February 15, 2022, Item #14
DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
AG EN DA REPORT City of Poway
February 15, 2022
Honorable Mayor and Members of the City Council
Aaron Beanan, Director of Finance .
Nicole Roesler, Revenue and Operations Manager
Nicole Roesler, Revenue and Operations Manager vVl.J
(858) 668-4409 or [email protected]
CITY COUNCIL
Ambulance Rates Study and Resolution Amending and Establishing the Emergency Medical Services and Ambulance Transport Fees A fee study for ambulance transport services has not been conducted since 2007. Fees studies are important to ensure the City's cost recovery is in alignment with the cost to provide service. For ambulance transport services they are also important to ensure the City's fee categories align with insurance reimbursement categories. As such, this staff report is for the consideration of the Ambulance Rates Study of January 27, 2022 (Attachment A) and a Resolution (Attachment B) amending the Emergency Medical Services and Ambulance Transport Fees within the Fire Department section of the Master Fee Schedule.
Recommended Action:
It is recommended that the City Council take public input, close the public hearing, receive the ambulance rates study report, and adopt the Resolution amending the emergency medical services and ambulance transport fees within the Fire Department section of the Master Fee Schedule.
Discussion:
The Poway Fire Department is committed to providing outstanding emergency medical services, fire protection services and fire prevention services to the community and is ready to respond to emergencies and disasters 24-hours a day, 365 days a year at three stations strategically located throughout the City. Resources dedicated to respond to emergency medical service type incidents are staffed by firefighters trained as paramedics. Automatic and mutual aid is also provided to adjoining agencies upon request.
Of the many services provided by the Poway Fire Department, emergency medical services and ambulance transports (ambulance services) are the most frequently used by Poway residents and non-residents. Nearly 82% of all 911-calls received from a three-year period of FY17-18, FY18-19, and 1 of 29
February 15, 2022, Item #14
FY19-20
involved
medical
related
emergencies.
As
reflected
in
the
adopted
budget
for
FY21-22,
funding
support
for
the
fire
department
includes
revenue
from
ambulance
related
fees
($1,268,525),
fire
protection
special
tax
($636,000),
mutual
aid
($44,000),
various
fees
associated
with
inspection,
plan
check
and
other
safety
fees
($344,552),
and
miscellaneous
fees
($4,
1 SO)
with
the
remaining
department
costs
funded
by
the
General
Fund
($11,371,347).
Staff
completed
the fee
study
for
ambulance
services
to
ensure
that
fees
do
not
exceed
the
costs
of
providing
services
and
recommend
setting
fees
consistent
with
City
financial
policies.
It
is
a
best
practice
to
complete
a
rates
study
to
address
changes
to
service
deliver
and
costs
fee
study
every
five
years.
Under
the
terms
of
California
propositions
218
and
26,
which
set
restrictions
on
local
government
finance,
user
fees
charged
by
the
City
are
limited
to
recovering
the
cost
of
providing
the
related
service.
The
last
cost
study
that
included
ambulance
services
was
performed
in
2007
and
fees
were
last
updated
in
2010.
Operational
costs
for
ambulance
services
have
increased
over
the
last
fifteen
years.
For
example,
the
cost
of
two
ambulance
vehicle
replacements
in
2007
was
$350,240
compared
to
$509,722
in
2021,
or
45.5%
greater.
The
total
operating
budget
for
the
Fire
Department,
excluding
law
enforcement,
in
FY06-07
was
$7,850,260
compared
to
$13,658,574
in
FY21-22,
or
a
73.9%
increase.
Additionally,
there
has
been
significant
changes
to
the
healthcare
system
. National
healthcare
reform
with
the
Patient
Protection
and
Affordable
Care
Act
became
law
in
2010.
Modifications
to
reimbursement
policies
and
procedures
for
Medicare,
Med-Cal,
and
private
insurances
make
it
necessary
to
update
and
modernize
the
fee
schedule
to
increase
the
City's
share
of
reimbursement
for
services.
Fee
Study:
NBS
Government
Finance
Group
(NBS),
the
consultant
hired
to
conduct
the
comprehensive
cost
of
service
study,
was
formed
in
1996
and
specializes
in
financial
consulting
for
local
governments
in
California.
NBS
prepared
an
Ambulance
Rates
Study
Report
with
input
from
staff
from
the
Finance
Department
and
Fire
Department.
The
fee
study
was
conducted
to
update
the
City's
costs
to
provide
ambulance
services
to
the
community
for
which
fees
are
assessed.
Details
of
the
methodology
and
analysis
can
be
found
in
Attachment
A,
Final
Ambulance
Rates
Study,
summarizing
the
key
findings
and
recommendations.
Analysis-
There
were
three
phases
of
analysis
completed
in
the
fee
study:
1. Cost
of
service
analysis
- A
comprehensive
effort
to
capture
all
associated
staff
time
and
labor
costs
in
the
Fire
Department.
2. Fee
establishment
-This
includes
not
only
establishing
the
names
and
categories
for
fees
but
also
recalibrating
them
to
simplify
the
overall
fee
structure
and
to
either
increase
the
likelihood
of
cost
recovery
or
make
the
fee
structure
more
equitable
for
the
community.
3. Cost
recovery
evaluation
-
Comparing
the
current
fee
for
each
activity
to
the
total
cost
of
service
for
that
service
or
activity.
Setting
Fees-
While
there
is
no
set
standard
to
setting
fees,
the
City
has
historically
adjusted
ambulance
fees
comparable
to
the
average
of
other
agencies
in
the
region
providing
similar
services.
When
comparing
fees
with
other
local
comparable
agencies,
it
is
useful
to
consider
the
following:
•
They
reflect
the
"market"
cost
of
such
fees
and
can
assist
in
assessing
the
reasonableness
of
City's
fees
but
does
not
reflect
the
cost
of
service
incurred
by
Poway.
•
Fee
surveys
should
not
be
used
as
the
primary
criteria
in
setting
fees
because
there
are
many
factors
that
affect
how
and
why
other
communities
have
set
their
fees
at
their
levels
including
2 of29
February 15, 2022, Item #14
differing cost recovery policies and procedures, basis of fees and frequency of review, and level and cost of services provided.
Currently, Poway's ambulance fees are the lowest or among the lowest in the region for ambulance transports according to a calendar year 2019 survey of fees and charges of comparable agencies in San Diego County. The chart below shows the current and proposed fee for the Advanced Life Support 2 (ALS2) Resident category and where it sits in relation to the other city and special district providers in the County. As shown, Poway's ALS2 Resident fee is currently the lowest in the County.
Current and Proposed Poway Fee for Advanced Life Support 2-Resident Ambulance Transport Bill Comparison ALS2 Re.sident Catecory $5,000
S--4,SOO $4,359 $4,452
$3,883
53,:00
Average= $2,461 *
51,500
$2,100 52,161
.$2,0CO
Sl,535 Sl,558 51,697
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*Ave,-..ge exclufts City of Pow.ty propo ,a,d fees As of 2019 S.ain Otego County Ambul..iince R.ate Survey As previously mentioned, fees have not been adjusted since 2010. As a result, cost recovery levels for the City have dropped to an average of 20%-31 %. The Poway Fire Department operates a high level of service staffing model for emergency medical services with all firefighters dually trained as paramedics and responsible for emergency response, treatment, and transport of patients. Poway is one of four cities in the county that continue to operate using this model, while other service areas are utilizing contracted transport providers or other staffing models that include single-role paramedics or emergency medical technicians with their firefighter/paramedic staff. As such, staff recommends the approval of an updated cost recovery methodology and to consider a 100% full cost recovery level. The figures in the Proposed Fees Table are based on FY 21-22 adopted budget and exclusive of the recently executed 6-year Poway Firefighters Association (PFA) contract approved after the budget was adopted.
Ambulance fees were reviewed individually, compared to current market rates, and reviewed to determine the proposed adjustment to cost recovery levels. The increase in revenue will be used to partially offset annual operating expenses within the Fire Department to continue to maintain the desired service levels to the community. The Fire Department is and will continue to participate in all existing and upcoming supplemental governmental programs that provide reimbursement for ambulance transport, with the goal of helping offset the cost of providing these services. 3 of29
February 15, 2022, Item #14
The table below shows the proposed fees as well as information on their cost recovery.
