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HomeMy WebLinkAboutFiremed Financial Reports & User Fee Study/11-21-94 APPROVED BY CITY COUNCIL ,x 2b GG � 19 M Y CLERK REQUEST FOR CITY COUNCIL ACTION Date: November 21, 1994 Submitted to: Honorable Mayor and City Council Submitted by: Michael T. Uberuaga, City Administra r Prepared p ed by. Michael P. Dolder, Fire Chief Subject: REVIEW OF FIREMED FINANCIAL REPORTS AND CONSIDERATION OF A LIMITED INCREASE IN CERTAIN FIREMED USER FEES Consistent with Council Policy? [X] Yes [ ] New Policy or Exception Res (i '0- Statement of Issue, Recommendation,Analysis,Funding Source, Alternative Actions,Attachments: STATEMENT OF ISSUE: 1. Consideration of the FireMed Program's financial report. 2. Consideration of adjusting user fees to offset increased costs associated with providing emergency paramedic services and a modification in ambulance fees charged to non-FireMed members to prevent further subsidy from FireMed membership revenues. RECOMMENDATION: 1. BY MOTION, accept the FireMed Program's financial report as submitted by staff. 2. BY MOTION, approve resolution# 64-f2 authorizing revised user fees for Fire Department provided Advanced Life Support (ALS), Basic Life Support (BLS) and emergency ambulance transportation for non-FireMed members. ANALYSIS: The Fire Department has provided paramedic services since 1974. On July 1, 1990, the City instituted user fees for persons requiring emergency paramedic and ambulance services. As an alternative to paying for these services directly, residents may join the City's FireMed program by paying a$36 annual membership fee. These fees are retained by the FireMed Enterprise Fund and are used to pay for an expanded emergency services program. Fees also offset the nonreimbursed cost of services provided to its members. Request For City Council Action FireMed Financial Report/User Fee Study Page 2 As of 1994, over$7,000,000 in revenue has been collected by FireMed for emergency paramedic and ambulance services supplied by the Huntington Beach Fire Department. From this amount, over $550,000 has been transferred back to the General Fund to offset indirect overhead charges identified by the MSI study. FireMed Financial Report The Fire Department staff assembled the financial information in generally acceptable financial formats. The statements included in Attachment#1 compare various revenue and cost centers from one period to another. Until recently, the City's fiscal year has remained constant, July 1 through June 30. Unfortunately, the recent change in the City's fiscal year would make a comparative financial report for July, 1993, to September 30, 1994, erroneous. However, once the data is assembled and analyzed by staff, a single fifteen month financial report for this period will be forwarded to the City Council. The financial statements included in Attachment#1 are: • Balance Sheet -period ending June 30, 1993 • Operating Statement- period ending June 30, 1993 • Operating Statement -three year period ending June 30, 1993 In addition, summaries of the accounts receivable, collection rates and membership activity have been provided. The FireMed Financial Report indicates FireMed has significantly contributed to the City's Paramedic Program. Each year over $2,000,000 is added from sources outside of the City's General Fund. This added revenue base from user fees and voluntary membership enables the Fire Department to improve services without utilizing the General Fund as a source of revenue. Additional paramedics, equipment, ambulance services, community programs and General Fund/MSI overhead costs are paid directly by the FireMed Program. Over 50% of all City paramedic and ambulance services are now paid by FireMed. The Program's ability to bill patients or their insurance company permits FireMed to maintain a net worth in excess of$1,000,000. This amount is retained by the Program in the form of accounts receivable and equipment. However, the delay in receiving payment for services provided contributes to the Program's $200,000 negative cash flow. In addition, increased expenses and short term operating losses affect this balance. Although the FireMed Program maintains a significant net worth, the negative cash flow should be corrected as soon as possible. Short term borrowing from the General Fund does not fix the long term cash flow problems. As shown in Attachment#2, staff recommends a limited increase in user fees to correct this negative cash flow condition. Request For City Council Action FireMed Financial Report/User Fee Study Page 3 These short term losses occur despite aggressive efforts of FireMed staff. If fact, the collection rate has increased to over 60% of the total user fees billed. This amount has continued to improve during 1994. The collection rate for this year is estimated to be in excess of 65%. This collection rate is improving despite payment restrictions imposed by insurance and government programs. Total program revenue, including voluntary membership has risen as well. Annual Program revenue has increased by $590,000 since the program started in 1990. New billing and membership strategies continue to be pursued in order to optimize the Program's potential. FireMed User Fee Study As result of the FireMed Program financial statements prepared for the Fiscal Year ending June 30, 1993, it was determined that a review of user fees should be conducted. The financial statements revealed a cumulative FireMed operating loss.' Since 1991, staff has been attempting to mitigate personnel and General Fund overhead cost increases. These increases were passed onto the FireMed program without a rate increase. Staff has been successful in increasing program revenue by improving the collection rate of user fees. In 1991, the collection rate was just 5 1% for all user fees billed. By 1993 the rate had risen to 60%. Concurrently, overall program revenue increased from $1,412,135 for FY 1999/91 to $2,002,497 for FY 1992/93. Unfortunately this $590,362 improvement in total program revenue has not been sufficient to meet program cost increases. As an alternative to reducing paramedic services or requesting funds from the General Fund, the Fire Department has conducted a study of FireMed user fees to determine if these fees could be adjusted to meet the cash shortfall. The areas considered by this study include: 1. Review of FireMed revenue and expenses 2. Comparison of FireMed user fees with other cities or companies providing similar services 3. User fee equity-FireMed Members&Non-FireMed Members Although the FireMed Program currently has more assests than liabilities, a 14:1 ratio, expenses continue to exceed current revenue. At the end of the 1992/93 fiscal year, the cummulitive expenses outpaced revenue by $202,307. The cumulative total of operating and General Fund cost increases is $447,635. It should be noted that salary and benefit costs equal 48% of the Cost Center 1991/92 1992/93 Total Increase FireMed operating budget. Personnel $794,880 $1,023,299 $228,419 Operations 702,384 756,868 54,484 The wage increases granted General Fund/MSI 35,268 200,000 164,732 in 1991, along with the Total/Net Change $1,532,532 $1,980,167 $447,635 General Fund/MSI overhead charges, were passed on to FireMed without an adjustment in the Program's user fee schedule. Request For City Council Action FireMed Financial Report/User Fee Study Page 4 The financial report used to complete this study is based on data obtained from Fiscal Year ending June 30, 1992/93 and is included in Attachment#1. Increases in FireMed costs necessitating an adjustment in user fees are based on increases from personnel and General Fund/MSI overhead charges. These cost increases occurred prior to the implementation of the Fire Department's Ambulance Program. The City's General Fund Ambulance Program which began on November 1, 1993 has not increased the cost of ambulance services to the FireMed Program. Staff conducted a survey of all Orange County cities and private ambulance services. Rate comparisons for Advanced