Agenda Item 12
April 13,2010
Public Hearing
MEMORANDUM
TO:
FROM:
County Council
~
Michael Faden, Senior Legislative Attorney
Minna Davidson, Legislative Analyst
~('..&-
SUBJECT:
Public Hearing:
Expedited Bill 13-10, Emergency Medical Services Transport
Fee - Established
Expedited Bill 13-10, Emergency Medical Services Transport Fee - Established,
sponsored by the Council President at the request of the County Executive, was introduced on
March 23, 2010. A Public Safety Committee worksession is tentatively scheduled for April 26 at
9:30 a.m.
Bill 13-10 would authorize the County to impose and collect a fee to recover costs
generated by providing emergency medical service transports. This bill would also provide for a
schedule of emergency medical services, transport fees, fee waiver criteria, permitted uses of fee
revenues and other procedures to operate the emergency medical services fee program. Bil113­
10 would prohibit a local Fire and Rescue Department from imposing a separate emergency
medical services transport fee. The Executive would be required to issue regulations to
implement the fee; draft regulations are attached on ©9-11.
This packet contains:
Expedited Bil113-1 0
Legislative Request Report
Memo from County Executive
Draft regulation
Fiscal Impact Statement
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Expedited Bill No.
13-10
Concerning: Emergency Medical Services
Transport Fee - Established
Revised: 3-22-10
Draft No. _1_
Introduced:
March 23,2010
Expires:
September 23, 2011
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: -.:..:N""-on'-"e=<--_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request ofthe County Executive
AN EXPEDITED ACT
to:
authorize the County to impose and collect a fee to recover costs generated by
(1)
providing emergency medical service transports;
(2)
provide for a schedule of emergency medical services transport fees, fee waiver
criteria, permitted uses of fee revenues, and other procedures to operate the
emergency medical services fee program;
(3)
prohibit a Local Fire and Rescue Department from imposing a separate emergency
medical services transport fee;
(4)
require the Executive to issue certain regulations to implement an emergency
medical services transport fee;
(5)
require a certain annual transfer be made as payment of residents' uninsured portion
of the emergency medical services transport fee; and
(6)
generally amend County law regarding the provision of emergency medical services;
By adding
Montgomery County Code
Chapter 21, Fire and Rescue Services
Section 21-23A. Emergency Medical Services Transport Fee
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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ExPEDITED BILL
No. 11-10
1
2
3
4
Sec.
1.
Section 21-23A is added as follows:
21~23A.
Emergency Medical Services Transport Fee.
W
Definitions.
5
In this Section the following tenns have the meanings indicated:
6
7
ill
Emergency medical services transport
means transportation
Qy
the Fire and Rescue Service of an individual
Qy
ambulance or
other Fire and Rescue Service vehicle used for
purpose.
§;
8
9
similar
Emergency medical services transport
does not
10
11
include transportation of an individual under an agreement
between the County and
~
health care facility.
12
13
14
ill
Federal poverty guidelines
means the applicable health care
poverty guidelines published in the Federal Register or
otherwise issued
Qy
the federal Department of Health and
Human Services.
15
16
17
18
19
ill
(hl
Fire and Rescue Service
includes each local fire and rescue
department.
Imposition gffee.
The County must impose
~
fee for any emergency
~
medical services transport provided in the County and, unless
prohibited
Qy
other law, outside the County. under
agreement.
mutual aid
20
21
22
23
W
Liability for fee.
Subject to subsection
(Q1
each individual who
receives an emergency medical services transport is responsible for
paying the emergency medical services transport fee.
@
24
25
26
Hardship waiver.
ill
The Fire Chief must Waive the emergency medical servIces
transport fee for any individual whose household income is at or
27
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EXPEDITED BILL
No. 13-10
28
29
30
31
32
33
34
below 300 percent of the federal poverty guidelines.
An
individual must request
~
waiver on
~
form approved
Qy
the Fire
Chief.
ill
The Fire Chief may deny
f!
request for
f!
waiver if an individual
who claims financial hardship under this Section does not
furnish all information required
Qy
the Fire Chief.
!£)
Payment gf Residents' Uninsured Portion gf the Emergency Medical
Services Transport Fee.
35
36
37
ill
Tax revenues received
Qy
the County must be treated as
payment, on behalf of County residents, of the balance of each
resident's portion of the emergency medical services transport
fee that is not covered
Qy
the resident's insurance.
38
39
40
41
ill
The County Council must annually transfer from the General
Fund to the Consolidated Fire Tax District Fund an amount that
the Council estimates will not be covered
Qy
residents'
insurance as payment of all residents' uninsured portion of the
emergency medical services transport fee.
42
43
44
45
ill
Obligation to transport.
The Fire and Rescue Service must provide
46
emergency medical services transport in accordance with applicable
medical protocols to each individual without regard to the individual's
ability to
~
(g)
Restriction on Local Fire and Rescue Departments.
A local fire and
~
47
48
49
50
51
52
53
54
rescue department must not impose
medical transport.
separate fee for an emergency
aD
Use gf revenue.
Except for the transfer received from the General
Fund under subsection
!£)
and in the first fiscal year this fee is
implemented, the revenues collected from the emergency medical
CD
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ExPEDITED BILL
No.
13-10
55
56
57
58
59
60
servIces transport fee must be used to supplement, and must not
supplant, existing expenditures for emergency medical services and
other related fire and rescue services provided
J2y
the Fire and Rescue
Service.
ill
Regulations; fee schedule.
regulation under method
The County Executive must adopt
~
ill
to implement the emergency medical
~
61
62
63
services transport fee program. The regulation must establish
fee
schedule based on the cost of providing emergency medical services
transport.
The fee schedule may include an annual automatic
64
65
66
67
68
69
adjustment based on inflation, as measured
J2y
an index reasonably
related to the cost of providing emergency medical services transports.
The regulation may require each individual who receives an
emergency
medical
servIces
transport
to
provide
financial
information, including the individual's insurance coverage, and to
assign insurance benefits to the County.
Sec. 2. Expedited Effective Date.
70
71
72
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on the date when
it
becomes
law.
Approved:
73
74
75
76
77
Nancy Floreen, President, County Council
Date
78
79
80
81
Approved:
Isiah Leggett, County Executive
Date
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LEGISLATIVE REQUEST REPORT
Expedited Bill 13-10
Emergency Medical Services Transport Fee - Established
DESCRIPTION:
This Bill would authorize the County to impose and collect a fee to
recover costs generated by providing emergency medical services
transports.
In order to meet current fiscal challenges facing the County, the County
must increase the amount of revenue available to maintain core
Government programs and services.
To enhance the amount of revenue available to support core government
programs and services.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
Office of Management and Budget; Department of Finance; Fire and
Rescue Service
FISCAL IMPACT:
To be requested.
ECONOMIC
IMPACT:
EVALUATION:
To be requested.
Subject to the general oversight of the County Executive and the County
Council.
Many jurisdictions in the regions have imposed an emergency
medical services transport fee.
Joseph Beach, Director of Management and Budget
Kathleen Boucher, Assistant Chief Administrative Officer
Richard Bowers, Chief, Fire & Rescue Service
Marc Hansen, Acting County Attorney
EXPERIENCE
ELSEWHERE:
SOURCES OF
INFORMATION:
APPLICATION
Yes.
