Calif. fire district partners with AMR in cost-saving plan
The new partnership includes a combined dispatch center, and is expected to save money for the cash-strapped Contra Costa Fire District
By Matthew Artz
Contra Costa Times
MARTINEZ, Calif. — A first-of-its-kind approach for providing ambulance care to many Contra Costa residents should operate in the black, a new report found, but it's unlikely to generate enough savings to significantly boost services at the cash-strapped Contra Costa Fire District.
Urged to operate more efficiently, ConFire has proposed a new partnership with its longtime ambulance provider, American Medical Response.
Rather than continuing to contract out for the service, ConFire will take over responsibility for billing and collecting insurance reimbursements as well as liability if anticipated revenue doesn't materialize. Meanwhile, AMR will essentially function as a subcontractor providing ambulances and paramedics for a set fee.
The arrangement, which includes a combined dispatch center, should cut costs and reduce the need to dispatch fire trucks to nonemergency medical calls. But it does come with added risk to taxpayers, consultants from the firm Citygate Associates cautioned in a 60-page report to county supervisors.
ConFire is getting into the ambulance business at an especially grim time for the industry. Since the Great Recession, both public and private insurers have dramatically lowered reimbursement rates for ambulance care, putting a squeeze on providers, Citygate warned.
ConFire anticipates collecting only one-quarter of the estimated $2,775 charge for a basic ambulance transport. A decade ago, ambulance providers recouped at least two-thirds of their charges, Citygate's Stewart Gary told supervisors at their Tuesday meeting.
"The insurance companies are flat out not paying, period," he said. "Or they're only paying the Medicare rate," which Gary said was a few hundred dollars.
Gary also poured cold water on another key driver of the ambulance plan -- that by taking control of its ambulance service, ConFire can generate substantial income by participating in a program that offers partial reimbursements for the medical transport of certain Medi-Cal recipients.
The Ground Emergency Medical Transport program, which is only open to publicly-run ambulance services, was seen as a potential boon to the fire district. A former consultant projected that it could help drive net revenue up to $10 million in the second year of the contract with AMR.
But Citygate cautioned that most Medi-Cal recipients won't qualify and that only about 5 percent of ambulance trips will be covered by the program.
Citygate and ConFire estimated net income for the ambulance program at just under $2 million the first year. While that is expected to climb slightly, Gary urged supervisors to set up ample reserves to guard against further reimbursement cuts by insurers.
Supervisors remained supportive of the new approach, but Karen Mitchoff didn't hide her disappointment with the projected revenue figures.
"I've been under the impression that there was going to be a happy spot sooner rather than later," she said. "And there ain't going to be a happy spot. And it's important that the public understands that."
ConFire Chief Jeff Carman said the merged dispatch center will enable the district to more efficiently respond to medical calls while freeing engines to focus on major incidents.
"Although there is a $1.9 million financial benefit to this, the indirect benefits cannot be overlooked," he told supervisors.
The new approach comes with added risks for taxpayers, but Gary said that declining insurance reimbursements threaten all public agencies responsible for providing ambulance services. If private providers can't turn a profit, he said, taxpayers could be asked to keep them afloat. Alameda County's ambulance provider, Paramedics Plus, recently asked for an injection of $5 million of public funds to cover some of its loses.
Contra Costa supervisors said they were still on board with ConFire's plan and directed the county to proceed with negotiating a five-year contract that would take effect next year.
"This may not work out very well in the end," Supervisor Mary Piepho said. "But this is what I think the public wants us to test."
©2015 the Contra Costa Times (Walnut Creek, Calif.)