Budget and Audit Committee Report 915 I Street, 1 st Floor Sacramento, CA

Transcription

1 Budget and Audit Committee Report 915 I Street, 1 st Floor Sacramento, CA File ID: November 7, 2017 Discussion Item 04 Title: Proposed Emergency Medical Services (EMS) Fee Adjustments and Amended Policy for EMS Revenue Recovery and Fee Waiver Location: Citywide Recommendation: 1) Review the proposed Emergency Medical Services (EMS) Fee adjustments; 2) review the EMS Revenue Recovery and Fee Waiver Policy; and 3) pass a Motion forwarding to City Council to conduct a public hearing. Contact: Chad Augustin, Deputy Chief, (916) , Fire Department Presenter: Chad Augustin, Deputy Chief, (916) , Fire Department Attachments: 1-Description/Analysis 2-FY16 ALS Cost Analysis 3-Regional Fee Comparisons 4-Resolution 5-Exhibit A (Current & Proposed SFD EMS Base Rates & Procedures) 6-Exhibit B (EMS Revenue Recovery and Fee Waiver Policy) Page 1 of 14 Matthew Ruyak, Interim City Attorney Mindy Cuppy, City Clerk John Colville, City Treasurer Howard Chan, City Manager

2 File #: Discussion Item 04 Description/Analysis Issue Detail: On February 7, 2006, City Council formally adopted a Citywide Fees and Charges Policy (Resolution ) to ensure that City fees and charges reflect Council s direction regarding recovery of costs related to providing programs and services. The EMS program is a fee supported program. The last fee increase for this program was in June 2012 (Resolution ). In addition to the increase in EMS service fees to recover ongoing costs associated with the provision of Basic Life Support (BLS) and Advanced Life Support (ALS), staff recommends the adoption of a new First Responder s Fee to recover the cost of patient care provided by the first response unit. Since pre-hospital care is a critical component of the healthcare system most medical insurances will reimburse this cost. Other agencies in the region charge this fee to offset the cost of the first response unit. Imposition of a First Responder Fee is within the constitutional powers granted to the City by Article XI, Section 7, of the California Constitution. The following chart summarizes the proposed fee changes for the City s Emergency Medical Services (EMS) program. Description Current Rates Proposed Rates 1 Change Base Rates ALS1 Bundled Transport Fee $1, $1, $ ALS2 Bundled Transport Fee $1, $1, $ BLS Bundled Transport Fee $1, $1, $ Treat No Transport (TNT) $ $ $58.23 Mileage $26.60 $33.48 $6.88 Night Charge $81.35 $ $21.05 Oxygen $ $ $28.68 New First Responder Fee None $ $ Procedures 2 Continuous Positive Airway Pressure (CPAP) $ $ $38.82 Chest Decompression $ $ $28.42 Electrocardiogram (EKG) Monitoring $ $ $33.15 Cardioversion $ $ $33.15 Defibrillation $ $ $33.15 Intubation $ $ $27.49 EZ Interosseous $ $ $67.01 Needle Cricothyrotomy $ $ $ Fees will be adjusted annually, beginning July 1, 2018, and each July 1st thereafter, by the percentage change in the Consumer Price Index (CPI) Series Title: Medical Care in the U.S. City Average, All Urban Consumers, Not Seasonally Adjusted, as published by the U.S. Department of Labor, Bureau of Labor Statistics for the twelve (12) month period ending December 31 of the preceding year. 2 Fees apply when used for ALS Transports or Medical Assessment City of Sacramento November 7, 2017 powered by Legistar Page 2 of 14