Proposed Fees Table
Fee Description Fee Proposed Proposed Current Current
Unit/Type Fee Cost Fee Cost
Recovery Recovery
% %
EMERGENCY MEDICAL SERVICES and
AMBULANCE TRANSPORT
Base Charge-Advanced Life Support 1
Resident Flat $4,369 100% $1,029 24%
Non-Resident Flat $4,369 100% $1,366 31%
Base Charge-Advanced Life Support 2
Resident Flat $4,369 100% $1,029 24%
Non-Resident Flat $4,369 100% $1,366 31%
Base Charge-Basic Life Support
Resident Flat $4,369 100% $866 20%
Non-Resident Flat $4,369 100% $1,196 27%
Treatment and Release Flat $2,550 100% $150 6%
ADD-ON CHARGES
Per-Mile Charge Per Mile $16 $16
Oxygen Flat $66 $66
Medications Flat Cost Plus Cost Plus
50% 50%
Supplies Flat $49 $49
EKG Flat $46 $46
Night Charge (7pm to 7am) Flat $50 $50
CPR Non-Transport Flat $100 $100
Extra Attendant Flat $50 $50
Cost Recovery Limitations -Most bills for ambulance services do not result in full payment. In setting fees and cost recovery, the level of use fee cost recovery should consider the public versus private benefit of the program or activity. However, there are fee collection limitations imposed by the healthcare industry that have an impact the total amount the City is able to collect from ambulance users when services are rendered. The Centers for Medicare and Medicaid Services (CMS) sets limits or caps on how much a provider can be reimbursed for administering ambulance services and private insurances pay a percentage of the costs billed which varies. While these fee limits do not preclude a provider from setting fees higher than what will be reimbursed, it does make full cost recovery infeasible. If fees are increased, the patient co-pays or deductibles remain the same, but the City will be able to bill insurance carriers for a higher percentage of the cost of service. Additionally, patients are not balance billed, a practice where a provider bills a patient for the difference between the fees charged and any amounts paid by the patient's insurer.
Indexing for Inflation -Similar to other fee adjustments approved by City Council, an annual fee adjustment utilizing published industry economic factors is recommended to assist with maintaining cost recovery objectives as operational costs increase. Ambulance Service Fees set forth in Exhibit 1 will increase each July commencing July 1, 2022 by the annual change in the Consumer Price Index (CPI) -All Urban Customers, San Diego-Carlsbad (2020 = 303.932), as published by the United States Bureau of Labor Statics, subject to rounding to the nearest whole dollar. 4 of 29
February 15, 2022, Item #14
Resources -An update to the City's fees will not change the way ambulance services are provided. No one is denied emergency services due to their type of healthcare coverage or ability to pay. The City offers payment plans with modest monthly payments and no interest or penalties. Additionally, there are resources for eligible uninsured individuals with Emergency Medi-Cal, California's state-funded health insurance benefits program, which may provide medical care in serious and sudden medical emergencies. In addition to these resources, staff are recommending the creation of a financial hardship assistance policy to allow the City Manager or designee authority to approve a reduction in fees for patients who are uninsured and are unable to pay for all or part of their bill due to limited income. The framework for this is included in the resolution.
Environmental Review:
This action is not subject to review under the California Environmental Quality Act (CEQA).
Fiscal Impact:
Utilizing the proposed fee schedule, the City could increase annual billing amounts and associated cost recovery from approximately $2,700,000 to $9,800,000 and result in additional estimated receipts of $1,800,000-$3,000,000 annually in FY22-23 compared to $1,193,957 million collected in FY20-21. A smaller revenue adjustment in the current fiscal year of $300,000 is estimated due to the timeframe to receive reimbursements from insurance providers. However, because the revenue estimates are gross averages and reimbursement is dependent upon the payer mix, number of transports, etc., the actual revenue could vary significantly changing the amount of cost recovery the City realizes. The amount of cost recovery to the City realizes will be better understood over time. Revenue is reflected in the Paramedics Division budget (503050). In order amend the fee schedule, it is necessary for the City Council to adopt a Resolution authorizing this action.
Public Notification:
A Notice of Public Hearing was published in the Poway News Chieftain on Thursday, January 27, 2022 and February 3, 2022.
Attachments:
A. Ambulance Rates Study January 27, 2022
B. Resolution Amending Existing and Establishing New Fees for Emergency Medical Services and Ambulance Transport Within the Fire Department Section of the Master Fee Schedule.
Reviewed/ Approved By:
Wend serman
Assistant City Manager
5 of29
Reviewed By:
Alan Fenstermacher
City Attorney
e
City Manager
February 15, 2022, Item #14
Prepared
by
:
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NBS helping
communiti
fund
tomorrow
nbsgov.com 6
of29
ATTACHMENT
A
Co
rporat
e
Hea
dqu
art
ers
32605
Temecula
Parkwa
y, Suite
100
Temecula,
CA
92592
Toll
free:
800.676.7516
February 15, 2022, Item #14
TABLE
OF
CONTENTS
1. Executive
Summary
........................................................................................................ 5 2.
Project
Approach
............................................................................................................ 7 2.1
Legal
Foundation
....................................................................................................... 7 2.2
Project
Approach
............
...
....
...
................................................................................. 8 3.
Analysis ........................................................................................................................ 12 3.1
Cost
of
Service
Analysis
........................................................................................... 12 3.2
Fee
Establishment
................................................................................................... 17 3.3
Cost
Recovery
Evaluation
........................................................................................ 18 4.
Conclusion
.................................................................................................................... 22 7
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February 15, 2022, Item #14
1. EXECUTIVE SUMMARY
The City of Poway wished to perform a study of its fees for ambulance services. The City's primary purposes in conducting this Study were to ensure that fees do not exceed the costs of providing services and to provide an opportunity for the City Council to set fee amounts according to local cost recovery policies.
The body of this report illustrates calculation of the maximum fee amounts that reflect the City's full costs of providing services, as well as the policy options for considering implementation of fee amounts at or below that ceiling.
This Study identified approximately $14.9 million in total annual City costs of providing Emergency Medical Services (EMS). The City bills $2.7 million, per year, on average, for ambulance services at current fee amounts. If the City were to collect 100% of their billings, revenue received would recover approximately 18% of the total annual costs of providing EMS services.
However, review of historical EMS calls for service data showed that not all calls result in an ambulance transport and/or treatment without transport service. Of those calls that do result in an ambulance transport and/or treatment without transport service, there are instances when no bill for service occurs, such as mutual aid response where the City does not provide transport service. Additionally, most bills for ambulance services do not result in full payment. Depending on whether the recipient of a bill is a private or public insurance company, or individual, significant write downs, write offs, and payment delays typically occur. Based on an analysis of billing and revenue receipts data, the City's receives, on average, approximately 43% of the annually billed amount for services.
As shown in Table 1 on the next page, at current annual billing activity levels, the City could increase "Average Annual Billings at Current Fees" from $2.7 million to the "100% Full Cost Recovery Fee Levels" of $9.8 million per year. The "Collected" row of the table considers that the average revenue received is 43% of annual billings due to write offs, etc. Therefore, the net increase in revenue received by increasing current fees to full cost recovery fee amounts is an estimated $3 million.
As discussed in Section 2.2.3 of this report, there may be local policy considerations for adopting fees at less than the calculated full cost recovery amount. Also, the Centers for Medicare and Medicaid Services (CMS) sets limits, or "caps", for how much a provider can be reimbursed for administering ambulance services. CMS, however, does not regulate how much can be charged to individual patients or private insurance companies. All these considerations and nuances will impact the amount of revenue ultimately collected from any increase in ambulance fees for services.
Per City staff's request, Section 3.3.1 of this report presents three cost recovery options for consideration:
• Option 1: Transport fees established at 100% full cost recovery; Add-on charges assumed at no change from current fee amounts
ONBS
8 of29
CITY OF POWAY
Ambulance Rates Study 5
February 15, 2022, Item #14
• Option 2: Transport fees and Add-on charges established at the average of the regional comparison
• Option 3: Transport fees and Add-on charges at the 66th percentile of the regional comparison Table 1 shows a summary of annual estimated revenue projections for each of the policy options described.
