Certificate of Need for Transport

How to improve transport and arrival times in Arizona

By: Jesse Scott, BS

Abstract

Conceived by a group of motivated trauma surgeons in 2007, The Arizona Trauma Association (AzTA), formerly AZTRACC, shared a common goal: to improve the delivery of health care to injured patients throughout the state of Arizona by supporting collaborative research, education, and outreach activities of trauma centers in the state of Arizona. One important step in this effort is to ensure excellence in emergency medical transportation. Arizona has unique Certificate of Need legislation and regulations compared to the rest of the United States. We need to improve our policy. This white paper sets out the context for the improvement of the Certificate of Need for Transport in the state of Arizona as well as our recommendations.


Introduction

Arizona instituted Certificate of Need (CON) legislation in 1983 and has failed to reevaluate since then. This is unique as many states have no CON regulations for any service, and others have transport regulations in addition to all institutions that offer patient care, including hospitals and private transport companies. In Arizona, the only type of healthcare facility that is required to have a CON is ground ambulatory services, including both public and private services. Providers throughout the state and particularly in rural environments have documented inconsistent and increasing ambulance response times for years, and, although data is hard to document, these extended response times might lead to inequitable health outcomes. By changing regulations around ground transport, we may be able to flatten this disparity, thus improving health outcomes for patients throughout the state.


What is CON for Transport in Arizona?

Arizona simultaneously has the fifth largest city in the country in Phoenix, while also maintaining a significant rural population, making it an idiosyncratic case study. Because most of the wealth and population in the state has grown to reside in the burgeoning urban centers like Phoenix and Tucson, private emergency transportation groups are incentivized to focus their services on these regions at the expense of servicing the diaspora of rural communities. The CON system grew from the need to limit the number of emergency transportation services present in urban centers while ensuring that services are available for the protection of small communities.

Certificate of Necessity (CON) legislation in Arizona was created in 1983 to address regulation and distribution of ground ambulance services. The goal of the statutes and rules regarding CON is to ensure that the creation of an emergency transport service will result in benefit for the population, as well as to ensure protections for rural citizens. 

An applicant for CON in Arizona is required to demonstrate that they can:

  • Provide benchmarking and performance improvement plans for the Emergency Medical Services (EMS) system;
  • Collect and submit electronic patient care reports;
  • Adopt clinical and operating procedures consistent with best practice guidelines
  • Initiate guideline-based pre-arrival instructions for all 9-1-1 callers requesting assistance;
  • Attend and participate in regional and STATE EMS Councils;
  • Ensure that services to rural communities and county islands are maintained and improved;
  • Ensure that service will be cost-effective and not result in higher ambulance rates;
  • Assess the impact of a successful application on individuals living within and in rural and wilderness areas adjacent to the service area requested and Applicant’s plan to address that impact;
  • Assessment of the financial and operational impact of a successful application on the ability of an existing CON holder to serve residents within and living in rural and wilderness areas adjacent to the CON service area requested; and
  • A plan to ensure continued ambulance service in rural and wilderness areas should the current CON holder be unable to serve those areas.

A certificate of necessity will be issued by the Bureau of EMS and Trauma Systems (BEMSTS) if all the following apply

  • The ambulance service has a certificate of registration issued by the department for at least one ambulance pursuant to section 36-2212.
  • The director finds that public necessity requires the service or any part of the service proposed by the applicant.
  • The director finds that the applicant is fit and proper to provide the service.
  • The applicant has paid the appropriate fees pursuant to section 36-2240.
  • The applicant has filed a surety bond pursuant to section 36-2237.

(Arizona Legislature, 2017, 2-4)


Why do we have this legislation in the first place?

Providing emergency ambulatory services is a serious regulatory and service challenge and has no obvious solution. Transport providers must make money in order to be a feasible business, which means that they need to be able to charge for the services that they do provide. Naturally, they will be encouraged to focus their efforts and employees in high-population, high wealth areas such as Phoenix and Tucson, where transport lengths are shorter, and they stand to receive more emergent and interfacility calls for transportation.

Conversely, the Arizona Department of Health Services must ensure that there is emergency transport coverage for all citizens of the state regardless of their ability to pay, which means that they either need to incentivize transport providers to cover wide areas or require them to cover large jurisdictions to in order to operate in the area that they desire to provide coverage for.

Since 1983 the world of healthcare has changed. Internet infrastructure reaches even rural communities, electric vehicles are commonplace, but the only factor that has changed in the EMS industry is cost. Rural communities like Navajo and Hopi territory in Northeastern Arizona still do not have adequate coverage from ground ambulances. 