3 File #: Discussion Item 04 On March 18, 2014, the City Council adopted Motion Order approving the Advanced Life Support (ALS) Revenue Recovery Policy. The ALS Policy does not address fees for basic life support services and does not include a provision to waive fees for persons with financial hardships. It is recommended that the policy be renamed and amended to include these provisions. Policy Considerations: The changes are consistent with Council s adopted Fees and Charges Policy and support the City s budget sustainability and fiscal responsibility goals. Proposition 26 was passed by the voters on November 2, 2010, amending Article XIII C of the State constitution. According to the ballot measure, the intent of the measure is to ensure the effectiveness of Propositions 13 and 218 by providing a definition of a tax for state and local purposes so that neither the Legislature nor local governments can circumvent these restrictions on increasing taxes by simply defining new or expanded taxes as fees. Thus, under Proposition 26, a tax has been defined broadly to include any levy, charge or exaction of any kind imposed by a local government, except for seven specified categories of charges. Moreover, the City bears the burden of proving that a fee or charges is not a tax. The proposed fees will cover the Fire Department s reasonable cost of providing EMS. The amended EMS Revenue Recovery and Fee Waiver policy will provide the guidelines and processes to waive all or a portion of the EMS fees due to a financial hardship. Economic Impacts: Not applicable. Environmental Considerations: This report concerns administrative activities that will not have a significant effect on the environment, and does not constitute a project as defined by the California Environmental Quality Act (CEQA) [CEQA Guidelines Section (b) (3); (b) (2)]. Sustainability: Not applicable. Commission/Committee Action: Not applicable Rationale for Recommendation: The EMS program fees were last increased in The cost to provide these services has increased in the past five years and the proposed increases are needed to reduce the gap between costs of service and actual revenues received as shown on Attachment 1. A process to allow the City Manager or the City Manager s designee to waive all or reduce a portion of the EMS fees due to a financial hardship is appropriate and consistent with practices by other EMS providers in the region. City of Sacramento November 7, 2017 powered by Legistar Page 3 of 14

4 File #: Discussion Item 04 Financial Considerations: When the EMS program was established, Council stated that City ambulance rates should be lower than other local providers given similar customer mixes and that rates cover the direct costs of providing the service without a General Fund subsidy. The Fire Department proposes a 26% increase in the base rate and procedural services which will help in reducing the gap between the costs of providing these services and the actual revenues received. Additionally, this change will bring our fees more in line with the fees charged within the region as shown on Attachment 2. Based on current EMS workload, the proposed changes to the existing fees will allow the Fire Department to increase revenues by approximately $2.3 million per fiscal year to address the current structural variance between the cost of providing EMS and the recovery of those program costs. The structural variance includes the cost of uncollectible accounts receivable or bad debt. The existing variance is related to the increasing costs of providing EMS services including labor, medical supplies, pharmaceuticals, equipment and vehicle operation/maintenance costs. The new first responder fee will be charged to every patient transported by the City Fire Department, as well as any patient provided with initial care by the City and transported by another agency. Based on a review of the FY2015/16 calls for services, this fee will generate approximately $1.2 million in new revenues. As it has been more than 5 years since the last EMS fee increase, the City s costs for providing these services have increased substantially. In an effort to keep fees in line with increasing costs and avoid significant rate increases in the future it is recommended that the EMS Program fees be adjusted annually. Similar to Sacramento Metropolitan Fire District, staff is recommending that these fees be adjusted annually, beginning July 1, 2018, and each July 1st thereafter, by the percentage change in the Consumer Price Index (CPI) Series Title: Medical Care in the U.S. City Average, All Urban Consumers not seasonally adjusted, as published by the U.S. Department of Labor, Bureau of Labor Statistics for the twelve (12) month period ending December 31 of the preceding year. Staff will prepare a cost analysis annually and only implement CPI changes provided the increase doesn t exceed the cost of providing services. Local Business Enterprise (LBE): Not applicable. City of Sacramento November 7, 2017 powered by Legistar Page 4 of 14

