HomeMy WebLinkAboutItem D: Eugene Fire & EMS Department Ambulance Service Area Realignment
ECC
UGENE ITY OUNCIL
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Work Session: Eugene Fire & EMS Department
Ambulance Service Area Realignment
Meeting Date: April 17, 2013 Agenda Item Number: D
Department: Eugene Fire & EMS Staff Contact: Randall B. Groves, Chief
www.eugene-or.gov Contact Telephone Number: 541-682-7115
ISSUE STATEMENT
In keeping with Recommendation #5 in the 2009 Joint Elected Officials Ambulance Transport Task
Force Report, Eugene Fire and EMS entered into a 2011 IGA with the Lane Rural Fire/Rescue
District (LRFR) to create more of an urban/rural split between Ambulance Service Area #4
(Eugene) and #8 (LRFR). The IGA was signed on August 21, 2011. LRFR subsequently created a
functional consolidation with Lane County Fire District #1 and now operates as the Lane Fire
Authority (LFA). Following a favorable evaluation period, both Eugene Fire & EMS and the LFA
have submitted a joint request to Lane County, which has statutory authority for assigning ASAs
within the County, to reconfigure the boundary between ASA #4 and #8 to codify the change. The
majority of this area is within ASA #4, Zone #3.
BACKGROUND
The first Joint Elected Officials Ambulance Transport Task Force meeting convened on April 6,
2009. During the next two years, the ATS JEO Task Force decided on seven recommendations.
Recommendation #5 stated that the ASA boundaries should be reconfigured to the west of
Eugene’s Urban Growth Boundary and the western-most contract fire protection districts served
by Eugene Fire & EMS. This boundary change will provide a number of benefits for the
constituents and ambulance service providers. First, it will greatly reduce response times for
emergency calls occurring in ASA #4, Zone #3. Zone #3 extends from just west of Eugene’s urban
growth boundary (UGB) to a point between Walton and Mapleton (See Attachment #1). With a
redeployment of an LFA ambulance into the area, ambulance response times were reduced by an
average of seven minutes and 14 seconds during the evaluation period. Second, the shift in
boundaries allows Eugene ambulances to remain within ASA #4 and be available more often for
response within the metro area. Third, this move has helped preserve some badly needed
capacity within Eugene’s ambulance system. Fourth, the boundary change would allow for growth
of the LFA ambulance service, both geographically in service area as well as in terms of a revenue
base. Additionally, it better aligns with the first response service area of the newly consolidated
LFA organization. The change will also pave the way for a future placement of an LFA ambulance
in the City of Veneta area which would decrease response times further. However, it must be
recognized that deployment decisions in this area will ultimately be made by the provider agency.
S:\CMO\2013 Council Agendas\M130417\S130417D.doc
In order to change the boundary permanently, the departments must meet with the Lane County
Health Authority which is in charge of Chapter 18 of the Lane County Ambulance Service Area
Plan. The meeting will be held on, April 9, 2013. It is expected that the proposed changes will be
accepted and forwarded to the Lane County Commissioners for adoption.
RELATED CITY VALUES
City of Eugene Goal #1: Safe Community
City of Eugene Goal #4: Effective, Accountable Municipal Government
City of Eugene Goal #5: Fair, stable, and adequate financial resources
ELECTED OFFICIAL OPTIONS
This is informational only to provide an update about the proposed ASA changes.
CITY MANAGERS’ RECOMMENDATION
None. This is an informational work session only.
SUGGESTED MOTION
None. This is an informational work session only.
