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HomeMy WebLinkAboutItem A: Non-Emergency Transport ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Non-Emergency Stretcher Car Transports by Private Providers Meeting Date: February 13, 2008 Agenda Item Number: A Department: Fire & EMS Department Staff Contact: Denise Giard www.eugene-or.gov Contact Telephone Number: (541) 682-7111 ISSUE STATEMENT The work session was initiated by Councilor Andrea Ortiz to discuss private provider requests to deliver non-emergency stretcher car service within the city of Eugene. In discussing this issue, staff asks that the council consider the entire ambulance transport system with regard to service delivery, funding stability, system capacity and workload. Eugene’s fee-supported ambulance system is no longer self- supporting and the resource base has inadequate capacity to keep pace with today’s call volume and workload. BACKGROUND The City currently operates its ambulance transport system within an Ambulance Service Area (ASA), assigned by Lane County, under the authority of the State of Oregon. This mandate is to ensure that no portion of the state is left without ambulance service. Eugene’s ASA encompasses 438 square miles and serves a population approaching 180,000. In fiscal year 2007, the Fire & EMS Department responded to 16,976 medical calls for service that resulted in the transport of 11,167 patients. Eugene staffs three 24-hour, dual-role (firefighter/paramedic) transport ambulances, one 24-hour swing crew (fire company that can be shut down to staff an additional ambulance when needed), and up to two single-role (paramedic only) transport ambulances during peak periods. For emergency medical calls within the city, the closest advanced life support fire suppression company and ambulance are dispatched concurrently. Eugene and Springfield both staff their fire suppression units with firefighter/paramedics and equip them with advanced life support equipment and medications. The City is currently operating its ambulance transport system at a financial deficit and without adequate resources. Without any intervention, the ability to sustain the Ambulance Transport Fund (ATF) into FY10 is in jeopardy. At present, the fiscal deficit is being covered by ATF fund (592) reserves. System Financial Deficit: Although there are a number of contributing factors to the current financial situation, the deficit is primarily attributed to the reduced levels of reimbursement the City receives from Medicare (federal) and Medicaid (state) for qualifying patient transports. These decreases have been phased in by the federal government since the passage of the Balanced Budget Act of 1997, which shifted much of the financial burden for covered patient transports from the federal government to local providers. In 2003, Congress passed the Medicare Modernization Act (MMA), which introduced several temporary payment provisions, including a regional fee schedule that overlapped with the F:\CMO\2008 Council Agendas\M080213\S080213A.doc transition to the national fee schedule. These temporary payment provisions are set to expire in December 2009. Despite the efforts of MMA, the cost to deliver service exceeds the reimbursements received from Medicare. These changes are the primary contributing factors to the system’s current financial state of affairs. In fact, recent reports provided by the Government Accountability Office (GAO) and the American Ambulance Association (AAA) found that: ? Ambulance providers are paid substantially below their average costs to provide services to patients covered by Medicare. ? Medicare’s share of transports is greater than Medicare’s share of payments. ? Ambulance services provide more uncompensated care than any other major healthcare provider groups. To place this situation in perspective, Medicare and Medicaid transports, along with Medicare HMO covered transports, account for about 60% of the system’s current business, and money is lost on each and every covered transport performed. In fact, the federal government and HMO capitated payments pay only about half of the standard fee for service and federal law does not allow the City, or any provider, to bill patients beyond what is allowable under the Medicare and Medicaid payment schedules. The City must therefore “write down” the amount that exceeds the federal reimbursement schedule since ambulance providers are not allowed to collect their fees or true costs for delivering the service if they exceed this amount. In addition to the write downs associated with Medicare and Medicaid, the City also provides transport service to patients who are either uninsured or underinsured, and unable to privately pay for their transport costs. These calls create a level of bad debt which frequently results in the system’s need to “write off” the debt for the City. Write offs and write downs collectively impact the ability to cover overhead costs for the system and assumes no margin to finance capital improvements for technology, communications systems, apparatus, equipment and facilities, and builds no reserve capital for maintaining services following a natural or economic disaster or terrorist event. Eugene