What has this accomplished? 

Because CON awardees are required to service many rural communities, there is often coverage by EMS agencies where there was no transportation coverage at all in the past. This is an enormous benefit to rural municipalities and has resulted in a gross improvement of emergency service access.

On the other hand, emergency transport agencies are consolidating, creating an increasingly small number of transport providers with an increasingly large amount of power. In some municipalities that already have their own ambulances but do not have a CON because it has already been awarded to another private or public provider, they are still beholden to these transportation agencies that may or may not be faster or more proficient than what local fire services can provide. For example, Scott Freitag, Fire Chief for Prescott Valley, published a white paper expressing his immense frustration with transport arrival times in his jurisdiction. In this paper, he also lays out his outrage at the reporting system that AZDHS currently has in place for incidents where transport is delayed can be reported (Freitag & Niemynski, 2019). He feels that the inadequacy of our current system is providing no beneficence and is a disservice to the community that EMS serves.

Additionally, air transport has become much more common in order to service rural communities in hard-to-reach locations. Air ambulance is not only an extraordinary expense to a patient who may or may not require rapid transit but is also the most dangerous method of transport. In Arizona, air ambulance base-cost ranges from $11,750 to $25,678 without including the cost of materials, treatments, maintenance, and miles traveled (Arizona Department of Health Services, 2018). By comparison, ground transports begin at a rate of $759 to $2819 before the cost of materials, treatments, maintenance, and miles traveled (Arizona Department of Health Services, 2021). This is a massive cost that adds up quickly. It is also the only option available to many rural communities who otherwise would have to wait long periods for ground transport to come to them from a larger community. Although air ambulances are costly they can be used effectively and in necessary cases. But the return on cost must be balanced carefully with the benefits from allowing ground transport when air is not necessary. For example, physicians from Mt. Graham medical center in southern Arizona were unsatisfied with patient transport times and endeavored to improve this for their population. To improve health outcomes, they took matters into their own hands and worked with Ponderosa Aviation to begin providing prompt air transport services for emergency medical or natural calamities. According to nurses from Mt. Graham, physicians and nurses often do not feel that ground transport will arrive in a timely fashion and choose to call Ponderosa Aviation when their patient’s need for a higher level of care is dire.

The impact of CON on the state budget is not insignificant. In 2021, Medicaid insurance is growing in importance, with a larger and larger proportion of the population enrolling. In the first six months of this year, the population enrolled in the Arizona Health Care Cost Containment System increased by 100,000, currently at 2,236,003 with no major loss of Medicaid population (Snyder, 2021). Considering that the Arizona population is currently 7.29 million in 2021, this means that 31% of the population uses state healthcare in some capacity. This number is going to increase year over year, and with it, the public burden caused by transportation will increase. Long drives to rural areas to pick up a patient increase this cost, late arrivals result in additional medical treatments which increases this cost, calling for air transport to ensure that the patient will arrive at a higher level of care on time increases this cost. As Certificate of Need continues to result in these issues, the pain of paying for it is going to increasingly fall upon the entire public.

State legislators appear to have a different perspective on the importance of this issue. The chairwoman of the State Senate Health and Human Services committee, when asked about this issue, informed us that there have been no reports of any issue (Barto, 2021). From the perspective of the Arizona State Legislature, the lack of reports of the barriers created by CON indicates that the patient population of Arizona is best served by the current, unrevised CON for Transport Legislation.

The primary method for reporting patient response times in Arizona is the AZ-PIERS system, which 90% of emergency response organizations use (AZ PIERS, 2021). Figure 1 shows 911 Dispatch to Patient Response times for the most recent reported period ending in 2019. This shows a minuscule difference between the mean and median for suburban and urban 911 calls, with a much larger difference in rural calls and a significantly larger difference in wilderness calls. This can be attributed to the lower overall number of calls in these areas, as well as the much longer times being subject to higher variance. However, this does show that the CON system has improved arrival times in these regions, while still leaving significant room for improvement.

Figure 1: 911 Dispatch to Patient Response time in minutes -2019 (AZ PIERS, 2021).


How does Arizona compare to other States?

Maybe CON is the only way that we can solve the problem of rural transport. However, states such as Nevada, Colorado, and Utah all have similar geographies and face the issue of widespread rural populations in addition to large urban centers. They have not treated the issue with the same solution that Arizona has maintained.

