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Home My WebLink About2023-05-16; City Council; ; Ambulance Revenue and BillingCA Review __AF__ Meeting Date May 16, 2023 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: Nathan Pearson, Fire Division Chief nathan.pearson@carlsbadca.gov, 442-339-2241 Subject: Ambulance Revenue and Billing Districts: All Recommended Action Receive a report describing ambulance billing methodology and recent changes in reimbursement and revenue. Executive Summary The Carlsbad Fire Department provides ambulance transport services and receives reimbursement for some of its costs for the service. The level of reimbursement revenue the city receives is driven by factors such as call volume, insurance coverage, supplemental government program reimbursement rates and the level of fees set by policy. Over the last several years Carlsbad has seen an increase in revenue generated by ambulance transports. This increase was driven by several factors, including; •The Fire Department’s two new ambulances •Increased call volume •Increased insurance coverage rates •Shifts in the mix of the individuals, insurers and other payors •Increased efficiency in billing methods •Modest increases in ambulance rates based on standard industry guidelines •New programs that provided additional reimbursement •A renegotiated contract with the billing vendor Total ambulance transport revenue has increased from approximately $3 million in fiscal year 2017-18 to $4.2 million in fiscal year 2021-22. Supplemental reimbursement programs are expected to provide the city about $375,000 in annual additional reimbursement revenue. As is the case with all city fees, the ambulance fees cannot legally exceed the city’s cost in providing the services. Also, because of reimbursement limitations in various health coverage programs and other factors, the city does not recover the full cost of these services. The structure of ambulance fees was last evaluated in June 2014. The Fire Department is completing an ambulance fee and first responder fee feasibility study to inform future revisions to the city’s ambulance fees. May 16, 2023 Item #7 Page 1 of 6 Explanation and Analysis History and structure of ambulance fees The Carlsbad Fire Department has provided ambulance response and transport service to the community since 1977. The authority to bill for these services is established by Title 18 of the Social Security Act and under Title 42 of the Code of Federal Regulations. The Centers for Medicare Service is the federal agency responsible for establishing standards and methods for ambulance billing and reimbursement. The state of California has a complimentary agency, the Department of Health Care Services, which manages reimbursements under California’s Medi- Cal programs. Recommendations for ambulance billing categories are standardized by the federal Centers for Medicare Service and are defined by the level of care, services provided and the interventions provided during a patient encounter. Billing is further broken down by the resident status of the patient, meaning residents of Carlsbad transported by a Carlsbad ambulance are billed at a lower rate for certain levels of care. As with other fees for public services, state law prohibits the fees charged for the service from exceeding the cost incurred by the city for its delivery. Carlsbad’s fees for ambulance services Fee type Fee charged Basic life support (Resident) $997 Advanced life support Level 1 $1,222 Advanced life support Level 2 (Resident) $1,328 Advanced life support Level 2 (Non-resident) $1,434 Milage (per mile) $24 Oxygen (flat rate) $80 Medications administered, no transport (flat rate) $212 The Carlsbad Fire Department has among the lowest fees for service for ambulance transport in San Diego County: Comparison: Advanced life support Level 1 – Resident fees Carlsbad $1,222 County average $2,751 Highest in county (Poway) $4,597 Lowest in county (Coronado) $1,221 (The complete 2022 San Diego County Ambulance Rate Survey is provided as Exhibit 1.) It should be noted that the communities of Encinitas, Del Mar, Solana Beach and Rancho Santa Fe are part of County Service Area-17. Residents in that area pay a fixed assessment per residential unit of $34.46 to subsidize