Billed
Collected
Net Col I ected
Revenue Increase
TABLE 1. REPORT SUMMARY
Estimated Annual Billings per Policy Option
100% Full Cost Regional Fee Levels Regional Fee Levels
Average Annual
Billings at Current
Fees
Recovery Fee Levels -Average -66th Percentile
$ 2,731,204 $ 9,754,207 $ 5,206,073 $ 6,771,947
$ 1,184,550 $ 4,169,923 $ 2,225,596 $ 2,895,007
$ 2,985,373 $ 1,041,046 $ 1,710,457
As shown, the potential net increase in revenue from increasing current fees to one of the presented policy options in this report is estimated at between $1 million and $3 million. However, predicting the amount to which adopted fee increases will truly affect City revenues is difficult, given that reimbursement rates for different types of fee payers ultimately drives what percentage of any bill for ambulance services is actually paid.
ONBS
9 of29
CITY OF POWAY
Ambulance Rates Study 6
February 15, 2022, Item #14
2. PROJECT
APPROACH
In
approaching
any
fee
study,
we
at
NBS
assess
the
unique
conditions
of
the
agency
with
which
we
work,
apply
a
core
philosophy,
and
select
methodologies
that
best
fit
the
requirements
of
the
individual
agency.
Given
the
diversity
and
nuances
present
in
many
aspects
of
city
finance
and
policy,
this
is
a
necessary
strategy
since
one-size-fits-all
methods
are
not
sustainable
once
they
become
owned
by
the
agency
served. There
is
a
legal
foundation
in
place
that
provides
the
City
with
the
authority
to
impose fees
for
the
services
it
provides.
The
cost
of
providing
these
services
and
activities
can
be
reasonably
calculated
and
fees
can
be
structured
in
a
manner
that
allows
the
City
to
recover
up
to
100%
of
service
costs.
The
calculation
of
the
cost
of
providing
services
is
an
analytical
effort
that
involves
adopted
and
expected
cost
information
and
estimates
of
time
(or
time
tracking
information)
required
to
perform
a service
or
activity.
Determining
the
targeted
level
of
cost
recovery
from
a
new
or
increased
fee
is
not
an
analytical
exercise.
It
involves
agency-specific
judgments
linked
to
a variety
of
factors,
such
as
existing
City
policies,
agency
wide
or
departmental
revenue
objectives,
economic
goals,
community
values,
market
conditions,
level
of
demand,
and
others.
Further,
the
Centers
for
Medicare
and
Medicaid
Services
(CMS)
sets
limits,
or
"caps",
for
how
much
a
provider
can
be
reimbursed
for
administering
ambulance
services.
CMS,
however,
does
not
regulate
how
much
can
be
charged
to
patients
or
private
insurance
companies.
If
the
adopted
fee
is
set
at
an
amount
that
does
not
exceed
the
estimated
and
reasonable
full
cost
of
providing
the
service
or
activity
requested,
the
City
is
in
compliance
with
the
legal
framework
currently
in
place.
2.1 Legal
Foundation
In
California,
there
is
great
variability
amongst
fees
charged
to
individuals
for
receiving
ambulance
transport
and/or
treatment.
There
is
no
set
standard
in
California
locally
or
statewide
for
how
ambulance
fees
and
rates
should
be
calculated
or
administered.
Therefore,
in
our
opinion,
the
foundation
for
justification
of
ambulance
fees
for
services
needs
to
rely
on
a
combination
of
federal
guidelines
and
requirements
as
well
as
California
state
authorities
for
charging
fees.
CMS
is
a federal
agency
within
the
United
States
Department
of
Health
and
Human
Services
(HHS)
that
administers
the
Medicare
program
and
works
in
partnership
with
state
governments
to
administer
Medicaid.
CMS
develops
a
national
Ambulance
Fee
Schedule
for
services
eligible
for
partial
reimbursement
to
providers.
CMS
sets
limits,
or
"caps",
for
how
much
a
provider
can
be
reimbursed
for
administering
ambulance
services.
CMS,
however,
does
not
regulate
how
much
can
be
charged
to
patients
or
private
insurance
companies.
For
the
ambulance
transport
benefit
under
Medicare
Part
B,
an
annual
update
is
applied
to
the
payment
limits
for
ambulance
transports
that
is
equal
to
the
percentage
increase
in
the
Consumer
Price
Index
for
All
Urban
Consumers
(CPI-U)
for
the
12-month
period
ending
with
June
of
the
previous
year.
This
study
relies
on
several
of
the
CMS
guidelines
to
structure
which
types
of
fees
are
charged
for
Medicare
and
Medicaid
billing
purposes.
O
NBS
10 of
29 CITY
OF
POWAY
Ambulance
Rates
Study
7 February 15, 2022, Item #14
It
is
generally
accepted
in
California
that
cities
are
granted
the
authority
to
impose
user
and
regulatory
fees
for
services
and
activities
they
provide
through
provisions
of
the
State
Constitution.
More
specifically,
the
type
of
fees
the
City
of
Poway
seeks
to
establish
for
ambulance
services
fall
under
the
California
Constitution
Article
XIII
C.
Section
l(e),
which
provides
seven
stated
exceptions
to
the
State's
definition
of
a
"tax".
The
City's
ambulance
fees
represent
cost
recovery
opportunities
entirely
within
the
City's
control.
These
are
revenues
which
the
City
Council
may,
at
its
sole
discretion
upon
public
hearing,
implement
and/or
modify
without
further
public
process
or
approval.
The
only
legal
limitation
on
the
establishment
of
these
fees
is
that
they
may
not
exceed
the
estimated
and
reasonable
costs
incurred
to
provide
the
service
or
perform
the
function
for
which
the
fee
is
charged.
2.2 Project
Approach
The
fee
study
is
a
quantitative
effort
which
compiles
the
full
cost
of
providing
governmental
services
and
activities
and
translates
those
costs
into
proposed
fee
amounts
best
aligned
with
how
services
are
provided.
There
were
three
phases
of
analysis
completed
during
this
study:
1. Cost
of
Service
Analysis
2. Fee
Establishment
3. Cost
Recovery
Evaluation
2.2.1 COST
OF
SERVICE
ANALYSIS
A
Cost
of
Service
Analysis
is
a
quantitative
effort
that
compiles
the
full
cost
of
providing
governmental
services
and
activities.
There
are
two
primary
types
of
costs
considered:
direct
and
indirect
costs
. Direct
costs
are
those
that
specifically
relate
to
an
activity
or
service,
including
the
real-time
provision
of
the
service.
Indirect
costs
are
those
that
support
provision
of
services
in
general
but
cannot
be
directly
or
easily
assigned
to
a
singular
activity
or
service.
The
following
are
different
types
of
direct
and
indirect
costs
that
are
considered
in
the
Cost
of
Service
Analysis:
Direct
Costs: •
Direct
personnel
costs
-
Salary,
wages
and
benefits
expenses
for
personnel
specifically
involved
in
the
provision
of
services
and
activities
to
the
public.
•
Direct
non-personnel
costs
-
Discrete
expenses
incurred
by
the
City
due
to
a
specific
service
or
activity
performed,
such
as
contractor
costs,
third-party
charges,
and
very
specific
materials
used
in
the
service
or
activity.
Indirect
Costs: •
Indirect
personnel
costs
-
Personnel
expenses
supporting
the
provision
of
services
and
activities.
This
can
include
line
supervision
and
departmental
management,
administrative
support
within
a
department,
and
staff
involved
in
technical
support
activities
related
to
the
direct
services
provided
to
the
public.
•
Indirect
non-personnel
costs
-
Expenses
other
than
labor
involved
in
the
provision
of
services.
O
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11 of
29 In
most
cases,
these
costs
are
allocated
across
all
services
provided
by
a
department,
rather
than
directly
assigned
to
individual
fee
categories.
CITY
OF
POWAY
Ambulance
Rates
Study
8 February 15, 2022, Item #14
,, Overhead costs -These are expenses, both labor and non-labor, related to City-wide support services. Support services include general administrative services such as City Manager, Finance, Human Resources, etc. The amount of costs attributable to the City included in this Study were sourced from the City's Cost Allocation Plan prepared by the Finance Department.
