Planned trims in Medicare reimbursements give the county two choices: slash emergency services or find money elsewhere.
By EDIE GROSS
© St. Petersburg Times, published December 3, 2000
Chuck Kearns is trying hard to ward off a crisis.
He has written numerous letters to members of Congress and to President Clinton, imploring them to rethink a decision that could cost Pinellas County millions of dollars and threaten the quality of emergency care available to its residents.
The object of his concern: The federal government's plan to drastically reduce how much it reimburses the county's Emergency Medical Services Department for transporting Medicare patients in ambulances.
The proposal could cost the county as much as $7-million over the next four years -- money it may have to recoup in higher property taxes or higher fees for other ambulance patients.
Kearns, the director of Pinellas County's EMS system, is not crazy about either of those options. The only other choice he sees is cutting back on the emergency services provided, an option he and other county officials adamantly oppose.
"We're losing 100 bucks a transport when this new proposal hits," Kearns said. "Now you see my crisis."
The pinch will be felt by private ambulance companies and government EMS departments -- and subsequently ambulance users and taxpayers -- all over the country if the new Medicare reimbursement fees are approved.
Letters of concern have poured into the Health Care Financing Administration in the three months since the agency that administers Medicare announced its new reimbursement rates.
The new rates were scheduled to take effect Jan. 1, but have been delayed until at least April 1 so the agency, which falls under federal Department of Health and Human Services, can look over all the comments, a spokesman said.
In the meantime, people such as Kearns are lobbying Congress and the president to push for changes in the agency's proposal.
"We don't think they (agency officials) have paid very much attention to our concerns," Kearns said.
Pinellas County contracts with a private company, American Medical Response, to operate ambulances here. The company runs those ambulances under a county name, Sunstar.
If Sunstar carries a Medicare patient to a hospital, the county is allowed to charge that patient $250.43 plus mileage. Medicare pays for 80 percent of the costs, and the county bills the patient or the patient's supplemental insurance for the difference.
Under this system, the county is usually able to cover the cost of each ambulance trip, which averages $236.72.
Under the new system proposed by the Health Care Financing Administration, Kearns worries the county will come up several million dollars short.
Medicare would pay the county based on the urgency of each ambulance trip. Emergency trips would earn a little more than they do now. But non-emergency trips -- for instance, if a nursing home resident is taken to a hospital but does not need any drugs on the way -- would earn far less than it costs the county to complete those trips.
And the county would no longer be able to bill the patient or a supplemental insurance company for the remainder of the cost.
Pinellas County EMS estimates that 40 percent of its 106,000 annual ambulance trips involve Medicare patients. The county has 95 licensed nursing homes where many Medicare patients live, Kearns said.
Kearns' office believes it would lose $7-million over the course of the plan's four-year phase-in period and $3-million each year after that.
The situation is equally bleak in other parts of the nation. The American Ambulance Association reports that some of its 950 members, mostly private ambulance companies, are struggling to cope with the cost cuts.
"There just aren't a lot of options right now to stay viable and get low Medicare rates," said Tristan North, the group's director of government affairs. "We've been hearing from a lot of our members. Some are taking hits as big as 50 percent. They are talking about going out of business."
The financial picture in Pinellas is not pretty. The county billed $36-million in ambulance fees last year and collected about 67 percent of that, or $24-million, Kearns said.
If the Medicare cuts reduce that figure, the county is still expected to pay American Medical Response $15.5-million a year, buy medical supplies, fund the medical director's contract, pay St. Petersburg Junior College for training costs, buy computers and radios and support the salaries of about 40 people in EMS administration.
So how to make up the difference?
"We've been trying to say, "If you ride, you pay for the service.' Now, if you ride, the taxpayers may have to pick it up and pay for your service," Kearns said. "Clearly, they are not covering our costs with this dollar figure."
Pinellas County has several options, none of them popular, for making up the expected shortfall.
It could raise the EMS tax charged to property owners. That tax is legally allowed to go as high as $1.50 per $1,000 of property value. Right now, residents pay 75 cents per $1,000 of property value. The owner of a $125,000 home with a $25,000 homestead exemption pays about $75 a year in EMS taxes.
Most of the money raised has traditionally been used to support paramedics at fire departments and raise the level of medical care provided by those departments, Kearns said.
The county also could raise the ambulance fees for privately insured patients. Right now, those people pay $341.20 per ambulance trip, although that fee is expected to rise to $355 in the coming year.
Or the county could simply lower the quality of service it provides. For instance, instead of guaranteeing that paramedics will respond to all medical calls, the county could hire emergency medical technicians, who have about one-third as much training.
"I don't like any of those options. They're all yucky," said Interim County Administrator Gay Lancaster. "I don't know what we'll do. I don't want to denigrate the system."
County commissioners have not yet discussed what they will do if the new Medicare reimbursement rates are approved.
Chairman Bob Stewart wrote letters to U.S. Rep. Mike Bilirakis, R-Palm Harbor, and U.S. Rep. C.W. Bill Young, R-Indian Rocks Beach, last week, urging them to carry the county's concerns to the Health Care Financing Administration.
"We're putting a lot of eggs in the basket of having Congress come through and solve this for us," Stewart said Friday. "If the federal government does not come through for us, we'll be looking at some combination of alternatives."
Congress may need to do more than just exert influence, said North of the American Ambulance Association. It needs to put more money in the Medicare pot so that the Health Care Financing Administration can increase the reimbursement rates.
The money available for ambulance payments is about $2.65-billion, North said. Congress needs to increase that by $1.1-billion a year to keep counties like Pinellas and private ambulance companies out of trouble, he said.
The three-month delay in the fee structure may give officials like Kearns and organizations like North's more time to push for that money.
"This will happen," North said of the new rates. "We're just hoping we can get some improvements to it beforehand."