Life Support (ALS) paramedic, Basic Life Support (BLS) first responder and ambulance transportation fees are included in the User Fee Report (Attachment#2) on pages 6 and 7. The rate comparisons indicate that Huntington Beach currently has the lowest ALS/BLS and ambulance fees of any city in Orange County. The question of user fee equity was also addressed in the report. Currently, FireMed members are paying a disproportionate share of the expanded paramedic program financed by FireMed. The User Fee Study concluded when the total revenue received from FireMed members is compared to the amount received from non-members, FireMed members as a group pay more than their non-member counterparts. In 1992/93, FireMed members subsidized $582,600 of program costs provided to non-member patients. Proposed FireMed User Fee Schedule Staff has included a recommended user fee schedule. The complete user fee resolution is included in Attachment#4. The resolution, when approved by the City Council, would provide a two tier rate structure for paramedic and ambulance fees. The significant factors indicated in the report that a limited increase in user fees are necessary include: • Current rates do not provide sufficient revenue to meet program expenses. • Program costs have increased by $447,635 since 1991. • Existing FireMed user fees are the lowest in Orange County. • Patients who are FireMed members, Medicare or Medi-Cal participants would NOT be affected. The Fire Department is recommending an adjustment in the paramedic fees to offset previous increases in personnel, operational and general overhead costs of the FireMed program. In addition, non-FireMed member ambulance fees should be adjusted to the countywide rate that was approved by the Orange County Board of Supervisors in June of 1994. This adjustment in the non-FireMed rates will provide an equitable distinction between those who provide on-going financial support of the program from those who do not. Request For City Council Action FireMed Financial Report/User Fee Study Page 5 The two tier rate proposal is as follows Fee T Ex isting xistin R P d Rate Rate ro ose mb ?'sr€ ...... .........::::::::::.;:.;:.;: -Household $36.00 $36.00 -Low Income Household 18.00 18.00 -Business/each 10 employees 36.00 36.00 .....................:::Fiftemrc.: .....:... :::::.:::::::::.::_::::::::::::::::::::.:::::::::::::.:::::::::::::::::::::::::::::.:::::::::::::::... ..........::..:..:....:......... ............................................................................................................................ -Basic Life Support (BLS) 100.00 125.00 -Advanced Life Support (ALS) 150.00 200.00 - Ambulance Base Rate (Emerg) 190.00 190.00 -Mileage 8.00 8.00 -Night Call 30.00 30.00 - Oxygen 30.00 30.00 - Standby 22.00 22.00 -Medical Supplies (Expendable) 10.00 10.00 -Basic Life Support (BLS) 100.00 150.00 - Advanced Life Support (ALS) 150.00 250.00 - Ambulance Base Rate (Emerg) 190.00 242.75 -Mileage 8.00 10.05 -Night Call 30.00 40.90 - Oxygen 30.00 40.90 - Standby 22.00 29.20 -Medical Supplies (Expendable) 10.00 13.30 FUNDING SOURCE: FireMed User Fees -Non-Member rate increase collected by FireMed Enterprise Fund. Revenue collected primarily from insurance companies, Health Maintenance Organizations (HMOs) and government healthcare programs. If recommended action is adopted, no General Fund revenue would be required to maintain existing level of paramedic services. ALTERNATIVE ACTIONS: 1. Increase All FireMed user fees to maximum Orange County fee schedule. 2. Increase FireMed user fees at a level less than the proposed rate schedule. 3. Reject the proposed fee schedule and transfer three(3) firefighter/paramedic positions from FireMed to the General Fund -- increase cost to the General fund - $250,000 annually. 4. Reject the proposed fee schedule and reduce paramedic program by three (3) firefighter/paramedic positions and reduce total Fire Department paramedic units by one (1) paramedic engine company. Request For City Council Action FireMed Financial Report/User Fee Study Page 6 ATTACHMENTS: 1. Attachment 1 -FireMed Financial Report 2. Attachment 2 -FireMed User Fee Study 3. Attachment 3 -Request for Ambulance Rate Increase - Orange County Ambulance Association - Orange County Board of Supervisors -Rate Increase Approved 4. Attachment 4 -Resolution establishing revised FireMed user fees. .�J .fee ; 3 �J-, City of Huntington Beach Fire Department Attachment 1 : FireMed Financial Report Huntington Beach City Council Meeting November 21 , 1994 HUNTINGTON BEACH FIRE DEPARTMENT FireMed Financial Report For Fiscal Years Ending 1991, 1992, and 1993 Presented to Huntington Beach City Council November 21, 1994 Prepared by FireMed Program Huntington Beach Fire Department i • Table of Contents Section Page Introduction.......................................................................... ..............3 Program Goals Operational.................................................................................4 Financial.....................................................................................5 Financial Statements Overview....................................................................................7 BalanceSheet...........................................................................10 Operating Statement--Ending June 30, 1993.........................13 Operating Statement-- 3 Year History....................................15 Accounts Receivable and Collection Current Balance, User Fees Billed and Collections.................16 Aging, Collection Rate and Collection History.......................17 Voluntary Membership Revenue Analysis of Membership..........................................................18 Program Summary............................................................................20 FireMed Financial Report Page 2 Introduction e FireMed program is pleased to submit this report to the Huntington each City Council for fiscal year ending June 30, 1993. Staff believes this report is an accurate summary of the FireMed program's financial performance. Data used to compile this report is based on information obtained from the City's Administrative Services Department as well as statistical data maintained by the FireMed Program. As a result of the change in the City's fiscal year, a comparative 1993/94 twelve month report has not been provided. A separate fifteen month financial report for the period of July 1, 1993, through September 30, 1994, will be prepared when all data has been reviewed and audited by staff. This report includes balance sheets, operating statements, accounts receivable and collection history. Where possible, explanations have been provided for any significant event or change which may effect the program's performance. Staff welcomes comments and questions from the community. Public support of this lifesaving program continues to improve paramedic services for those who live or work within the City of Huntington Beach. FireMed Financial Report Page 3 0 • Program Goals Operational Goals The Huntington Beach Fire Department instituted its FireMed Program in 1990 in order to attain the goal of faster paramedic response times for medical emergencies. At the time the program was instituted, paramedic responses were achieved within five minutes for 50% of all medical aid incidents. The stated goal at the outset of the FireMed program was to use FireMed revenues to hire additional personnel so that a paramedic response time of five minutes could be achieved for 80% of the medical incidents. This five (5) minute response standard was developed to comply with the Growth Management Committee's recommendations made to the City Council during the late 1980's. As of 1994 Paramedic Responses Time to Arrival five minute 1992/93 response times �� r "PFF ,.mutes % are achieved in Q 60% of all medical aid , ,aa Source: Huntington Beach incidents• Fire Department GOAL4 Increase The Number Of Paramedic Units Paramedic response times play an important role in patient survival rates. In cases where