ATTACHMENTS
A. Lane County Ambulance Service Area Map
B. Memorandum (November 25, 2009) – Report and Recommendations
C. Memorandum (May 24, 2012) – Report and Recommendations
FOR MORE INFORMATION
Staff Contact: Eugene Fire & EMS Chief Randall B. Groves
Telephone: 541-682-7115
Staff E-Mail: randall.b.groves@ci.eugene.or.us
S:\CMO\2013 Council Agendas\M130417\S130417D.doc
ATTACHMENT A
Lane County Ambulance Service Area Map
LFA
ANE IRE UTHORITY
ASA8
Western Lane Ambulance
Eugene Fire & EMS Springfield Fire & Life Safety
ASA 4
(Zone #3)
South Lane
Fire & RescueOakridge Fire and Ambulance
ATTACHMENT B
M
EMORANDUM
November 25, 2009
TO: Mayor Kitty Piercy and Eugene City Council Members
Mayor Sid Leiken and Springfield City Council Members
Commission Chair Peter Sorenson and Lane County Commissioners
President Larry von Moos and Lane Rural Fire/Rescue Board Members
FROM: Ambulance Transport System Joint Elected Officials Task Force (Mike Clark,
Andrea Ortiz, Dave Ralston, Hillary Wylie, Rob Handy, Larry von Moos, and
Kevin King)
SUBJECT: REPORT AND RECOMMENDATION
SUMMARY
In view of negative revenue experiences and projections for the ambulance service providers in
central Lane County (Eugene Fire & EMS Department, Springfield Fire & Life Safety Depart-
ment, and Lane Rural Fire/Rescue District), which were brought on by reduced Medicare reim-
bursements and a number of other economic factors, our Task Force was charged earlier this year
to study the problem and develop a recommendation, or set of recommendations, to provide for
long-term financial stability for this service, without compromising the high quality of prehospi-
tal emergency medical care that our constituents expect and deserve.
We acknowledge that the provider departments – and their governing bodies – have already ex-
pended substantial effort to address this critical public concern, both by taking extraordinary
steps to reduce expenditures and by passing extraordinary increases in user fees to offset decreas-
ing revenue, but these measures have served only to slow, not stem the fiscal bleeding. Efficien-
cies within the scope of each agency’s control have been or are now being implemented. This
task force was formed because a solution to this crisis is beyond the capacity and authority of
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any one provider agency acting unilaterally. It is vital that the possible solutions recommended
by this task force immediately be addressed at a regional level and given the highest possible
priority for allocation of time and resources.
Having studied this issue and the range of available options, having engaged the public at a se-
ries of community forums and online, and having worked in concert with stakeholders including
local fire and ambulance service professionals, hospitals, and firefighters’ unions, we recom-
mend as follows:
1.That all three jurisdictions remain prepared to allocate a level of General Fund sup-
port as necessary for the continued high-quality provision of this core service.
2.That the Eugene and Springfield City Councils authorize initial steps toward merger
of their fire departments.
3.That exploration begin immediately of more sustainable public funding options.
4.That marketing of FireMed subscriptions be enhanced and expanded in an effort to
generate additional revenues to lessen reliance on general fund tax support.
5.That the City of Eugene and Lane Rural Fire/Rescue analyze the possibility of recon-
figuring the boundaries of the county’s Ambulance Service Areas so as to provide for
an urban-rural split between Eugene and Lane Rural Fire/Rescue; and, if conditions
appear favorable, that the Lane County Board of Commissioners be asked to enact
such reconfiguration.
6.That work proceed as rapidly as possible regarding provision of a regional mobile
health care system, featuring tiered levels of response (and cost) available to patients
depending on the nature of the emergency with a report to elected officials by the end
of calendar year 2010.
7.That public ambulance service provider agencies continue to lobby the Oregon legis-
lature and U.S. Congress for larger-scale long-term solutions.
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 ambu-
lance 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. Year one (4/1/02-12/31/02) provided a blending of 20 per-
cent fee schedule and 80 percent reasonable charge. The reasonable charge portion was then re-
duced by 20 percent in each of the four subsequent years, so that as of 2006 only the fee schedule
amount was payable.
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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
we once had the ability to collect the full reasonable 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 similarly.
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 contributing to the problem. One is the growing number of individuals eligible for Medi-
care. The other is the economy generally, as the provider agencies – which do not refuse
transport because of inability to pay – are being forced to write off more and more bills as uncol-
lectible.
The Eugene Fire & EMS Department has taken many steps to try to keep the ambulance service
self-sustaining including increasing the transport rates; reducing ambulance coverage for non-
peak times; and cutting costs for administrative staff, materials and supplies. The department has
also worked closely with City Finance staff to identify the appropriate cost split between the
Ambulance Transport Fund and General Fund to ensure the ATF is not supplementing General
Fund services.
In addition, with Eugene’s ambulance system capacity very thin, the department elected to sub-
contract much of its non-emergency transport work to a private provider through an RFP process
as a cost avoidance strategy. With inadequate revenue to increase the number of advanced life
support ambulances on the street, the department elected to privatize this portion of the service
and match a more appropriate level of resource with particular non-emergent call types.