All cost components in this Study use annual (or annualized) figures, representing a twelve-month cycle of expenses incurred by the City in the provision of services. Once the total estimated annual costs of providing services are known, further analysis is completed to identify service costs that may not be eligible for recovery in the fees subject to study.
To translate the annual costs of providing fee-related services into full cost-recovery individual fee amounts, we applied estimated or tracked time data and estimated or tracked activity data as an indicator of the level of service provided by type of service provided.
2.2.2 FEE ESTABLISHMENT
The Study's process provided the opportunity to propose additions and deletions to the fee schedule, as well as to rename, reorganize, and clarify fees imposed. Many such revisions better conform fees to current practices, as well as improve the calculation offees owed by an individual, the application of said fees, and the collection of revenues.
In most cases, the current structure of fees did not change; the focus is to recalibrate the fee amount to match the costs of services. In several cases, however, fee categories and fee names were simplified or re structured to increase the likelihood of full cost recovery, or to enhance the fairness of how the fee applies to various types of fee payers.
2.2.3 COST RECOVERY EVALUATION
The fee model compares the existing fee for each service or activity to the average total cost of service quantified through this analysis. A cost recovery rate of 0% identifies no current recovery of costs from fee revenues (or insufficient information available for evaluation). A rate of 100% means that the fee currently recovers the full cost of service. A rate between 0% and 100% indicates partial recovery of the full cost of service through fees. A rate greater than 100% means that the fee exceeded the full cost of service.
Fees examined in this Study should not exceed the full cost of service. In other words, the cost recovery rate achieved by a fee should not be greater than 100%. We assist with modeling the "recommended" or "targeted" level of cost recovery for each fee, always established at 100%, or less, than the calculated ful I cost of service.
As covered in section 2.1 Legal Foundation, while CMS sets limits, or "caps", for how much a provider can be reimbursed for administering ambulance services, the agency does not regulate how much can be charged to patients or private insurance companies. As such, targets and recommendations always reflect agency-specific judgments linked to a variety of factors, such as existing City policies, revenue objectives, economic goals, community values, market conditions, level of demand, and others. Because this element ONBS
12 of 29
CITY OF POWAY
Ambulance Rates Study 9
February 15, 2022, Item #14
of
the
Study
is
subjective,
the
results
of
this
study
provide
the
cost
of
service
calculation
based
on
100%
full
cost
recovery
as
well
as
the
framework
for
the
City
to
adjust
in
accordance
with
the
City's
goals
as
pertains
to
code
compliance,
cost
recovery,
economic
development,
and
social
values.
2.2.4 COMPARATIVE
FEE
SURVEY
Often
policy
makers
request
a comparison
of
their
jurisdiction's
fees
to
surrounding
or
similar
communities
. City
staff
provided
NBS
with
a
2019
survey
of
similar
fees
and
charges
in
comparable
agencies.
The
names
of
San
Diego
agencies
surveyed
have
been
marked
as
"Provider"
for
confidentiality.
As
illustrated
in
the
comparison
survey,
the
City's
current
Ambulance
Transport
fees
are
lower
than
most
of
the
comparison
agencies.
The
Treatment
and
Release
fee
is
around
the
average
of
agencies
that
charge
fees
for
assessment
at
the
scene
. The
remaining
fees
such
as
EKG,
Medications,
Mileage,
Night
Charge,
Supplies,
and
Oxygen
fall
in
the
middle
of
the
other
comparison
agencies
surveyed.
While
a
comparison
can
provide
a sense
of
the
local
market
pricing
for
services
and
be
useful
in
gauging
the
impact
of
recommendations
for
fee
adjustments,
the
following
should
be
noted
about
the
general
use
of
comparative
survey
data:
•
Comparative
surveys
typically
do
not
provide
information
about
the
cost
recovery
policies
or
procedures
inherent
in
each
comparison
agency.
•
A
"market
based"
decision
to
price
services
below
the
full
cost
of
service
calculation,
is
the
same
as
deciding
to
subsidize
that
service.
•
Comparative
agencies
may
or
may
not
base
their
fee
amounts
on
the
estimated
and
reasonable
cost
of
providing
services.
•
Comparative
fee
survey
efforts
are
often
non-conclusive
for
many
fee
categories.
Comparison
agencies
typically
use
varied
terminology
for
provision
of
similar
services.
The
results
of
the
Comparative
Fee
Survey
for
the
City's
Ambulance
fees
are
shown
on
the
following
page.
O
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13 of
29 CITY
OF
POWAY
Ambulance
Rates
Study
10 February 15, 2022, Item #14
~
ALS2 BLS Treat and Release
-.i:a,. Units
0 .... Resident Non -Resident Resident Non -Resident Resident Non -Resident Resident Non -Resident N !Provider 1 \Q
Provider 2 $4,451.94 $4,451 .94 $3,967.94 $3,967 .94 $1,613.83 $1,613.83 Provlder3 $3,883.21 $3,883.21 $3,425 .37 $3,425 .37 $1,487.05 $1,487.05 Provider4 $3,287 .00 $3,287.00 $3,026.00 $3,026.00 $2,452.00 $2,452.00 Provider 5 $3,287 .00 $3,287.00 $3,026.00 $3,026 .00 $2,452 .00 $2,452 .00 Provlder6 $3,166 .00 $3,166.00 $2,900 .00 $2,900 .00 $2,228.00 $2,228.00 id $3,166 .00 $3,166.00 $2,900 .00 $2,900.00 $2,228.00 $2,228.00 Providers $3,166 .00 $3,166 .00 $2,900 .00 $2,900 .00 $2,228.00 $2,228.00 Provider9 4 I $3,147 .57 $3,147 .57 $2,967.48 $2,967.48 $1,076.11 $1,076.11 $165 .00 $165 .00 rovider 10 $3,086.43 $3,086.43 $2,660 .93 $2,660.93 $857 .65 $857 .65 rovider 11 2,787.00 $2,787.00 $2,526 .00 $2,526 .00 $2,207.00 $2,207.00 Provider 12 $2,671.34 $2,671.34 $2,396.98 $2,396.98 $2,022 .71 $2,022.71 $202 .74 $202 .74 Provider13 $2,600.52 $2,600.52 $2,343.43 $2,343.43 $1,319.81 $1,319.81 Provlder14 $2,590.42 $2,590.42 $2,392.33 $2,392.33 $1,076 .11 $1,076.11 $165.00 $165.00 Provider 15 $2,161.07 $2,161 .07 $1,962 .98 $1,962 .98 $1,076 .11 $1,076.11 Provider 16 $2,100 .00 $2,100 .00 $2,100.00 $2,100.00 $865 .00 $865 .00 Provider 17 $1,697 .00 $1,829.00 $1,580 .00 $1,709 .00 $1,000.00 $1,117 .00 $154 .00 $204 .00 Provider 18 $1,668.00 $1,668.00 $1,668.00 $1,668 .00 $1,668.00 $1,668.00 $150 .00 $150 .00 Provider 19 $1,635.00 $1,824 .00 $1,523.00 $1,712.00 $1,479 .00 $1,668.00 $138.00 $200.00 Provider 20 $1,458 .61 $1,458. 61 $1,458.61 $1,558.61 $1,458 .61 $1,458 .61 $182.34 Provider 21 $1,330 .11 $1,569 .89 $1,308 .41 $1,504 .78 $475.41 $589.10 Provider 22 $1,320.00 $1,840 .00 $1,180.00 $1,680.00 $980.00 $1,480.00 $100 .00 $150 .00 $1,268 .75 $1,370 .25 $1,167 .25 $1,268 .75 $952.33 $952 .33 $203.00 $1,255 .00 $1,255 .00 $1,255 .00 $1,255.00 $915 .00 $915.00 $150.00 $150 .00 Provider 25 $1,141.00 $1,141.00 $1,141.00 $1,141.00 $1,016 .00 $1,016 .00 Footnote 1' 1: Provider 26 is City of Poway Ambulance
Mileage 02 Meds
3.77 $317 .49
$63.87 $241 .94
$60.39 $228 .91
$48.00 $118.00
$48.00 $118 .00
$48.00 $127.00
$48.00 $127 .00
$48 .00 $127 .
