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04/02/2019 03:25 PMThe Madison Ambulance Association is bleeding money and the medicine needed to stem the flow is seemingly out of reach. In the midst of the town budget season, local officials and members of the ambulance association are looking for ways to keep the association solvent and operating at the level of service residents in town have come to expect in the long term.
The ambulance association is not a town department, but the town partially funds the service every year, somewhere in the ballpark of $550,000 over the last few fiscal years. For this upcoming fiscal year, the ambulance association asked for an increase of $160,000 over the prior year just to maintain services in light of an existing operating deficit, and at this point, the Board of Finance (BOF) has settled on a $110,000 increase and asked the association to take the remaining $50,000 out it its reserves.
The funding level necessary to support the ambulance association has often been a moving target for the town, but the association is now regularly losing money each year. However, while town officials and members of the ambulance association can clearly see the cause of the issue, there is no simple fix.
The Big Picture and the Big Problem
The ambulance association, a non-profit organization, in town currently operates with a staff of 36—18 paramedics and 18 EMTs. Those employees staff two ambulances. Of the staff of 36, only 13 are considered full-time employees.
When a 911 medical emergency call comes in, the ambulance goes out and staff performs whatever medical treatment is needed. That’s where the money problem begins.
In Connecticut, like many other states, an ambulance can only bill the patient if that patient is transported to the hospital, so that means that if an ambulance is able to treat the patient on scene and does not transport, the ambulance does not get paid for those services, according to Madison Ambulance Association Director Chris Bernier.
“Current laws and regulations do not allow an ambulance service provider to charge the patient for services rendered on scene,” he said. “So say we get on scene to a diabetic patient, right, and we ended up providing medication and using supplies, there is an expense to us as a service, but we can’t bill the patient for those.”
Beyond the inability to charge for certain services, the other issue revolves around service rates and insurance. Bernier said the State of Connecticut essentially tells the ambulance service what it can charge a patient for a certain service, but those rates don’t match up with insurance program rates under Medicare and Medicaid.
“As an example, say a paramedic transport is $1,000,” he said. “That is what the state would allow us to charge, but Medicare would basically only allow us to charge $300 and the difference between the two is something called a contractual adjustment and we cannot seek that funding. So we can’t bill the patient more, we can’t charge another insurance company more for it, so we have to automatically write that off, in simple terms.”
Having to write off $700 in that example sounds bad, but compounded by the fact that a large number of Madison residents are now on Medicare, in reality that number starts to multiply very quickly. In fiscal year 2017-’18 the ambulance association had an adjusted total of $736,967 it could not recoup.
“We know over 75 percent of the people we transport have Medicare or Medicaid,” he said. “The thing is for us is we don’t know who the patient is going to be and we don’t know if they have insurance or whatever the case may be. That’s done with our billing company, because we don’t refuse someone because they don’t have insurance. We are a 911 provider, so if someone calls 911, we have to go.”
The ambulance association operates on a roughly $1.5 million budget each year. Bernier described it as a three-legged stool, with a portion coming from the town, a portion coming from donations, and a portion coming from billing. But when you can’t bill for more than $700,000 of service, the fiscal problem grows.
“For a service like us, our biggest issue is the reimbursements,” he said. “So last year out of all the patients that we billed, $736,967 is what was contractual adjustment was, so those were things we couldn’t bill for. So that is a huge chunk of change that doesn’t really allow our service to operate as well as it should, and if we didn’t have that much adjusted, we wouldn’t be requesting as much from the town.”
Fixing the billing issue will require an action by the Connecticut General Assembly. Bernier said Medicare and Medicaid are currently considering adjusting their models to allow ambulance associations to bill for services rendered on site, regardless of transport, but the state would have to adopt that policy, too.
“The State of Connecticut would still have to modify the language and regulations to allow this to happen,” he said. “In Connecticut right now, Anthem Blue Cross Blue Shield is an insurance provider. They have openly said that they will allow ambulance services to charge for non-transport services, but state law does not allow us to.”
The Bare Bones Budget
It costs the ambulance association roughly $4,500 a day to operate and Madison is unique in that it is the only non-profit career EMS service in the area, Bernier said. The staff is currently paid anywhere from $5 to $10 below market rate, he added, making it difficult to keep staff. Bernier said the ambulance budget is as lean as can be, but the billing model makes revenue very unpredictable.