Springfield Fire & Life Safety staff has focused on maximizing existing revenue sources for all
three providers through the joint FireMed program and development of new revenue sources
through Mobile Health Services research and design.
However, none of these adjustments individually or in whole has created a sustainable fund dur-
ing any 6-year financial forecast period. Eugene’s Ambulance Transport Fund reserves have de-
creased from $1.1 million in FY07 to $165,000 in FY09. The financial goal is to maintain a re-
serve equal to two months’ operating expenditures. For Eugene, this total for FY10 is $1.16 mil-
lion. At this point, the projections show the fund will be out of reserves by the end of FY10.
Additionally, for FY10, the fund is unable to support its medic unit replacement reserve resulting
in lengthening the time for fleet replacement.
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 need-
ed. An additional $300,000 in support is allocated for the current fiscal year.
The Lane Rural Fire/Rescue District was granted an Ambulance Service Area (ASA) encompass-
ing the northwest portion of Eugene’s ASA in 2001 and in 2002 began providing emergency
medical transport in addition to fire and rescue services to that area, resulting in a reduction of
ambulance transport revenue as well as FireMed membership revenue for Eugene. As a pre-
existing taxing authority, Lane Rural has been able to augment its overall revenue with ambu-
lance fees and FireMed revenue, but not to the extent that the ambulance service is fully self-
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supported; instead, the district annually levies funds as necessary to provide all of its services, in
effect providing some support to the ambulance service with general tax monies. For FY09 this
requirement is estimated to be between $400,000 and $500,000 or approximately one-third of the
district’s total revenue.
The entire problem will be further exacerbated next calendar year. A temporary increase in the
fee schedule provided in the Medicare Modernization Act of 2003 is scheduled to sunset Decem-
ber 31, 2009. Also, for the first time, providers will not be allowed an annual inflationary ad-
justment in the fee schedule. The calendar year 2010 impact of these two factors alone is esti-
mated at $400,000 for Eugene and $300,000 for Springfield.
In February of this year, at the conclusion of a Joint Elected Officials summit regarding this is-
sue, the formation of our Task Force was authorized.
EXPLANATION OF RECOMMENDATIONS
General Fund Support
1.
In Eugene and Springfield, since the cities assumed responsibility for providing am-
bulance service in 1981, it has been established public policy that the service is
to be self-supporting through fees collected (including FireMed membership fees).
This, with the benefit of occasional fee increases, was sufficient until the Medicare
reimbursement reductions took effect.
Facing those reductions, the provider agencies took all steps available to them to con-
tinue to provide service on a self-sustaining basis. However, the crisis worsened as
Oregon’s Medicaid program enacted similar reductions, as the federal reductions be-
came more severe, and as the national economy deteriorated.
Lane Rural Fire/Rescue already supplements its ambulance fee and FireMed revenue
with general tax revenue as necessary. In Eugene and Springfield, this has been re-
quired to a limited extent in recent years, and fiscal projections indicate that the need
for General Fund support is escalating at an alarming rate.
The elected bodies could choose to make General Fund support the permanent solu-
tion to the problem before us. However, the Task Force believes that, for the sake of
preserving other local government services to the greatest extent possible, General
Fund support should be viewed only as a short-term solution. In the long term, the
public will be better served if ambulance and fire services are supported by a combi-
nation of fees for service, FireMed membership fees, and some form of dedicated tax
support.
Fire Department Merger
2.
During the time that our Task Force has been studying and deliberating on the ambu-
lance funding issue, the Portland consulting firm ESCI was commissioned by the cit-
ies of Eugene and Springfield to prepare a report regarding the possible benefits of
4
further collaboration between Eugene Fire & EMS and Springfield Fire & Life Safe-
ty, beyond that already occurring.
The ESCI report, which has been presented to the two City Councils, concludes that
merging the support functions of these departments would save the cities an estimated
$850,000 per year through the elimination of redundant positions (via retirements and
normal attrition). The consultants recommended such a merger.
This proposal happens to align well with our other recommendations. With an inter-
governmental agreement merging these departments as an initial step, not only will
significant General Fund savings be realized immediately, but also, and more im-
portantly for the long term, the transition to a district will be a smaller, more manage-
able step. For these reasons our Task Force is in support of working toward the rec-
ommended merger.