Fire & EMS has made incremental changes over the past five years in its attempt to minimize the impact to the funding decrease and in hopes of the federal government passing legislation to reduce the impact. Incremental changes include increases in ambulance fees, increases in the FireMed membership fee, delayed replacements of ambulances and life-saving medical equipment, which has resulted in some adverse impacts, brought the ambulance billing function in-house, appropriately reallocated some first response costs back to the general fund, and decreased most non-essential EMS training. Although the department’s incremental system changes have produced some cost savings, these changes have not corrected the system’s operating deficit. Likewise, no substantive federal legislative relief appears to be on the horizon. Until now, adjustments to the system have been incremental in nature and directed more towards the symptoms of the problem, rather than the root cause of the problem, which is an inadequate funding structure that relies solely on fees for service and FireMed membership revenue. System Capacity Deficit: In addition to the financial deficit described above, the system is also struggling with a growing capacity and work load problem. In fiscal year 1995, the department staffed four 24-hour, dual-role ambulances and responded to 11,431 medical calls for service. In fiscal year F:\CMO\2008 Council Agendas\M080213\S080213A.doc 2007, the department staffed three 24-hour, dual-role ambulances and one or two peak period, single- role ambulances that collectively responded to almost 16,976 medical calls for service. In addition, the firefighter/paramedics assigned to dual-role ambulances also respond as firefighters to fires, rescues and hazardous materials calls for service. Staff believes the problems associated with both the financial and capacity deficits will continue to become more problematic as our community’s population ages, and Sacred Heart Hospital moves to the new River Bend campus in Springfield on August 10, 2008. The aging population will increase the proportion of Medicare and Medicaid patients. This shift in demographics will increase calls for service while decreasing collections. Likewise, without a hospital located in our City, the hospital move will conservatively add an average of 20 minutes to each patient transport delivered to that facility. RELATED CITY POLICIES City Code 2.604, Fire and Ambulance Services City Code 2.606, Ambulance Service (significantly amended on 5/13/04 to allow subcontracting) City Code 2.608, Ambulance Services – Fees City Code 3.862, First Aid and Medical Transport Vehicles – Responsibilities of Owner COUNCIL OPTIONS In considering potential options for addressing the revenue and capacity deficiencies, staff feels it is important to answer four policy questions to guide the discussion. Policy Questions: 1.Is ambulance transport considered a core City service? 2.Who should provide ambulance transport services to our community? -Fire & EMS Department rd -3 City Service rd -Public/Private partnership (City emergency and 3 party non-emergency) rd -All patient transport provided by a 3 party 3.What level of pre-hospital care should be provided by the Fire & EMS Department for our community? -First Response -Emergency Transport only -Full Service (First Response & Emergent & Non-emergent Transport) 4.How should ambulance transport services be funded? Potential Short-Term Solutions: ? Increase Ambulance Transport Fees – Increases some revenue by charging more to those who can afford to pay. Poses a greater impact on low-income community members. ? Short-Term General Fund subsidy – Shifts some or all of the costs from fees for service to the General Fund. ? Continue congressional lobbying efforts. ? Implement tiered transport fee system – Would increase revenue in unincorporated areas of the Ambulance Service Area to help offset any General Fund subsidy. F:\CMO\2008 Council Agendas\M080213\S080213A.doc Potential Long-Term Solutions: ? Create Ambulance Service Taxing District – Shifts some or all of the costs from fees for service from the City to a taxing district. ? Long-Term General Fund Subsidy (Redistribute Overhead Costs GF 011/ATF 592) – Shifts some or all of the costs from fees for service to the general fund. ? Work with other ASA providers and Lane County and attempt to reconfigure ASA Boundaries to create more of an Urban/Rural Split – Would change the service delivery area which could allow modifications to the current service delivery system. ? Subcontract Non-Emergent Transport component – Could help with the deficit and a portion of the capacity and workload problem. ? Full ambulance system privatization – Would eliminate the financial liability of running an ambulance system, but reduce the number of firefighters on the street each day and result in an ambulance workforce with a higher turnover rate and less experience in the field. This option does not eliminate the financial liability of providing first response. CITY MANAGER’S RECOMMENDATION There is no City Manager recommendation at this time. SUGGESTED MOTION No motion is suggested for this item. ATTACHMENTS A. Joint Letter to Congressman DeFazio