Item 1: Future Ambulance Transport Funding

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JEO OINT LECTED FFICIALS AIS GENDA TEM UMMARY Action: Future Ambulance Transport Funding Meeting Date: December 7, 2009 Agenda Item Number: 1 Department: Eugene Fire & EMS Dept. Staff Contact: Randy Groves, Chief Springfield Fire & Life Safety Dept. Dennis Murphy, Chief Lane Rural Fire/Rescue District Dale Borland, Chief ISSUE STATEMENT Owing to reduced Medicare reimbursements and other economic factors, ambulance transport operations in the central Lane County region are no longer able to operate on a self-sustaining basis, with user fees and FireMed memberships as their only sources of funding. BACKGROUND Throughout our region, the majority of patients transported are covered by Medicare. Before the implementation of the Ambulance Fee Schedule on April 1, 2002, ambulance suppliers received payment from Medicare on a “Reasonable Charge Basis.” Medicare would pay 80 percent of the allowable amount and the remaining balance was the responsibility of the patient. This allowed transport providers broad flexibility in setting rates and assured recovery of costs. The Balanced Budget Act (BBA) of 1997 added a new section 1834(1) to the Social Security Act which mandated the implementation of a national fee schedule. This section also required ambulance providers and suppliers to accept the Medicare allowed charge as payment in full; there was no longer the ability to bill the patient or another insurance provider for the balance of the reasonable charge. The new fee schedule took effect in 2002 and was phased in over a five-year period, with full implementation on January 1, 2006. Put simply, the new national fee schedule, which covers 60 to 70 percent of all transports, does not allow most ambulance providers to recover the cost of providing the service. Instead, where providers once had the ability to collect the full reasonable charge (which has risen over the years from $535 to $1,600 per transport), they are now reimbursed between $200 and $400, depending on the type of call. Medicaid, the State of Oregon’s health insurance program, reimburses similarly. Eugene’s Ambulance Transport Fund reserves have decreased from $1.1 million in FY07 to $165,000 in FY09. At this point, the projections show the fund will be out of reserves by the end of FY10. Springfield’s Ambulance Transport Fund reserves were depleted as of FY09. The City Council allocated up to $500,000 in General Fund support, of which approximately $300,000 was needed. An additional $300,000 in support is allocated for the current fiscal year. Z:\CMO\2009 Council Agendas\M091207\S0912071.doc