New Form of Taxation
3.
This recommendation is based on our belief that continued and growing General Fund
support for ambulance service is unsustainable, and that all other revenue-raising and
cost-cutting measures combined are not sufficient to resolve this issue.
Fire District – In most of Lane County, and increasingly throughout the United States,
fire and ambulance services are provided by special-purpose districts. The growth in
emergency service special districts in areas traditionally served by municipalities may
be attributed to greater competition among public services for increasingly scarce re-
sources, given these districts show a higher degree of success historically to secure
public willingness to pass tax measures to fund high-quality fire, rescue, and emer-
gency medical services.
A general fire service district, including ambulance service, offers a significant public
safety advantage over a district that provides ambulance service only, because – as is
the case now in all three of our jurisdictions – ambulances can be staffed by cross-
trained firefighter/paramedics who can, as necessary, supplement non-ambulance fire
and rescue efforts. In a multi-unit response, the availability of these additional fire-
fighters can make a life-saving difference.
Health District or County Service District – A new limited special-purpose district
could be formed in the region, or the region could annex to an existing health district,
to provide ambulance service. Such a district would be governed by an elected board
of directors. Alternatively, a county service district could be established. This type
of entity would be governed by the Lane County Board of Commissioners. Under ei-
ther of these options, any boundary could be drawn, as long as it did not overlap an-
other district providing the same service. Either option would require an affirmative
vote of the electors within the proposed district.
Appendix H is an overview of district-related options for ambulance service funding,
prepared in June by Lane Council of Governments. The Task Force also reviewed a
full LCOG report regarding districts that was commissioned by the Lane County Fire
Defense Board.
5
In planning for formation of, or annexation to, a special district, many further, more
specific decisions will be needed. Boundary issues, revenue requirements, and the
possibility of tax rate compression will need to be addressed. An election will be re-
quired. Because implementation of these options even at best speed will take a con-
siderable period of time, we recommend the immediate formation of an intergovern-
mental staff team to fast-track the study of the feasibility of implementing this solu-
tion.
Local Option Levy – We are identifying this option only as a temporary means of re-
living the General Fund of the ambulance service funding burden. We believe it may
meet with voter acceptance initially, but we have serious concerns about this form of
funding due to its need for renewal in perpetuity.
Enhance FireMed Marketing
4.
Since its inception in 1985, the FireMed ambulance membership program has been
marketed primarily as a form of protection against personal liability for an ambulance
bill. While the program does serve that purpose for households, the revenue generat-
ed has become essential to the continued provision of high-quality service.
More and more in recent marketing, this latter fact has been mentioned, but the sup-
port-for-the-service theme has always been subordinate to the cover-your-family
theme. We believe the time has come to reverse this.
In marketing for the FY11 membership year, we propose that FireMed advertising fo-
cus on the opportunity to contribute to a safe community, and to a lesser extent, but
still overtly, on the private benefits of membership. Staff analysis has shown that a
significant percentage of members already subscribe on a public-support basis, and
we believe more might do so if they saw the opportunity in that light.
We are also recommending, for the upcoming campaign, a greater reliance on en-
dorsements as a supplement to paid advertising. Toward this end, we are developing
a program whereby endorsing organizations will be able to offer FireMed member-
ships at a group rate below the new rate proposed for the upcoming enrollment cam-
paign.
Reconfigure Ambulance Service Area Boundaries
5.
This recommendation can be adopted or rejected independently of the two above. We
propose analysis of the possibility that the Ambulance Service Area (ASA) assigned
to Lane Rural Fire/Rescue be extended to the south so as to abut the Cottage Grove
ASA, reducing the territory of the Eugene ASA such that it includes only those areas
within the Eugene Urban Growth Boundary plus special districts now served by Eu-
(See ASA map, Appendix D.)
gene Fire & EMS.
This boundary change would have a twofold purpose. First, it would greatly reduce
in-service times for a percentage of ambulance calls now handled by Eugene Fire &
EMS, as Eugene’s ASA currently extends west to a point between Walton and Maple-
6
ton. This would preserve Eugene rescue and transport resources for emergency avail-
ability in the more immediate Eugene metro area.
