ASTM F1493-93(2008)
(Guide)Standard Guide for Financing and Financial Accountability of Medical Transportation Systems (Withdrawn 2015)
Standard Guide for Financing and Financial Accountability of Medical Transportation Systems (Withdrawn 2015)
SIGNIFICANCE AND USE
Management—Sound fiscal management is essential for all medical transportation systems. Without sufficient financial resources, a system will fail to consistently achieve its objectives. Therefore, finance is a primary responsibility in all systems; be they hospital owned/operated, private, public or volunteer organizations, or any combination thereof.
Cost Determination—This guide is designed to accurately determine actual and imputed costs of providing ambulance service. It provides methodology for understanding the value of services rendered and a basis for realistic industry-wide comparisons.
Cost Accounting—It is recognized that medical transportation services frequently are a part of a larger organization. However, the proper use of this guide mandates that all costs, real and imputed, directly or indirectly related to providing ambulance service, regardless of organizational structure, be totally and accurately accounted for through the use of generally accepted accounting principles.
Application—This guide, as part of the ASTM Standards and Practices, shall apply in its entirety whenever the entire document, or any part thereof, is used by any governmental authority to establish, operate, manage or regulate the delivery or payment for medical transportation services.
SCOPE
1.1 This guide 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.
WITHDRAWN RATIONALE
This guide established guidelines for understanding the financing of medical transportation systems.
Formerly under the jurisdiction of Committee F30 on Emergency Medical Services, this guide was withdrawn in June 2015. This standard is being withdrawn without replacement due to its limited use by industry.
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NOTICE: This standard has either been superseded and replaced by a new version or withdrawn.
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Designation: F1493 − 93(Reapproved 2008)
Standard Guide for
Financing and Financial Accountability of Medical
Transportation Systems
This standard is issued under the fixed designation F1493; 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 (´) indicates an editorial change since the last revision or reapproval.
1. Scope systems; be they hospital owned/operated, private, public or
volunteer organizations, or any combination thereof.
1.1 This guide establishes guidelines for understanding the
financing of medical transportation systems. It identifies fac-
4.2 Cost Determination—This guide is designed to accu-
tors affecting financing, system design and performance
rately determine actual and imputed costs of providing ambu-
requirements, revenue sources, financial accountability and
lance service. It provides methodology for understanding the
management, and requirements for financially efficient sys-
value of services rendered and a basis for realistic industry-
tems.
wide comparisons.
4.3 Cost Accounting—It is recognized that medical trans-
2. Referenced Documents
portation services frequently are a part of a larger organization.
2.1 ASTM Standards:
However, the proper use of this guide mandates that all costs,
F1177 Terminology Relating to Emergency Medical Ser-
real and imputed, directly or indirectly related to providing
vices
ambulance service, regardless of organizational structure, be
totally and accurately accounted for through the use of gener-
3. Terminology
ally accepted accounting principles.
3.1 Definitions of Terms Specific to This Standard:
4.4 Application—Thisguide,aspartoftheASTMStandards
3.1.1 patient transport price—determined by summing all
and Practices, shall apply in its entirety whenever the entire
costs related to patient transports, to include all non allowed
document, or any part thereof, is used by any governmental
chargesandcontractualallowanceandadjustedbyanyrevenue
authority to establish, operate, manage or regulate the delivery
generated by any subsidies, contributions and subscription
or payment for medical transportation services.
fees. The resulting amount is divided by the total number of
patient transports to determine the patient transport price.
5. Environmental Factors
3.1.2 medical transportation system—(see Terminology
5.1 Several significant factors of a given service area affect
F1177 for the definition of this term.)
its system’s resources and related costs. They require careful
3.1.3 medical transportation services—(see Terminology
examination and analysis. Understanding these factors will
F1177 for the definition of this term.)
enhance the ability of those who direct, administer, manage
and/or regulate medical transportation systems to more accu-
4. Significance and Use
rately determine anticipated needs and evaluate actual costs.
4.1 Management—Sound fiscal management is essential for
5.2 Terrain—Areas with mountains, valleys, waterways and
all medical transportation systems. Without sufficient financial
bridges,andsoforth,willusuallybelessaccessibleandrequire
resources, a system will fail to consistently achieve its objec-
more resources resulting in reduced efficiency and a higher
tives. Therefore, finance is a primary responsibility in all
patient transport price.
5.3 Roads and Highways—Outdated and dangerous design
of roads create hazards.These hazards create more demand for
This guide is under the jurisdiction of ASTM Committee F30 on Emergency
service and thus require a greater concentration of resources.
Medical Services and is the direct responsibility of Subcommittee F30.03 on
Organization/Management.
The extra resources increase system costs.