it takes paramedics longer than 5 minutes to arrive on scene, less than 50% of the patients will survive. Other studies conclude that for each minute it takes for paramedics to begin their lifesaving procedures, seven percent(7%) fewer patients survive. GOAL4 Provide Citywide CPR Training For FireMed Members National and local studies agree that other factors contribute to patient survival. Recently, the Orange County Emergency Medical Services Agency conducted research with Kim Salnas, M.D., where it was determined that patients receiving early Cardiopulmonary Resuscitation(CPR) from bystanders have a greater chance of survival. In fact, the study concluded that bystander CPR may increase patient survival rates by as much as 25%. To meet these goals,the Fire Department has incorporated changes within the City's paramedic system. Since its inception in 1990,the FireMed Program has subsidized over $7 million dollars in emergency medical services to the City. FireMed Financial Report Page 4 0 0 Program Goals Funding is obtained through the FireMed voluntary membership program and related user fees. These funds continue to enhance emergency prehospital care within the City of Huntington Beach by: • increasing the number of paramedic units • funding nine firefighter-paramedics positions • improving paramedic response times • paying for a city operated ambulance system • providing CPR classes to FireMed members In addition to FireMed services,the program will keep a medical history of members for paramedic use during emergencies. FireMed also initiated a program called Operation Hug in which a stuffed animal is used as a method for comforting children faced with distressing injury to themselves or a loved one. During 1995 it is hoped that sufficient funding will be available to complete the Fire Department's plan to place a paramedic unit in every fire station. This is expected to boost paramedic response time percentages. This essential system design is a prerequisite if the 80%response time standard will be met. Additional program funding must be obtained through competitively priced user fees and an expanded FireMed membership base if the Fire Department is expected to meet its goals. Financial Goals The $36 voluntary per household fees paid into the program are solicited first on the basis of improving the system and; secondly, as a way for members to save money should they use the service. Savings to program members are in the amount for which members would be personally liable. When the member uses paramedic or ambulance services within the City, the FireMed Program will bill the member's insurance company for the user fee. If the insurance company does not pay or pays only a portion of the charges, the program will write off the unpaid balance. If the member has no insurance,the bill is absorbed entirely by the membership program. Members are not liable for any amounts not covered by insurance. Those patients who are not members are billed for the full amount of paramedic and ambulance services. Full cost for transportation plus BLS or ALS services can range from $300 to $500. Households that choose the membership option can avoid paying these fees entirely. Membership spreads the cost of paramedic improvement with all of those who might benefit from this improved level of service instead of placing the entire burden on only those who use it. As a result, the program's user fees are subsidized by households that participate in the voluntary membership program. FireMed Financial Report Page 5 Program Goals ,Revenueftom Huntington Beach FireMed user and voluntary contributed i ' to the City's totalparamedic budget if ; 11 111 As demonstrated by the chart to the right, the Funding Source Paramedic Program FireMed Program city of Huntington Beach contributes over $2,000,000 annuall to the x .; >>:> >::>:<: :::.;:.:::... ..:..................... Ci 's paramedic and ,;:,:.,::. :<:> s9� g:>::<::<::::::......:. ambulance system. The „j` " " f;, �.,:;,,•,• .�< :,:. Vic•. benefits of maintaining an adequate level of funding is apparent. Without this funding source, the Fire Department would have to cut services or request FireMed Revenues Contribute 56%of increased funding from the the City's Total Paramedic Budget General Fund. GOAL4 Increase FireMed Membership Participation FireMed membership includes over 23,000 of the nearly 72,000 Huntington Beach households; or 32% of all residents. Staff is seeking to raise this membership percentage to 40%. This would increase the number of households by 5,760 and yield an additional $207,360 annually in program revenue. An aggressive marketing campaign is scheduled for early 1995 to improve citizen awareness and increase enrollment. GOAL-* Adiust FireMed User Fees User fees for the FireMed Program have not increased since 1990. During this time payroll, operational and General Fund overhead costs have all increased. If the FireMed program is to meet the operational goals established by the Growth Management Committee, an increase in fees is required. In order to provide an equitable incentive to existing and future FireMed members, a two tier rate structure will be offered. When approved by the City Council, the non-FireMed member user fees will be the same as the rates charged by the majority of other Orange County cities. The lower rate will be charged to the FireMed member's insurance company. This adjustment in rates will provide fairness to members by capping the amount paid by the member's insurance company. In this manner, the members will no longer be paying for a disproportionate share of the services. FireMed Financial Report Page 6 0 0 Financial Statements financial Statements provide a standard means of measuring an enterprise's performance from one period to another. In addition, certain trends once established, can provide decision makers with an objective means to formulate future actions and goals. It is for these reasons that the Fire Department Staff assembled the financial information in a generally acceptable financial format. The statements compare various revenue and cost centers from one period to another. Until recently, the City's fiscal year has remained constant, July 1 through June 30. Unfortunately, the recent change in the City's fiscal year makes a comparative financial report for July 1, 1993,to September 30, 1994, erroneous. Once the data is assembled and analyzed by staff, a single 15 month financial report for this period will be forwarded to the City Council. The Financial Statements included in this report are: • Balance Sheet--Period Ending June 30, 1993 • Operating Statement--Ending June 30, 1993 • Operating Statement-- 3 Year Period Ending June 30, 1993 In addition, summaries of accounts receivable, collection and membership activity have been provided. Where possible, a comparison of the previous 3 years of activity is shown. This information will assist the reader when evaluating program trends. Balance Sheets The Balance Sheet on page 10 indicates the program's total assets, liabilities and net worth for the period of July 1, 1992, to June 30, 1993. The following categories describe the source of the various assets and liabilities contained in the FireMed Balance Sheet. CURRENT ASSETS - $1,219,654 ■ Assets that can be converted quickly into cash (less than one year) Cash in Bank- ($286,243) The amounts of cash on hand after expenses have been paid. The program's source of cash is paramedic/ambulance user and membership fees (negative balance covered by General Fund). Accounts Receivable - $2,247,804 The amount of paramedic/ambulance user fees that have been billed to patients and insurance companies but not yet paid. Promissory Notes - $8,093 The amount of money owing to FireMed from patients paying fees over an agreed amount of time; usually less than 12 months. FireMed Financial Report Page 7 • • Financial Statements Reserve for Health-care Allowances/Non-collectibles - ($750,000) The amount of money expected to be written off the existing Accounts Receivable balance. Medicare,Medi-Cal