ambulance transport services. Any patient transported in that area is also charged per transport. As an example, the transport fee for advanced life support Level 1 for a resident is $400 plus mileage, in addition to the subsidies mentioned above. May 16, 2023 Item #7 Page 2 of 6 Carlsbad’s ambulance billing rates are adjusted annually as part of the city’s Master Fee Schedule and are linked to the Ambulance Inflation Factor, which the Centers for Medicare Service sets annually based on the consumer price index for urban areas and other factors. The city receives ambulance reimbursement payments from Medi-Care, Medi-Cal, private health insurance and individuals who received services. These groups comprise the payor mix, which fluctuates over time based on community demographic and rates of insurance coverage. Payor mix for Carlsbad ambulance transports for FY 2023 Payment Source Percent of transports Medicare 55% Medi-Cal 15% Insurance 21% Private 9% Recent changes to reimbursement and revenue Over the last ten years, the ambulance industry has seen many changes that have affected reimbursement: • The City Council approved two new ambulances and related personnel for the Fire Department, increasing its number of ambulance transports it can provide. • More community members became insured under the Affordable Care Act, the major provisions of which came into force in 2014. • Fire Department staff have been actively pursuing additional reimbursement through voluntary supplemental reimbursement programs. • Changes in the payor mix • Increased billing efficiency • Minor increases in ambulance rates based on standard industry guidelines • A recent renegotiation of the contract for ambulance billing also led to a reduction of the percentage of net receipts paid to the contractor. Carlsbad previously paid 5% of net receipts to the billing contractor. With the ratification of the most recent contract in 2022, the new rate is 4.5% of net receipts. These changes have steadily increased the city’s ambulance reimbursement revenue over the last several years. While the landscape of healthcare billing has been changing, city staff have also pursued voluntary opportunities to maximize the amount of reimbursement the city receives. Staff have obtained additional reimbursement for medical transports provided over the last four years through California Department Health Care Services programs providing ground emergency medical transport reimbursement for patients covered by Medi-Cal programs. This increase is an average of approximately $245,000 per year for the period of participation. The processing of some of these payments was suspended during the COVID-19 emergency. Therefore, reimbursements under one of these programs accounting for four years of payments are being retroactively received this year totaling approximately $969,000. May 16, 2023 Item #7 Page 3 of 6 Because of the factors detailed above: • The city’s average reimbursement revenue per patient transport by ambulance has risen from $563 per transport in fiscal year 2017-18 to $657 per transport in the current fiscal year to date. • Annual revenue from ambulance transport has increased from approximately $3 million in fiscal year 2017-18 to $4.2 million in fiscal year 2021-22. Updates to the ambulance fees within the Master Fee Schedule were suspended during the COVID-19 emergency and have not been revised since September 2020. Since fiscal year 2017- 18, Carlsbad’s ambulances fees rates have increased by only about 4.6%. Future changes In addition, the state Legislature approved a new reimbursement program that went into effect on Jan.1, 2023. Assembly Bill 1705 established the Public Provider Ground Emergency Medical Transport Intergovernmental Transfer program to provide additional reimbursement for public agencies. The State of California has not adjusted reimbursement rates since 1999. Based on Carlsbad’s historic payor mix and our average number of patient transports eligible under this program, staff anticipates that ambulance revenue may increase by $375,000 per year, ongoing, by replacing current reimbursement programs, without any additional fees for service to ambulance users in Carlsbad. The Fire Department worked with a consultant to create its Standards of