ASTM F1493-93(1998)
(Guide)Standard Guide for Financing and Financial Accountability of Medical Transportation Systems
Standard Guide for Financing and Financial Accountability of Medical Transportation Systems
SCOPE
1.1 This document establishes guidelines for understanding the financing of medical transportation systems. It identifies factors affecting financing, system design and performance requirements, revenue sources, financial accountability and management, and requirements for financially efficient systems.
General Information
Relations
Standards Content (Sample)
NOTICE: This standard has either been superceded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
Designation: F 1493 – 93 (Reapproved 1998)
Standard Guide for
Financing and Financial Accountability of Medical
Transportation Systems
This standard is issued under the fixed designation F 1493; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (e) indicates an editorial change since the last revision or reapproval.
1. Scope 4.2 Cost Determination—This guide is designed to accu-
rately determine actual and imputed costs of providing ambu-
1.1 This document establishes guidelines for understanding
lance service. It provides methodology for understanding the
the financing of medical transportation systems. It identifies
value of services rendered and a basis for realistic industry-
factors affecting financing, system design and performance
wide comparisons.
requirements, revenue sources, financial accountability and
4.3 Cost Accounting—It is recognized that medical trans-
management, and requirements for financially efficient sys-
portation services frequently are a part of a larger organization.
tems.
However, the proper use of this guide mandates that all costs,
2. Referenced Documents real and imputed, directly or indirectly related to providing
ambulance service, regardless of organizational structure, be
2.1 ASTM Standards:
totally and accurately accounted for through the use of gener-
F 1177 Terminology Relating to Emergency Medical Ser-
ally accepted accounting principles.
vices
4.4 Application—This guide, as part of the ASTM Stan-
3. Terminology
dards and Practices, shall apply in its entirety whenever the
entire document, or any part thereof, is used by any govern-
3.1 Definitions of Terms Specific to This Standard: Descrip-
mental authority to establish, operate, manage or regulate the
tion of Terms Specific to This Guide:
delivery or payment for medical transportation services.
3.1.1 patient transport price—determined by summing all
costs related to patient transports, to include all non allowed
5. Environmental Factors
charges and contractual allowance and adjusted by any revenue
5.1 Several significant factors of a given service area affect
generated by any subsidies, contributions and subscription
its system’s resources and related costs. They require careful
fees. The resulting amount is divided by the total number of
examination and analysis. Understanding these factors will
patient transports to determine the patient transport price.
enhance the ability of those who direct, administer, manage
3.1.2 medical transportation system—(see Terminology
and/or regulate medical transportation systems to more accu-
F 1177 for the definition of this term.)
rately determine anticipated needs and evaluate actual costs.
3.1.3 medical transportation services—(see Terminology
5.2 Terrain—Areas with mountains, valleys, waterways and
F 1177 for the definition of this term.)
bridges, etc., will usually be less accessible and require more
4. Significance and Use
resources resulting in reduced efficiency and a higher patient
transport price.
4.1 Management—Sound fiscal management is essential for
5.3 Roads and Highways—Outdated and dangerous design
all medical transportation systems. Without sufficient financial
of roads create hazards. These hazards create more demand for
resources, a system will fail to consistently achieve its objec-
service and thus require a greater concentration of resources.
tives. Therefore, finance is a primary responsibility in all
The extra resources increase system costs.
systems; be they hospital owned/operated, private, public or
5.4 Weather—Systems subject to extreme weather condi-
volunteer organizations, or any combination thereof.
tions (i.e., cold and snow, heavy rain and rock/mud slides,
hurricanes, heat and dry conditions, wild/forest fires, and the
This guide is under the jurisdiction of ASTM Committee F30 on Emergency
like.) will need seasonal or periodic plans to meet area needs
Medical Services and is the direct responsibility of Subcommittee F30.03 on
during such extremes. Maintenance of proper response plans
Organization/Management.
and participation therein is a cost factor to the system. During
Current edition approved Sept. 15, 1993. Published November 1993.
