a payment system for prehospital care that reflects the costs of providing those services.

Similarly, many hospitals do not have a strong economic motivation to address the problems of ED crowding, boarding, and ambulance diversion; indeed, they may even benefit from these practices. Several payment approaches could eliminate this perverse incentive. One is to eliminate or compensate for the differential in payment between scheduled and ED admissions that relates to differences in both payer mix and severity of illness. Another approach is to provide hospitals with direct financial rewards or penalties based on their management of patient throughput. CMS, through its purchaser and regulatory power, has the ability to drive hospitals to address and manage patient flow and ensure timely access to quality care for its clients. All payers, including Medicare, Medicaid, and private insurers, could also develop contracts that would penalize hospitals for chronic delays in treatment, crowding, and diversion. CMS should lead the way in the development of innovative payment approaches that would accomplish these objectives. All payers should be encouraged to do the same.

Adapting the Legal and Regulatory Framework

The way hospitals and EMS agencies deliver emergency care is shaped largely by federal laws, including the Emergency Medical Treatment and Active Labor Act (EMTALA) and the Health Insurance Portability and Accountability Act (HIPAA). The application of these laws to the actual provision of care is guided by regulatory rules and advisories, enforcement decisions, and court decisions, as well as by providers’ understanding of these.

EMTALA was passed in 1986 to prevent hospitals from refusing to serve uninsured patients and “dumping” them on other hospitals. The act established a mandate for hospitals and physicians who provide emergency and trauma care to provide a medical screening exam to all patients and properly stabilize patients or transfer them to an appropriate facility if an emergency medical condition exists (GAO, 2001). This requirement applies regardless of patients’ ability to pay.

EMTALA also has implications for the regional coordination of care. The act was written to provide individual patient protections—it focuses on the obligations of an individual hospital to an individual patient (Rosenbaum and Kamoie, 2003). The statute is not clearly adaptable to a highly integrated regional emergency care system in which the optimal care of patients may diverge from conventional patterns of emergency treatment and transport.

Until recently, EMTALA appeared to hinder the regional coordination of services in several ways—for example, requiring a hospital-owned ambulance to transport a patient to the parent hospital even if it was not the

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