and certain Health Maintenance Organizations(HMO's)have a maximum amount that they may reimburse for paramedic/ambulance fees. These amounts are regulated by state and federal laws. Approximately 35% of all fees charged by FireMed are reduced or written off. This amount compares favorably with the private sector that writes off between 30%to 35% of their respective charges. FIXED ASSETS-$240,744 ■ Capital items, equipment and land that is not easily converted into cash and may lose value over time. Land- $0 The estimated or current value of real estate owned by the program. FireMed does not currently own any land. Buildings- $0 The estimated value of buildings owned by the program. The program does not currently own any buildings. Equipment- $224,254 The purchase price or value of equipment when it was first acquired by the program. This amount includes items such as paramedic vans,vehicles, radios and other related medical and rescue equipment purchased from program fees. Machinery- $118,541 Specific items acquired that enabled the City to provide an expanded Municipal Services Statement and include the FireMed billing option. Previously,water and trash had been billed on a small post card type statement. Accumulated Depreciation- ($102,051)The amount all fixed assets have lost in value. Generally,the full value of buildings, equipment and machinery is depreciated over an appropriate life-span of the item. Except for land and buildings,this amount is usually depreciated over a 5 to 10 year period. CURRENT LIABILITIES - $95,114 ■ The amount currently owing or will become due based on financial commitments incurred by the program. Accounts Payable - $33,316 The amount owing to various vendors or program contractors based on outstanding purchase orders and invoices. Accrued Payroll - $36,515 The amount of payroll costs yet to be posted to the program for the 2 week period preceding the end of the fiscal year. Current Vacation/Sick Leave - $25,283 Benefit costs to be posted to the program for ending payroll period. FireMed Financial Report Page 8 • • Financial Statements FireMed maintains afund equity in excess of I Million Dollars. FUND EQUITY- $1,365,284 ■Amount invested and cumulative earnings. Contributed Capital - $311,000 Fund Equity Liabilities Amount invested or contributed $96,114 by the General Fund at program start-up. r„ Retained Earnings - $1,054,284 The program's cumulative net worth after all program liabilities have been subtracted from program assets. TOTAL LIABILITIES AND FUND EQUITY - $10460,398 ■ The balance part of the balance sheet. The Program's equity plus liabilities equal program assets. A means of verifying that the retained earnings portion has been calculated accurately. FireMed Financial Report Page 9 • • Financial Statements Balance Sheet- Fiscal Year Ending June 30, 1993 The Balance Sheet indicates retained earnings in the amount of 1,054,284 This amount represents the value of the accounts receivable (after adjustments and allowances) and the book value (after depreciation) of equipment purchased by the FireMed Program during the past three (3)years ASSETS Current Assets Cash in Bank -286,243 Accounts Receivable 2,247,804 Promissory Notes 8,093 Reserve for Healthcare Allowances/Non-collectable -750,000 Total Current Assets $1,219,654 Fixed Assets Land 0 Buildings 0 Equipment 224,254 Machinery 118,541 Fixtures 0 Less Accumulated Depreciation -102,051 Total Fixed Assets $240,744 Other Assets 0 TOTAL .0 ,398 LIABILITIES Current Liabilities Accounts Payable 33,316 Accrued Payroll 36,515 Current Vacation/Sick Leave 25.283 Total Current Liabilities $95,114 Fund Equity Contributed Capital 311,000 Retained Earninas 1,054,284 ,TotalNetWorth -. :: :: $1;365,284" TOTAL • $1,460,398 FireMed Financial Report Page 10 Financial Statements Operating Statement- Description The Operating Statement on page 13 represents actual revenue received and expenses paid during the period of July 1, 1992 through June 30, 1993. This method of reporting reflects the actual cash requirements placed on the program. Although user fees are charged and are reflected in the program's accounts receivable, the amounts shown in this statement represent payments received and amounts issued to vendors for services and equipment provided to the program. In this way,the actual cash surplus or deficit can be shown. Operating Revenue-the amount of money actually received by the program Membership..............................amount received from FireMed voluntary membership fees Paramedic/Amb Fees...............amount received from paramedic/ambulance user fees Interest......................................transferred from General Fund from shared investment pool Operating Expenses -the amount of money actually paid out to various vendors for service or equipment supplied to the program. Salaries & Benefits...................salaries paid to 9 paramedic, 2 permanent and 1 temporary staff position. Also includes amount paid to other department members for overtime spent on FireMed educational program Telephone..................................telephone and pager expense Postage......................................amount reimbursed to General Fund for postage charges Supplies.....................................paramedic and office supplies Film ...........................................film stock and processing Food...........................................refreshments for various FireMed public relation presentations Travel........................................travel and mileage reimbursements Books.........................................professional reference books Advertising...............................amounts paid for newspaper and related composition expense Ambulance Svs.........................amount paid to private company for ambulance transportation. Note - these charge are passed on to patients via paramedic and ambulance user fees Rental........................................equipment rental Contractual Svs........................fees paid out for billing service and various service contracts on equipment Printing.....................................outside printing charges Maintenance.............................costs for repair on equipment in excess of service contracts Uniform Allowance..................costs reimbursed to General Fund for paramedic and staff uniforms Meetings....................................cost for administrative seminars Training& Schools..................charges for a portion of paramedic training Certification..............................cost of state and county paramedic certification Dues & Membership................professional organizations Miscellaneous...........................amount charged back or credited from previous reporting period FireMed Financial Report Page 11 • Financial Statements Operating Statement- Revenue/Expense Percentages The chart to the left FireMed Revenue indicates the different 1992/93 sources of FireMed revenue and their Interest <1% percentage of the total. During 1992193, FireMed received $1,302,519 from user fees charged to persons using paramedic and/or ambulance services; $699,424 from households enrolled the FireMed voluntary membership program; and$554 in interest from pooled cash. FireMed Expenses - 1992/93 ,s . Contract Svs 2% The chart above indicates the percentage of FireMed funds spent from the program's various cost centers. Salaries and Benefits accounted for the highest expense ($1,023,299)followed by ambulance services ($715,963) and General Fund/MS1 overhead($200,000). Ambulance services are currently provided by the Fire Department's Ambulance Program and these funds are now paid to the General Fund instead of a private contractor. For a complete listing of all expenses and revenues, see the Operating Statement on page 13. FireMed Financial Report Page 12 • ! Financial Statements Operating Statement- Fiscal Year Ending June 30, 1993 The modified Operating Statement represents actual cash received and expended by the FireMed program for fiscal year 1992193. All program