$43.33 $156 .54
I I
$39.90 $127 .39
$48.00 $118 .
$41.32 $33.65
$46.18 $203 .17
$43.33 $156 .54
$43.33 $156.54
$21.50 $100.00 $15.00
$27.00 $65.00 Cost+ 55%
$18.50 $80.00 Variable
$19.00 $94.00
$24.32 $91.18 Cost
$24.00 $73.38 $664.54
$34.80 $50.00 Cost+l00%
$23.25 $76.13
$24.00 $65.00 cost+
$25.00 $93.00 Variable
Add om
•
EKG
I I
$50.00 $85.00
Varies $20.00
$28.00
Res-Cost+ $50.00
90%Non- R
Cost plus
137%
Varies $33.96
I
$128 .15 $36.17
I
Varies $20.00 I
Varies
I I
Varies I $20.00 I
Varies
Night Charge
$155 .09
$155.09
$30.00
$43.00
$43.41
$50.00
I
I
I
I
I
CPR Non
Trans
$2,100.00
$621.13
$150 .00
I
I
I
:r:t:too
-
I $253 .66
$125 .00
$154 .00
I $154 .00
$100 .00
$30.
$100.00
February 15, 2022, Item #14
2.2.5 DATA
SOURCES
The
following
data
sources
were
provided
by
the
City
and
used
to
support
the
cost
of
service
analysis
and
fee
establishment
phases
of
this
Study:
•
Adopted
Budget
for
Fiscal
Year
(FY)
2021-22
•
A
complete
list
of
the
Fire
Department's
personnel,
salary/wage
rates,
paid
benefits,
etc.
•
Prevailing
fee
schedules
•
Annual
ambulance
activity
and
billing
data
Calls
for
service
data
The
City's
adopted
budget
is
the
most
significant
source
of
information
affecting
cost
of
service
results.
We
did
not
audit
or
validate
the
City's
financial
management
and
budget
practices,
nor
was
cost
information
adjusted
to
reflect
different
levels
of
service
or
any
specific,
targeted
performance
benchmarks.
This
Study
has
accepted
the
City's
budget
as
a
legislatively
adopted
directive
describing
the
most appropriate
and
reasonable
level
of
City
spending.
O
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15 of
29 CITY
OF
POWAY
Ambulance
Rates
Study
11 February 15, 2022, Item #14
3. ANALYSIS
The focus of this Study is on fees charged for ambulance services provided by the City. The following is a summarized list of fees studied:
• ALS -Advanced Life Support includes emergency medical care performed for sustaining life, including cardiopulmonary resuscitation (CPR), defibrillation, airway management, and the administration of drugs and medications. Additional medical procedures may include cardiac monitoring, I.V.'s, and the use of diagnostic devices.
• BLS -Basic Life Support generally does not include the administration of drugs or invasive skills.
• Treatment and Release -Flat fee for services applied when the City responds to an emergency call for service, administers care at the scene, and does not transport the patient to hospital.
• Related Add-Ons -Itemized charges allowed by CMS for EKG services, Oxygen, Fuel, Medications, and Night services.
The fees examined in this Study excluded other fire related fees for services, development impact fees, utility rates, and any special tax assessments, all of which fall under distinct legal, analytical, and procedural requirements different from the body of user fees analyzed in this effort. Additionally, this Study fines and penalties imposed by the City for violations to its requirements or codes.
3.1 Cost of Service Analysis
A full range of fire and paramedic services are provided by the City's Fire Department. These services can be summarized into three main service delivery programs for purposes of this analysis:
• Fire Operations and Suppression Response -Emergency response related to fire incidents and other types of emergencies.
• Emergency Medical Services (EMS) -Ambulance response services that typically result in a transport to a hospital or treatment on-scene without transport. • Fire Prevention -Annual inspections of commercial buildings, development review, Fire Code permits, investigative and code enforcement activities, etc.
Personnel respond from three (3) strategically located fire stations to provide quick and effective response.
3.1.1 ANNUAL COST OF EMS SERVICES
The focus of this cost of service analysis was to reasonably estimate the total annual costs of providing ambulance services that can be recovered through fees for services. Table 2 presents the total cost of service analysis for the City's Fire Department, segregated into the main service delivery programs:
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CITY OF POWAY
Ambulance Rates Study 12
February 15, 2022, Item #14
TABLE
2. TOTAL
FIRE
DEPARTMENT
SERVICE
COSTS
PER
PROGRAM
I
E
I
General
I
I
mergency
Cost
Element
d"
15 .
Operations/
Fire
Prevention
TOTAL
Me
1ca
erv1ces
Labor Recurring
Non-Labor
Citywide
Overhead
Department
Admi
n
$
5,263,409
$
334,438
7,988,282 1,276,295
Suppression
2,719,107
$
1,188,132 3,898,360
733,266
503,856
$
8,486,372
153,182
1,675,752
620,554
12,507,197
120,018
2,129,579
As
shown,
the
total
cost
of
providing
all
Department
services
is
approximately
$24.8
million.
EMS
services
are
approximately
$14.9
million,
which
is
60%
of
total
Department
costs.
EMS
DIRECT
LABOR
COSTS
The
amount
of
"Labor"
costs
shown
in
Table
2 above
was
established
as
follows.
Firefighters
and
paramedics
are
divided
into
3 shifts
working
on
a
rotational
schedule.
Utilizing
a constant
staffing
philosophy,
each
shift
consists
of
17 personnel
ready
to
respond
and
provide
emergency
and
non
emergency
services
any
time
of
day.
According
to
the
calls
for
service
report,
most
calls
for
service
responded
to
by
the
Department
are
EMS
rather
than
suppression
related.
As
to
how
resources
are
deployed
for
EMS
response,
there are
two
(2)
ambulances
currently
in
service,
seven
(7)
days
per
week,
twenty-four
(24)
hours
per
day.
Two
(2)
additional
ambulances
are
kept
ready
in
reserve
to
ensure
adequate
coverage
for
the
community's
needs.
The
two
(2)
ambulances
in
service
are
supported
by
three
(3)
paramedic
fire
engines
and
one
(1)
truck.
Each
time
an
ambulance
responds
to
a
call
for
service,
a
paramedic
engine
accompanies
that
ambulance
to
provide
medically
necessary
support
to
the
ambulance
and
personnel
inside
it.
The
City
is
dedicated
to
ensuring
a
paramedic
is
on
scene
within
eight
(8)
minutes
of
a
dispatched
call,
so
an
engine
is
always
dispatched
to
a
medical
call
along
with
ambulance.
Each
ambulance
is
staffed
with
two
people,
both
are
paramedic
firefighters.
Each
paramedic
engine
is
staffed
with
three
people:
a captain,
an
engineer,
and
a
firefighter.
All
personnel
on
engines
are
paramedics.
An
analysis
of
calls
for
service
for
FY
2017
/18,
FY
2018/19,
and
FY
2019/20
shows
the
breakdown
of
incidents
and
minutes
for
EMS
calls
versus
other
types
of
calls.
C
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29 CITY
OF
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Ambulance
Rates
Study
13 February 15, 2022, Item #14
TABLE 3. TIME ON TASK
. k ( 1 • 11 ) b f . Percentage of Time on Tas Tota Time on Ca s Num er o Minutes .
Minutes
Emergency Medical Response 559,007 82%
Other Response Type 120,961 18%
Table 3 shows the City's response time for Emergency Medical Services is approximately 82% of all calls for service. Because the City accounts for salaries and benefit expenses for all paramedic personnel in one central accounting/budgetary unit {Fire Suppression), a method for allocating direct labor costs between the Department's main service delivery programs is needed. To estimate the amount of salaries and benefit costs dedicated to EMS, the time on task split of 82% for personnel costs for Fire Captain/Paramedic and Firefighter/Paramedic positions are allocated to EMS, as are 18% of Fire Engineer/Paramedics position costs.
