Iowa EMS agency considers restructuring as a government entity
The change would help with the agency's long-term sustainability while creating operational benefits, additional revenue opportunities and tax benefits
By Jennifer Dewitt
Quad-City Times, Davenport, Iowa
DAVENPORT, Iowa — MEDIC EMS, the primary ambulance service in Scott County, is exploring the idea of restructuring the agency from its not-for-profit status to a multi-jurisdictional government entity.
In a presentation Tuesday to the Scott County Board of Supervisors, MEDIC Executive Director Linda Frederiksen discussed the concept of reorganizing under a 28E Agreement with Iowa municipalities including Davenport, Bettendorf and Scott County. The change, she said, would help in the agency's long-term sustainability while creating operational benefits, additional revenue opportunities, tax benefits and improved benefits for its employees.
Section 28E of the Iowa Code allows for a new government body to be created by two or more government bodies.
"A shift in payor mix has led to a gradual decline in net revenues," she said, adding that the percentage of patients covered by commercial insurance has declined as employers trim benefit plans.
Ten years ago, 35 to 40% of patients had commercial insurance; now that is down to 20 percent, she said. "Payors like Medicaid and Medicare are paying rates below the cost of operation."
But if MEDIC becomes a governmental agency, she said it could participate in the Iowa Offset Program, which recovers outstanding debts from individual income tax returns and casino winnings. It also would be eligible for Ground Emergency Medical Transport funding, which could increase revenues by $775,000 annually. As a 28E entity, it also could receive sales tax exemptions as well as state and federal fuel tax exemptions, which alone could save MEDIC $40,000 a year.
"The additional revenue could stabilize or reduce our ambulance costs for our patients," she told the supervisors.
Frederiksen said some of MEDIC's employees could be enrolled in the Iowa Public Employment Retirement System, or IPERS, which is a defined benefit vs. the current defined contribution program.
County Board Chairman Tony Knobbe asked what would be the downside, to which she said the employee benefit costs "could rise a little."
But the new benefits could help retain and attract employees.
"Anything we can do to entice people to what a great profession this is," said Frederiksen, who has been with MEDIC 24 years.
On the operations side, Frederiksen said the new structure would improve the organization's ability to respond and enhance its integration with the Scott Emergency Communications Center, the countywide dispatching center.
With increased revenues, the agency also could improve the EMS infrastructure, deploy its resources in response to population shifts, and improve response times in the rural areas.
"We could ensure greater response times at no additional costs," she said.
Paul Andorf, MEDIC's information systems manager, provided data that showed, depending on the type of call, MEDIC's response times vary from 6 minutes, 22 seconds to 8 minutes, 45 seconds in the metro area. That compares 10 to 11 minutes in rural areas.
"If you're having a heart attack, 10 minutes is a long time," Knobbe said after the meeting. He is in favor of making MEDIC a 28E entity. "We're more efficient in doing this altogether."
He said two other agencies, Scott Emergency Communications Center and the Scott County Solid Waste Commission, also operate as 28E entities and serve the entire population on behalf of Scott County and the other entities.
Frederiksen credited the Scott County Board of Health with first suggesting a structure change back in 2015. In 2018, MEDIC's board hired Washko and Associates to evaluate its options, and Nyemaster Law Firm, Des Moines, developed the two options. The first was to form a 28E entity only with the Scott County municipalities, and the second was to form an entity with the municipalities and other non-public entities, such as the hospitals.
But Frederiksen said the second option did not have the same revenue opportunities that a government entity is granted. MEDIC's board of directors has unanimously recommended the first option.
Scott County Administrator Mahesh Sharma, who serves on MEDIC's board, said Frederiksen is making the same presentations across the county including a presentation with the city of Davenport later Tuesday afternoon.
"Obviously, this is a complex situation, once we get the green light all the attorneys will get involved and we'll come back to you (with a proposal)," he said, adding that the actual model and other details are still being worked out.
©2019 Quad City Times, Davenport, Iowa