from Eugene Fire Chief Randy Groves and Springfield Fire Chief Dennis Murphy, to the United Front in support of the Medicare Ambulance Payment Extension Act, (S.1310 and HR.2164) FOR MORE INFORMATION Staff Contact: Denise Giard, Deputy Chief Telephone: (541) 682-7111 Staff E-Mail: denise.a.giard@ci.eugene.or.us F:\CMO\2008 Council Agendas\M080213\S080213A.doc ATTACHMENT A Fire & Life SafetyFire & Emergency Medical Services Department Office of the Fire Chief Office of the Fire Chief City of Springfield City of Eugene nd 225 Fifth Street 1705 W. 2 Avenue Springfield, OR 97477 Eugene, Oregon 97402 (541) 726-3737 (541) 682-7130 (541) 726-2297 FAX (541) 682-7116 FAX www.springfieldfire.org www.eugene-or.gov 14 November 2007 Congressman Peter DeFazio 2134 Rayburn H.O.B. Washington, DC 20515 SUBJ: Letter of Support for the Medicare Ambulance Payment Extension Act Dear Congressman DeFazio: The Cities of Eugene and Springfield urge you to help preserve patient access to critical ambulance services by supporting the Medicare Ambulance Payment Extension Act (S. 1310 and H.R. 2164) by Congressmen Mike McNulty, Tom Reynolds, Chip Pickering and Tom Allen. S. 1310 and H.R. 2164 would extend ambulance relief from the Medicare Modernization Act with a 5% increase through 2009 to rates under the Medicare ambulance fee schedule. Without prompt action to bolster Medicare reimbursement, ambulance service providers in our communities and across the nation will be forced to reduce essential emergency medical treatment and patient transport. Although Congress provided desperately-needed relief on a temporary basis to ambulance service providers in the Medicare Modernization Act of 2003 (MMA), the MMA of 2003 included a significant reduction in Medicare and Medicaid ambulance reimbursement. For instance, while the MMA included short-term reimbursement adjustments including a 1% urban and 2% rural increase, a mileage rate increase for longer transports and a payment boost for ambulance transports in extremely rural or “super rural” areas, the 1% urban and 2% rural increase expired at the end of last year and the regional adjustment has gone from being 80% to only 20% of payment rates. As a result, ambulance service providers will lose an estimated $450 million in relief from 2007 through 2009. According to a recent report (Ambulance Providers: Costs and Expected Medicare Margins Vary Greatly GAO-07-383, May 23, 2007) by the Government Accountability Office (GAO), ambulance service providers are reimbursed by Medicare an average of six percent (6%) below Page 1 of 2 their costs of providing services to Medicare patients. A similar report commissioned by the American Ambulance Association (AAA) determined that figure to be approximately 8%. Those figures do not take into consideration other factors such as uncompensated care which the AAA report estimates to be between 10.8% and 16.5% of all ambulance care. The effect of these reductions has resulted in a significant loss of ambulance funds for most urban jurisdictions around the nation, including Eugene and Springfield. Although there are a number of contributing factors, our deficit is primarily attributed to the reduced levels of reimbursement our department receives from Medicare and Medicaid for qualifying patient transports. These decreases have been phased in over time and impact our ability to cover the service delivery costs. To place this situation in perspective it is important to understand that Medicare and Medicaid transports, along with Medicare HMO covered transports, account for approximately 60% of our current business and we lose money on each and every one we perform. In fact, the federal government and HMO-capitated payments pay about half of our standard fee for service and federal law does not allow us to bill the patient beyond what is allowable under Medicare and Medicaid. Subsequently we are required to "write down" the difference that exceeds the federal reimbursement schedule since we are not allowed to collect for it. In the cities of Eugene and Springfield, these losses have resulted in changing ambulance funds from self-sustaining to losing money. These diminishing levels of reimbursement are jeopardizing the health and safety of the very citizens it seeks to protect. We cannot afford to allow our health care safety net and a critical part of our emergency and disaster response system to deteriorate further because of below cost Medicare reimbursement. S. 1310 and H.R. 2164 would provide a 5% increase in Medicare payments rates which would maintain the level of relief from the expiring provisions of the MMA. While this increase will not adequately address the enormous negative impact of below-cost reimbursement on patient access to life-saving and high quality ambulance care, it will sustain providers until a permanent solution can be addressed. The cities of Eugene and Springfield strongly urge your support of S. 1310 and H.R. 2164. It is critical that Congress act now and extend the relief to ambulance services providers from the MMA by supporting a 5% across the board adjustment in 2008 and 2009. Sincerely, Chief Randall Groves, Chief Dennis Murphy, City of Eugene City of Springfield Page 2 of 2