City Council
Report
City Council Meeting: November 11, 2024
Agenda Item: 10.A
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To: Mayor and City Council
From: Matthew Hallock, Fire Chief, Fire Department
Subject: Introduction and First Reading of an Ordinance Amending Municipal Code Section 4.65.030 and Approval of 2nd Modification to Agreement #10605 for Emergency Medical Transport and Billing Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding that the agreement and ordinance is not a “project” subject to the California Environmental Quality Act (CEQA);
2. Authorize the City Manager to negotiate and execute a second modification to agreement #10605 with Westmed Ambulance Service, Inc, dba McCormick Ambulance Service, for emergency ambulance services and medical billing services for the Fire Department;
3. Authorize the City Manager to negotiate and execute a cost recovery agreement with McCormick Ambulance for 12 months, on the same terms and conditions, for a total agreement period of eight years; and
4. Introduce for first reading an ordinance to amend Municipal Code Section
4.65.030 to extend the Living Wage Ordinance exemption for the term of the contract with McCormick Ambulance for emergency ambulance services and medical billing services.
Summary
Since 2004, the City has contracted with a private ambulance contractor to provide emergency medical transport and billing services for the response, assessment, treatment, and/or transportation of members of the public by Santa Monica Fire Department (“SMFD”) paramedics. Since 2018, the City has contracted with McCormick Ambulance for these services. On August 23, 2022, Council approved the first modification to Contract No. 10605 to extend the City’s agreement with McCormick until January 31, 2025. At the time City staff intended to begin the competitive bidding 2 of 5
process in the latter half of 2024 and have a new agreement with the selected vendor executed by the time the current McCormick agreement expired. However, due to the complexity of the transport and billing industry and its associated processes, SMFD requires additional time to solicit and evaluate proposals and to execute an agreement with the selected vendor. Therefore, staff recommends an extension of the current agreement with McCormick until January 31, 2026, under the same terms and conditions. The extension would be for 12 months and would provide the City with enough time to complete the competitive bidding process and execute a new agreement. Staff also recommends that Municipal Code Section 4.65.030 be amended to extend the exemption period in the Living Wage Ordinance to allow for McCormick to continue lawfully operating within City limits during the extended term of the current agreement.
Discussion
The Santa Monica Fire Department responds to over 17,500 emergency calls per year.
Of those calls, about 75% are for medical services. An ambulance and a paramedic fire engine are dispatched to all calls requiring medical treatment, regardless of severity.
Because the City contracts with McCormick Ambulance for emergency medical transport and billing services for patients, a McCormick Ambulance and an SMFD paramedic engine both arrive at the scene. Based on the assessments of responding SMFD paramedics, a determination is made to either: “treat-no-transport”, provide basic life support (“BLS”) transport, or provide advanced life support (“ALS”) transport. For ALS transports, SMFD paramedics accompany the patient to provide treatment in the ambulance enroute to the medical facility. McCormick makes about 8,200 transports annually, split roughly 59% BLS and 41% ALS.
Under the City’s agreement, the City does not submit a direct payment to McCormick for its services. Instead, McCormick bills the patients directly for their transport services.
The charges assessed are based on rates set by Los Angeles County, as set forth in their General Public Ambulance Rates Schedule. For ALS transports, McCormick sends the City the Advanced Life Support (ALS) Assessment Fee, adopted by Council on June 15, 2004. This fee is currently $1,106 and is the difference between the ALS and BLS emergency response rate ($3,329 and $2,223, respectively) in the FY 2024-25 General 3 of 5
Public Ambulance Rates Schedule. Medi-Cal and Medicare patients are billed at their respective contracted rates. The City receives revenue from McCormick for ALS transports only. In FY 2023-24, the City received $404,967 in cost-recovery for transports occurring in that fiscal year.
With the anticipated expiration of the current contract on January 31, 2025, SMFD issued a Request for Proposal for an ambulance transport provider on October 14, 2024 with proposals due on or before November 11, 2024. However, due to the complexity of the transport and billing processes and the ambulance service provider industry in general, SMFD requires additional time to evaluate the proposals, select a vendor, and execute an agreement. Therefore, staff recommends extending the term of the City’s current agreement with McCormick for 12 months, or until January 31, 2026.