Cover, which assesses local risks and demographics to determine the level of protection that best fits a department’s needs. The Standards of Coverage recommend evaluating emergency medical service fees. Based on that recommendation, and given the recent industrywide changes to ambulance billing and new resources for transport services within the city, the Fire Department is now conducting an ambulance fee and first responder fee feasibility study with a hired consultant, AP Triton, to thoroughly evaluate the current rates. This study is intended to establish an objective and reasonable rate for ambulance transports based on regional averages and industry standards to make related and justifiable adjustments to the city’s Master Fee Schedule. Considerations for future ambulance fee revisions include the cost to deliver the service, the structure of fee bundles and additional options beyond transport fees. The Fire Department intends to recommend revisions to the ambulance fee section of the Master Fee Schedule in the city’s upcoming budgeting process for the coming fiscal year. Fiscal Analysis There is no fiscal impact associated with receiving this report. Next Steps Recommendations made by the ambulance fee study, once completed, will be incorporated into the Master Fee Schedule revision and presented as part of the fiscal year 2023-24 budget for the City Council’s consideration next month. Environmental Evaluation This action does not constitute a project within the meaning of the California Environmental Quality Act under California Public Resources Code Section 21065 in that it has no potential to May 16, 2023 Item #7 Page 4 of 6 cause either a direct physical change or a reasonably foreseeable indirect physical change in the environment. Exhibit 1. Countywide Ambulance Fee Survey 2022 May 16, 2023 Item #7 Page 5 of 6 Exhibit 1 May 16, 2023 Item #7 Page 6 of 6 2.on San Diego County Ambulance Rate Survey Advanced life support Level 2. Advanced life support Level 1 Basic life support Jurisdiction Resident Non-resident Jurisdiction Resident Non-resident Jurisdiction Resident Non-resident Lemon Grove $4,853.02 $4,853.02 Poway $4,597.00 $4,597.00 Poway $4,597.00 $4,597.00 Poway $4,597.00 $4,597.00 Lemon Grove $4,335.17 $4,335.17 Alpine $3,267.00 $3,267.00 La Mesa $4,521.55 $4,521.55 La M esa $3,976.95 $3,976.95 Rural county (Mercy) $3,267.00 $3,267.00 San Miguel $4,451.94 $4,451.94 San Miguel $3,967.94 $3,967.94 Valley Cent er $3,267.00 $3,267.00 Alpine $4,070.00 $4,070.00 Alpine $3,850.00 $3,850.00 Viejas $3,267.00 $3,267.00 Rural county (Mercy) $4,070.00 $4,070.00 Rural county (Mercy} $3,850.00 $3,850.00 Bonita $2,800.00 $2,800.00 Valley Center $4,070.00 $4,070.00 Valley Cent er $3,850.00 $3,850.00 Chula Vista $2,800.00 $2,800.00 Viejas $4,070.00 $4,070.00 Viejas $3,850.00 $3,850.00 Imperial Beach $2,800.00 $2,800.00 National City $3,265.44 $3,265.44 Pala $2,900.00 $2,900.00 Borrego Springs $2,500.00 $2,500.00 Pala $3,166.00 $3,166.00 Rincon $2,900.00 $2,900.00 County Fire Protection Dist rict $2,500.00 $2,500.00 Rincon $3,166.00 $3,166.00 National City $2,812.60 $2,812.60 Pala $2,228.00 $2,228.00 El Cajon $2,894.12 $2,894.12 Bonit a $2,800.00 $2,800.00 Rincon $2,228.00 $2,228.00 Bonita $2,800.00 $2,800.00 Chula Vista $2,800.00 $2,800.00 Lemon Grove $2,160.30 $2,160.30 Chula Vista $2,800.00 $2,800.00 Imperial Beach $2,800.00 $2,800.00 San Diego City $2,158.30 $2,158.30 Imperial Beach $2,800.00 $2,800.00 El Cajon $2,606.18 $2,606.18 Sycuan $1,800.00 $1,800.00 N. County Fire $2,646.04 $2,708.85 San Diego City $2,558.06 $2,558.06 La M esa $1,768.77 $1,768.77 San Diego City $2,671.34 $2,671.34 N. County Fire $2,437.50 $2,501.70 Escondido $1,668.00 $1,668.00 Borrego Springs $2,500.00 $2,500.00 Borrego Springs $2,500.00 $2,500.00 N. County Fire $1,573.91 $1,625.58 County Fire Protection Dist rict $2,500.00 $2,500.00 County Fire Protection District $2,500.00 $2,500.00 San Miguel $1,613.83 $1,613.83 Sycuan $2,500.00 $2,500.00 Sycuan $2,250.00 $2,250.00 Oceanside $1,070.00 $1,600.00 Oceanside $1,440.00 $2,000.00 San Marcos $1,820.44 $1,820.44 El Cajon $1,478.19 $1,478.19 Vista $1,697.00 $1,829.00 Oceanside $1,2.90.00 $1,820.00 San Marcos $1,457.42 $1,457.42 San M arcos $1,820.44 $1,820.44 Vista $1,580.00 $1,709.00 Barona $1,323.00 $1,323.00 Escondido $1,668.00 $1,668.00 Escondido $1,668.00 $1,668.00 Vista $1,000.00 $1,117.00 carlsbad $1,32.8.00 $1,434.00 Barona $1,323.00 $1,323.00 Coronado $1,087.00 $1,087.00 Barona $1,323.00 $1,323.00 carl.sbad $1,222.00 $1,222.00 carlsbad $997.00 $997.00 Coronado $1,221.00 $1,221.00 Coronado $1,221.00 $1,221.00 National City $976.33 $976.33 Average rates $ 2.,92.2..59 $ 2.,954.47 Average rates $2,750.59 $2,TT7.37 Average rates $2,135.30 $2,161.17 . .. ·.' . , .... .,., -, . ... -, ... . . ; . , . ,.