Second, the boundary change would allow for growth of the Lane Rural ambulance
service, both geographically and in terms of revenue. It also would pave the way for
possible placement of a Lane Rural ambulance in the Veneta area, although that de-
ployment decision would ultimately be made by the provider agency based on further
analysis.
The above objectives would not be achieved without some revenue impact to Eugene
Fire & EMS, which would be transferring an estimated 850 calls per year to Lane Ru-
ral. This represents revenue estimated at $500,000. That figure, however, represents
raw revenue only. It should be recognized that, in expanding its service territory,
Lane Rural would incur additional operating expenses that would offset the revenue
to a great extent; conversely, Eugene’s actual net loss of revenue would be smaller
because rural calls cost more operationally than urban ones, and also because fewer
Eugene-based calls will need to be handled by other agencies. Actual calculations of
the net effect would depend on deployment configurations subsequent to an ASA
boundary change, and also on actual call experience under that scenario.
Mobile Health Care System
6.
A Mobile Health Care (MHS) system links prehospital emergency medical services
with several types of non-emergency medical care in a network of 24-hour healthcare.
In Central Lane County, these would include fire/paramedic first response fire en-
gines and ambulances, a private non-emergency ambulance contractor, wheelchair
transport vehicles, and a mobile primary care provider known as Med Express.
The MHS system is designed to triage phone calls from the public for help on illness
and injury and match the level of response more closely with the level of care need-
ed. The responding caregiver determines if the patient can be safely treated and re-
leased without further care or needs additional care. If additional care is needed,
the caregiver determines whether the patient must be seen immediately or later
and whether the patient needs transportation to a doctor's office, clinic, or emergency
department.
The goal is to improve early access to advice and direct the patient to the most appro-
priate level of care to match the nature and severity of illness or injury. This is de-
signed to improve the quality of care while lowering the overall cost.
Currently, only the fire units and private non-emergency ambulance service are
linked. Grant funding is being sought to link all other parts of the system and demon-
strate the efficacy of the MHS network.
Continue to Lobby Congress for Relief
7.
From a national perspective, the effect of the Balanced Budget Act of 1997 on ambu-
lance services has been very small in comparison to the effects on physicians, hospi-
tals, and other health care providers. Nonetheless, ambulance associations and local
7
governments have had some limited success in pushing for increases in the fee sched-
ule (an example being the Medicare Prescription Drug, Improvement, and Moderniza-
tion Act (MMA) of 2003, which unfortunately is due to sunset on December 31 of
this year). This lobbying should continue.
OTHER OPTIONS CONSIDERED
Continue to Raise Rates:
Although this approach has been used in the past to forestall revenue
deficits, our Task Force rejected it for simple mathematical reasons. Because the majority of pa-
tients transported are covered by Medicare with its capitated reimbursement schedule, and be-
cause a large percentage of the remaining patients are unable to pay, the full fee is seldom col-
lected. Even an astronomical rate increase would result in only a minimal revenue gain, and
would in all likelihood result in a negative patient care impact if cost became a deterrent to ac-
cepting transport.
Privatize the Service:
The elected bodies to which we belong have identified ambulance
transport as a core public service that should continue to be publicly administered. Therefore the
option of privatization was not studied by our group, and was not identified to the public as a vi-
able option. Eugene Fire & EMS has contracted with a private provider to handle some non-
emergency transports, but assignment of emergency prehospital care to this or any other private
provider is not being considered. Under full privatization, the public would not only relinquish
quality control, but also the emergency response versatility afforded by the firefighter/para-
medics now staffing local ambulances.
Market FireMed as an Alternative to Additional Taxation:
This was suggested at one of the
community forums. It is correct that, if a sufficient number of FireMed memberships were sold,
that enhanced revenue stream could take the place of General Fund support. However, FireMed
and fire service professionals have countered, and we as your Task Force believe, that this type
of marketing would probably result in unfortunate public perceptions and could lead to a back-
lash. Further, continued service would become dependent on adequate FireMed sales from one
year to the next. Having said that, we are recommending enhanced marketing of FireMed, but
with a positive approach.
PUBLIC PARTICIPATION
During our process, we directed staff to engage the public regarding this issue. We published an
op-ed column in The Register-Guard explaining our charge, and nine community forums were
organized within the three jurisdictions. The forums were announced via paid advertising,
earned (unpaid) media (newspaper, television, and radio), and online. There were also presenta-
tions made to the Eugene City Club, Eugene Chamber of Commerce, and Springfield Chamber
of Commerce. In addition to the community forums, we set up an online survey providing the
same information and options as were provided at the public forums.