WITHIN
MUNICIPALITIES:
PENALTIES:
To be researched.
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
lsiah Leggett
C()un~v
Executive
MEMORANDUM
March 18,2010
TO:
FROM:
SUBJECT:
Nancy Floreen, Council President
Isiah Leggett,
countyExecutive~~~~
)
~""7
,
-~
..... .
.,/
FY 2011 Budget Reconciliation and Financing Act
I am attaching for Council's consideration a Budget Reconciliation and Financing
Act (BRF A) which makes changes to the County Code that are necessary to reconcile my
recommended FY 2011 operating budget with projected FY 2011 revenues. This bill will help
the County address its current fiscal challenges by increasing the amount of revenue available to
maintain and enhance core government programs and services. I am also attaching a Legislative
Request Report for the bill. A Fiscal Impact Statement will be transmitted to Council soon.
The BRFA consists of five primary components. First, it increases the energy tax
rates. Second, it temporarily redirects the portion of recordation tax revenues that are currently
reserved for County Government capital projects and rental assistance programs to the general
fund for general purposes. Third, it allows revenues generated by the Water Quality Protection
Charge to be used to pay debt service on bonds that fund stonnwater management infrastructure
projects. Fourth, it transfers responsibility for administering equal employment opportunity
programs from the Office of Human Resources to the Office of Human Rights. Fifth, it
authorizes the Fire and Rescue Service to impose an Emergency Medical Services (EMS)
Transport Fee.
As the Council knows, the County's energy tax is actually a tax on fuel oil,
natural gas, and electric utility providers which is passed on to all utility customers. Because the
energy tax is a broad-based tax, its impact on fan1i1ies is reduced by the fact that it is paid by
businesses and households, and all levels of govenunent, including federal agencies located in
the County (that currently do not pay any other major County tax). Additionally, the energy tax
is a consumption tax based on energy usage.
It
is not based on the overall size of the utility bill
or the cost per unit of energy used as bille-d to the consumer. Therefore, the amount of the tax
can be lessened by reduced energy usage. Based on existing usage patterns for the average
homeowner, my recommended FY 2011 budget assumes an average increase in the energy tax of
approximately $2.90 per month. I have also recommended additional funding in the Health and
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Nancy Floreen, Council President
March 18,2010
Page 2
Human Services budget for the County's Energy Assistance Program to minimize the impact to
low-income households.
My recommended FYll budget contains several efforts to restructure County
Government to improve responsiveness and efficiency. One of these changes is the transfer of
the Equal Employment Opportunity program from the Office of Human Resources to the Office
of Human Rights. This shift takes advantage of existing staff resources to reduce costs and
leverage the efforts of County staff to produce better outcomes for the community. This bill
modifies the County code provisions relating to the responsibilities of the Office of Human
Resources and Office of Human Rights to reflect this change.
The EMS Transport Fee is needed to fund fire and rescue services in the County.
Without this fee, emergency response to residents will be impaired. EMS Transport Fees are
widely employed throughout the nation and by local governments throughout the Washington
region. These jurisdictions have not experienced any indication that people decline to use
emergency transports as a result of the imposition of an ambulance fee. By creating a prepaid
fund for uninsured County residents, the legislation that I am transmitting imposes a fee only on
County residents with health insurance which covers EMS Transports. This arrangement more
equitably distIibutes the economic burden of providing EMS transport services in the County
between residents and nonresidents. The legislation provides for a hardship waiver for
nonresidents who fall below 300 percent of federal poverty guidelines.
To provide the Council with a complete picture of the EMS Transport Fee
program created by this bill, I am attaching a copy of the proposed Executive Regulation to
implement the fee. This proposed regulation will be published in the April 2010 County Register
and submitted to Council after the 30-day public comment period ends on April 30.
Finally, I note that the BRF A is consistent with Bill 31-09, Consideration of
Bills One Subject (enacted on September 29,2009), which requires that a bill "contain only
one subj ect matter".' As noted in the Council staff packet for Bill 31-09, that bill was intended to
adopt the "one subject rule" of the Maryland Constitution, which requires all laws enacted by the
General Assembly to contain only one subject. The Maryland Attorney General has repeatedly
concluded that budget reconciliation and financing bills do not conflict with the one subject rule.
For example, in 2005, the Attorney General noted that "(f]or the past fourteen years, 15 budget
reconciliation, budget reconciliation and financing acts or variations thereof, have been used to
balance budgets, raise revenue, make fund transfers, redistribute funds, cut mandated
appropriations and authorize or mandate appropriations."] The Attorney General concluded that
all of those bills were consistent with the one subject rule because the provisions of the bills were
"clearly germane to the single subject of financing State and local government".
See Panitz
v.
Comptroller a/the Treasury,
247 Md. 501 (1967) (Omnibus supplemental appropriation bill
comprised a single subject for purposes of
§
29 of
Art
III of the State Constitution even though
See May 19,2005 memorandum from Attorney General J. Joseph Curran,
Jf.
to Governor Robert Ehrlich regarding
House Bill 147 (2005).
I
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Kancy Floreen, Council President
March 18, 2010
Page 3
the bill combined such diverse elements as police aid to local govemment; teacher salaries and
pensions; and general unrestricted grants to local government).
Attachments (3)
cc:
Joseph Adler, Director, Office of Human Resources
Jennifer Barrett, Director, Finance Department
Joseph Beach, Director, OMB
Kathleen Boucher, ACAO
Richard Bowers, Fire Chief, MCFRS
Marc Hansen, Acting County Attomey
Robert Hoyt, Director, DEP
Richard
Y.
Nelson, Jr., Director, DHCA
James Stowe, Director, Office of Human Rights
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MONTGOMERY COUNTY
EXECUTIVE REGULATION
Offices
of the
County Executive· 101 Monroe Street· Rockville, Maryland 20850
Subject
Emergency Medical Service Transport Fees
Originating Department
Montgomery County Fire and Rescue Service
Montgomery County Regulation on
EMERGENCY MEDICAL SERVICE TRANSPORT FEES
Issued by: County Executive
Regulation No. _ _ __
COMCOR: Chapter 21
Authority: Code Section 21-23A
Supersedes:
NI
A
Council Review: Method (2) under Code Section 2A-15
Register Vol. __ No. _ _
Effective Date: Date Bill
XX-IO,
"FY 2011 Budget Reconciliation and Financing Act"
becomes effective
Comment Deadline: April 16, 2010
Summary:
This Regulation establishes: (1)
An
emergency medical services transport fee schedule;
and (2) a requirement that an individual who receives an emergency medical services
transport provide certain information and execute an assignment of certain health
insurance benefits.
Scott Graham, Assistant Chief, Montgomery County Fire and Rescue Service
(240) 777-2493
Montgomery County Fire and Rescue Service
101 Monroe Street,
12th
Floor
Rockville, Maryland 20850
Number
Effective Date
Staff contact:
Address:
Page 1 of3
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MONTGOMERY COUNTY
EXECUTIVE REGULATION
Offices of the County Executive
101
Monroe Street • Rockville, Maryland 20850
Subject
Emergency Medical Service Transport Fees
Originating Department
Montgomery County Fire and Rescue Service
Section 1.
Fee Schedule
a.