income, expenses, capital equipment costs and General Fund transfers are included. The current operating loss for the FireMed Program, after transfer of the General Fund's (MSI) overhead charges, was$68,039. OPERATING REVENUE Membership 699,424 Paramedic/Ambulance Fees 1,302,519 Interest 554 TOTAL OPERATING REVENUE (Cash Received) $2,002,497 OPERATING EXPENSES Salaries & Benefits 1,023,299 Telephone 1,286 Postage 5,805 Supplies 21,938 Film 0 Food 93 Travel 0 Books 1,089 Periodicals 87 Advertising 14,750 Ambulance Services 715,963 Rental 0 Contractual Services 39,003 Contract Services, Other 3,137 Printing 58 Maintenance 761 Uniform Allowance 0 Meetings 250 Training &Schools 1,174 Certification 2,300 Dues & Membership 25 Miscellaneous (50,841) TOTAL OPERATING EXPENSES $1,780,177 CAPITAL Capital Acquisition 90,369 TOTAL OPERATING EXPENSES AND CAPITAL(Cash Expended) $1,870,546 Operating Income (Cash Received Less Cash Expended) $131,951 Transfer to General Fund $200,000 INCOME • FireMed Financial Report Page 13 Financial Statements Three Year Operating History- July 1, 1990 - June 30, 1993 A three (3) year operating statement comparing the income and expense categories is included on page 15. The purpose of this statement is to provide information regarding changes in revenue and expenses from the program's start-up phase and the subsequent three (3) year operational period. The following describes some of the significant changes reflected in this 3 year Operating Statement. FireMed Operating Revenue Program Operating Revenue has increased by $590,362 annually when $2,500,00 W compared to 1991, the Program's first $2,000,00 `, complete year of operation. Although the $1,500,00 OLnumber of patients treated has remained $1,000,00 consistent during this same period, an $500,000 increase in the collection rate is attributed $o 1991 1992 1993 to this increase in revenue. Operating and Overhead Expenses Expenses, Capital & Overhead continued to grow, based g � primarily on $2,000,000 increases in payroll, contractual services and $1,500,000 supplies. Payroll increased due to a three $1,000,000 year, 18%pay increase for all City 33 /, A..'. $500,000 employees. Contractual services saw an increase as a result of the cost of billing 1991 1992 1993 services with an outside agency. operating 0 Capital ill MSI/Gen Fund Accumulated FireMed operathig losses exceed $200,000. 3 Year Revenue & Expenses Revenue & Expenses-Although the FireMed 2,500,00 MI2,000,000 9 b Program currently has more assests than 1,500,00MI111 liabilities, a 14:1 ratio, expenses continue to 1,000,000, exceed current revenue. At the end of the 500,0061 0 1992/93 fiscal year, the cummulitive expenes 1991 1992 1993 outpaced revenue by $202,307. Income g Expenses FireMed Financial Report Page 14 0 • Financial Statements Operatin_a Statement- Start-up & 3 Year Summary This summary statement is based on a "cash"method of accounting which represents cash received and expended by the FireMed Program for the start-up period(1989190) and the subsequent 3 year period. All program revenue, expenses, capital costs and General Fund transfers are included. The carry forward loss for the previous years is$202,307. Although cash received improved significantly this past year, expenses when compared to 1990 have increased by$447,635 annually. . , .0 Operating Revenue Membership 96,631 875,331 835,277 699,424 Paramedic/Ambulance Fees 51,662 533,096 810,040 1,302,519 Interest 9,718 3,708 2,230 554 Contributed Capital 161,000 0 0 0 Equipment Aquisition/Other Funds 150,000 0 0 0 Total Operating Revenue(Cash Received) $469,011 $1,412,135 $1,647,547 $2,002,497 Operating Expenses Salaries&Benefits 51,169 794,880 894,028 1,023,299 Telephone 0 0 1,554 1,286 Postage 7,500 1,688 2,624 5,805 Supplies 532 7,817 15,179 21,938 Film 0 0 11 0 Food 0 0 0 93 Travel 0 0 0 0 Books 12 0 2,567 1,089 Periodicals 0 49 0 87 Advertising 0 0 7,880 14,750 Ambulance Services 0 624,282 713,450 715,963 Rental 0 0 646 0 Contractual Services 16,367 43,000 638 39,003 Contract Services, Other 0 0 0 3,137 Printing 0 2,401 205 58 Maintenance 0 6,392 8,106 761 Uniform Allowance 0 11,313 0 0 Meetings 0 0 25 250 Training &Schools 0 2,702 4,068 1,174 Certification 0 340 200 2,300 Dues&Membership 0 0 0 25 Miscellaneous 0 2,400 14,373 (50,841) Total Operating Exnses $75,58t) $1,497,264 $1,665,554 $1,78Q,177 Capital Acquisition 35,757 231,084 5,444 90,369 Total;expenses and.:capital $11 1,337 $1,72$,348 $1,67Q,998 $1,871),545 Operating Income Transfer to General Fund $0 $35,268 $117,000 $200,000 INCOME0, Retained Earnings(Loss)-Beginning of Year 0 357,674 6,193 ($134,258) Retained Earnings(Loss)-End . FireMed Financial Report Page 15 ! • Accounts Receivable and Collection Accounts receivable are generated from user fees for paramedic and emergency ambulance services. Patients are treated and transported to hospital emergency rooms following treatment by emergency Fire Department personnel. Patients and/or their insurance companies are billed for these services. The amounts owing to the FireMed Program are those amounts pending payment by patients, insurance companies, liens on pending litigation or government health programs. FireMed members are not responsible for any out of pocket charges not paid for by their insurance carrier. Accounts Receivable Balance Start of Reporting Period - July 1, 1992 $2,110,657 End of Reporting Period - June 30, 1993 2,247,804 User Fees Billed The chart below indicates the amount of paramedic and ambulance service user fees billed during each month of fiscal year 1992193 User Fees Billed -FY 1992/93 $1,866,445 :>::>::::.>:.>:.: $150,000 $100,000 .> $60,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Collections The graph below indicates the amount of user fees actually collected during fiscal year 1992193. Amounts billed from previous periods but collected during this reporting period are also included. User Fees Collected -FY 1992/93 $1,302,538 $170,682 200,000 ::: 150,000 100,00 >: $50,00: $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun In January 1993, the FireMed Program entered into an agreement with a private billing agency. The billing agency invoices patients for services, bills their insurance company, submits claims to Medicare and Medi-Cal and establishes liens for various third party legal actions. As displayed in the graph above, a significant increase in the amount collected occurred during the third month after utilizing their services. FireMed Financial Report Page 16 0 0 Accounts Receivable and Collection Aging-Days to Collect The graph below indicates the average amount of time it takes to receive payment from a month's amount of billed user fees. As shown below, it takes more than 120 days to collect 60% of the outstanding Percent Collected by Number of Days balances from any given period. Considering the +120 Days ...... current collection amounts, ......... .................. ................ .................. ................. 90 Days the program would improve ......... ........................... 60 Days its cash balance by $100,000 if the program collected its 30 Days receivables 30 days sooner. 0% 10% 20% 30% 40% 50% 60% 'Collection Rate is greater than 60%fior all billed services. Although the above graph indicates a collection rate of 60% for FireMed accounts receivable, previous periods have resulted in lower collection rates. The chart below compares the collection rate of the past three years. As seen by the nine (9) percent increase in the collection rate for 1992/93, the outside billing agency has Collection Rate -3 Year Summary contributed to improved ..... ... . ............. . . .... ................ ....... . ................ collection rate. Considering the .......... ... .. ..... current fee schedule, each 1% . ............. ... ............ .......... 55%- improvement in the collection ........................... ...... ....... ................ .......... rate increases program income by 50% ............ ........... $20,000. ... ............ ..... .......... . ........... 