Documentation can be found in Appendices A through F, including a full transcript of written
public comments received.
In summary, the combined responses from the community forums and the online survey showed
the most support for the formation of a general fire service district, while General Fund support
8
(at the expense of other public services) was the least favored option. Numerical details regard-
ing the responses are given in the appendix. Altogether, 116 responses were received and rec-
orded.
We recognize that this is not a statistically valid sample, but it does represent the views of those
interested enough to participate. We considered the public response in the same light as public
testimony received on any issue, and we are confident that the full elected bodies will do the
same.
CONCLUSION
With the political will already expressed to continue emergency medical transport as a core pub-
lic service, and with the existing revenue streams no longer adequate, there is little question that
additional tax support will be required. The only questions are as to the form and magnitude of
that additional tax support.
Some of the measures recommended above can provide a degree of financial relief and/or service
improvement. To directly address the larger and more critical central issue, however, we are
compelled to report that General Fund support will probably be required to bridge the gap over
the short to mid-term, and we conclude further that some new form of general tax support is the
best solution for the long term, both from a fiscal and service standpoint. We recommend that
further analysis of that option begin without delay.
Please contact any member of the Task Force, or staff in the respective fire service agencies, if
you have questions or would like any additional information.
APPENDICES
A.Media clippings
B.Flier announcing public forums
C.Factsheet and ballot provided at public forums
D.ASA map
E.Financial graph presented at public forums
F.Public input results and comments
G.LCOG overview of district alternatives
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ATTACHMENT C
Eugene Fire & Emergency Medical Services
City of Eugene
Springfield Fire & Life Safety
City of Springfield
Lane Rural Fire Rescue
M
E M O R A N D U M
DATE: May 24, 2012
TO: Mayor Kitty Piercy and Eugene City Council Members
Mayor Christine Lundberg and Springfield City Council Members
Commission Chair Sid Leiken and Lane County Commissioners
President John Baxter and Lane Rural Fire/Rescue Board Members
FROM: Fire Chief Cities of Eugene & Springfield Randy Groves
Fire Chief Lane Rural Fire District Dale Borland
ON BEHALF
OF: Ambulance Transport System Joint Elected Officials Task Force: Eugene City
Councilor Andrea Ortiz, Eugene City Councilor Mike Clark, Springfield City
Councilor Sean VanGordon, Springfield City Councilor Marilee Woodrow, Lane
County Commissioner Jay Bozievich, Lane Rural Board Vice President Pete
Holmes, Lane Rural Board Member Jim Drew
SUBJECT: REPORT AND RECOMMENDATION
SUMMARY
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.
May 24, 2012
Page 1 of 7
Provider departments and their governing bodies have already expended substantial effort to
address this critical public concern by taking steps to reduce expenditures and increase revenues
including passing extraordinary increases in user fees, FireMed memberships fees, and
implementing initiatives recommended by the 2009 initial Joint Elected Officials ATTF. None of
these adjustments individually or in whole has created a sustainable revenue source during any 6-
year financial forecast period. The Task Force was re-established in 2011 to continue the
discussion of finding a permanent funding source offering stabilization for this vital service.
The 2011 ATTF has developed the following options:
Do nothing.
1. Jurisdictions would remain responsible for providing and funding
ambulance transport within its assigned Ambulance Service Areas (ASA). Under this
option, jurisdictions recognize stabilizing the fund could require additional fee increases,
continued reduction in expenditures, change in service levels, and/or on-going General
Fund support for the continued high-quality provision of this core service. The elected
bodies could choose to make General Fund support the permanent solution to the
problem. However, the Task Force believes that, for the sake of preserving other local
government services to the greatest extent possible, General Fund support should be
viewed only as a short-term solution. Further, residents who do not live in the city limits
but reside within the ambulance service area will not be contributing to the support of the
service under this scenario.
Privatize.