~ lcsA 17 -San Dieguito $400.00 $1,050.00 lcsA 17 -San Dieguito $400.00 $1,050.00 CSA 17 -San Dieguito $400.00 s1,oso.oo I !Santee-Lakeside EMSA $900.00 $2,700.00 !Santee-Lakeside EMSA $900.00 $2,700.00 Santee-Lakeside EMSA $900.00 $2,700.00 11 Average rates with CSAs $2.,765.86 $2,880.02 Average rates with CSAs $2.,605.72 $2,715.14 Average rates with CSAs $2.,032..86 $2.,141.44 Ambulance Revenue and Billing Nick Ordille, Assistant Chief Nate Pearson, Division Chief Fire Department May 16, 2023 { City of Carlsbad SOC RECOMMENDATION TO EVALUATE EMS FEES •History and structure of ambulance fees •Recent changes to reimbursements and revenue •Ambulance Fee Study ITEM 7: AMBULANCE REVENUE { City of Carlsbad AMBULANCE FEE STUDY •Ambulance Fee Study will be included as part of the Master Fee Schedule update •Consider regional rates and industry standards ITEM 7: AMBULANCE REVENUE { City of Carlsbad PROPOSED ACTION Receive a report describing ambulance billing methodology and recent changes in reimbursement and revenue. ITEM 7: AMBULANCE REVENUE { City of Carlsbad BACKGROUND •Authority to bill for services •Local ordinance •Fees are bundled •Carlsbad rates are among lowest in county ITEM 7: AMBULANCE REVENUE { City of Carlsbad AMBULANCE FEE OVERVIEW Fee Type Fee Charged Transport Fee (average of bundles)$1,200.00 Mileage (per mile)$24.00 Oxygen (flat rate)$80.00 Medications administered, no transport (flat rate)$212.00 ITEM 7: AMBULANCE REVENUE AMBULANCE FEE COMPARISON –CY22 ITEM 7: AMBULANCE REVENUE $0.00 $500.00 $1,000.00 $1,500.00 $2,000.00 $2,500.00 $3,000.00 $3,500.00 $4,000.00 $4,500.00 $5,000.00 Coronado Carlsbad Barona Vista Oceanside Escondido San Marcos Sycuan N. County Fire El Cajon National City San Diego City Borrego Springs San Diego County FPD Pala Rincon Bonita Chula Vista Imperial Beach San Miguel La Mesa Alpine Rural County (Mercy) Valley Center Viejas Lemon Grove Poway Carlsbad SD County Average AMBULANCE FEE COMPARISON Carlsbad Avg Transport Fee $1,200 County Average $2,616 Percent Difference to Average 118% Percent Difference to Highest 290% Percent Difference to Lowest -5% Carlsbad GEMT Cost per Call (FY21/22)$2,600 *CSA communities apply per parcel benefit fee to subsidize ambulance services and use different fee structure. ITEM 7: AMBULANCE REVENUE RATE PAUSE •Rates normally adjusted annually by AIF •AIF follows CPI •Rates last adjusted in 2019 •Rate adjustments paused during COVID ITEM 7: AMBULANCE REVENUE { City of Carlsbad PAYOR MIX •Impacts reimbursement •Four main sources of payment •Varies by community ITEM 7: AMBULANCE REVENUE { City of Carlsbad PAYOR MIX –CY2022 ITEM 7: AMBULANCE REVENUE 55% 15% 21% 9% Medicare Medi-Cal Insurance Self Pay/Uninsured ■ ■ ■ ■ ( City of Carlsbad REVENUE SOURCES –CY22 ITEM 7: AMBULANCE REVENUE 48% 9% 41% 2% Medicare Medi-Cal Insurance Self Pay/Uninsured ■ ■ ■ ■ ( City of Carlsbad SUPPLEMENTAL PROGRAMS •Additional reimbursement for Medi-Cal transports •Retro payments received for $969,000 •Anticipated additional revenue estimated at $375,000/year going forward ITEM 7: AMBULANCE REVENUE 1111111 { City of Carlsbad REVENUE NUMBER OF TRANSPORTS TOTAL REVENUE ITEM 7: AMBULANCE REVENUE PAYOR MIX SUPPLEMENTAL PROGRAMS BILLING RATES -x- AMBULANCE TRANSPORT REVENUE ITEM 7: AMBULANCE REVENUE 0 1000 2000 3000 4000 5000 6000 7000 8000 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 [proj] Number of Transports $0.00 $1,000,000.00 $2,000,000.00 $3,000,000.00 $4,000,000.00 $5,000,000.00 $6,000,000.00 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 [proj] Total Revenue LOOKING AHEAD •Ambulance Transport Fee Rate Study •Provide options for consideration •Fee adjustment policy decision ITEM 7: AMBULANCE REVENUE { City of Carlsbad Questions ITEM 7: AMBULANCE REVENUE (cityof Carlsbad