In imposing and collecting the emergency medical services transport fee authorized under
Code Section 21-23A, the Fire Chief must comply with all applicable provisions of
42 CFR Parts 410 and 414,
Fee Schedule for payment ofAmbulance Services and
Revisions to the Physician Certification Requirementsfor Coverage ofNon-emergency
Ambulance Services.
The Fire Chief must impose the emergency medical services transport fee according to
the following schedule:
1.
Number
Effective Date
b.
ii.
$8.50 per mile, one way, from point of pick up to
the health care facility; plus
• Basic Life Support - Non-emergency*
• Basic Life Support Emergency*
• Advanced Life Support - Levell Non-Emergency*
• Advanced Life Support Level 1 - Emergency*
• Advance Life Support Level2*
• Specialty Care Transport*
$300.00
$400.00
$350.00
$500.00
$700.00
$800.00
* The terms in the schedule are as defined in 42 CFR Parts 410 and 414.
Section 2.
Required Information; Assignment of Benefits.
a.
An individual who receives an emergency medical services transport must furnish
to the County or the County's designated agent: (i) information pertaining to the
individual's health insurer (or other applicable insurer); and (ii) if applicable, financial
information that the Fire Chief determines is necessary for determining eligibility for a
waiver of the fee.
An
insured individual who receives an emergency medical services transport must
execute an assignment of benefits necessary to permit the County to submit a claim for
the fee to the applicable third party payor.
b.
c.
The Fire Chief must increase the amount of the fees in the schedule annually by the
amount of the Ambulance Inflation Factor (AIF) as published by the Centers for
Medicare and Medicaid Services (CMS), United States Department of Health and Human
Page 2 of3
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MONTGOMERY COUNTY
EXECUTIVE REGULATION
Offices of the County Executive • 101 Monroe Street • Rockville, Maryland 20850
Subject
Emergency Medical Service Transport Fees
Originating Department
Montgomery County Fire and Rescue Service
Number
Effective Date
Services.
Section 3.
Severability.
If a court of final appeal holds that any part of this regulation is invalid, that ruling does not
affect the validity of other parts of the regulation.
Section 4.
Effective Date.
This regulation is effective on the date that Bill XX-I 0, "FY
2011
Budget Reconciliation and
Financing Act" becomes effective.
Approved:
Isiah Leggett, County Executive
Page 3 of3
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OFFICE OF MANAGEMENT AND BUDGET
Isiah Leggett
County Executive
Joseph F. Beach
Director
MEMORANDUM
April 8, 2010
TO:
FROM:
SUBJECT:
Nancy Floreen, President, County Council
Joseph
F.
Beaob.
~
c ...
Expedited
Bill
13-10, Emergency Medical Service Transportation Fee - Established
The purpose of this memorandum is to transmit a fiscal
and
economic impact st.aten1e'nt
to the Council on the subject legislation.
'>
LEGISLATION
SUMMARY
The expedited bill proposes the following: authorize the COI.mty to impose and collect
a
fee to recover costs generated by providing emergency medical service transports; provide for a schedule
of emergency medical services transport fees, fee waiver criteria, permitted uses offee revenues, and
other procedures to operate the emergency medical services fee program; prohibit a Local Fire and
Rescue Department from imposing a separate emergency medical services transport fee; require the
Executive to issue certain regulations to implement an emergency medical
services
transport fee; require a
certain annual transfer be made as payment of residents' uninsured portion ofthe emergency medical
services transport fee; and generally amend County law regarding the provision of emergency medical
services.
FISCAL SUMMARY
Revenues
The projected revenues are based on a mix offour payer
types:
Medicare, Medicaid,
CommerciallAuto Insurance and Self Pay and average revenue per transport rate of $248 in
FYl!
down
to $246
in
FY14 and a Montgomery County Fire and Rescue Service estimated transport volume of
56,977 for
FYI 1
which
is
expected to increase to 64,091 in FY14.
The legislation
is
expected to result in revenues of$14.1 million
in
FYI1), $14.7 million
in
FY12, $15.2 miUion in FY13, and $15.8 million in FY14. The FYI I revenue ofS14.1 million is a
decrease from the County Executive's recommended FYll operating budget revenue assumption of$14.7
million due to updated revenue projections that reflect the following factors: available ePCR data (since
January
20I
0)
and
updated dispatch data; Medicare implementing a
0%
inflation factor
in
20
10,
down
from 5% in 2009 (due to uncertainty for the federal health care reform); and the lowering ofthe
Assuming
mid-year
implementation.
with
collection ofrevenues beginning retroactively from the beginning ofthe
fiscal year assuming Council passage ofthe
expedited
legislation before June
30, 2010.
I
Office of the Director
101 Monroe Street, 14th Floor· Rockville, Maryland 20850 • 240-777-2800
www.montgomerycountymd.gov
@
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Nancy Floreen, President, County Council
April 8, 2010
Page
2
Geographic Practice Cost index from 1.08
to
1.057
(used
by Medicare
to
calculate ambulance fee
schedule reimbursement rates). For additional details on the basis ofthese estimates please see the
attached EMS Transport Revenue Projections Report prepared for the County
by
Page. Wolfberg, and
Wirth.
Expenditures
Personnel Costs
It
is
expected that
in
the
first
year of implementation two additional full-time personnel
will be needed for implementation: a Manager ofBilling Services and an Information Technology
Specialist. The FYllsalary, wages and benefits total will be $190,750.
Operating Expenses
Operating expenses for FYll are comprised of third party contract expenditures of
$770,87<Y
(5.5%
of gross revenues collected), $200,000 for community outreach activities, and $25,000
for training. Total annual operating expenses for full year operation of the program
are
dependent,
in
part, on the negotiated fee for the third
party
contractor who will manage the billing program on behalf of
the County. Also, the costs of community outreach will be reduced after the initial year of
implementation because the need for these outreach activities will not be as significant when the program
is fully operational.
ECOMONIC
SUMMARY
Since the EMS Transport Fee
is
employed by local governments throughout the
Washington region, it
is
most likely that the imposition ofthe fee wi11 have
no
economic impact on the
County.
The following contributed to and concurred with this analysis: Blaise DeFazio, Office of
Management and Budget; Scott Graham, Montgomery County Fire and Rescue Service;
Dominic Del Pozzo, Montgomery County Fire and Rescue Service; Michael Coveyou, Department of
Finance; and David Platt, Department ofFinance.
JFB:bdf
Attachment
c:
Timothy
L.
Firestine, Chief Administrative Officer
Richard Bowers, Chief, Montgomery County Fire and Rescue Service
Kathleen Boucher, Assistant Chief Administrative Officer
Jennifer Barrett, Director, Department ofFinance
Marc Hansen, Acting County Attorney, Office of the County Attorney
David Dise, Director, Department ofGeneral Services
Scott Graham, Montgomery County Fire and Rescue Service
Alexandre Espinosa, Office ofManagement and Budget
Dominic Del Pozzo, Montgomery County Fire and Rescue Service
John
Cuff,
Office of Management and Budget
Blaise Defazio, Office of Management and Budget
2
The Executive's March 15
th
recommended
operating
budget assumed third
party
contract expenditures
of $800,470
or
5.5% ofS14.7 million
in
gross revenues collected. The contractor cost may
be
revised based on a more favorable
contract arrangement
@
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY-CLIENT COMMUNICATION
MONTGOMERY COUNTY FIRE RESCUE SERVICES
Updated
2010
EMS Transport Revenue Projections
Submitted
By:
Pagel...... t,
Wolfberg
\\i~
The National EMS Industry Law Firm"'"
&Wirth.'~1
llr·
March 19, 2010
Page, Wolfberg & Wirth, LLC
5010 E. Trindle Road, Suite 202
Mechanicsburg. PA 17050
(717)
691-0100
(717) 691-1226 (fax)
Web Site: www.pwwemslaw.com
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EXECUTIVE SUMMARY
If EMS insurance billing is implemented in Montgomery County, Maryland, the
County is projected to generate $59,776,918 in new revenue over the initial four years of the
program. Thereafter, the County would be expected to continue to derive in excess of $15
million per year of new revenue under the program. Under the proposed Montgomery
County EMS transport fee model, none of the projected revenues would paid out of the
pockets of County residents.