Annual Book of ASTM Standards, Vol 13.02.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
NOTICE: This standard has either been superceded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
F 1493 – 93 (1998)
such times maximum resources are required and system 6.5 Jurisdictional Responsibilities—Jurisdictions exist at
efficiency is reduced resulting in higher overall patient trans- the federal, state, regional, and local level which have an
port costs. impact on the operation of each EMS provider and the EMS
system. They may include the following:
5.5 Population Density—Areas of high population density
generate higher call volume and allow greater flexibility in 6.5.1 EMS Regulations/Legislation—EMS regulations and
legislation are usually passed at the state or local units of
utilization of resources resulting in lower overall patient
transport costs. government. They are usually influenced by EMS guidelines
recommended at the federal level.
5.5.1 Demographics—Areas with population characteristics
6.5.2 Labor—Federal labor laws cover issues related to
with high concentrations of the elderly and economically
Health & Safety, Collective Bargaining, and Wages & Hours.
disadvantaged, or both will result in higher call volume and a
6.5.3 Taxes—Federal, state, and local taxes apply to pur-
greater demand on resources to meet the needs of these
chases, property, incorporation, and the like.
portions of the total service area.
6.5.4 Other Non-EMS Related Costs—Other restrictions
5.6 Natural/Man Made Disasters—Systems subject to un-
include building and zoning regulations.
predictable events of extreme consequences (for example,
earthquakes, airplane crashes, structural fires, hazardous mate-
7. System Factors Related to Expense
rial incidents, and the like.) will need emergency preparedness
7.1 Exclusionary Policies—Systems that exclude providers
planning to meet area needs during disaster events. Mainte-
from emergency or non-emergency calls, respectively, by
nance of proper response plans and participation in exercise are
design increase total system cost. Utilization of all resources
cost factor to the system. During disasters maximum resources
within the service area is necessary to achieve maximum
are required and system efficiency is reduced resulting in
economy while maintaining performance requirements,
higher overall patient transport costs.
thereby resulting in lower overall patient transport price.
7.2 Performance Factors—Jurisdictional authorities have a
6. System Design Factors
responsibility to establish performance requirements for the
6.1 Service Area—It is generally more economical for a
provider(s) of service and demand accountability and compli-
medical transportation system to serve a larger population.
ance thereof. In the design of such requirements, cost consid-
Systems which provide a larger volume of transports within a
erations, allowances for geography, population density, demo-
given area will benefit from the inherent economies of scale
graphics, economies of scale, duplication and/or multiple
and generate a lower average cost per transport.
responders and exclusionary policies, must be addressed.
6.2 Medical Transport Providers—The number of medical
Precise accounting practices for the system must be initially
transport providers in a service area directly influences the cost
established and routinely maintained so all cost factors within
per transport. Duplication of resources by multiple providers
the system design can be identified and reviewed with rela-
within a service area can negatively impact economies of scale.
tionship to the performance factors.
6.3 Health Care Facilities—The number and location of
7.2.1 Operations—Factors include meeting standards for
hospitals, nursing homes, and the like, will influence costs. A
average response and total times, staffing patterns, etc. Systems
significant number of transports to hospitals outside the service
that require shorter response and total time performance will
area can increase costs. A larger ratio of nursing home beds to
demand greater resources and will cost more than those with
a given general population can result in higher economies of
less rigid requirements.
scale than a smaller ratio and thereby lower costs.
7.2.2 Clinical Capability—Factors include meeting stan-
6.4 Start-Up Costs—Sufficient funds must be available to
dards for the license level of the service (Basic to Paramedic),
ensure the success of initial start-up, or expansion of an
the license level of the personnel, on-line medical control,
existing service. To determine the required level of funding,
quality assurance activities, and the like. Systems that require
consideration must be given to the following;
higher levels of clinical care, training and medical supervision
6.4.1 Offıce/Service Facility—Items to be included are
will demand greater resources and will cost more than those
building, office equipment, furniture and fixtures, computers,
with lesser requirements.
etc.
7.3 Effıciency—Efficiency is affected by policies, ordi-
6.4.2 Equipment—Items to be included are ambulances,
nances, and rules which limit the flexibility of the provider or
administrative vehicles, communication equipment, medical
which do not provide incentives to promote efficiency.
equipment and supplies, etc.