The state of Nevada does not have a CON program in place for emergency ambulatory services. In contrast, they allow volunteer municipality transport services for rural regions, while holding all transportation in the city and urban areas to standard time requirements for arrival on the scene. Although some rural emergency transportation volunteers are small groups, they are assisted by hard-wing and rotary-style air transports when volunteer ground transport is insufficient (National Highway Traffic Safety Administration Technical Assistance Team, 2009, 19-20). Hard-wing transportation is defined as transport by air vehicle that is jet/propeller driven with wings that do not move, while rotary-style transportation is defined as transport by air vehicle which has rotating wings (ie. helicopters) (AeroMedExpress, 2017).

Additionally, neither the states of Colorado nor Utah currently use CON laws. Utah ceased use of this system in 1984, while Colorado kept the system until 1987 (National Conference of State Legislatures, 2019). Both states also use a system made up of a combination of private ground/air transportation and municipality/fire department transport. This system is supported by many non-emergency medical transport providers. These support the system by reducing the load that non-emergent interfacility transports and transports from home to appointment transports have on the system.

Due to the similarities between all these states, there may be a lot that Arizona can learn from the systems that they have in place for regulating emergency ground and air transportation. 


Conclusion and Recommendations:

Without revision to GD-099-PHS-EMS: Certificates of Necessity for Ambulatory Service, there can be little improvement to medical transport in our state. Criteria for response time, geographical designation, more stringent renewal, and oversight criteria, and a more active regulatory authority are necessary if we are to continue the use of CON in Arizona. The Arizona Department of Health Services has approved only three CON applications in the last three years (Arizona Department of Health Services, 2021), with only one of these CON holders being a municipality. The financial cost of applying is unlikely to be the reason for this lack of accepted CON applications because the total cost of applying is only 150$. 

Because CON awardees are given the certification due to need in a region, it results in a process that preferentially denies applicants. According to Ex Agency Director for AZDHS as well as Executive Director for the Arizona Public Health Association Will Humble, the primary reason that there is not better coverage throughout the state is that it is significantly more difficult to prove that there is a need for another transport company than it is to prove that there is no need (Humble, 2021). This process is harmful to the patient at the end of the day. If an organization wants to maintain an emergency transportation service and can do so effectively, then it should be allowed to do so. If there is not sufficient need for their services, then this will be proven through failure to generate revenue. The success of a service should not be guaranteed by awarding a CON.

There are many options for the improvement of our regulations, but it cannot be known the significance of the impact that they could have. Based on the background of this issue, the AzTA makes five recommendations for the consideration of the AZDHS Bureau of Emergency Medical Services.

Option 1:

Change nothing. By continuing with current CON requirements, we accept that there will continue to be inequity between transport times in urban centers and that of rural areas. Response times for ground transport will continue to rise without pressure to innovate or change. Air ambulance services will continue to gain in prevalence and will continue to be a drain on the finances of both the patient and the State. 

Option 2:

Allow for local municipality emergency providers such as Fire Districts to provide rescues when necessary, essentially excluding them from CON requirements. The necessity for this will be when the CON holder is unable to provide reliable and timely transportation. In an emergency, such as a mass casualty incident, this is a good solution because it provides local support when the standard system is strained. This solution does not provide significant benefit to most individual patients over time in areas that typically have long response times from CON holders due to either lack of easy access to the area or greater population needs in another area of their jurisdiction.

How often will this provide benefit to healthcare providers and to the patient? How will we define situations in which this rule becomes active? Fire, multi-vehicle accidents, and shootings may all qualify as emergency incidents, but where would the cutoff be? This solution will be complex, and fraught with fighting between policymakers, current CON holders, and local service providers.

Option 3:

Remove Certificate of Necessity legislation entirely. The benefit of this approach is that there are many local EMS systems that have no interest in profit margin, and they would be allowed to expand based on their ability to provide value to the patient and to the healthcare system. Additionally, municipalities and local providers would be able to charge for their on-scene treatments when they have transferred the patient, thus allowing them to put that money back into improving their service. The potential drawback of removing CON requirements is that it may result in an overall decrease in interest of large EMS corporations such as AMR and AMT in providing service to rural regions. Although, because air transport already plays such an important role for these communities in Arizona, that may not affect their transport times.

Option 4:

Improve and modernize CON regulations. Response times have changed since the initial implementation of GD-099, and the requirements for ground and air transport should be changed with them. CON holders should be evaluated annually based on their patient outcomes, and response times for each individual community.

This has a lot of room for variation, and a lot of possibilities for innovation. Ensuring that patient outcomes come at the forefront of justifying any changes is imperative in ensuring that we maintain an ethical framework in our emergency transportation system. By making every effort to be beneficent, and non-maleficent, we will find improvements necessary in our regulation.