This report supplements two earlier reports, submitted in January and November of
2008. The County requested this updated report in light of any changed circumstances in
health care billing, as well as the economic and federal political climate, that may have
impacted our earlier projections. In addition, in January, 2010 the County transitioned its
EMS operations from paper-based to electronic patient care reporting, so a limited amount
of actual data became available to replace assumptions that could only previously be made
using informed estimates.
'
The updated 2010 report adjusts the total four-year revenue projections downward
by $2,454.584 (from $62,231,502 to $59.776,918) as compared to the four-year projections
in the November, 2008 report. The major reasons (none of which were foreseeable at the
time of the 2008 projections) for this change, in order of impact, are:
• MCFRS dispatch data show a lower-than-anticipated Advanced Life
Support (ALS) dispatch rate, resulting in fewer transports being
eligible for ALS reimbursement under the ALS Assessment rule;
• MCFRS ePCR and dispatch data compelled revising the ALS vs.
Basic Life Support (BLS) transport ratio from 57:43 to 45:55.
• Medicare implemented a 0% Ambulance Inflation Factor (AIF) for
2010. While future years' AIF are expected to be positive, uncertainty
over counterbalancing Medicare cuts under the pending federal health
care reform legislation have conservatively led us to assume a 0%
inflationary adjustment allowed charges in years 2-4 of these
. projections; and
in
• The Geographic Practice Cost Index (GPCI) (which
is
used
by
Medicare to calculate ambulance fee schedule reimbursement rates)
for Maryland Locality 01 was adjusted from 1.08 to 1.057 in 2009.
In
addition, the limited ePCR data made available by the County also showed a
higher volume of Advanced Life Support - Level 2 (ALS2) transports than previously
anticipated. though this had a negligible (but slightly positive) impact on the projections.
Montgomery
County, Maryland
Updated 2010 EMS Transport Revenue Projections (March 19,2010)
Page 2
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TABLE OF CONTENTS
Executive Summary.... ............................. ................................. ............. ...........
2
I.
II.
Overview............. ........... ........... ....... ..... ........ ........ ....... ............. ............. 4
Methodology and Assumptions ..................................................................
5
A.
Time Intervals ........................,......................................................
5
Estimated Transport Volume ............................................................
5
Transport Mix by Payor...................................................................
5
Transport Mix by level of Service .....................................................
6
Payor Type ...................................................................................
7
B.
C.
D.
F.
G.
Self-Pay Transports.......................... ................. .............. ...............
7
Mileage.......................................................................................
7
Charges..........................................· ........................ ;..................
7
.
Approved Charges........................................................................
8
..Allowables"................................................................................;
9
Patient Care Documentation ............................................................ 9
H.
r.
J.
K.
III.
Revenue Projections ................................................................................ 10
A.
B.
Total Cash Receipts ....................................................................... 10
Average Revenue Per Transport...................................................... 10
Gross and Net Collection Percentages ..............................................
10
c.
IV.
V.
Conclusion................................... ........................................ ................
12
Important Notices ...........................................................
~
.......................
12
Appendix A - Year One Revenue Projections........................................................
13
Appendix
B -
Year Two Revenue Projections ........................................................
16
Appendix
C -
Year Three Revenue Projections ......................................................
19
Appendix
0 -
Year Four Revenue Projections ........................................................
22
Appendix E - EMS Rate Setting Article .................................................................. 25
Montgomery County, Maryland
Updated 2010 EMS
Transport
Revenue
Projections (March 19,2010)
Page 3
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I.
Overview
Montgomery County Fire Rescue Services (MCFRS) is evaluating the potential
implementation of an EMS Transport Revenue Recovery Program. MCFRS has engaged
Page, Wolfberg
&
Wirth, LLC (PWW), a national EMS industry law and consulting finn, to
assist it in this process. Among the tasks with which PWW is charged is the development of
revenlJe projections that might be realized in the event that the revenue recovery program is
implemented. PWW was asked to update these projections in March, 2010. At that time,
some of the first electronic patient care reporting (ePCR) data became available, with the
system having been implemented countywide in January,'2010. We have stated in this
updated report where assumptions were changed based on these data, though
it
must be
noted that two months of data might not be representative of EMS trends in the County.
Nevertheless, where actual data are now available to replace prior assumptions in certain
aspects of the projections, the data will be used instead of the assumptions.
When assessing potential revenues from any proposed health care billing
undertaking,
it
must be remembered that revenue forecasting is both an art and a science;
there is little in the way of published, publicly-accessible data from which meaningful
comparisons to similar jurisdictions can be drawn. Whenever possible, key assumptions
affecting these projections were kept on the "conservative" side. and many such
assumptions are based on our experience in working with EMS systems of all configurations
across the United States. All assumptions made in the generation of these projections will
be stated so that Montgomery County elected officials, policymakers and Fire Rescue
leadership can be guided accordingly.
Our detailed revenue projection spreadsheets for Years One - Four are attached to
this report as Appendices A-D.
Previous revenue projection reports dated January 18. 2008 and November 13, 2008
were also provided to the County. .
Montgomery County, Maryland
Updated 2010 EMS Transport Revenue Projections (March 19,2010)
Page 4
@)
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II. Methodology and Assumptions
A,
Time Intervals
This report provides four
(4)
years of revenue projections. We utilized
2010
Medicare rates as a starting figure for this updated report. The reports are presented on a
Calendar Year (CY) basis. These projections were made on a CY basis primarily because
Medicare (from which the single largest portion of revenues is expected to be derived)
typically adjusts its allowed rates on a calendar year basis, CY projections can easily be
converted into Fiscal Year (FY) projections by taking a pro-rata share of the annual
projections and combining them with the corresponding pro-rata portion of the subsequent
'calendar year's projections.
B.
Estimated Transport Volume
All estimated transport volumes utilized in this report were provided by MCFRS. This
statistic is the key driver in any EMS transport fee revenue projection model. We note that
MCFRS previously utilized a paper patient care reporting approach, which limits both the
accuracy and the quantity of available data from which these projections can be made.
Starting in January,
2010,
the County transitioned to an electronic patient care
reporting system (ePCR). For the purpose of preparing this updated
2010
report, two
,months of
2010
data was made available to PWW for review (January and February
2010).
Although caution should be taken In generalizing a mere two months of ePCR data
(particularly in months where two of the worst weather-related events of the past
25
years hit
the region), the data generally confirm the transport volume estimations made by PWW in
the
2008
reports. For instance, the estimated ALS1-Emergency transport volume in Year
two of the November
2008
PWW report was
12,535,
or an average of
1044.58
transports
per month. According to the MCFRS ePCR data for January,
2010,
the reported number of
ALS transports in January,
2010
was
1029,
a variation of less than
1.5%.
