Item B: Ambulance Fund Stabilization

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ATTACHMENT 1 JEO OINTLECTEDFFICIALS AIS GENDATEMUMMARY ACTION: AMBULANCE TRANSPORT SYSTEM SUSTAINABILITY Meeting Date: May 24, 2012 Agenda Item Number: 1 Department: Eugene and Springfield Fire Departments Staff Contacts: Randall B. Groves, Chief Lane Rural Fire/Rescue District Dale Borland, Chief ISSUE STATEMENT The Joint Elected Officials Ambulance Transport Task Force (ATTF) recognizes ambulance transport as a core service that is accessible to the residents and visitors of central Lane County regardless of ability to pay. Seen as a regional system, Eugene Fire & EMS Department, Springfield Fire & Life Safety Department, and Lane Rural Fire/Rescue District provide ambulance transport for a majority of Lane County citizens. Rural Metro Ambulance, a private ambulance service providing select non-emergency transports, and LifeFlight, air ambulance transportation for the most critical patients, augment the system. The three governmental providers continue to experience a financial crisis attributed largely to the federal government’s decline in Medicare and Medicaid payments and the economic recession resulting in an increase in utilization by those underinsured and uninsured. All three regional providers are projecting annual financial deficits beginning in FY13. BACKGROUND 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, including patient co-payments as payment in full and eliminated the ability to bill the patient or another insurance provider for the balance of the reasonable charge. Put simply, the national fee schedule, which covers 60 to 70 percent of all transports, does not allow most ambulance providers to recover the full cost of providing the service. Instead, where we once had the ability to collect the full billable charge (which has risen over the years from $535 to $1,600 per transport), we are now reimbursed between $200 and $400, depending on the type of call. Medicaid, the State of Oregon’s health insurance program, reimburses at a similar range. While Medicare and Medicaid reimbursement reductions are the primary reason that emergency medical transport in our region has become a revenue-negative enterprise, two national trends are also