HANOVER — Fees charged to patients by Upper Valley ambulance services reflect a problematic disparity between the costs of emergency-medical aid and the reimbursements paid out by insurers, according to first responders.

On Monday, for example, the Hanover Selectboard approved a new municipal fee schedule that raised rates for town ambulance service. The base fee for ambulance transportation with basic or advanced medical support will increase from $900 to $990, while the fee for special care support — usually reserved for people in critical condition — will increase from $1,300 to $1,430.

In addition, the mileage rate, an additional surcharge, will increase to $22 per mile from $20 per mile.

The ambulance rates, along with several other town fees, have not been updated for several years, resulting in revenues falling behind the costs of providing the services, according to town Finance Director Ellen Bullion.

“Many of our rates and fees have not been increased since 2020, and some since 2017,” Bullion said.

Many insurers — including the federal Medicaid and Medicare programs — pay only a fraction of the true cost of ambulance services, resulting in patients and taxpayers having to make up the difference.

“Our reimbursement system is so outdated, it doesn’t cover the cost of services,” said Jeff Spencer, founder of Medical Business Services in Essex, Vt.

Medical Business Services manages billing and revenue for 34 municipal or nonprofit ambulance providers in New Hampshire and Vermont, including Hanover and the Bethel-based nonprofit White River Valley Ambulance.

Spencer, a former first responder, said that Medicaid and Medicare — which insure up to 70% of the patients using ambulance transport — have antiquated reimbursement rates that fail to factor how much the industry has evolved.

Thirty or 40 years ago, an ambulance provided little beyond transportation to the hospital, Spencer explained. The technicians had significantly less medical training than today, and the medical equipment available in the vehicle was limited.

“Today, you're getting an emergency room on wheels,” Spencer said. “Interventions are done at the bedside that used to only be done in a hospital emergency room.”

Ambulance equipment is expensive, as are the vehicles themselves.

Kevin McAllister, chief of the Windsor Fire Department, said a cardiac monitor costs about $45,000 and the department recently priced $248,000 for a new ambulance; the same vehicle cost $100,000 less prior to the pandemic.

Payroll is another cost driver for ambulance providers, said Matt Parrish, executive director of White River Valley Ambulance.

Hiring certified EMTs, or emergency medical technicians, is more competitive than ever, partly because training programs were closed for two years during the pandemic and because hospitals are recruiting EMTs to work in their urgent care units, which increases the demand.

In addition, it is virtually unheard of today to find volunteer EMTs, who were more common to the region 20 or 30 years ago, Parrish said. Part of this is due to more demanding requirements on EMTs to maintain their certification, which must be renewed every two years and requires 48 hours’ professional development coursework.

“It’s a bit much to ask of a volunteer,” Parrish said.

Yet these changes to the industry are not adequately reflected in insurance reimbursement rates, Spencer noted.

For example, a 10-mile ambulance trip in Hanover to Dartmouth Hitchcock Medical Center would now be billed at $1,210 — $990 for the base fee and a $220 mileage add-on.

In New Hampshire, Medicaid would contribute only $323 toward that bill, including a $243 base rate reimbursement plus $4.01 per mile, according to Spencer.

Medicare reimbursements are slightly higher though still insufficient, Spencer said. Unlike Medicaid, where the patient does not have a payment obligation, Medicare patients are responsible for 20% of the bill.

Though Medicare rates in New Hampshire vary by location, in Hanover Medicare would reimburse a total of $620 for a 10-mile ambulance transport — a base rate of $532 plus $8.80 per mile.

This year Vermont increased its Medicaid reimbursement rates for ambulance services to equal its Medicare rates — the equivalent of a $518 base rate for transport services plus $8.80 per mile.

In Windsor, Town Manager Tom Marsh told the Selectboard at a June 23 meeting that the town was ending the 2023 fiscal year with a shortfall of up to $75,000.

Part of the reason for the deficit, Marsh said, was an increase in ambulance billing write-offs, which reflect the shortfall between costs and what Medicaid or Medicare pay, as well as unpaid bills from uninsured patients.

Marsh said the percentage of billing write-offs increased from 22% in fiscal year 2022 to a percentage “in the 40s” in the fiscal year that just ended.

Patrick Adrian may be reached at padrian@vnews.com or at 603-727-3216.

CORRECTION: Jeff Spencer, a billing service contractor, said about modern ambulances that: “Today, you're getting an emergency room on wheels.” A previous version of this story misquoted him.