Therefore. the
total transport volume estimates have not been modified in this report.
Modest annual increases in call volume, which can be,expected as population grows,
continue to be assumed in these updated
2010
projections, as they were in the
2008
reports.
C.
Transport Mix by Payor
Transport mix estimates are found on the top of each spreadsheet (Exhibits A-D).
The "transport mix" is the number and percentage of transports by applicable payor type.
Because MCFRS has not previously billed for EMS transport, these payor mix
percentages are estimates which are,
if
anything, designed to conservatively underestimate
revenues.
It
is possible that in actual experience, the ·Self Pay" category (which includes
uninsured patients and patients for whom Insurance cannot be identified) will be lower than
the estimated
28%.
In addition, the possible enactment of federal health care reform
legislation might ultimately reduce the Self Pay category by moving more of the uninsured
into an insured category. Lowering the Self Pay category would move more people into
either the Commercial Insured, Medicare or Medicaid categories;
which
would have a
resulting increase on revenues. However, we believe it
is
best to continue to estimate the
Montgomery County, Maryland
Updated
2010 EMS
Transport
Revenue Projections (March 19, 2010)
Page 5
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payor mix more conservatively and therefore will continue to use the previous payor mix
estimates.
D.
Transport Mix by Level of Service
Within each payor category, we utilized a consistently estimated approach to the
level of service mix (i.e., BLS vs. ALS). In our 2008 report, we utilized an ALS-BLS ratio of
57/43
(Le., 57% ALS, 43% BLS). In the two months of 2010 dispatch data provided by the
County, we note that approximately 60% of all dispatches were categorized as BLS (59.3%
in January, 2010 and 60.3% in February, 2010). These data appear to under-triage the
reporting of ALS conditions at the time of dispatch when compared to our experience in
other jurisdictions. The
57/43
projections used in the 2008 report were conservative based
on our experience in other jUrisdictions, and frankly we were surprised to see such a low
percentage of ALS dispatches in the January and February 2010 data.
Medicare rules reimburse ambulance services at the ALS1-Emergency level for
medically necessary, covered transports when the provider furnishes a qualifying"ALS
Assessment," even if no ALS interventions are provided. However, a prerequisite to billing
for ALS Assessments is a qualifying ALS-Ievel dispatch. Because MCFRS data suggest
under-triage of ALS dispatch conditions, we are revising the ALS/BLS ratio to
45155.
We
are selecting
45/55
because, even though the reported percentage of ALS-Ievel dispatches
are only 40%, there will undoubtedly be a number of calls where the reported dispatch is
condition is BLS but the patient Is found to require an ALS intervention. The revision of
these service mix estimates will have a negative effect on the revenue projections, though
that will of course make the projections even more conservative.
Certainly as more ePCR and CAD data become available, these service mix
estimates can be revisited.
It
is
also important to note that we assigned a small (almost negligible) percentage
(1%) of transports to "non-emergency" levels of service. We recognize that MCFRS is solely
a 911, emergency provider. However, until dispatch protocols are fully integrated with-billing
systems, there
is
a chance that on a small percentage of calls, billers
will
not have the
requisite emergency dispatch information available to them and, acting out of an abundance
of compliance, will code the claims as "non-emergencies." That is why non-emergency
levels of service are included in the model.
We also included the "Specialty Care Transport" (SCT) level of service on the
spreadsheet model, though we did not assign any transports to this category. SCTs are
interfacility transports, which we presume would not be handled by MCFRS, though the SCT
category is included
in
case MCFRS would like to investigate the financial impact of
providing this type of service in the future.
In our 2008 reports we also assumed a relatively conservative 1% for -ALS2" level
transports. This is a more intensive (and higher-reimbursed) level of service that applies
when a patient receives invasive interventions such as endotracheal intubation. We note
that the January/February 2010 ePCR data reported by MCFRS suggest that the actual
ALS2 percentage might be as high as 2.1%. Accordingly, we have adjusted our ALS2
service mix from
1
%
to 2%. A sma" positive impact on revenues will result from this
change.
Montgomery
County,
Maryland
Updated
2010 EMS
Transport Revenue
Projections
(March
19,2010)
Page 6
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E.
Payor Type
There are four payor types utilized in these projections: Medicare, Medicaid,
Commercial/Auto Insurance and
Self~Pay.
As a provider of emergency, 911 services only,
. we assumed that MCFRS will not enter into contracts with Medicare managed care
("Medicare Advantage") organizations or other commercial payors. Therefore, because non­
contracted providers are paid by Medicare Advantage plans for emergency transports at the
Medicare fee-for-service rates, all transports of Medicare Advantage patients are included
in
the "Medicare" category. "Medigap" copayments are also included in the Medicare
category, with an estimate of
52%
of co payments being paid by these Medicare
supplemental insurance pOlicies (UMedigap"). Similarly. the "Commercial/Auto Insurance"
category includes commercial managed care plans, traditional indemnity "fee-for-service"
plans, automobile liability insurance policies, workers compensation payments, and similar
types of commercial or self-insurance.
F.
Self-Pay Transports
In this mode!. we assumed that the County would implement an "insurance only"
billing policy, under which County residents would be billed only to the extent of available
insurance. County residents would not be billed for copayments, deductibles or other
charges unmet by their insurance coverage (in addition, no payment would be collected
from uninsured residents). We assume that 90% of patients in the Self Pay category will be
County residents, and, therefore that only
10%
of the Self Pay category are non-residents.
We further also assume a collection rate of
30%
from the non-resident, self-pay population
in this model.
G.
Mileage
Medicare and most commercial payors reimburse ambulance services for "loaded"
miles, i.e., for those miles which the patient is on board the ambulance, from the point of
pickup to the closest appropriate destination. We made the assumption, given the
geography, population centers and population density of the County, that the average
transport would include five
(5)
loaded miles. As with all assumptions in this model, this
particular assumption can be modified to determine the resulting impact on revenues if
desired.
H.
Charges
We included a proposed schedule of charges for each level of service. Of course,
the selection of a rate schedule is entirely up to County policymakers and is typically a factor
of many economic and political considerations. However, the County's charges should,
without question, be a fair amount higher than the prevailing Medicare-approved rates,
because, under Federal law. Medicare pays the
lesser
of the approved Medicare fee
schedule amount
or
the provider's actual charges. In other words, If a provider charges
less
than the applicable Medicare fee schedule payment, Medicare does not "make up the
difference." It becomes legitimate revenue that is irretrievably lost and cannot be recovered
from any other source. Establishing rates that are comfortably above the approved
Medicare fee schedule amounts is a paramount consideration in the establishment of any
ambulance rate schedule.
Montgomery
County.
Maryland
Updated 2010 EMS Transport Revenue Projections (March 19, 2010)
Page 7
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We assumed an annual increase of
5%
in the County's ambulance rate schedule
(i.e., charges) in years
2-4.
An
article dealing with ambulance rate-setting that the County might find helpful
is
attached to this report as Appendix E.
I.