OPERATING AND CAPITAL COSTS
Review of the City's adopted expenditure budget for FY 2021/22 identified several on-going operating costs that are directly attributable the provision of EMS services. Unlike labor expenses, the City accounts for EMS related operating costs in a singular and separate accounting unit from Fire Suppression. These are shown in Table 2 as "recurring non-labor", and further detailed in Table 4, below:
TABLE 4. EMS OPERATING COSTS
Operating Cost Item FY 21/22 Budget
Professional Develop & Recogn $ 250
Other Professional Fees 50,600
Utilities-Other 9,050
Hazardous Waste Removal 1,500
Vehicle Operations & Maintenance 57,330
Essential Training 8,900
Other Contractual Services 19,913
Equipment Repair & Maint. 19,700
Office & Stationery Supplies 700
Medical Supplies 37,345
Safety Supplies 5,500
Operating Supplies 4,500
Printing 1,650
Publication & Dues 50
Capital Outlay Rental-Vehicle 81,450
Cap Outlay Rental-Other Equip. 36,000
-~ En,\f,'£f:1 l-ll.'~l lt•J.ir:.11
Approximately $334,000 are operating costs directly dedicated to providing Emergency Medical Services.
Operating costs include services and supplies needed to support operations, as well as the amortized cost of replacing vehicles and equipment needed for service delivery which are shown as the "capital outlay" expenditures at the bottom of the list.
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CITY OF POWAY
Ambulance Rates Study 14
February 15, 2022, Item #14
OVERHEAD COSTS
There are two types of overhead costs considered in this analysis: Citywide overhead and Fire Department overhead.
Citywide Overhead costs include administrative services that support the Fire Department such as Finance, Human Resources, City Manager, Information Technology, etc. The City's Finance Department completes an overhead cost allocation plan analysis, which for FY 21-22 identifies $13.5 million in overhead costs attributable to the Fire Department.
TABLES. OVERHEAD COSTS
I
2021-22
Allocated Indirect/Support Services Ad d 8 d opte u get Citywide Overhead
Safety Services -Fi re Suppression $ 12,317,738
Safety Services -Fire Prevention
Safety Services -Paramedics
667,905
475,918
The total share of these costs attributable to EMS services, is shown in Table 6.
TABLE 6. EMS OVERHEAD COSTS
I
Emergency
Allocated Indirect/Support Services Medical
Citywide Overhead
Safety Services -Fire Suppression
Safety Services -Fi re Pr even ti on
Safety.Services -Paramedics
Services
7,546,105
442,177
The portion of overhead costs allocated to EMS, is based on the overall share of Department staff time spent on EMS, resulting in approximately $8 million of overhead costs.
Fire Department Administration Costs were also allocated to all main service areas, with EMS receiving approximately $1.3 million, as shown in Table 2.
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CITY OF POWAY
Ambulance Rates Study 15
February 15, 2022, Item #14
TOTAL ANNUAL COST ALLOCATION SUMMARY
Based on the analysis competed for each attributable cost component described above, Table 7 summarizes the City's total estimated annual cost of providing EMS services at $14.9 million. As described above, the total estimated cost of providing services includes all identifiable direct and indirect costs.
TABLE 7. TOTAL ANNUAL EMS COSTS
I
Emergency
Cost Element d. 1 S . Me 1ca erv1ces
Labor
Recurring Non-Labor
Citywide Overhead
Department Ad min
3.1.2 INDIVIDUAL FEE FOR SERVICE COSTS
$ 5,263,409
334,438
7,988,282
1,276,295
To translate the total annual EMS costs established in Table 7 into individual costs per type of ambulance service, EMS costs were allocated to individual fee for service categories based on the average number of calls by type and the average amount of time required to service each type of call. Both calls by type and average time per call were sourced from the Fire Department's dispatch records Utilizing calls for service data provided by the City's dispatch system, a weighted distribution factor was derived by call volume and call time between Transports, Non-Transports, and Other Calls. Each time an ambulance responds to a call for service, a paramedic engine accompanies that ambulance to provide medically necessary support to the ambulance and personnel inside it. Therefore, service time must reflect the total number of personnel responding to each call, on average:
• Two person ambulance -Paramedic/Firefighters
• Three person paramedic Engine -Captain, Engineer and Firefighter. Each of these people are also Paramedics.
• Transports are defined as calls that consisted of a patient being transported to the hospital by ambulance. Transports last an average of approximately 60 minutes per call. • Non-Transports are defined as calls where treatment was administered on the scene, but the ambulance did not transport the patient to a hospital, also known as "Dry Run". Based on conversations with City staff, if the medic unit is on the scene for more than 25 minutes, it would be indicative that an assessment with some form of treatment or advanced evaluation was performed.
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CITY OF POWAY
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February 15, 2022, Item #14
•
Other
Calls
are
defined
as
calls
that
last
less
than
the
10-minute
"on-scene
time"
threshold,
which
would
be
indicative
of
no
treatment
was
administered
on-scene
and
no
transport
was
provided
by
ambulance.
These
calls
have
no
potential
for
recovery
of
costs
through
fees
for
ambulance
services.
The
cost
of
service
analysis
for
individual
ambulance
services
is
shown
in
Table
8 below.
TABLE
8. AVERAGE
TOTAL
COST
PER
TYPE
OF
AMBULANCE
SERVICE
Average
Average
Average
Average
Average
Service Service
Average
Type
of
Ambulance
Service
Time
Service
%
Annual
Time Time
Cost
per
Service
(hrs)-
time(hrs)
-
Distribution
Calls
Ambulance
(hrs)
-
(hrs)-
Annual
Service
Engine
Total
Transport
2,851
1.98 2.97
2.47 7,049
86%
$
4,369
Non-Transports
684
0.58 0.87
1.44 988
12%
$
2,550
Other
Calls
260
0.20 0.30
0.49 128
2%
$
870
Total
3,795
2.75 4.13
4.41 8,165
100%
$
3,801
Per
the
dispatch
data,
Table
8 shows
the
average
annual
distribution
of
effort
required
to
service
various
types
of
Emergency
Medical
Services
calls
as
86%
Transports,
12%
Treatment
Non-Transports,
and
2%
Other
Calls.
Applying
the
$14.9
million
of
costs
shown
in
Table
7,
the
average
cost
of
service
per
ambulance
call
is
$3,801,
and
for
each
type
of
ambulance
service
is
$4,369
for
Transport,
$2,550
for
Treatment
Non-Transports,
and
$870
for
Other
Calls.
3.2 Fee
Establishment
The
City's
current
fee
structure
and
fee
amounts
are
shown
in
Table
9 on
the
following
page.
As
discussed
in
Section
2.2.2 of
this
report,
the
Study's
process
provided
the
opportunity
to
propose
additions
and
deletions
to
the
fee
schedule,
as
well
as
to
rename,
reorganize,
and
clarify
fees
imposed.
In
general,
ambulance
fee
schedules
tend
to
be
standardized
across
local
governments.
Fee
schedules
typically
contain
the
following
types
of
fees
for
services:
•
Transport
Fees,
which
are
typically
delineated
between
ALS
versus
BLS
transport
services,
and
treatment
without
transport
services.
Fees
for
transport
services
also
sometimes
indicate
different
fee
amounts
for
residents
versus
non-residents.
•
Add-on
Charges,
for
services
provided
during
transport
that
vary
per
incident,
such
as
mileage,
oxygen,
medications,
supplies,
EKG,
etc.
Poway's
transport
fees
are
structured
within
the
same
standards
seen
in
other
agencies.
However,
the
City's
official
Master
Fee
Schedule
adopted
by
Resolution
08-083
lists
only
two
Add-on
charges
for
Mileage
and
Oxygen.
As
shown
in
Table
9,
and
in
the
regional
comparison
of
fees,
the
Study
identified
other
active
Add-on
charges
in
the
City's
billing
data.
NBS
recommends
the
City
publish
all
standard
Add
on
charges
that
it
intends
to
bill
for
on
a
routine
basis
in
the
Master
Fee
Schedule.
O
NBS
21 of
29 CITY
OF
POWAY
Ambulance
Rates
Study
17 February 15, 2022, Item #14
3.3 Cost
Recovery
Evaluation
Table
9 shows
the
Total
Cost
of
Service
Per
Activity
calculated
by
the
Study
(full
cost
recovery
fee
amounts}
as
compared
to
the
current
fees
charged
by
the
City.