7.3.1 Efficient systems deploy ambulance, staffing, and
6.4.3 Inventory—Items to be included are sufficient levels
equipment resources to eliminate duplication.
of supplies for on-going operations of ambulance services and
7.3.2 Efficient systems promote cooperation between the
office functions for the period of time it is expected to take to
jurisdictional authorities and the providers to identify and
establish cash flow to support on-going operation.
eliminate waste, inefficiencies and restrictive regulations in
6.4.4 Personnel—Items to be included are expenses related
order to reduce overall system cost while improving system
to recruiting, hiring, training, salaries and benefits.
efficiency.
6.4.5 Insurance—Actual premium paid, or imputed costs
8. System Factors Related to Revenue
for self-funding.
6.4.6 Working Capital—Funds adequate to support overall 8.1 Revenue Sources—Different types of revenue sources
operations until such time as sufficient cash flow is established. fund the providers within an EMS system. The different types
NOTICE: This standard has either been superceded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
F 1493 – 93 (1998)
of revenue, separately or in combination with each other, have 9.2.1.2 Fixed Assets—Assets which will have value to the
different impacts on the operations of the system. system at the end of a twelve month (FY) period.
8.1.1 Subsidies—Revenue received from direct governmen-
9.2.1.3 Other Assets—Assets whose length of value is
tal funding. Subsidies range from total funding to supplemental
indeterminable (for example, goodwill, tax credits, utility
compensation to affect shortfalls from other revenue sources. deposits, and the like).
8.1.2 Subscription Fee—Pre-paid fee for a family or indi-
9.2.2 Liabilities—Obligations owed by the system.
vidual who belong to a membership plan which agrees to
9.2.2.1 Current Liabilities—Obligations which will gener-
provide ambulance service for reasons of medical necessity.
ally be paid within a twelve month (FY) period (for example,
8.1.3 Contributions/Donations—Revenue received from in-
accounts payable, accrued payroll expenses, current portion of
dividual or general solicitations, fund raising, grants, etc.
long-term debt, and the like).
8.1.4 Fee for Service—Revenue received from charges for
9.2.2.2 Long-Term Liabilities—Obligations owed by the
specific services performed.
system whose payment term extends beyond a twelve month
8.2 Reductions in Revenue—Revenue may be reduced be-
(FY) period (for example, bank notes, bond payments, ad-
cause of management practices related to third party payor
vances from stockholders, and the like).
regulations, group purchases of service, or non-payment of
9.2.2.3 Other Liabilities—Obligations whose payment
fees.
terms are indeterminable (for example, deferred taxes, and the
8.2.1 Non-Allowed Charges—Third party payors such as
like).
Medicare and Medicaid reimburse specific service and supplies
9.2.3 Equity—The value of the difference between total
utilized at a lower rate than the normal billing rate. The
system assets and liabilities which reflect the net value of the
unreimbursed amount is referred to as non-allowed charges.
system.
This is applicable only on transports where the provider
9.2.3.1 Paid in Capital—Initial or additional investment in
accepts Medicare or Medicaid assignment.
the system.
NOTE 1—It is not mandatory that a provider must accept assignment on 9.2.3.2 Retained Earnings/Reserves—The total net income/
Medicare claims. Providers may submit claims as non-assigned and
loss which remains in the system at a specific point in time.
charge patients the full amount for services rendered, thereby avoiding the
9.3 Income Statement—The measure of the financial perfor-
reduction in revenue for non-allowed charges.
mance of the system over a period of time.
8.2.2 Contractual Allowances—Specific group purchasers
9.3.1 Revenue—Total income from all revenue sources, less
may be granted pre-determined discounts based upon negoti- revenue reductions.
ated agreements (for example, exclusive contract, accelerated
9.3.2 Operating Expenses—Total costs, real or imputed,
payment, and the like).
which relate to producing the service (for example, service
8.2.3 Bad Debt—Although bad debt is a cost of doing
related salaries & associated costs, supplies, vehicle mainte-
business, it bears special mention with relationship to reduction
nance & depreciation, insurance, and the like).
in revenue.
9.3.3 General and Administrative Expenses—Total costs,
8.2.3.1 An EMS provider will have a significant number of
real or imputed, which relate to administration and promotion
accounts (much higher than most other industries) which will
of the service (for example, administrative/clerical salaries and
not be paid. These accounts are bad debt,
...
Questions, Comments and Discussion
Ask us and Technical Secretary will try to provide an answer. You can facilitate discussion about the standard in here.