Approved Charges
For each payor category (except, of course, for self-pay), we estimated an "approved
charge." This is the amount that Medicare, Medicaid or commercial insurers will approve for
the particular level of service. Medicare rates are established annually according to a
national fee schedule and vary slightly based on geography (due to the incorporation ofthe
"Geographic Practice Cost Indicator" (GPCI) from the Medicare physician fee schedule into
the Medicare ambulance fee schedule. The
2008
projections assumed a GPCI of
1.08,
which was at that time the applicable GPCI for Maryland Locality
01.
For purposes of this
2010
updated report, we note that the Medicare approved charges reflect a GPCI for
Maryland Locality
01
that was slightly adjusted in
2009
by Medicare to
1.057.
This will have
a negligible, though slightly negative effect on the projections.
We also note that in our
2008
report, we used
2008
approved Medicare charges as
the "starting point" upon which all subsequent years' projections were based. For purposes
of this updated
2010
report, we are using
2010
approved Medicare charges as the starting
point, which are approximately
3.4%
higher than they were in
2008.
With regard to the GPCI, a portion of the Medicare' Ambulance Fee Schedule is
adjusted to reflect geographic cost differences in providing ambulance services in different
parts of the country. Because Medicare found it inefficient to develop a national cost index
specific to measure the different costs of providing ambulance services across the United
H
States, it simply "borrowed a geographic cost formula it had already developed for the
Physician Fee Schedule and incorporated into the Ambulance Fee Schedule. That fonnula
is the "Practice Expense" portion of the Geographic Practice Cost Index (GPCI}from the
Physician Fee Schedule.
Medicare rates have historically increased annually by a modest inflation factor. In
2007
J
Medicare announced an Ambulance Inflation Factor (AI F) of
2.7%
for dates of service
In CY
2008.
A
5%
AIF was adopted for dates of service in CY
2009.
Since the adoption of
the Medicare ambulance fee schedule in
2002,
there has consistently been a positive AIF.
Therefore, we conservatively assumed a
2.5%
Medicare AIF for years 2-4 of the projections
in our
2008
report. However, since the AIF is based on a consumer price index, and
because of deterioration in the overall economy, Medicare adopted a
0%
AIF for
2010.
In
addition, as of December
31,2010,
some temporary Medicare ambulance increases expired
and were not legislatively renewed. Finally, the pending health care refonn legislation
WOUld, if enacted, result in Medicare cuts over
th~
next several years, though ambulance
reductions are not specificallY targeted. Nevertheless, we are modifying our projections to
presume a
0%
AIF in years
2-4.
We do not believe it to be likely that there will be continued
0%
growth in approved charges, but in order to keep these projections as conservative as
possible, we are assuming
0%
inflation in the
2010
base rates for years
2-4
for the Medicare
and Commerdal categories. As in our
2008
reports, we assumed no annual increase in
Maryland Medicaid rates, which are a flat
$100
(ALS or BLS) with no allowance for loaded'
mileage.
Montgomery County, Maryland
Updated 2010 EMS Transport Revenue Projections (March 19, 2010)
Page
8
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For commercial insurers. we assumed an overall percentage of approved charges of
67%. It is very difficult to predict with certainty how this payor class will respond to the
implementation of an EMS billing program. Some commercial insurers pay 100% of billed
charges for emergencies without question; others take aggressive stands against paying full
charges and often wifl pay some arbitrary amount that they deem to be "reasonable.
If
We
believe. that an overall figure of 67% of charges takes these variables into account.
The difference between MCFRS's charges and the payor-"approved charges" are
ordinarily not collectible. With regard to Medicare, this is considered to be "balance billing"
and is prohibited by Medicare law. These mandatory "write offs" are referred to as
·contractual allowances."
J.
"Allowables"
For each payor category, we included an estimated
A
a l1owable" percentage. This
can be confusing, but an Mallowable" percentage is the percentage of the payor-approved
charges that MCFRS can expect to be paid. In other words, once Medicare applies the
Mcontractual allowance" referenced above and determines the MapprOVed charge," Medicare
only pays the provider 80% of that approved charge. The remaining 20% is a copayment.
which is the responsibility of the patient. As state above, in this model, we assume a
Medicare copayment collection rate of 52% from "Medigap" insurers, which generally pay
these copayment amounts,without regard to residency status, automatically after Medicare
makes the primary payment.
.
We utilized a 100% "allowable" figure for Medicaid and commercial payors, but,
again, remember that this is
not
the same as assuming a 100% "collection rate" from these
payors. This merely means, to use Medicaid as an example. that Medicaid can be expected
to pay 100% of
its approved charge
for ambulance services (currently. $100) and
not
100%
of MCFRS's actual charges.
We utilized a collection rate of 30% for self-pay accounts O.e., the estimated 10% of
the self-pay category that are non-residents}, again reflecting the likely adoption of an
"insurance only" bifling policy for residents.
K.
Patient Care Documentation
One key variable not reflected in these projections is that EMS billing is only as good
as the field documentation that supports
it.
For instance. EMS providers must thoroughly
and accurately document information necessary to support proper billing deciSions,
including patient condition, treatment and other clinical factors, and must collect signatures
of patients (when possible) or other authorized signers at the time of service. The County
should provide periodic documentation training for all EMS personnel in the County to
ensure that legally defensible and compliant documentation is completed in all cases. '
Inadequate or inaccurate completion of patient care reports can negatively impact projected
revenues. The County's January, 2010 implementation of an electronic patient care
reporting {ePCR} system will undoubtedly be a significant benefit in producing quality EMS
documentation as well as reliable EMS data.
Montgomery County, .Maryland
Updated 2010 EMS Transport Revenue PrOjections (March 19, 2010)
Page 9
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111. Revenue Projections
A.
Total Cash Receipts
We have broken down projected cash receipts by each payor, and then calculated
an overall total. Year One revenues are projected at approximately
$14.1
million. Years
Two..,.. Four projections are approximately
$14.6
million,
$15.2
million and
$15.7
million,
respectively. Again, County policymakers and budget officials must take into account the
assumptions and limitations discussed above when budgeting anticipated revenues from the
EMS transport fee program.
B.
Average Revenue Per Transport
For each year, we project an Overall Projected Average Revenue Per Transport.
This is a simple calculation of gross cash receipts divided by total transport volume in a
given year. This takes into consideration all revenues from all payor sources and all levels
of transport, but it is a helpful "global perspective" of billing performance.
It could be argued that the Average Revenue Per Transport estimates, which are
approximately
$247,
are optimistic. Of course, this is directly related to the rate structure
that the County's policymakers ultimately decide to put into place. Nevertheless, we have
compared Montgomery County to other jurisdictions and believe there are some compelling
reasons why these Average Revenue Per Transport estimates are reasonable.
First, Montgomery County has a comparatively high median household income.
According to U.S. Census bureau statistics, Montgomery County median household income
in
2004
was
$76,957,
compared with
$57,019
for all of Maryland. This puts Montgomery
County in the highest median household incomes in the United States. Given this statistic
alone, some could argue that our Average Revenue Per Transport estimates are
too
conservative.
Second, we compared these Average Revenue Per Transport Estimates with other
jurisdictions in the U.S. (using data available
to
us In
2008).
While these data do not always
take into account the same factors, and thus creates a potential problem of comparing
"apples and oranges," these data can be informative. For instance, in Dayton. Ohio
(according to data obtained from that City's ambulance billing contractor), a city with a
median household income of
$34.978
and approximately
16.000
EMS transports per year, .
the average revenue per transport was
$217.