45% 1990191 1991192 1992/93 Collected Amount- 3 Year Summary The amounts listed below represent a three year history of the user fees collected for paramedic and emergency ambulance services. The most significant change occurred during fiscal year 1992/93 where User Fees Collected -3 Year Summary collections increased by ...... ........ $492,479 over the previous ... .. . . . $1,400,000 ... . ................................ ..... .... fiscal year. This can be ..... $1, zoo,000 - ........ attributed tot use of an .............. ..... $ , ,000 outside billing service and 1000 .......................... . .............. .......... . ............. $800 .......... ......... redirection of staff time to .... .......... '000 A... $600,000 - ... collect past due accounts N .......... ............. . ..... .........%.-..-.-.-.-.-.- :::j. ......... ......... -: .......... . .... $400,000 ............. . ...........:. ............. receivable. ....... $200,000 ......... $0 . ......... 1990/91 1991/92 1992/93 FireMed Financial Report Page 17 Voluntary Membership Revenue Membership in the FireMed program is voluntary. Members pay$36 per household, $18 for low-income, 71,000 Total Households each year to cover all persons living at the residence. 1992/93 During the 1992/93 fiscal year, 30% of all Huntington Beach households were enrolled in the FireMed Program. Households that receive a Municipal ., t Services Statement may pay $6 every two months to join the Program. Low-income households account for less than 4% of the total membership enrollment. When the FireMed Program started in July of 1990, the City Council authorized the automatic enrollment of every residential water account into the membership program. As a result, the original membership enrollment rate was 34%. This enrollment rate continued through the Percent of Households Enrolled first year of the program. In subsequent years, as a result of residents moving 1990/91 from the area enrollment 1991/92 declined To minimize this ff program n ...........>;:.;:.;:.;:.;:.;:.;:.;:::: effect, the o a m now 2193 199 p g automatically enrolls new F Y nr 1993/94* ........................................ residential er customers Estimated water 28% 29% 30% 31% 32% 33% 34% into the program Now, FireMed membership increases by more than 100 households each month. The convenience of paying membership via the Municipal Services Statement has How Memberships Are Billed provided an effective method of maintaining Directly a strong membership base. Currently, 90% ::: :10% of all membership revenue is collected from f the Municipal Services Statement. The remaining membership is billed directly on an annual basis. As shown below, the membership fees when collected in this manner, provide a steady cash flow. Postage, Membership Fees Received -FY 1992193 invoice preparation, $699 424 accountingand 0,000 .................. . ..................... ........... . ............................. posting costs are o,000 incorporated in the o,000 0000 Municipal Services 0,000 .. Statement process. $0 This reduces costs by July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun consolidating these processes into the existing billing system. Members also enjoy the advantage of spreading the cost of membership over the entire year. FireMed Financial Report Page 18 • i Revenue Summary Although FireMed membership declined during FY 1992/93, total revenue continues to increase. The following chart indicates the amount of revenue collected from the Program's start-up period in July of 1990 through June 30, 1993. Preliminary estimates of the 12 month period of July 1, 1993, through June 30, 1994, have been included. Annual FireMed revenue has increased by $590,000 since 1991. Summary-Program Revenue 1990/9114213 :>:>:::>€:€:::::>:>:> > <:: ..........................................................:. .......::....................................1991/92 ........ 1992/93 :::* .::::::::: s imat $0 $600,000 $1,000,000 $1,500,000 $2,000,000 $2,600,000 Despite this continuing increase in revenue, expenses continue to outpace any advancement in overall program income. The increase in salaries and benefits, as well as General Fund/MSI costs can not be controlled by Program management. Decisions regarding payroll and overhead cost increases are dependent upon Administrative and City Council policies. FireMed Financial Report Page 19 Summary ffe FireMed Program has significantly contributed to the City's Paramedic Program. Each ear over $2,000,000 is added from sources outside of the City's General Fund. This dded revenue base from user fees and voluntary membership enables the Fire Department to improve services without utilizing the General Fund as a source of revenue. Additional paramedics, equipment, ambulance services, community programs and General Fund/MSI overhead costs are paid directly by the FireMed Program Over 50% of all City paramedic and ambulance services are now paid by FireMed. The Program's ability to bill patients or their insurance companies permits FireMed to maintain a net worth in excess of$1,000,000. This amount is retained by the program in the form of accounts receivable and equipment. However, the delay in receiving payment for services provided contributes to the Program's $200,000 negative cash flow. In addition, increased expenses and short term operating losses affect this balance. Although the FireMed Program maintains a significant net worth, the negative cash flow should be corrected as soon as possible. Short term borrowing from the General Fund does not fix the long term cash flow problems. It only provides a short term symptomatic solution. Staff will recommend a limited increase in user fees to correct this negative cash flow condition. These short term losses occur despite aggressive efforts of staff. If fact, the collection rate has increased to over 60% of the total amount billed. This amount has continued to improve during 1994. The collection rate for this year is estimated to be in excess of 65%. This collection rate is improving despite payment restrictions imposed by insurance and government programs. Total program revenue, including voluntary membership has risen as well. Annual Program revenue has increased by $590,000 since the program started in 1990. New billing and membership strategies continue to optimize the Program's potential. FireMed Financial Report Page 20 - a City of Huntington Beach Fire Department Attachment 2: FireMed User Fee Study Huntington Beach City Council Meeting November 21, 1994 HUNTINGTON BEACH FIRE DEPARTMENT FireMed User Fee Study Based on Financial Data From Fiscal Year Ending June 30, 1993 Presented to The Huntington Beach City Council November 21, 1994 Prepared by FireMed Program Huntington Beach Fire Department 9 0 Submitted to: Honorable Mayor and City Council Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Michael P. Dolder, Fire Chief Subject: FireMed User Fee Study INTRODUCTION As result of the FireMed Program financial statements prepared for the Fiscal Year ending June 30, 1993, it was determined that a review of user fees should be conducted. The financial statements revealed a cumulative FireMed operating loss of$202,307. Since 1991, staff has been attempting to mitigate personnel and General Fund overhead cost increases. These increases were passed onto the FireMed program without a rate increase. Staff has been successful in increasing program revenue by improving the collection rate of user fees. In 1991,the collection rate was just 5 1% for all user fees billed. By 1993 the rate had moved up to 65%. Concurrently, overall program revenue increased from $1,412,135 for FY 1999/91 to $2,002,497 for FY 1992/93. Unfortunately this $590,362 improvement in total program revenue has not been sufficient to meet program cost increases. As an alternative to reducing paramedic services or requesting funds from the General Fund,the Fire Department has conducted a study of FireMed user fees to determine if these fees could be adjusted to meet the cash shortfall. The areas considered by this study