2. The Cities of Eugene and Springfield currently contract with a private provider
for non-emergency transport. Under this contract, the Cities remain responsible for the
service provided within the ASA. Under full privatization, the public would not only
relinquish quality control, but also the emergency response versatility afforded by the
firefighter/paramedics now staffing local ambulances. The goal would be to find the
equilibrium point between these two ends of the public/private partnership spectrum. For
this option, a feasibility study would be required including a review of costs to each
jurisdiction to maintain fire response for medical calls in the event the ambulance
transport system is contracted to a private provider in its entirety. For example,
jurisdictions would need to maintain contracts for a supervising physician, which are
currently funded by individual Ambulance Transport Funds. Additional considerations
include payment for first response by the private provider and the financial stability of a
private provider to ensure long-term, high quality service.
Form Ambulance Transport District.
3. A new limited special-purpose district could be
formed in central Lane County, or the region could annex to an existing health district to
provide ambulance service. These options require governance by an elected board of
directors. Alternatively, a county service district could be established. This type of entity
would be governed by the Lane County Board of Commissioners. Forming a district
requires an affirmative vote of the electorate within the proposed district.
Attachment B is an overview of district-related options for ambulance service funding,
prepared in June 2011 by the Lane Council of Governments (LCOG). The Task Force
reviewed a full LCOG report regarding districts that was commissioned by the Lane
May 24, 2012
Page 2 of 7
County Fire Defense Board. The ATTF also reviewed a high-level presentation on
projected costs and estimated rate for the regional service.
In planning for formation of, or annexation to, a special district, a feasibility study
highlighting proposed district legal boundaries, changes to the Metro Plan, sustainable
tax revenue requirement, and taxing issues such as uncollectible percent and
compression, both a reduction to gross tax revenue would need to be completed. Because
implementation of district options will take a considerable period of time, we recommend
the immediate formation of an intergovernmental staff team to fast track the study of the
feasibility of implementing this solution.
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, which includes the
patient’s co-payment, as payment in full and transport agencies were no longer able 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. Year one (4/1/02-12/31/02) provided a blending of 20
percent fee schedule and 80 percent reasonable charge. The reasonable charge portion was then
reduced by 20 percent in each of the four subsequent years, so that as of 2006 only the fee
schedule amount was payable. Since 2006, jurisdictions have received small, incremental
increases in reimbursement. However, current reimbursement levels remain well below the cost
of the service.
Put simply, the national fee schedule, which covers 60 to 70 percent of all transports, does not
allow ambulance providers to recover the cost of providing the service. Instead, where we once
had the ability to collect the full reasonable 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 similarly.
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 contributing to the problem. One is the growing number of individuals eligible for Medicare.
The other is the economy. Ambulance transport providers in our region do not refuse transport
because of inability to pay and are being forced to write off more and more bills as uncollectible.
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The Eugene Fire & EMS Department has taken many steps to try to keep the ambulance service
self-sustaining including increasing the transport rates; reducing ambulance coverage during
non-peak times; and cutting costs for administrative staff, materials, and supplies. The
department has also worked closely with City Finance staff to identify the appropriate cost split
between the Ambulance Transport Fund (ATF) and General Fund (GF) to ensure the ATF is not
supplementing General Fund services as well as to identify needed GF support on a one-time
basis to balance the ATF in 2010 and 2011.
In addition, Eugene’s ambulance system capacity is very thin. With inadequate revenues to
increase the number of advanced life support ambulances on the street, the department elected to
privatize select non-emergency calls for service, which matches a more appropriate level of
resource with particular call types to a private provider as a cost avoidance strategy.
Springfield Fire & Life Safety staff has focused on maximizing existing revenue sources for all
three providers through the joint FireMed program by increasing the membership fee and by
increasing participation in the JobCare program. In FY12, the FireMed program managers
focused on decreasing administration and advertising costs of the program. However, it has been
noted that even with the recent adjustments to the program, FireMed, in itself, will not garner
enough revenues to balance the Ambulance Transport Funds.
Springfield Fire & Life Safety has taken several steps toward keeping the ambulance transport
system self-sustaining including increasing transport rates and reducing costs for administration.
Springfield Fire & Life Safety also contracts with a private provider for inter-facility, non-
emergency transports. In FY11, the Ambulance Transport Fund accumulated reserves totaling
$251,605. These reserves are forecasted to be depleted by the end of FY13.