TABLE
9. CURRENT
FEE
EVALUATION
AND
PERFORMANCE
Fee
Description
EMERGENCY
MEDICAL
SERVICES
and
AMBULANCE
TRANSPORT
Base
Charge-Advanced
Life
Support
1 Poway
Resident
Non-Resident
Base
Charge
-Advanced
Life
Support
2 Poway
Resident
Non-Resident
Base
Charge-Basic
Life
Support
Poway
Resident
Non-Resident
Treatment
and
Release
ADD-ON
CHARGES
Per-Mi
I e
Charge
Oxygen Medications Sup
lies
EKG
Fee
Unit
/
Total
Cost
of
Type
Service
Per
Poway
Current
Fee
Activity
flat
$
4,369
$
1,029
fl at
$
4,369
$
1,366
flat
$
4,369
$
1,029
fl at
$
4,369
$
1,366
flat
$
4,369
$
866
flat
$
4,369
$
1,196
flat
$
2,550
$
150
per
mile
$
16 fl at
$
66 flat
Cost
lus
50%
flat
$
49 flat
Existing Cost
Recovery
% 24% 31% 24% 31% 20% 27% 6%
$
46 -
-
-
---
-.. ························
········· ············
···················+~---~
~·....;...---
-+
--
..
Night
Charge
(7pm
to
7am)
flat
$ --···················?..9.
..........
--
--
CP
_R_N_o_n_-T
_ra_~~
.............
.....
................................
.................. ....__
fl_a t-
-+-------1-'
$'--
---
+--
-----4
Extra
Attendant
__
f_l a_t_-1-··
········
·······
·····················+-'-
$ ___
__..
_
_
_
-1
As
shown,
the
Poway's
current
transport
fees
recover
between
6%
and
31%
of
the
total
cost
of
providing
each
service.
Add-on
charges
were
not
evaluated
on
a
cost-per-service
basis;
however,
by
excluding the
anticipated
billings
associated
with
these
charges
from
the
calculation
of
the
transport
rates,
the
risk
of
overcharging
a
recipient
for
transport
service
is
mitigated.
3.3.1 RECOMMENDED
FEES
-POLICY
APPROACH
The
following
table
shows
three
options
for
establishing
ALS
Transport,
BLS
Transport,
and
Treatment
and
Release
(Non-Transport}
fees
either
at
or
below
the
100%
full
cost
of
service
fee
amounts
calculated
through
this
Study.
•
Option
1:
Transport
fees
established
at
100%
full
cost
recovery;
Add-on
charges
assumed
at
no
change
from
current
fee
amounts
O
NBS
-
22 of
29 CITY
OF
POWAY
Ambulance
Rates
Study
18 February 15, 2022, Item #14
•
Option
2:
Transport
fees
and
Add-on
charges
established
at
the
average
of
the
regional
comparison
•
Option
3:
Transport
fees
and
Add-on
charges
at
the
66 th
percentile
of
the
regional
comparison
TABLE
10. POLICY
OPTIONS
OPTION
1 OPTION
2 OPTION
3 CURRENT
Total
Cost
of
Cost
Cost
Regional
Fee
Cost
Existing
Fee
Fee
Description
Fee
Unit/
Service
Per
Recovery
Regional
Fee
-
Recovery
-66th
Recovery
Poway
Cost
No
.
Type
Activity
%
Average
%
Percentile
%
Current
Fee
Recovery
%
EMERGENCY
MEDICAL
SERVICES
and
1 AMBULANCE
TRANSPORT
Base
Charge-Advanced
Life
Support
1 Poway
Re
sident
flat
$
4,369
100%
$
2,267
52%
$
2,900
66%
$
1,029
24%
Non-Res
ident
flat
$
4,369
100%
$
2,327
53%
$
2,900
66%
$
1,366
31%
Base
Cha
rge-Adva
need
Life
Support
2 Powa
Resident
flat
$
4,369
100%
$
2,461
56%
$
3,166
72%
$
1,029
24%
Non-Resident
flat
$
4,369
100%
$
2,520
58%
$
3,166
72 %
$
1,366
31%
Base
Charge-Basic
Life
Support
Powa
Res
ident
flat
$
4,369
100%
$
1,464
34%
$
2,228
51%
$
866
20%
Non-Res
ident
flat
$
4,369
100
%
$
1,512
35%
$
2,228
51%
$
1,196
27%
Treatment
and
Release
flat
$
2,550
100
%
$
153
6%
$
172
7%
$
150
6%
2 ADD-ON
CHARGES
Per-Mile
Char
e
pe
r mile
$
39 $
48 $
16 Oxygen
flat
$
123
$
127
$
66 Medications
flat
Cost
pl
us
50%
Cost
pl
us
50%
Cost
plus
50%
Su
lies
flat
$
69 $
69 $
49 EKG
flat
$
39 $
68 $
46 Night
Char
e (7pm
to
7am)
flat
$
75 $
155
$
50 CPR
Non-Trans
flat
-·-----·-·
__ $ ___ , ......
957
---·
···· ... $
2,100
$
100
Extra
Attendant
flat
$
102
$
140
$
50 Using
this
approach
to
establish
recommended fees
for
the
Council's
consideration,
the
annual
estimated
billings
for
each
policy
option
are
illustrated
in
Table
11. Billed Collected Net
Col
I ected
Revenue
Increase
TABLE
11. BILLED
VS
COLLECTED
Estimated
Annual
Billings
per
Policy
Option
Average
Annual
Billings
at
Current
Recovery
Fee
Levels
100%
Full
Cost
Fees
Regional
Fee
levels
Regional
Fee
Levels
-Average
-66th
Percentile
$
2,731,204
$
9,754
,207
$
5,206,073
$
6,771,947
$
1,184,550
$
4,169,923
$
2,225,596
$
2,895,007
$
2,985,373
$
1,041,046
$
1,710,457
At
current
billing
activity
levels,
the
City
could
increase
annual
billing
amounts
from
approximately
$2.7
million
at
current
fees,
to
up
to
$9.8
million
at
full
cost
recovery
fee
amounts.
Once
the
collections
rate
of
43%
is
applied,
the
net
increase
in
revenue
collected
ranges
from
an
estimated
$1
million
to
$3
million,
O
NBS
-
23 of
29 CITY
OF
POWAY
Ambulance
Rates
Study
19 February 15, 2022, Item #14
depending on the policy option chosen. However, as discussed further in Section 3.3.2, predicting the amount to which any adopted fee increases will affect City revenues is difficult to quantify.
3.3.2 PAYER MIX
Understanding the City's payer mix is an important consideration when setting final fee amounts because most bills for ambulance services do not result in full payment. For example, as discussed throughout this report, CMS sets limits, or "caps", for how much a provider can be reimbursed for ambulance services.
CMS, however, does not regulate how much can be charged to private paying patients or commercial insurance companies. Individuals may have issues with their ability to pay the full fee amount, and commercial insurance companies may have their own limits and reimbursement policies. Actual reimbursements are based upon billing the patient for the medical service provided and dependent on whether the recipient of a bill has private or public insurance, or no insurance. There are four basic categories of reimbursements.
• Medicare -Primary health care coverage for people over the age of 65 • Medi-Cal -Component of the federal Medicaid program that is provided for qualified individuals and families
• Commercial Insurance -Benefits purchased independently, or provided by employers to employees
• Private Pay-For those without any form of medical insurance The data in the following tables shows the City's current payer mix based on financial class data and revenues reported by the City's third-party biller, Wittman Enterprises LLC. This information may be useful in understanding the impact on actual reimbursements received after recommended fees are adopted.
TABLE 12. PAYER MIX -NUMBER OF TRANSPORTS
Number of Percentage of Category Transports Transports
Medicare 793 45.06%
Medi-Cal 167 9.49%
Commercial Insurance 192 10.91%
Private Pay 608 34.55%
Totals 1,760 100.00°/4
In Table 12, out of a total of 1,760 transports for FY 2019-20, Medicare is the largest category, representing 793 transports and 45.06% of the transports mix. Private Pay is the second largest, and Commercial Insurance and Medi-Cal categories are third and fourth largest.
