennCare (Medicaid), and private insurers often reimburse at rates that providers say do not cover costs; staff noted a recent proposed CMS rule that could further constrain state‑directed payments and affect reimbursement levels. The report recommended encouraging voluntary city–county partnerships over statutory mandates that would require municipalities that do not provide service to reimburse counties. Staff said mandatory reimbursements could prompt cities to start their own services and raise net costs for counties covering outlying areas.
Other potential measures discussed included: expanding non‑emergency transport opportunities, greater use of billing companies to increase collections, sharing medical directors across jurisdictions, removing statutory caps on training centers (to increase workforce pipeline), and increasing participation in the TNT2 program (treatment in place/alternate destination reimbursements). Pettit noted staff had nearly 100 stakeholder interviews and were integrating additional TennCare data received after the draft.
Members asked whether staff would make recommendations on TennCare/Medicare reimbursement rates. Staff said the draft outlines the constraints and monitoring needs and that further recommendations may be added after continued conversations with TennCare and federal developments on the CMS rule.
Staff will incorporate newly obtained data into the final report and consider whether the TNT2 program and other state rural health initiatives could be scaled.
