This new column, which will appear occasionally, focuses on issues of rural and frontier EMS.
The Medicare ambulance fee schedule (AFS) is old news now. Some services have coped with it, some are trying, and some are being, well, creative. The challenge of funding ambulance operations continues, though: Fulton County, GA, plans to end a $7 million annual subsidy for Grady EMS in Atlanta. In Oklahoma, at least 50 ambulance services apparently couldn't get help and have closed since the AFS took effect.
The cost equation isn't mysterious. The annual personnel cost to operate one ambulance is $455,520 if each worker staffing it is paid $20 an hour and 30% of their salary is benefits. Nobody would argue that as a minimum, right? Those paid less than $20 an hour know they deserve more, and those making over $20 an hour certainly know they're not worth less.
Here's a breakdown of the cost per call to pay the personnel based on various call volumes:
The issue is, what funds are coming in to offset these personnel costs?
When the revenue generated per call is less than the cost of running it, one of several options must occur: 1) Lower personnel pay; 2) A combination department with a mix of paid and volunteer staff; 3) Manage with volunteers; 4) Find a new revenue source; or 5) Some combination of these. Rural ambulance services are at a distinct disadvantage, as they can't create more volume than already exists in their area, and there aren't any contracts to steal or lucrative markets to move into.
Taxing District Options While Fulton County is ending its subsidy, other areas are making other taxing/subsidy options available for EMS. Minnesota, Nebraska and Wyoming are three states that have taxing district options to fund EMS. These special districts assess property taxes that are outside the levy limits states impose on local governments. They appear on tax bills as "special assessments," along with things like school district taxes and assessments for street repair and other purposes.
Residents in Wyoming have become creative with a state option for rural health districts. Wyoming Statute Title 39, Chapter 13, Article 104, allows counties to establish special rural healthcare districts that can levy taxes of up to two mils for rural healthcare districts and up to 12 mils that can be used for other districts such as hospitals, public health and social services. Five counties have established rural health districts, three created for the purpose of supporting ambulance services.
Nebraska state statute 13-303 allows each county to provide EMS as a governmental function, and that "Any county board…and the governing bodies of cities and villages may pay their cost for such service out of available general funds or may levy a tax for the purpose of providing the service." Following some additional requirements, an EMS taxing district can be formed with a levy that "Shall be in addition to all other taxes and…restrictions on the levy of taxes provided by statute, except that when a fire district provides the service, the county shall pay the cost for the county service by levying a tax on that property not in a fire district providing the service."
Minnesota state statute chapter 144F allows two or more political subdivisions to establish an EMS special taxing district. The district consists of a board of representatives of the political subdivisions and is required to have an advisory committee including representatives of first responders, ambulance services, ambulance medical directors and EMS communications experts. Up to 4.8 mils or $400,000 per year (whichever is less) may be taxed to support first responders, ambulance services, medical control facilities and regional EMS programs. "Ambulance staff can finally stop worrying about money," says Tom Bertch, assistant ambulance director for the state's Floodwood Ambulance Service. "We now have money for large-ticket purchases like ambulances and AEDs." Bertch helped pass legislation for Floodwood's EMS taxing district, and that service-specific district eventually became statewide.
Is It the Option for Your Service? Special taxing districts are a way to create revenue to offset expenses not covered through patient billing. Bertch suggests that before you seek to establish a district, consider these principles:
Know exactly how you are going to use the money;
Establish clear roles and responsibilities for advisory and taxing board members;
Clearly communicate to citizens the need for the taxing district;
Ensure you are maximizing your current revenue sources and minimizing your costs.
Ambulance taxing districts are helping some rural ambulance services maintain quality service while others are closing. Could they be an option for you?
Gary Wingrove is responsible for strategic affairs at Mayo Clinic Medical Transport in Rochester, MN, and chairs the rural EMS issue group for the National Rural Health Association and the advisory board of the Rural Domestic Preparedness Consortium.
Aarron Reinert, NREMT-P, BA, is executive director for Lakes Region EMS, a rural ambulance service in Minnesota that covers a 450-square-mile service area.