include: 1. Review of FireMed revenue and expenses 2. How do current user fees compare with other cities or companies providing similar services 3. User fee equity - FireMed Members &Non-FireMed Members In addition to the above topics, a recommended fee schedule has been included. When this report is submitted to the City Council, a corresponding fee resolution will be included. Staff is also submitting the FireMed Program Financial Report to City Council dated November 21, 1994, to provide additional support for recommendations detailed in this study. BACKGROUND The FireMed Program was approved by the Huntington Beach City Council in 1989 to provide funding for an expanded paramedic program. The Fire Department determined that additional paramedic units and staff would be needed to meet the Growth Management Committee's recommended paramedic response time. FireMed User Fee Study Page 2 0 The goal established by the City Council is to have paramedics arrive on scene within five (5) minutes for 80% of the paramedic responses. As specified by the FireMed Ordinance, user fees were authorized for paramedic and ambulance services to obtain the revenue necessary to meet this goal. In addition to user fees, a voluntary membership program was included in the FireMed Program. Persons wishing to avoid any out of pocket expense associated with City provided emergency medical services could contribute an annual membership fee to the FireMed Program. Revenue from membership fees are pooled with user fees charged to patients using paramedic and ambulance services. These fees are collected and used to pay for additional paramedic personnel and equipment. FireMed funds are dependent upon these two sources of revenue. Prior to the Program's inception, paramedic services were provided without charge to all who received treatment. All paramedic program costs were absorbed by the General Fund. Ambulance services were provided by a private ambulance company who billed the patient directly for ambulance transportation charges. When FireMed was approved,the Program began billing for both of these services. This new billing arrangement provided reimbursement from insurance companies, Health Maintenance Organizations (HMOs), Medicare and Medi-Cal for paramedic and ambulance services. This new source of revenue supplied the subsidy necessary to expand existing paramedic services without using General Fund revenue as a permanent source of funding. As of 1994, over$7,000,000 in revenue has been collected by FireMed for emergency paramedic and ambulance services supplied by the Huntington Beach Fire Department. From this amount over$550,000 has been transferred back to the General Fund to offset indirect overhead charges identified by the MSI study. It is important to identify the City Council's intent in passing the FireMed Ordinance and the related fee schedules. User and membership fees collected by the FireMed Program are to be used to pay for the expanded paramedic program. Therefore income and costs indicated in this study reflect only those revenues and expenses directly related to the expanded paramedic system. Costs for the basic General Fund paramedic program are not included. 1. Review of FireMed Revenue and Expenses. 3 Year Revenue & Expenses Although the FireMed Program currently has z,soo,00 more assests than liabilities, a 14:1 ratio, 2,000,000 ..., . expenses continue to exceed current revenue. At 1,500,00 the end of the 1992/93 fiscal year,the 1,000,00 cummulitive expenes outpaced revenue by soo,00 o $202,3 07. 1991 1992 1993 Income „Expenses FireMed User Fee Study Page 3 0 • After completion of the financial reports for fiscal year 1992/93, an operating loss of $68,049 was observed. This loss, although less than previous years, contributed to the accumulated operating losses of$202,307 for the FireMed Program. Retained Earnings (Loss) Cash Basis $400,000 ; . Year Income(loss) $300,000 1989/90 $357,674 $200,000 1990/91 -351f481 $100,000 `' AV- 1991/92 -140,451 1992/93 68,049 3 Total Income(loss) $202,307 ($100,000) ($200,000) .. ($300,000) 1989190 1990/91 1991/92 1992/93 These losses have occurred despite an aggressive effort by staff to minimize the impact of mandatory cost increases passed on to the program. Since 1991,the Program has experienced increases in: • personnel expenses of$228,419 • operating expenses of$54,484 • General Fund/MSI overhead charges of$164,732 During this time, no adjustment in user fees have been made. The cumulative total of operating and General Fund cost increases is $447,635. It should be noted that salary and benefit costs equal 48% of the FireMed operating budget. The general wage Cost Center 1991/92 1992/93 Total Increase increase granted to Personnel $794,880 $1,023,299 $228,419 Operations 702,384 756,868 54,484 all City employees in General Fund/MSI 35,268 200,000 164,732 1991, along with the Total/Net Change $1,532,532 $1,980,167 $447,635 General Fund/MSI overhead charges, were passed on to FireMed without an adjustment in the Program's user fee schedule. Despite these cost increases, FireMed has been able to lessen the impact of the added expenses by improving the collection rate and improving membership participation. Amount of Increase From Previous Year Operating and General Fund Costs Annual program revenue now exceeds $2,100,000. $300,000 . � Unfortunately,this increase has $200,000 k'11 not been able to capture the WK funds necessary to completely $100,000 recover from cost increases that $0 were not offset by a 1991/92 1992/93 corresponding rate increase. ®Operating Increase ®General Fund/MSI FireMed User Fee Study Page 4 The financial report used to complete this study is based on data obtained from Fiscal Year ending June 30, 1992/93. For the purpose of clarity,please note the City's Ambulance Program began on November 1, 1993. The General Fund's Ambulance Program has not increased the cost of ambulance services to FireMed. Increases in FireMed costs are based primarily on increases from personnel and General Fund/MSI overhead charges occurring prior to the implementation of the Fire Department's Ambulance Program. 2. How Do Current User Fees Compare With Other Cities Or Companies Providing Similar Services? Staff conducted a survey of all Orange County cities and private ambulance services. Rate comparisons for Advanced Life Support (ALS)paramedic and Basic Life Support (BLS) first responder fees are included on page 6. Ambulance transportation charges are shown on page 7. ALS/BLS Fees ALS and BLS fees are fees for paramedic or first responder treatment provided by the Fire Department. Until 1990,this treatment was completely subsidized by the City's General Fund. User fees in this category are recovered to pay for the expanded level paramedic system. Fees for these services are categorized into two categories: • ALS - Advanced Life Support/Paramedic • BLS - Basic Life Support/First Responder As shown on the following tables, the Huntington Beach Fire Department currently charges the lowest ALS/BLS fees of all cities that charge for such services. Ambulance Transportation Fees Ambulance charges are fees for ambulance transportation. These fees are itemized into the following categories: • Base Rate • Mileage • Oxygen • Night Service • Stand-by • Supplies By adjusting the ambulance fee schedule to match other cities indicated in the table, the City's non-FireMed member ambulance transportation rates would be the same as the majority of all other cities and the private surveyed.. FireMed User Fee Study Page 5 0 • Advanced Life Support and Basic Life Support Fee Comparison Orange County Cities-ALSBLS Fee Comparison 300 \, s Huntington 250 „ t Beach ALS/BLS 200 Fees are y the lowest 150 in Orange 100 County. 