Current edition approved Feb. 1, 2008. Published March 2008. Originally
5.4 Weather—Systems subject to extreme weather condi-
approved in 1993. Last previous edition approved in 2003 as F1493 – 93(2003).
DOI: 10.1520/F1493-93R08.
tions (that is, cold and snow, heavy rain and rock/mud slides,
For referenced ASTM standards, visit the ASTM website, www.astm.org, or
hurricanes, heat and dry conditions, wild/forest fires, and the
contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM
like) will need seasonal or periodic plans to meet area needs
Standards volume information, refer to the standard’s Document Summary page on
the ASTM website. during such extremes. Maintenance of proper response plans
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
F1493 − 93 (2008)
and participation therein is a cost factor to the system. During 6.4.6 Working Capital—Funds adequate to support overall
such times maximum resources are required and system operations until such time as sufficient cash flow is established.
efficiency is reduced resulting in higher overall patient trans-
6.5 Jurisdictional Responsibilities—Jurisdictions exist at
port costs.
the federal, state, regional, and local level which have an
5.5 Population Density—Areas of high population density
impact on the operation of each EMS provider and the EMS
generate higher call volume and allow greater flexibility in system. They may include the following:
utilization of resources resulting in lower overall patient
6.5.1 EMS Regulations/Legislation—EMS regulations and
transport costs. legislation are usually passed at the state or local units of
5.5.1 Demographics—Areas with population characteristics
government. They are usually influenced by EMS guidelines
with high concentrations of the elderly and economically recommended at the federal level.
disadvantaged, or both will result in higher call volume and a
6.5.2 Labor—Federal labor laws cover issues related to
greater demand on resources to meet the needs of these
Health & Safety, Collective Bargaining, and Wages & Hours.
portions of the total service area.
6.5.3 Taxes—Federal, state, and local taxes apply to
purchases, property, incorporation, and the like.
5.6 Natural/Man Made Disasters—Systems subject to un-
6.5.4 Other Non-EMS Related Costs—Other restrictions
predictable events of extreme consequences (for example,
include building and zoning regulations.
earthquakes, airplane crashes, structural fires, hazardous mate-
rial incidents, and the like) will need emergency preparedness
7. System Factors Related to Expense
planning to meet area needs during disaster events. Mainte-
nanceofproperresponseplansandparticipationinexerciseare
7.1 Exclusionary Policies—Systems that exclude providers
cost factor to the system. During disasters maximum resources
from emergency or non-emergency calls, respectively, by
are required and system efficiency is reduced resulting in
design increase total system cost. Utilization of all resources
higher overall patient transport costs.
within the service area is necessary to achieve maximum
economy while maintaining performance requirements,
6. System Design Factors
thereby resulting in lower overall patient transport price.
6.1 Service Area—It is generally more economical for a
7.2 Performance Factors—Jurisdictional authorities have a
medical transportation system to serve a larger population.
responsibility to establish performance requirements for the
Systems which provide a larger volume of transports within a
provider(s) of service and demand accountability and compli-
given area will benefit from the inherent economies of scale
ance thereof. In the design of such requirements, cost
and generate a lower average cost per transport.
considerations, allowances for geography, population density,
6.2 Medical Transport Providers—The number of medical
demographics, economies of scale, duplication and/or multiple
transport providers in a service area directly influences the cost
responders and exclusionary policies, must be addressed.
per transport. Duplication of resources by multiple providers
Precise accounting practices for the system must be initially
withinaserviceareacannegativelyimpacteconomiesofscale.
established and routinely maintained so all cost factors within
the system design can be identified and reviewed with rela-
6.3 Health Care Facilities—The number and location of
tionship to the performance factors.
hospitals, nursing homes, and the like, will influence costs. A
7.2.1 Operations—Factors include meeting standards for
significant number of transports to hospitals outside the service
averageresponseandtotaltimes,staffingpatterns,andsoforth.
area can increase costs.Alarger ratio of nursing home beds to
Systems that require shorter response and total time perfor-
a given general population can result in higher economies of
mance will demand greater resources and will cost more than
scale than a smaller ratio and thereby lower costs.
those with less rigid requirements.
6.4 Start-Up Costs—Sufficient funds must be available to
7.2.2 Clinical Capability—Factors include meeting stan-
ensure the success of initial start-up, or expansion of an
dards for the license level of the service (Basic to Paramedic),
existing service. To determine the required level of funding,
the license level of the personnel, on-line medical control,
consideration must be given to the following;
quality assurance activities, and the like. Systems that require
6.4.1 Offıce/Service Facility—Items to be included are
higher levels of clinical care, training and medical supervision
building, office equipment, furniture and fixtures, computers,
will demand greater resources and will cost more than those
and so forth.
with lesser requirements.