5 Attachment 1 Advanced Life Support Cost Analysis 1 18,610,222 Revenues - Ongoing 600,000 Revenues - Ongoing GEMT included in Fire budget 2 19,210,222 Subtotal Revenues 15,959,107 ALS Operating Budget (Labor) 3 3,832,680 Labor Adjustments for Ambulance and Paramedic Incentives 4 780,523 Services & Supplies and Reimbursements 679,440 Fleet Expenses (Ambulance Fuel & Maintenance) 5 3,086,609 Cost Plan Charges 6 updated to reflect FY 2016 Cost Plan 606,500 Capital Expenditures (Ambulances and ALS Equip) 7 24,944,859 Subtotal Expenses (5,734,637) Gain/(Loss) 8 FY2015/16 ALS Costing 1 Revenues/Expenses are based on FY2015/16 actuals, except for direct labor costs required to provide ALS and the annual CIP budget for the purchase of ambulances, both of which are based on budget. 2 Beginning in FY2015/16 a $600,000 a revenue budget for GEMT reimbursements was established to support Fire Operations. IGT reports for FY2015/16 have not yet been submitted for reimbursement. IGT payments are received for past fiscal years and are not considered permanent and ongoing sources of revenue. 3 ALS labor is based on the approved budget to reflect the value of staffing necessary to operate the City's ALS Program. Using actuals from ALS exclusively does not include the staffing costs (including overtime) recorded in Suppression for providing ALS Services (Medic Teams). 4 ALS Incentives paid to employees not budgeted in ALS due to the rotation of firefighters (Medic Teams). Paramedic pay is included in base and Medic assignment is paid as incentive. These amounts include the fringe benefits associated with these incentives. The value is based on the approved labor budget, this cost is likely understated as it does not include overtime, preceptor pay, and medical quality assurance (MQA) training pay. 5 Fleet vehicle charges are based on FY2015/16 actual costs for ambulances in service which are recorded in the Fire Infrastructure budget. 6 The City s Cost Allocation Plan (CAP) identifies and distributes the allowable General Fund costs of the operating departments, specifically the support departments such as Mayor/Council, Charter Offices, Finance, Human Resources, Information Technology and General Services. These costs reflect charges that would be incurred if ALS was an enterprise fund. This includes the Fire Department Indirect Cost Recovery based on ALS FTE % of Total Fire FTE (16%). 7 Reflects funding budgeted in approved CIP for ambulances and ALS equipment. 8 If ALS were operated as an enterprise fund there would be an additional cost of approximately $1.98 million for an in lieu franchise tax payment to the General Fund as is required of all other City enterprise funds. Page 5 of 14

6 Attachment 2 City of Sacramento Base Fee Comparisons of Local 911 Transport Providers Base Rates for Providers SFD Current SFD Proposed Sac Metro Sac AMR Cosumnes Folsom ALS 1 Rates $1, $1, $ 2, $ 1, $ 1, $ 1, ALS 2 Rates $1, $1, $ 2, $ 1, $ 1, $ 1, BLS Rates $1, $1, $ 1, $ 1, $ 1, $ 1, Medical Assessment Treated / No Transport (TNT) $ $ $ $ - $ $ Mileage $26.60 $33.48 $ $ $ $ Night Charge $81.35 $ $ $ $ - Oxygen $ $ $ $ $ $ First Responder Fee None $ $ $ - $ $ Page 6 of 14

7 RESOLUTION NO. Adopted by the Sacramento City Council PROPOSED ADVANCED LIFE SUPPORT (ALS) FEE ADJUSTMENTS AND AMENDED POLICY FOR EMS REVENUE RECOVERY AND FEE WAIVER BACKGROUND A. The Fire Department Emergency Medical Services (EMS) is responsible for providing Advanced Life Support (ALS) services, Basic Life Support (BLS) services and transporting patients by ambulance throughout the City. These services are General Fund activities supported by fees charged for services. B. The last fee increase for this program was in June 2012 (Resolution ) The costs to provide these services have increased significantly over the past five years. C. A 26% increase in the base rates and procedures, and adoption of a First Responder s Fee will help in recovering the City s EMS Program costs. D. The existing EMS Program fees do not include a provision to adjust fees based on annual inflation. The ability to adjust fees annually will allow for recovery of increasing labor and service and supply costs. E. On March 18, 2014, the City Council adopted Motion Order approving the Advanced Life Support (ALS) Revenue Recovery Policy. F. The existing Advanced Life Support (ALS) Revenue Recovery Policy does not address fees for basic life support services, and it does not include provisions for waiving or reducing fees for persons with financial hardships. BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS: Section 1. Section 2. Section 3. The City of Sacramento Fee and Charge Report for the existing Fire Department EMS Program fees is amended as shown in Exhibit A. The City of Sacramento Fee and Charge Report for the Fire Department EMS Program is amended to include a new First Responder Fee as shown in Exhibit A. The City of Sacramento Fee and Charge Report for the Fire Department EMS Program is amended to include an annual fee increase beginning July 1, 2018, and each July 1st thereafter, by the percentage change in the Consumer Price Index (CPI) Series Title: Medical Care in the U.S. City Page 7 of 14