“Our service is completely different than a regular business model,” he said. “A person can’t go to the store and buy a gallon of milk and say, ‘I will pay you next year,’ but in reality that is what happens in our service. We can transport a patient today but not get paid and see the revenue until a year or two years down the road because of the timing with insurance. Or if it’s a motor vehicle accident with lawsuits involved, no one gets paid until everything is settled. It’s a much different business model than the average person might be used to.”
Bernier said because salaries are already under market rate and purchasing costs are low (the association takes part in group purchasing agreements to get better rates), the only way to cut costs would be to take equipment off the road. However, he said taking an ambulance offline wouldn’t save that many dollars and residents would face reduced services.
“Prior to 2011, we only had one ambulance staffed and we worked hard incrementally to make sure that we built up to the point we are at now,” he said. “Prior to that, we relied heavily on other towns and people had to wait up to 45 minutes for an ambulance to come and transport them. We got plenty of calls from concerned residents that met with the board and me and the first selectman at the time to get to where we are now. It is not like we are looking to staff three ambulance crews. We just want to maintain what we have now and keep the staff.”
Right now, the average Madison Ambulance Association response time is four minutes. For reference, on average, after cardiac arrest, the brain can survive six minutes without oxygen, according to Fire Marshal and Madison Ambulance Association President Sam DeBurra.
Other Options
Every municipality in the state is required by law to offer some sort of ambulance service. Town officials have taken a rough look at other options, but according to Selectman Bruce Wilson, even if the town has to keep subsidizing the ambulance budget, this is still the cheapest option with the highest service rate.
“To leverage the ambulance service, we are able to offer this service at a much lower cost than if we contracted with a private company that is going to have a profit expectation,” he said. “…The other way to go is with a municipal department, which is even more expensive still. While it’s true that we are funding an increasing level of support for the ambulance association, this model is still the best financial and service related solution for the town.”
DeBurra said back in 2011, when the ambulance association brought on the second ambulance and became a certified HEARTSafe community, the association looked at other possible funding options through outside contracting. The numbers were not promising then and they are not promising now.
“For the same personnel without the administrators, just to staff people for the ambulances, American Medical Response quoted us a price of $1.6 million in today’s dollars,” he said. “That is just the cost for four people—no vehicles or supplies or utilities or anything like that.”
Wilson, who is the Board of Selectmen (BOS) liaison to the ambulance association, said recent investigations haven’t found an easy solution to the ambulance problem, but said that might need to be part of the public message.
“I think one of our biggest challenges is making the community aware of what it takes to deliver this service to the community and I think everyone recognizes that it is a vital service that has to happen, but it doesn’t all happen by magic,” he said. “…We can continue to ask the ambulance association to run down their endowment, but on that point I wonder why we are treating them different than the other public-private services in town.”
The Current Budget
The BOF recently approved sending the total town budget to a second public hearing. That budget shows $110,000 extra for the ambulance association, $50,000 less than the original request from the association. By the last workshop, members of the BOF clarified the cut.
DeBurra told the board at a meeting on March 20 the ambulance association currently has about $217,000 in reserves but by the end of the fiscal year, that reserve will drop to $147,000.
“I don’t anticipate that ever growing because we just don’t make enough money to put it back, so once that reserve gets depleted, it is just gone,” he said.
Some members of the BOF had participated in critical debates with DeBurra at a previous workshop meeting, but by March 20, everyone seemed to be on the same page. BOF member Kevin Kranzler said he 100 percent supports EMS in town and he just wants to ask certain questions.
“Some of the suggestions we are putting forward are that this is the beginning of a conversation to come to an end where this makes the most sense for EMS and the town,” he said. “Critical decisions need to be made, but we do have some time, so the hope is we use this year to really understand what the town can do and what options we can consider and that when we move forward in the next year, that it is a true partnership between EMS and the town.”
The BOF asked that the BOS contract for a study of the ambulance association. BOF Chair Jean Fitzgerald said the study isn’t looking to “nickel and dime” the already-low staffing levels of the department, but to determine the level of funding the town might need to plan for if this ambulance model continues.
“The problem is the reimbursements and that is an issue that is out of your hands,” she said. “There is nothing else in those books that you can do to fix this problem and we acknowledge that…I think moving forward, if this study comes back and says, ‘This is what is needed to help the ambulance,’ then that becomes the new base. It becomes part of their line for the town and that is what we want to look at to make sure there is continuity and consistency. The ambulance can then count on a constant number from the town.”
Residents can donate to the Madison Ambulance Service. Visit http://madisonctems.org/donate to learn more.