The business of moving patients by ambulance is reeling, and Springfield’s Keystone Quality Transport, the largest privately owned, locally operated ambulance company in the Commonwealth of Pennsylvania, is feeling the pinch.

According to a recent report in The Philadelphia Inquirer, the industry is suffering because of poor pay from hospitals and private health insurers, a sharp rise in Medicaid patients, and efforts to squeeze bad operators out of the business of nonemergency care.

The latest evidence of trouble is the decision by Falck, the second-largest U.S. ambulance operator, to end operations in Pennsylvania on June 30.

“The reason we’re leaving is strictly related to reimbursement,” Charles Maymon, regional chief executive for Falck USA, which employs about 200 in the Philadelphia region, told the Inquirer. “We can’t make a living in the market.”

The area’s main private insurers, Independence Blue Cross and Aetna, said they pay ambulances fair rates for nonemergency services, such as moving patients to another hospital, a rehab center, or a nursing home.

Pennsylvania Medicaid regulators said they have no money in the budget to boost Medicaid’s rock-bottom ambulance reimbursement rate of $120 – half what Medicare pays. The cost per trip is about $250, one operator said.

Medicare covers the elderly, while Medicaid is for low-income people.

“The ambulance companies get squeezed,” Philadelphia healthcare lawyer Alice Gosfield told the Inquirer. “It’s a non-sustainable business model. It’s not going to work.”

Medicare has the best rate, paying $238.87 per trip in a basic ambulance, plus $7.24 per mile.

The Medicare rate is roughly in line with costs, according to Keystone’s chief financial officer, Todd Strine.

In most areas of healthcare, private insurers commonly pay more than Medicare, but for ambulances they pay less.

At the bottom is Medicaid’s $120 payment for a basic ambulance with no mileage for most trips.

For Keystone, which is the biggest private operator in the region, that means “we’re better off giving [the] beneficiary a $100 bill than we are taking that call,” Strine said.

Click here to read more about the financial squeeze for ambulance operators.