Though long provided to towns at no cost, Middlesex Hospital is now asking town governments to share the cost of providing 24/7 paramedic coverage within its service area. In the first year (2016), the proposed town charge would be $1 per capita.

Hospitals are required to provide paramedic service to their towns. Middlesex Hospital’s 19-town coverage territory includes Clinton, Westbrook, and Old Saybrook.

The town’s cost would rise each year by $1 until it reached $5 per capita in year five. At that rate, officials say the hospital would be paying 60 percent of the program’s cost and the towns, 40 percent.

Jim Santocroce, the manager of Middlesex Hospital’s Department of Emergency Medical Services, in presentations to local boards of Selectmen and Finance over the last two months, states that the paramedic program has operated at a loss for many years, for the following reasons.

The first reason is that the reimbursement rates for paramedic response and patient transport are set annually by the State of Connecticut Department of Public Health’s Office of Emergency Medical Services. In 2015 and in past years, these negotiated rates have not been set high enough to cover the costs of a paramedic response.

Second, even when the hospital, on a bill submitted by the ambulance association, charges Medicare, Medicaid, or private insurers for a paramedic response, the hospital is reimbursed at rate lower than the state-approved rate, leaving the hospital to bear the cost not reimbursed.

Until now, the hospital has provided paramedic coverage for free as a community service. But Santocroce is telling towns now that increasing cost pressures on the hospital make this model unsustainable.

Santocroce said that central to the financial stresses on hospitals are the new taxes the State of Connecticut has imposed in the past few years. Santocroce said that the hospital’s state tax bill has gone from $9 million a few years ago to $24 million this year.

“It’s a huge hit for a hospital our size,” said Santocroce.

Hospitals have begun to pursue cost-cutting strategies, and a costly program like the paramedic service that was provided to towns and their residents for free became a likely target for a cost-share model.

“In 1987, when the hospital started the paramedic program, volunteer transport services did not charge and bill for their services—they were all-volunteer. Now all of the volunteer [transport] services—except for Lyme—charge and bill the patient, Medicaid, Medicare. They all receive some reimubursement,” said Santocroce.

“Now, the way the laws are written, only transporting agencies can bill Medicare and Medicaid,” said Santocroce.

When a medical emergency requires a paramedic and an ambulance/EMT response, both the hospital (for the paramedic response) and the volunteer ambulance association incur a cost. When a bill is prepared and submitted to Medicare or Medicaid for reimbursement, federal laws require the bill for transport and paramedic response services be bundled in one bill, typically referred to as the ALS 1 bundle. Calls requiring intensive medical intervention by the paramedic are charged at a higher negotiated rate, the ALS 2 bundle charge.

Private insurers, unlike the federal programs, allow the hospital and transport agency to bill separately for their services. Most of the medical emergency calls, however, are either Medicare or Medicaid, according to hospital officials.

“There’s a significant shortfall between the rate and our costs. We’re providing the [paramedic] service and we’re asking the towns to share the costs,” Lisa Martino, vice president of Marketing and Development for Middlesex Hospital told the Westbrook Board of Selectman last week.

According to Santocroce, both the rates and the actual reimbursement are too low to cover the hospital’s paramedic call costs. In 2015, of the $1,288 charge per call for a ALS 1 level ambulance and paramedic response, Medicare withholds $822.10, paying only $465 of the bundled bill. Medicaid will pay nothing. For a more intensive ALS 2 ambulance and paramedic response to a medical emergency, Medicare withholds $613.67 of the $1,288 charge per call, paying only $613.67. Medicaid will pay nothing.

What happens if one or more of the 19 towns don’t agree to share Middlesex Hospital’s paramedic service costs this year?

“If the paramedic charges are unbundled [from the ambulance transport charges], a Medicare patient would be billed the $584 paramedic charge directly [by the hospital],” said Martino.

That would mean that senior citizens with limited incomes would be billed the full charge of the paramedic response.

“We felt this proposal was better,” Martino told the Westbrook Board of Selectmen.

Under the Middlesex Hospital proposal, each of the 19 towns in Middlesex Hospital’s state-mandated paramedic service area would pay $1 per capita in 2015 for 24/7 paramedic coverage. Currently, Middlesex Hospital has paramedics stationed at the Westbrook Emergency Center, in Middletown at Middlesex Hospital, and in Marlborough.

In Westbrook, with a population of roughly 8,000, this year’s $1 cost-share for paramedic coverage would set the total cost at about $8,000. The town’s per capita fee would rise by $1 per year until, in the fifth year, it reaches $5. In Clinton, population is about 15,000 and in Old Saybrook, 10,000.

At the $5 per capita rate, Martino said the cost split would be about 50-50 or 60-40 between the hospital and the town.

Over the past six weeks, Santacroce and Martino have pitched the new paramedic service charge to officials in each of the 19 towns in the hospitals state-designated service area. Some towns have placed a line item for the per capita charge in the proposed budgets that will go to public hearing, Town meeting and/or referendum. Others are still weighing the proposal.

Each town’s leaders have been presented with a one-year contract for the paramedic coverage cost-share program.

“I strongly urge that the Board of Selectmen and Board of Finance approve the agreement,” said Greg Prevost, chief of the Westbrook Ambulance Association. “This is the most fair way to do it.”

At the end of Westbrook’s Board of Selectmen meeting, Selectman John Hall said that he wanted a written commitment from the hospital that an oversight board with local leader membership would be set up, if the town agreed to cost-share. Martino agreed to send in a contract for the Selectmen’s review with this provision.