8 Average, All Urban Consumers, Not Seasonally Adjusted, as published by the U.S. Department of Labor, Bureau of Labor Statistics for the twelve (12) month period ending December 31 of the preceding year. A cost analysis will be prepared annually and CPI increases will be implemented, provided that the increase doesn t exceed the cost of providing services. Section 4. The EMS Program fee changes will be effective January 1, Section 5. Section 6. Section 7. Motion Order is rescinded. The ALS Revenue Recovery Policy is amended and renamed as the Emergency Medical Services (EMS) Revenue Recovery and Fee Waiver Policy as shown in Exhibit B. The EMS Revenue Recovery and Fee Waiver Policy is adopted (Exhibit B). Page 8 of 14

9 Exhibit A Description City of Sacramento Emergency Medical Services (EMS) Fees Current Rates Proposed Rates 1 Base Rates ALS1 Bundled Transport Fee $1, $1, ALS2 Bundled Transport Fee $1, $1, BLS Bundled Transport Fee $1, $1, Treat No Transport (TNT) $ $ Mileage $26.60 $33.48 Night Charge $81.35 $ Oxygen $ $ New First Responder Fee None $ Procedures 2 Continuous Positive Airway Pressure (CPAP) $ $ Chest Decompression $ $ Electrocardiogram (EKG) Monitoring $ $ Cardioversion $ $ Defibrillation $ $ Intubation $ $ EZ Interosseous $ $ Needle Cricothyrotomy $ $ Fees will be adjusted annually, beginning July 1, 2018, and each July 1st thereafter, by the percentage change in the Consumer Price Index (CPI) Series Title: Medical Care in the U.S. City Average, All Urban Consumers, Not Seasonally Adjusted, as published by the U.S. Department of Labor, Bureau of Labor Statistics for the twelve (12) month period ending December 31 of the preceding year. 2 Fees apply when used for ALS Transports or Medical Assessment Page 9 of 14

10 Emergency Medical Services (EMS) Revenue Recovery and Fee Waiver Policy Scope: CITYWIDE Policy Contacts Dawn Holm Budget Manager Department of Finance (916) Chad Augustin Deputy Chief Fire Department (916) Table of Contents Purpose Background Policy Regulatory References July 27, 1993 Resolution October 2011AB 678-Ground Emergency Medical Transport June 26, 2012 Resolution March 18, 2014 Motion Page 10 of 14

11 EMS Revenue Recovery and Fee Waiver Policy 1) PURPOSE a) To establish a policy for revenue recovery and fee waiver or reduction of costs associated with providing the City of Sacramento s (City) EMS program. 2) DEFINITIONS a) Advanced Life Support (ALS): This term is defined in Health and Safety Code section b) Basic Life Support (BLS): This term is defined in Health and Safety Code section c) Electronic Patient Care Report (epcr): A patient care report, as defined in Sacramento County Emergency Medical Agency Policy No , in an electronic format. An epcr is an electronic health record, within the meaning of Health and Safety Code section , created for each patient by Fire Department staff at the time of service. The report is used to relay information between the responding unit and the receiving hospital staff. The report serves as documentation of the treatment provided. d) Emergency: This term is defined in Health and Safety Code section e) Emergency Medical Services (EMS): This term is defined in Health and Safety Code section EMS includes Fire Department responses to provide ALS, BLS, and treat-not-transport patient care. f) Fee Waiver: the forgiveness of all of a patient s owed City Council approved EMS user fees, based on a formalized criteria and processes as outlined in this policy. g) Fee Reduction: the forgiveness of a portion of a patient s owed City Council approved EMS user fees, based on a formalized criteria and processes as outlined in this policy. 3) BACKGROUND a) On July 27, 1993 (Resolution ), the City established the ALS program. As costs for ALS services continue to increase, the revenues generated by fees for service have not grown proportionally. The City is challenged to recover fee for service revenues due to several different reasons, one of them being payer mix. The City s payer mix is currently 40 percent Medicare, 40 percent Medicaid, and 15 percent private insurance with the remainder being from self- insured and uninsured. In addition, there are federally mandated write-offs which allow the City to collect only a small percentage of the actual billed amount from Medicare and Medicaid. In an effort to maximize reimbursements and cover direct costs the City has pursued additional recovery options. Page 11 of 14