On the other side of the spectrum, in Nassau
County, New York, with a medial") household income
($80,647)
comparable to Montgomery
County's, and
42,106
annual transports, the average revenue per transport reported by their
billing contractor is $380. We therefore believe that the Average Revenue Per Transport
estimates in this revenue projection are realistic, again, depending upon the rate structure
implemented by Montgomery County.
C.
Gross and Net Collection Percentages
One common EMS billing measurement is the "collection percentage."
Understanding your projected collection percentage is vital when evaluating the ongoing
effectiveness of an outside biHing contractor.
Montgomery
County,.
Maryland
Updated
2010
EMS Transport
Revenue
Projections
(March 19,2010)
Page 10
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When measuring collection percentages, it is critical to distinguish the concepts of
"gross" versus "net" collection percentages. Gross collections look at actual cash receipts
divided by total charges. Net collections, on the other hand, look at actual cash receipts
divided by the amount the provider is allowed to collect for the particular service, after the
mandatory contractual allowances required by law are deducted. While both of these
measurements of billing performance have their weaknesses, the use of a gross collections
percentage as a measurement of billing performance is highlyartificial.
Consider the following example. Say that an agency
charges
$600 for a BLS
emergency call. Now, say that Medicare only
approves
$250 for a BLS emergency. Under
the law, as discussed above, your agency must write off the difference between its charge
and the Medicare approved amount. In this example, that "contractual allowance" would be
$350. Under a gross collections approach, assuming you were fully paid by Medicare, and
succeeded in collecting the 20% patient copayment (which likely would not be the case with
Montgomery County residents), you would only have collected 41.7% - or$250/$600.
However, under a net collections approach, your agency collected everything it was allowed
to collect under the law, so your net collection percentage on this claim was 100%.
The gross vs. net collections approach - as shown in this example - illustrates how
relatively easy
it
is to "manipulate" your "collection percentage" merely by adjusting your
actual charges. For instance, say the ambulance service in our example above decides to
increase its BLS emergency charge from $600 to $800. Now,
its
gross collection
percentage on the sample claim drops to
31
%, or $250/$800. The amount approved by
Medicare doesn't increase merely because your charges increased, so the result is a drop in
your gross collection percentage. However, the amount of cash you actually received .
stayed the same. So, on paper, your billing operation, when measured by a gross collection
percentage, looks like its performance is getting worse, when actually
it
may be unchanged,
or even better when you look at actual cash received. The reverse of this example is also a
potential pitfall: lowering your charges would have the result of artifiCially
increasing
your net
collection percentage, while not necessarily improving your cash receipts, thus perhaps
making billing performance seem better than it is.
We projected both gross and net billing percentages for purposes of this report. The
estimated gross collection rates are, conservatively, lower than reported national averages.
For instance, the Jems 200 City Survey in 2007 reported that the average gross collection
percentage for public-sector EMS agencies was
55.9%.
Our gross collection percentage
estimates for Montgomery County run in the 50-51
%
range.
It Is likely that lower gross collection percentage estimates do result in higher
net
collection percentage estimates. This is because a lower gross percentage means that
more of the "unallowed" charges have already been written off, leaving more "pure" and
collectible revenue on the table. Therefore, one would expect that the
net
collection
percentages would be higher. There are no meaningful, national net collection data
reported of which we are aware. Nevertheless, again, because the net collection percentage
represents income to which the County is legally and legitimately entitled, and already
factors in the allowed amounts, contractual write offs and very low estimated self-pay
percentage, we believe that the net collection percentages represent realistic expectations
for a billing contractor to achieve for a county as affluent as Montgomery County, Maryland.
Montgomery County, Maryland
Updated 2010 EMS Transport Revenue Projections (March 19.2010)
Page 11
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IV. Conclusion
Though based on many variables that are subject to change, these EMS billing
revenue projections demonstrate that there are substantial revenues that could be realized
were Montgomery County to implement an EMS transport fee. Of course, the decision on
whether or not to do so, and on how any realized revenues would be allocated, is up to the
sound discretion of the County's policymakers.
V. Important Notices
These projections are estimates only and not a guarantee of financial performance.
All projections are based in large part upon data supplied by the client. Estimating revenues
from the provision of any health care services involves many variables that cannot be
accounted for in a revenue estimate and that are beyond the control of the estimator. The
conSUltants have stated all key assumptions and have provided a relational spreadsheet
that allows the client to modify any assumptions that it finds necessary. The client is
responsible to verify all assumptions that affect these projections and to modify them when
necessary. This estimate does not constitute the rendering of professional accounting
advice, and does not take any expenses into account. Revenue projections can also be
impacted by changes in applicable reimbursement laws and regulations. The consultants
are not responsible to update this analysis unless asked to do so by the client. Finally, the
decision to undertake EMS billing rests entirely with the client, and the client bears all
responsibility for appropriate and compliant billing operations ..
Montgomery County, Maryland
Updated 2010 EMS Transport Revenue PrOjections (March 19,2010)
Page 12
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Appendix A
Year One Revenue Projections
Updated
03/19/10
Montgomery County, Maryland
Updated 2010 EMS Transport Revenue Projections (March 19, 2010)
Page 13
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',','
Est. Medicaid
@)
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:'.,".
J"
,.
.•...
....
;.;..~
.•. .t.
:",
Total Non­
Total
Sllf.payl
ResIdent Self·
Charges
Pay Charges
5
®
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Appendix B
Year Two Revenue Projections
Updated
03/19/10
Montgomery County, Maryland
Updated 2010 EMS Transport Revenue Projections (March 19,2010)
Page 16
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I';\"~
.'. . ".' .
Est.
%
of
®
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Est
Non­
Resident
®
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Appendix C
Year Three Revenue Projections
Updated
03119/10
Montgomery County, Maryland
Updated 2010 EMS Transport Revenue Projections
(March
19, 2010)
Page 19
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.!'.",.':.:".
Est. Medicaid
®
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_
..
,._-_
.....
__
...
'
..
,.
®
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.Appendix D
Year Four Revenue Projections
Updated
03/19/1
0
Montgomery County, Maryland
Updated
2010
EMS Transport Revenue Projections (March
19,2010)
Page
22
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,
....
:.
",~,:;:
....
,
..
Medicaid
I
Est.
Medicaid
®
 PDF to HTML - Convert PDF files to HTML files
".'
,.
;,:
..
;.
Total Non­
Total Self·Payl Resident
Self·
Chargelf
Est Non­
Resident
@)
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Appendix E
EMS Rate Setting Article
Montgomery County, Maryland
Updated 2010 EMS Transport Revenue Projections (March 19,2010)
Page 25
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How
SHOULD YOUR AMBULANCE
SET
ITS
RATES?
SERVICE
CONSULT
lfyour EMS organization charges lor its
serv~
above that approved amount (except for
his
I"""~
ices, you probably spend days, weeks or or her deductible-lf
applicabl~r
co-pay-
~!,
months leaming all the complex rules about ment). So you must write off the difference
billing. But
If
you ask administrators how between
your
rates and the MedIcare fee-
they set their rates, many will provide an schedule rates.
answet that
is
only slightly more advanced
KnoWing these contractual allowance
than "We pull them out of thin air.
to
However. amounts will prove crltical
in
measuring.
whether your service is pubHc, private or your billing performance.