Exemption from Living Wage Requirement
Contractors who provide emergency ambulance services to the City are different from other City contractors subject to the Living Wage Ordinance because emergency ambulance providers do not control rates for the services they provide. Rather, the Los Angeles County Board of Supervisors sets rates for all emergency transport services.
The County rates are the maximum allowable ambulance rates chargeable to the general public. Thus, while there is an established methodology for increasing rates that takes into account some wage changes, these factors do not include the higher Santa Monica living wage. Additionally, revenue collected by ambulance companies is dependent on the insurance payor mix of the patients transported. Payor mix varies from community to community, and in Santa Monica, approximately 47% of the ambulance transports are Medicare patients and 22% are Medi-Cal/Medicaid patients.
These patients pay considerably less to the ambulance company than what is billed. All of these factors, in addition to employee wages, influence the bottom line of any ambulance company providing services in this community.
On September 13, 2022, Ordinance No. 2718 was adopted to extend the sunsetting of the Living Wage Ordinance exemption for McCormick to July 31, 2025. The Council determined the extension to be warranted because staff had identified that emergency ambulance services providers have specific challenges that differentiate them from other City contractors. The Council’s action ensured that emergency ambulance services would be uninterrupted within the City. Staff now seeks to extend this 4 of 5
exemption again to coincide with the duration of the City’s contract with McCormick.
Staff recommends that Council adopt the attached proposed ordinance (Attachment A) amending Santa Monica Municipal Code §4.65.030 which extends the duration of the exemption to January 31, 2026.
Environmental Review
The modification of the City’s agreement with McCormick Ambulance and the corresponding proposed ordinance are not a “project” subject to the California Environmental Quality Act (CEQA). The modification extends the agreement for up to 12 months, allowing McCormick to continue providing ambulance transport and patient billing services for the City. The agreement modification and proposed ordinance are procedural in nature and simply extend the existing ambulance services and corresponding living wage exemption. Pursuant to CEQA Section 21065, the modification and proposed ordinance do not meet the definition of a “project” subject to CEQA as they will not “cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment”. Additionally, per Section 15378(b) of the CEQA Guidelines, a “project” does not include continuing administrative or maintenance activities, such as purchases for supplies, personnelrelated actions, general policy and procedure making. Therefore, the extended agreement and adoption of the proposed ordinance are not subject to CEQA.
Past Council Actions
Meeting Date Description
01/09/2018 Award RFP #144 to Westmed Ambulance Service, Inc. dba McCormick Ambulance
06/23/2020 Adopt Ordinance No. 2640 to amend Santa Monica Municipal Code Section 4.65.030 (living wage ordinance) to provide a temporary exemption for emergency ambulance
and billing services
08/23/2022 Approval of First Modification to Contract No. 10605 with McCormick Ambulance to extend agreement for two years
and Introduction/First Reading of Ordinance No. 2718 to 5 of 5
amend Santa Monica Municipal Code Section 4.65.030 to
also extend living wage exemption for two years
09/13/2022 Adopt Ordinance No. 2718 to amend Santa Monica Municipal Code Section 4.65.030 to extend living wage
exemption for two years
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action. Staff will return to Council if specific budget actions are required in the future.
McCormick Ambulance’s compensation is not a direct payment from the City; the provider bills the patient directly. McCormick Ambulance will also bill the patient on behalf of the Santa Monica Fire Department for services provided by the Fire Department. The cost recovery amount for FY 2024-25 is already included in the adopted budget.
Prepared By: Jonathan Tang, Principal Administrative Analyst Approved Forwarded to Council
Attachments:
A. Living Wage Exemption Ordinance to Jan 31, 2026
B. 2018-01-09 Award RFP 144 to McCormick
C. 2022-08-23 McCormick 1st Modification
D. Levine Act Disclosure Form 10-22-24
E. Oaks Initiative 10-22-24