HACKENSACK, N.J. — About 30 employees of a privately operated Totowa ambulance service are likely to wind up jobless as a result of its takeover Wednesday by a Lakewood company, prompted by declining reimbursements and rising costs.
Lifestar Response of New Jersey, which provides ambulance services in New York, New Jersey and three other states, handed over its Totowa operation to Gem Ambulance of Lakewood about 2 p.m., about a week after a sale was completed. Terms were not disclosed.
Alaine O’Brien, regional director of operations for Gem, said the company also took over Lifestar Response’s operation in Edison and that it had already hired at least 100 Lifestar Response employees between the two locations.
Danny Platt, president of Lifestar Response, said that 70 or 80 of the company’s 100 employees in Totowa would eventually be hired by Gem, mainly emergency medical technicians. The remaining employees, mostly dispatchers and administrative staff, will be laid off because their roles duplicate positions at Gem.
“They are in the process of processing applications and hiring people,” said Platt, referring to Gem.
Several employees, recalling how they learned of the sale 10 days ago, said they have yet to hear whether they will be hired or not, and fear the worst.
“I have been here so long. This is my income,” said Jasmine Rodriguez, 34, of Paterson, an EMT who has worked at Lifestar for 13 years. She said the company’s Union Boulevard building felt like a “funeral” Wednesday, with many employees crying.
“To come here and find we do not have a job,” she said. “That’s heartbreaking. We have bills. We have kids. We have rent that is due.”
Platt said Lifestar Response opted to sell in the face of “downward pressures on reimbursement and pricing,” from insurance companies and Medicare and Medicaid, combined with rising costs, including ambulance fuel, salaries and health insurance. In New Jersey, for example, the company gets $58 per trip in reimbursement from Medicaid, while most other states pay $150 to $200, he said.
The company, which also has operations in New York, Maryland, Pennsylvania and Alabama, will retain its units in East Orange, Orange and Irvington, where it is contracted to respond to 911 calls, he said.
In Totowa, the company does not answer emergency calls, but takes ailing patients and those in wheelchairs to and from hospitals, their homes or nursing homes, and to the doctor or other medical appointments.
“Gem is a locally owned business in New Jersey, and we thought it was a good option for the employees and the customers to go with the local,” Platt said.
Rob Davis, president of the Medical Transportation Association of New Jersey, a trade group for ambulance companies, said many are facing a budget squeeze as a result of state and federal government decisions.
The federal government sequester, which cut federal spending, resulted in a 2 percent cut in reimbursement under Medicare for ambulance trips, starting in April. Six months later, Medicare reimbursements for ambulance runs were cut a further 10 percent, Davis said.
In addition, Governor Christie in 2010 cut $9 million from the money available for reimbursement of ambulance transportation for patients who are both aging and low-income, Davis said. “There is a lot of pressure,” he said