12 b) In October 2011, AB 678 authorizing the Ground Emergency Medical Transport (GEMT) program, was enacted. It provides for the reimbursement of transports of Medi-Cal patients who are not in managed care. On March 18, 2014, the Council authorized an agreement with Sacramento Metropolitan Fire District (Motion No ) to pursue reimbursements through the GEMT program. c) On June 26, 2012, the Council approved increases to the ALS fees for service (Resolution ) to increase cost recovery to address a portion of the structural variance between the cost of providing services and the revenue collected for those services. d) On December 16, 2014, Council authorized the participation in the Rate Range Intergovernmental Transfer (IGT) program. IGT allows local governments to receive a federal reimbursement for transporting Medi-Cal patients that are in managed care. e) While the City can assure the continuation of fee for service revenues, revenue recovery programs such as GEMT and IGT are subject to the availability of state and federal funding. 4) EMS FEE RECOVERY POLICY a) The EMS Program shall be fully offset by fees generated by services provided. All revenues recovered for the provision of EMS services shall be used to cover direct and indirect costs to reduce the General Fund subsidy for this program. b) GEMT and IGT revenues received in excess of the Fire Department s approved General Fund revenue budget, during the fiscal year, shall be committed for future appropriations for the Fire Department. 5) EMS FEE WAIVER POLICY a) The City Manager or the City Manager s designee may waive all or a portion of the EMS fees established by City Council as provided herein. b) In no event shall any person be denied EMS services because of their inability or failure to pay the charges incurred for services provided. c) Procedures: i) Fee Waiver Application: 1. An applicant or applicant s legal representative may submit a completed Fee Waiver Application with adequate supporting documentation to the Fire Department for review and consideration. The Fee Waiver Application shall be on a form prescribed by the City Manager or the City Manager s designee. 2. Fire Department staff, through assistance from a contracted billing company, will use reasonable research methods to confirm the validity of the information provided. Page 12 of 14

13 3. Upon completion of the application review process above, the contracted billing company will notify all applicants as instructed by the Fire Chief or the Fire Chief s designee. 4. Fee waiver applications and supporting documentation will be retained in accordance with the City s Record Retention Policy. d) Fee Waiver Conditions and Options: i) Financial Hardship. A fee waiver may be granted in circumstances where a financial hardship is demonstrated. The determination of a financial hardship shall be based on the most recent Federal Poverty Level (FPL) chart provided by the Department of Health and Human Services (HHS). The Fire Chief may grant a waiver, reduction, or payment plan to applicants that demonstrate a financial hardship Federal Poverty Levels Household Size Poverty Level (100% Waiver) 2x Poverty Level (50% Reduction) 3X Poverty Level (25% Reduction) 1 12,060 24,120 36, ,240 32,480 48, ,420 40,840 61, ,600 49,200 73, ,780 57,560 86, ,960 65,920 98, ,140 74, , ,320 82, ,960 Note: Poverty Levels will be updated annually. The current poverty information is available at: 1. Waiver or Reduction: The Fire Chief may approve a full waiver or partial reduction of the remaining balance after all insurance payments have been posted based on the applicant s ability to pay the remaining balance. Reductions may range from 25% to 50% based on the applicant s financial hardship as reflected above. 2. Payment Plan: The Fire Chief may offer a low-cost monthly payment plan in lieu of, or in addition to, a reduction for applicants that have a verified financial hardship. ii) Services Provided. A waiver may be granted in circumstances where the level of response or services provided do not justify application of the charges incurred. Such determination shall be based on the contents of the applicable epcr or one or more of the following circumstances: 1. The call for service did not require response by Fire Department apparatus including an ambulance, engine company, or truck company; Page 13 of 14

14 2. Treatment or care provided to the applicant was at a lower level than the defined levels of ALS and BLS service; iii) The applicant did not initiate the call for service, and the applicant refused care. Page 14 of 14