Option 5:

Change the culture of CON application review in Arizona. Change the rules such that AZDHS will say yes to an application unless there is a convincing reason to say no. This is the exact opposite of the current process where the default is to say no unless there is a convincing reason to say yes.

Carve out municipalities as well as hospitals for alternate restrictions. Many municipalities in Arizona can transport emergency patients from the scene arrival but are unable to do so because they do not hold a CON, by allowing them to transport patients from their jurisdiction, we will take the weight off of the shoulders of those who do obtain a CON while ensuring that ambulances are always within city limits to respond to emergencies. Additionally, by allowing municipalities to maintain their own emergency transportation services, they are guaranteed to be able to charge for their services, something that many local first responders are unable to do when they do not have a CON. 

Finally, because CON is intended only to ensure that there is coverage for all areas of the state to respond to emergencies, interfacility transport services should be carved out of these restrictions. Large hospitals are fully capable of maintaining an ambulance service for interfacility transport. They should be allowed to control this service, and this will result in a significant benefit to the patient as well as the hospital. Patients need to be moved between facilities to receive appropriate care, and allowing hospitals to maintain this service will guarantee that they can be transported rapidly. Additionally, being able to clear up a bed for another patient will only serve to allow the hospital to serve their community more efficiently.


Acknowledgments

A special thank you for your assistance on this paper goes out to Michelle Notrica, PharmD, MPH for your editorial assistance in writing this paper. Additional thank you goes out to Dr. David Notrica, MD, and Dr. Chris Salvino, MD for your editorial guidance and for bringing this incredibly important issue to my attention.

Bibliography

AeroMedExpress. (2017, May 12). FIXED-WING AND ROTARY-WING AIR AMBULANCES: WHAT’S THE DIFFERENCE?

Arizona Department of Health Services. (2021, January 1). Arizona Ground Ambulance Service Rate Schedule. Bureau of Emergency Medical Services and Trauma System.

Arizona Department of Health Services. (n.d.). Ground Ambulance Certificate of Necessity (CON) Program. 150 North 18th Avenue, Suite 540, Phoenix, Arizona, USA. https://www.azdhs.gov/documents/preparedness/emergency-medical-services-trauma-system/ambulance/ground/CONGeneralInformation.pdf

Arizona Department of Health Services. (2021, July 1). Ground Ambulance Program – Certificate of Necessity (CON) Holders. Emergency Medical Services & Trauma System. https://www.azdhs.gov/preparedness/emergency-medical-services-trauma-system/#ambulance-ground-program-con

Arizona Department of Health Services. (2018, January 9). ARIZONA AIR AMBULANCE SERVICE RATE SCHEDULE ARIZONA AIR AMBULANCE SERVICE RATE SCHEDULE [Table showing the air transportation rates as of January 09, 2018. States *In accordance with Federal Regulations, the State is not allowed to regulate air ambulance provider routes or rates*]. Arizona Department of Health Services. 

Arizona Department of Health Services. (2021, January 1). Arizona Ground Ambulance Service Rate Schedule. Bureau of Emergency Medical Services and Trauma System.

Arizona Legislature. (2017, January). STATE OF ARIZONA ● EMERGENCY MEDICAL SERVICES AND TRAUMA SYSTEM [GD-099-PHS-EMS: Certificates of Necessity for Ambulance Service]. State of Arizona. https://azdhs.gov/documents/director/administrative-counsel-rules/rules/guidance/gd-099-phs-ems.pdf

AZ PIERS. (2021, July). 911 Dispatch to Patient Response time in minutes -2019 [Data from AZDHS Policy Committee Workgroup Meeting Notes on Emergency Response and Trauma System]. AZDHS.

Barto, N. (2021, July 15). Interview with Senator Nancy Barto on July 15.

Freitag, S., & Niemynski, D. (2019). Ambulance Transport and Certificate of Necessity Concerns. Central Arizona Fire.

Humble, W. (n.d.). Interview with Will Humble [Notes taken during interview on August 13, 2021].

National Conference of State Legislatures. (2019, 1 12). CON-Certificate of Need State Laws. NCSL. https://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx

National Highway Traffic Safety Administration Technical Assistance Team. (2009, February 24-27). A REASSESSMENT OF EMERGENCY MEDICAL SERVICES. STATE OF NEVADA, 18-20.Snyder, J. (2021, June 1). AHCCCS Population Highlights June 2021. AHCCCS.

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