Many
EMS organi­
not-for-profit, proper rates are crucial to your zations focus on ca:lculating collection per­
organIzation's overall success, and a rate-set- centages, but be sure Yo1;l measure periorm­
ting strategy that complies with the law is ance consistently. Gross collection
p~cent­
ages measure the amount collected versus
INCISIVE ANALYSIS OF
fundamental.
First and foremost, start by taking accurate the total amounts billed. Net collection '
EMS LEGAL TOPICS
measure of your organization's costs. TWs percentages-which generally provide a
Includes an assessment not only of such big- more meaningful measurement of bllling
ticket line items as personnel, vehicles, performance-evaluate the total amount col­
equipment and insurance, but also an assess- Iected versus the total amounts billed,
ment of
fuel,
maintenance, heat, electricity "thlnus the contractual allowances that the
and all other overhead elements. Don't forget Jaw requires you to write off.
depreciation; part of your revenues must go
Another fundamental decision your organ­
toward
replacing capital assets
in
the future izatlon must make With :regard to rates is
as well as to support current
op~ations.
whether It
will
bill for services on a bundled
These costs must
be
amortlzed-or spread or an unbundled. basis. A service using bun­
over your expected call volume--and must dIed billing rolls
all
charges for supplIes,
allow for the possibility of bad debt or uncol- "services, etc., Into one base rate charge
(typ­
lectible accounts. so your rates
reflect
the lcally billing only m11eage separately). A
true costs of doing bUSiness.
service that uses unbundled billing may ( )
Next, consider whether" your organlzation charge separately for such things as oxygen,
operates
in
a rate-regulated environment. disposable supplies, wait time and extra
While only a small handful of states (e.g., attendants.
Arizona, Utah and Connecticut) regulate
Though Medicare no longer pays on an
rates at the state level, some local govern- . unbundled basis and considers
all
these
ments may establish ordinances 6r laws that ancillary charges to
be
part of.the provider's
set ambulance rates or establish maximum base rate, other payers may still recognize
fee schedules. Even
if
your locality has no these
separ~te
charges;, So your service
such local law or ordinance, some contracts should consider the:ramifications of charging
between ambulance services and the areas those payers on a bundled versus unbundled
they serve Include rate stipulations, so be basis before decidiQg how to bill them.
sure to consult your municlpal contracts for
Important:
Remember when setting your
any
appllcable rate restrictions.'
rates that Medicare will pay only the lesser
An
ambulance service that Is not rate- of either the approved fee scheduie amount
regulated generally has a significant degree or the amount, you blil. In other words,
if
you
of flexibility In setting Its rates.
In
fact, charge less than the .Medicare-approved
your organization can price
its
services as It amount, Medicare
will
pay only up to the
sees fit and can generally raise those rates at amount of your bill. For that reason, and
any time.
because Medicare 'is the single largest payer
Of course, not every payer will reimburse for most ambulance services, you should
you for 100% of your bill, so you must
ensure
that your rates. are higher than the
also factor these mandatory write-offs Medicare-approved amounts for your varl­
(called contractual allowances) into your
OllS
levels of
se~ce;
otherWise.·your agency
rate-settlng. Medicare, for Instance.
will
only leave$
h~git~mate
revenue on the table.
pay amounts approved under the
Many EMS admlnistrajPrs
mistakenly
'J
Ambulance Fee Schedule, and the patient believe that
an-
ambulance service mmrt _'"
cannot be ubalance b1l1ed" for anything .charge all payers the
exact
same rates. This
LEGAL
This column is
no!'
in~~nd.d
as legaf advia or legal counsel
ill
;he
coniine::;
of'
all aWlm'r­
di..,t reladonship.
Consult an
attOrney for
sp.ci/ic legal adw.:!
conceming
)'Qur
situation.
2
FEBRUARY 2007
II
EMS INSIDER
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r
generally is not the case, however:
Ambulance services oIten charge different
rates in different circumstances.
~
For instance,
if
your organization partici­
~pates
in a managed care network as a .coo­
tracted provider, you might have a rate
schedule in y,our agreement with a partlcular
HMO or health plan that is lower than yout
retail rate schedule.
In
some cases, r;ltes
charged to
a
facility, such as
a
hospital or
:nursing home, also
may
differ
from
;your
agency's retail rates.
. Another
Important
reminder:·,
Although
providers generally
may
charge
different
rates
under various
cir·
cumstances,
remember that
your rates must
comply
with
such
laws
as the feder­
al
anti-kickback
. statute.
the
EMS Insider
in recent years.)
A
fmal caveat: Setting your rates should
not be a group exerdse.
In
other words, to
avoid raising issues under state or federal
antitrust laws, your organization must not
establish its rates based on discussions or
agreements
with
y(;mr competitors pr
with ..
other services
In
your area. This kind of c:on­
duct could be seen as price fIxing and can
have serious legal consequences.
Although. you.
will
need to consider:
other Issues when setting rates, these are
the. primary conslderatiQns. Within
.the.
broad parameters of state and federaUaws,
For example,
if
you discount the
rates'you
charge
a facility,
It
CQuld
appear that those discounts were given in
exchange for the facility's referral of
Medicare patients to your service, which
)could constitute an megal inducement and
l J
give rise to a violation of the AKS. (Much has
been written about the AKS and
its
applica­
tion to ambulance services 10.
pages of
Although
providers
generally
may
charge
different rates
under various
circu~stances,
remember
th':\t
your rates
must
comply with
~uch
laws
as the
federal anti-kickback
statute.
most ambulance services have great flexibil­
ity In establishing rates and charges for their
services.
Your organization
wlll
be best served
if.
you give your rates
the
thought and !ltten­
tion.
they
deserve instead of merely pulling
them
out of thin
air.
r
the
Help OSHA Revise Its Emergency-Response Regulations
The Occupational Safety and Health Administration currently covers emer­
gency respondersafety as
part
ofseveral standards, some of which are decades
old
and
out
of
date.
Consequently, OSHA
is
woricing to develop
a
single, uni·
fied'set of
revised
regulations, and is solidting input from
the
emergency­
response community
by
May
1
on what the revised regulations should include.
For more
information
and/or
to
contribute
to
this
effort,
visit
www.dot.gov/oshajregs/unified
agem:fa/2127.htm.
Wait to Respond to AMR, IAFC Advises Fire Departments
The International Association ofFiI'l!' Chiefs on Jan.
4
asked tire departments
to
hold off. on responding
to an American Medical Response sdlicitation
to
EMS
providers nationwide
to
agree
to
provide ambu­
lance services during large-scale disaSters ·until the IAFC and the Federal Emergency'Management Agency
can identifY tfthe
fire
service
can till the
potential need," According
to
IAFC, FEMA
"h;;tS
placed
a
hold on
this
initiative until
it can
review
the work
and
recommendations
of
the [1AFC]
Mutual Aid
System
Task
force.
u
JAFC
predicted
that
the
association and
FEMA
would
be
able
to
"resolve this
issue
and proviae
additional
gu
idance by February
20(17."
For more infonnation,
visit
www.iati:.
org or csntad:
Lucian
Deaton,
lAFC EMS
~ager/govem
menbJ
relations
at
Ideaton4i'iafc..org.
EMS INSIDER
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FEBRUARY 2007
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