6.4.2 Equipment—Items to be included are ambulances,
7.3 Effıciency—Efficiency is affected by policies,
administrative vehicles, communication equipment, medical
equipment and supplies, and so forth. ordinances, and rules which limit the flexibility of the provider
or which do not provide incentives to promote efficiency.
6.4.3 Inventory—Itemstobeincludedaresufficientlevelsof
supplies for on-going operations of ambulance services and 7.3.1 Efficient systems deploy ambulance, staffing, and
equipment resources to eliminate duplication.
office functions for the period of time it is expected to take to
establish cash flow to support on-going operation. 7.3.2 Efficient systems promote cooperation between the
6.4.4 Personnel—Items to be included are expenses related jurisdictional authorities and the providers to identify and
to recruiting, hiring, training, salaries and benefits. eliminate waste, inefficiencies and restrictive regulations in
6.4.5 Insurance—Actualpremiumpaid,orimputedcostsfor order to reduce overall system cost while improving system
self-funding. efficiency.
F1493 − 93 (2008)
8. System Factors Related to Revenue 9.2.1 Assets—Tangible or non-tangible items of value to the
system.
8.1 Revenue Sources—Different types of revenue sources
9.2.1.1 Current Assets—Assets whose value will be used or
fund the providers within an EMS system. The different types
realized within a twelve month (fiscal year) period (for
of revenue, separately or in combination with each other, have
example, cash, accounts receivable, pre-paid expenses, and the
different impacts on the operations of the system.
like).
8.1.1 Subsidies—Revenue received from direct governmen-
9.2.1.2 Fixed Assets—Assets which will have value to the
talfunding.Subsidiesrangefromtotalfundingtosupplemental
system at the end of a twelve month (FY) period.
compensation to affect shortfalls from other revenue sources.
9.2.1.3 Other Assets—Assets whose length of value is
8.1.2 Subscription Fee—Pre-paid fee for a family or indi-
indeterminable (for example, goodwill, tax credits, utility
vidual who belong to a membership plan which agrees to
deposits, and the like).
provide ambulance service for reasons of medical necessity.
9.2.2 Liabilities—Obligations owed by the system.
8.1.3 Contributions/Donations—Revenue received from in-
9.2.2.1 Current Liabilities—Obligations which will gener-
dividual or general solicitations, fund raising, grants, and so
ally be paid within a twelve month (FY) period (for example,
forth.
accounts payable, accrued payroll expenses, current portion of
8.1.4 Fee for Service—Revenue received from charges for
long-term debt, and the like).
specific services performed.
9.2.2.2 Long-Term Liabilities—Obligations owed by the
8.2 Reductions in Revenue—Revenue may be reduced be-
system whose payment term extends beyond a twelve month
cause of management practices related to third party payor
(FY) period (for example, bank notes, bond payments, ad-
regulations, group purchases of service, or non-payment of
vances from stockholders, and the like).
fees.
9.2.2.3 Other Liabilities—Obligations whose payment
8.2.1 Non-Allowed Charges—Third party payors such as
terms are indeterminable (for example, deferred taxes, and the
MedicareandMedicaidreimbursespecificserviceandsupplies
like).
utilized at a lower rate than the normal billing rate. The
9.2.3 Equity—The value of the difference between total
unreimbursed amount is referred to as non-allowed charges.
system assets and liabilities which reflect the net value of the
This is applicable only on transports where the provider
system.
accepts Medicare or Medicaid assignment.
9.2.3.1 Paid in Capital—Initial or additional investment in
the system.
NOTE 1—It is not mandatory that a provider must accept assignment on
Medicare claims. Providers may submit claims as non-assigned and
9.2.3.2 Retained Earnings/Reserves—The total net income/
charge patients the full amount for services rendered, thereby avoiding the
loss which remains in the system at a specific point in time.
reduction in revenue for non-allowed charges.
9.3 Income Statement—The measure of the financial perfor-
8.2.2 Contractual Allowances—Specific group purchasers
mance of the system over a period of time.
may be granted pre-determined discounts based upon negoti-
9.3.1 Revenue—Total income from all revenue sources, less
ated agreements (for example, exclusive contract, accelerated
revenue reductions.
payment, and the like).
9.3.2 Operating Expenses—Total costs, real or imputed,
8.2.3 Bad Debt—Although bad debt is a cost of doing
which relate to producing the service (for example, service
business,itbearsspecialmentionwithrelationshiptoreduction
related salaries and associated costs, supplies, vehicle mainte-
in revenue.
nance and depreciation, insurance, and the like).
8.2.3.1 An EMS provider will have a significant number of
9.3.3 General and Administrative Expenses—Total costs,
accounts (much higher than most other industries) which will
real or imputed, which relate to administration and pro
...
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