Table 13 shows the City's total revenues received by reimbursement category (payer mix) in FY 2019-20.
As shown, Commercial Insurance payers have the highest reimbursement rate, followed by Medi-Cal, Medicare, and Private Pay.
ONBS
24 of 29
CITY OF POWAY
Ambulance Rates Study 20
February 15, 2022, Item #14
TABLE 13. PAYER MIX -TOTAL REVENUE
Number of Collection Percentage of Category Revenue Transports Rate Revenue Medicare 793 $ 525 $ 416,685 33.01%
Medi-Cal 167 $ 893 $ 149,104 11.81%
Commercial Insurance 192 $ 2,832 $ 543,817 43.08%
Private Pay 608 $ 251 $ 152,838 12.11%
Totals 1,760 $ 1,262,444
It is important to note that increasing ambulance transport fees and add-on charges does not necessarily translate to a total increase in revenues at the reimbursement/payor level. For example, due to the fee limits set by CMS, one should not expect the Collection Rate per transport to increase significantly from what is shown in Table 13. The same is likely true for Medi-Cal and Private Pay. Out of all four payer categories, Commercial Insurance is the most likely to pay the highest reimbursement rate and the most likely to exhibit flexibility in its Collection Rate as compared to the other categories.
ONBS-
2s of 29
CITY OF POWAY
Ambulance Rates Study 21
February 15, 2022, Item #14
4. CONCLUSION
Based
on
the
Cost
of
Service
Analysis,
Fee
Establishment,
and
Cost
Recovery
Evaluation
outcomes
presented
in
this
Study,
the
proposed
schedule
of
fees
for
City
Council's
consideration
has
been
included
in
the
City's
accompanying
Staff
Report.
As
discussed
throughout
this
report,
the
proposed
fee
schedule
intends
to
improve
the
City
's recovery
of
costs
incurred
to
provide
individual
services,
as
well
as
to
adjust
fees
downward
where
fees
charged
exceed
the
average
costs
incurred.
Predicting
the
amount
to
which
any
adopted
fee
increases
will
affect
City
revenues
is
difficult
to
quantify.
For
the
near-term,
the
City
should
not
count
on
increased
revenues
to
meet
any
specific
expenditure
plan.
Experience
with
the
revised
fee
amounts
should
be
gained
first
before
revenue
projections
are
revised.
However,
unless
there
is
some
significant,
long-term
change
in
activity
levels
at
the
City,
proposed
fee
amendments
should
enhance
the
City's
cost
recovery
performance,
over
time,
providing
it
the
ability
to
stretch
other
resources
further
for
the
benefit
of
the
public
at
large.
Disclaimer
: In
preparing
this
report
and
the
opinions
and
recommendations
included
herein,
we
relied
on
several
principal
assumptions
and
considerations
regarding
financial
matters,
conditions
and
events
that
may
occur
in
the
future.
This
information
and
assumptions,
including
the
City's
budgets,
time
estimate
data,
and
workload
information
from
City
staff,
were
provided
by
sources
we
believe
to
be
reliable;
however,
we
did
not
independently
verify
such
information
and
assumptions
. While
we
believe
our
use
of
such
information
and
assumptions
is
reasonable
for
the
purpose
of
this
report, some
assumptions
will
invariably
not
materialize
as
stated
herein
and
may
vary
significantly
due
to
unanticipated
events
and
circumstances
. Therefore,
the
actual
results
can
be
expected
to
vary
from
those
projected
to
the
extent
that
actual
future
conditions
differ
from
those
assumed
by
us
or
provided
to
us
by
others
.
O
NBS
-
26 of
29 CITY
OF
POWAY
Ambulance
Rates
Study
22 February 15, 2022, Item #14
RESOLUTION NO. 22-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, AMENDING AND ESTABLISHING
EMERGENCY MEDICAL SERVICES AND AMBULANCE
TRANSPORT FEES WITHIN THE FIRE DEPARTMENT SECTION
OF THE MASTER FEE SCHEDULE
WHEREAS, California Government Code section 66016 et seq. establishes procedures for the adoption of fees for services by local government; WHEREAS, the City of Poway provides emergency medical services and ambulance transport as part of the operation of the fire department to residents and non-residents of Poway; WHEREAS, on May 4, 2010, the City Council adopted Resolution No. 10-017, adopting a Master Schedule of Fees;
WHEREAS, a cost study and analysis of the current fee schedule indicates that an increase in the existing fees and establishing certain new fees is warranted; WHEREAS, the proposed fees do not exceed the reasonable costs of providing the services for which the fees are imposed;
WHEREAS, the proposed fees will supersede any previously established fee for the City emergency medical services and ambulance transport; and WHEREAS, the City Council of the City of Poway held a duly noticed public hearing on January 18, 2022, allowing for the public to comment on the establishment of said fees.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows:
Section 1: The City Council finds that this amendment to the Master Fee Schedule is exempt from the requirements of CEQA pursuant to CEQA guidelines Section 15273 (a) (1 ).
Section 2: The City's Master Fee Schedule is hereby updated to amend and establish fees for Emergency Medical Services and Ambulance Transport Fees of the Fire Department set forth in Attachment attached hereto this Resolution and are hereby approved and effective March 1, 2022.
Section 3: Emergency Medical Services and Ambulance Transport Fees set forth in Attachment A will increase each July by the annual change in the Consumer Price Index (CPI) -All Urban Customers, San Diego-Carlsbad (2021 = 319.761), as published by the United States Bureau of Labor Statics, subject to rounding to the nearest whole dollar commencing July 1, 2022.
Section 4: The proposed fees set forth in Exhibit 1 are based on costs incurred by the City in providing services, which the City Council finds to be reasonable. 27 of 29 ATTACHMENT B
February 15, 2022, Item #14
Resolution
No.
22-
Page
2 Section
5:
The
City
Manager,
Fire
Chief
or
staff
designee
may
authorize
a
reduction
in
fees
for
individuals
transported
that
do
not
have
health
insurance
and
a
financial
hardship
is
demonstrated
or
other
extenuating
circumstances.
The
determination
of
a financial
hardship
shall
be
based
on
80%
of
Area
Median
Income
(AMI)
as
determined
for
San
Diego
County
published
each
year
by
the
County
of
San
Diego,
Department
of
Housing
and
Community
Development
Services.
Section
6:
This
Resolution
shall
become
effective
immediately.
PASSED,
ADOPTED
AND
APPROVED
at
a
Regular
Meeting
of
the
City
Council
of
the
City
of
Poway,
California
at
a
regular
meeting
this
15th
day
of
February,
2022,
by
the
following
vote,
to
wit: AYES: NOES: ABSENT: DISQUALIFIED:
Steve
Vaus,
Mayor
ATTEST: Carrie
Gallagher,
City
Clerk
28 of
29 February 15, 2022, Item #14
Exhibit
1 Resolution
No.
22-
Page
3 Emergency
and
Medical
Services
and
Ambulance
Transport
Fees
to
be
Amended
and
Established
in
the
Fire
Department
Section
of
the
Master
Fee
Schedule
City
of
Poway
Master
Fee
Schedule
Fire
Department
Service
Description
Fee
Fees
subject
to
CPI
adjustment
annually
July
1 each
year.
*Medications
updated
no
less
than
annually
based
on
costs.
Emergency
Medical
Services
and
Ambulance
Transport
Base
Cha
rge-Ad
vanced
Life
Sup
port
1 $4,369
Res
ide
nt/Non-Resident
Base
Cha
rge-Ad
vanced
Life
Sup
port
2 $4,369
Res
ide
nt/
Non-Res
ident
Base
Cha
rge-Bas
ic
Life
Suppo
rt
$4,369
Res
ident
/Non-Res
ident
Treatme
nt an
d
Release
$2,550
Res
iden
t/Non-Res
ident
IAdd-Ons
Per
-M
ile
Charge
$
16 Oxy
gen
$
66 M
ed
ications
*
Cos
t
Pl us
50%
Supp
lies
$
49 EKG
$
46 Nigh
t Cha
rge
(7p
m t
o
7am
)
$
50 CPR
Non-T
ranspo
rt
$
10 0
Ext
ra
Attendant
$
50 29
of
29