The Lane Rural Fire/Rescue District was granted an Ambulance Service Area (ASA)
encompassing the northwest portion of Eugene’s ASA in 2001 and in 2002 began providing
emergency medical transport in addition to fire and rescue services to that area, resulting in a
reduction of ambulance transport revenue as well as FireMed membership revenue for Eugene.
As a pre-existing taxing authority, Lane Rural has been able to augment its overall revenue with
ambulance fees and FireMed revenue, but not to the extent that the ambulance service is fully
self-supported; instead, the district annually levies funds as necessary to provide all of its
services, in effect providing some support to the ambulance service with general tax monies.
Currently, this requirement is estimated to be at least $400,000 annually.
None of these adjustments individually or in whole has created a sustainable revenue source
during any 6-year financial forecast period. All three Ambulance Transport Funds continue to
see annual deficits and depleting reserves. Another unobtainable goal is to maintain a reserve
equal to two months’ operating expenditures. As projected in the current 6-year financial
forecasts, no jurisdiction will meet this goal. Additionally, all three jurisdictions have relied on
contributions from their general funds to balance in recent fiscal years.
In 2009, the initial Joint Elected Officials Ambulance Transport Task Force was formed because
a solution to this crisis was determined beyond the capacity and authority of any one provider
agency acting unilaterally. After studying this issues and the range of available options, having
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engaged the public at a series of community forums and online, and having worked in concert
with stakeholders including local fire and ambulance service professionals, hospitals, and
firefighters’ unions, the taskforce recommended the following:
1.That all three jurisdictions remain prepared to allocate a level of General Fund
support as necessary for the continued high-quality provision of this core service.
2.That the Eugene and Springfield City Councils authorize initial steps toward merger
of their fire departments.
3.That exploration begin immediately of more sustainable public funding options.
4.That marketing of FireMed subscriptions be enhanced and expanded in an effort to
generate additional revenues to lessen reliance on general fund tax support.
5.That the City of Eugene and Lane Rural Fire/Rescue analyze the possibility of
reconfiguring the boundaries of the county’s Ambulance Service Areas so as to
provide for an urban-rural split between Eugene and Lane Rural Fire/Rescue; and, if
conditions appear favorable, that the Lane County Board of Commissioners be asked
to enact such reconfiguration.
6.That work proceed as rapidly as possible regarding provision of a regional mobile
health care system, featuring tiered levels of response (and cost) available to patients
depending on the nature of the emergency with a report to elected officials by the end
of calendar year 2010.
7.That public ambulance service provider agencies continue to lobby the Oregon
legislature and U.S. Congress for larger-scale, long-term solutions.
Several of these recommendations have been implemented including continued General Fund
support as needed per jurisdiction to keep programs viable. All three providers recognize General
Fund support is considered one-time and, at this time, is not a sustainable solution. The merger
initiative continues to make positive steps toward a fire district, which could ultimately provide
needed funding for ambulance transport. However, it is projected that forming a district is a
long-term goal and will not address the immediate funding need of the ambulance transport
service. As previously stated, increased revenues for the enhanced FireMed program have been
determined that the program cannot in itself, garner enough funding to stabilize the system. The
City of Eugene has moved forward with recommendation #5 by contracting with Lane Rural
Fire/Rescue District to provide rural ambulance transport services west of the urban growth
boundary. This agreement has resulted in decreased response times for the constituents being
served. This recommendation has had minimal impact on the Eugene workload issue but does
not address the financial stability of either ambulance transport system. Finally, regional
providers continue to actively work with the United Front at the State and Federal levels for
developing larger-scale, long-term solutions.
CONCLUSION
With the political will already expressed to continue emergency medical transport as a core
public service, and with the existing revenue streams no longer adequate, there is little question
that additional tax support will be required. The only questions are as to the form and magnitude
of that additional tax support.
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As shown, some of the measures recommended provided a degree of financial relief and/or
service improvement. However, to address the larger and more critical central issue, General
Fund support will probably be required to bridge the gap over the short to mid-term, and we
conclude further that some new form of general tax support is the best solution for the long term,
both from a fiscal and service standpoint.
Please contact any member of the Task Force, or staff in the respective fire service agencies, if
you have questions or would like additional information.
ATTACHMENTS
A.ASA map
B.LCOG overview of district alternatives
C.Media clippings
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Attachment A
Ambulance Service Area
Lane Rural
Springfield Fire & Life Safety
Eugene Fire & EMS
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