50 0 BLS Fees p ' 0 ALS Fees Ana BP CM Ful HB LB NB Org SA Wmr The table below indicates the current fees charged by other Orange County cities. As shown above, Huntington Beach currently has the lowest ALS/BLS fee schedule of all cities surveyed. SupportCITY Basic Life ... Anaheim 150.00 1 250.00 Brea None None Buena Park 125.00 250.00 Costa Mesa -Resident None None - Non-resident 135.00 220.00 Cypress None None Dana Point None None Fountain Valley None None Fullerton 175.00 275.00 Garden Grove Tax Overide Tax Overide H:untington Beac:.h -ExiStingi Fees 100.00 150.00 Irvine None None La Palma None None Laguna Beach-Resident None None - Non-Resident 200.00 300.00 Laguna Niguel None None Los Alamitos None None Mission Viejo None None Newport Beach-Resident 155.00 255.00 -Non-resident 155.00 255.00 Orange 150.00 250.00 Placentia None None San Clemente-Resident -Non Resident Included In Ambulance Fees Included In Ambulance Fees San Juan Capistrano None None Santa Ana 153.75 256.25 Seal Beach None None Stanton None None Tustin None None Villa Park None None Westminster 125.00 250.00 Yorba Linda None None Unincorporated None None FireMed User Fee Study Page 6 Ambulance Transportation Rate Comparison Orange County Public and Private Services $250 is Huntington `q Beach $2U0 i Y 3 y/ Ambulance 3 Fees are $150 e the lowest wu in Orange $100 ou ty s / $50 rtl3 R ■Base Rate ■NightlOxy Ana BP CM Ful B LB NB Org SA Wmr The chart above indicates Huntington Beach ambulance user fees are currently the lowest ambulance rates in Orange County. The table below compares each of the Orange County cities ambulance rates. Standbycity Provider Base Mileage Night Oxygen Anaheim Lifefleet 242.75 10.05 40.90 40.90 29.20 Brea Lifefleet 242.75 10.05 40.90 40.90 29.20 Buena Park Lifefleet 242.75 10.05 40.90 40.90 29.20 Costa Mesa Seal's 242.75 10.05 40.90 40.90 29.20 Cypress Medix 242.75 10.05 40.90 40.90 29.20 Dana Point Lifefleet 242.75 10.05 40.90 1 40.90 29.20 Fountain Valley Seal's 242.75 10.05 40.90 40.90 29.20 Fullerton Lifefleet 242.75 10.05 40.90 40.90 29.20 Garden Grove Lifefleet 242.75 10.05 40.90 40.90 29.20 Huntington Beach Existing Fees: >Fue (90.00 8 00 30.00 30.0(? 2...2..A. 2 50 Irvine Doctor's 242.75 10.05 40.90 40.90 29.20 La Palma Lifefleet 242.75 10.05 40.90 40.90 29.20 Laguna Beach Lifefleet 242.75 10.05 40.90 40.90 29.20 Laguna Niguel Medix 242.75 10.05 40.90 40.90 29.20 Los Alamitos Medix 242.75 10.05 40.90 1 40.90 29.20 Mission Viejo Medix 242.75 10.05 40.90 40.90 29.20 Newport Beach - Resident Seal's 118.00 6.00 22.00 22.00 0.00 -Non-resident Seal's 225.30 9.80 39.90 39.90 0.00 Orange Medix/Life 242.75 10.05 40.90 40.90 29.20 Placentia Emergency 225.30 10.05 40.90 40.90 29.20 San Clemente-Res Fire 300.00 .01 0.00 0.00 0.00 -Non Res Fire 500.00 .01 0.00 0.00 0.00 San Juan Capistrano Medix 242.75 10.05 40.90 40.90 29.20 Santa Ana Fire 223.00 9.75 39.50 39.50 0.00 Seal Beach Medix 242.75 10.05 40.90 1 40.90 29.20 Stanton Lifefleet 242.75 10.05 40.90 40.90 29.20 Tustin Doctors 242.75 10.05 40.90 40.90 29.20 Villa Park Lifefleet 242.75 10.05 40.90 40.90 29.20 Westminster Fire 225.30 9.80 39.90 40.90 28.50 Yorba Linda Emergency 225.30 10.05 40.90 40.90 1 29.20 Unincorporated Various 242.75 10.05 1 40.90 1 40.90 29.20 FireMed User Fee Study Page 7 0 0 3. User Fee Equity - FireMed Members & Non-FireMed Members FireMed members are currently paying a disproportionate share of the expanded paramedic program financed by FireMed. FireMed members join FireMed by paying a voluntary membership fee of$36 per household. Savings to Program members are in the amount for which members would be personally liable if they should use the service. When the member uses paramedic or ambulance service within the City,the FireMed Program bills the member's insurance company. If the insurance company does not pay or pays only a portion of the charges, the Program will write off the unpaid balance. Members with no insurance are not liable for any charges. The charts below show the different collection rates when comparing FireMed insurance billings to non-FireMed members. As you can see, FireMed collects 76% of user fees billed to members' insurance companies compared to only 64% collected from Non- FireMed members. FireMed Members Non-FireMed Members Amount Billed 1993-$480,318 Amount Billed 1993-$1,403,683 . - IMF The second source of revenue from FireMed members is received from voluntary membership fees. When the total amount of revenue received from FireMed members is compared to amounts received from non-members, it is easy to see that FireMed members are paying more as a group for services than Non-FireMed patients. As shown on the table below, FireMed members are paying $1,062,918 for$480,318 worth of FireMed services. In essence, FireMed members are subsidizing Non-FireMed patients by $582,600 annually. FireMed Members Non-FireMed Members User Fees Collected $363,494 $891,845 Membership Fees Collected 699,424 0 Total Revenue $1,062,918 $891,845 Charge for Services Provided 480;318 1,403,683 Excess/(Deficiency) $582,600 ($511,838) FireMed User Fee Study Page 8 Recommended User Fee Schedule The Fire Department is recommending an adjustment in the paramedic fees to offset previous increases in personnel, operational and general overhead costs of the FireMed program. In addition, non-FireMed member ambulance fees should be adjusted to the countywide rate that was approved in June 1994, by the Orange County Board of Supervisors. This adjustment in the non-FireMed rates will provide an equitable distinction between those who provide on-going financial support of the program from those who do not. The proposed fees are listed in the following table: Proposed FireMed User Fee Schedule Fee Type Existing Rate Proposed Rate .X. ..0 0 t .; ::. m er ht ::F e::::.:::::::::::::::::::::::::::::::::::::::::::::::.;:.;:.;:.;:.;:.;:.;:.;:.;:.;:.;:.;:.;:::.;. ...... '..' ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::..::::::::.::.::::::::::::::::::::::::::::: - Household...................................................................................$36.00..................................$36.00... - Low Income Household 18.00 18.00 - Business/each 10 employees 36.00 36.00 . :::.:...................: .:::::: ....::::..::...::::::::::.:::::::. ............... FitlYle 'lI` ': ; rdPr: "::>`:;::;:> ><''><;;:»>:::>:::>:>::>: ::::<:::: :':::>::>«::<':>::>::>:::>:::>:::> >::: d. :.: ...:b ::::::: ...:::::::::::::::::::: - Basic Life Support (BLS)............................................100.00...................................125.00... - Advanced Life Support (ALS) 150.00 200.00 - Ambulance Base Rate (Emerg) 190.00 190.00 - Mileage 8.00 8.00 -Night Call 30.00 30.00 - Oxygen 30.00 30.00 - Standby 22.00 22.00 - Medical Supplies 10.00 10.00 (Expendable) :. ; ::::::............_......._........... . . ... . ..: : .............. Life Support (BLS) 100.00 1.5.;0 .00 -Advanced Life Support (ALS) 150.00 250.00 - Ambulance Base Rate (Emerg) 190.00 242.75 - Mileage 8.00 10.05 -Night Call 30.00 40.90 - Oxygen 30.00 40.90 - Standby 22.00 29.20 - Medical Supplies 10.00 13.30 (Expendable) The above rate schedule is consistent with rates charged by other Orange County based public and private agencies. FireMed User Fee Study Page 9 0 0 As the graph below indicates, the revised FireMed user fee schedule would place non- member FireMed fees equal to other Orange County cities. Proposed Non-Member Ambulance Fees Orange County Public and Private Services &-- If approved $260 .- Huntington X. . ......... ....... ......... ...... .............. ...... . ....... . ... ........ .......... ....... ......... . ........ Beach .. ......... ......X-X .......... . ......... .... Ambulance Fees $200J. XXXX: ....... ........ . ....... ........ ........ would be .... ......... X...... comprable to $ISO. . ...... .... . .............. .... XX... other Orange X X ....... ........ .... ......... ........ county cities. ........ ........ ..... $100 .... ........ ... ........ .... .. ....... ....... :X. :X. .... ...... ......... ...... .... ... ........ ............. ........ ......... ........ .......... :X ®Base Rate ®Mileage 0 Night/Oxy Ana BP CM Ful HB LB NB Org SA Wmr The significant factors which indicate the limited increase in user fees are necessary are: • Current rates do not provide sufficient revenue to meet program expenses. • Program costs have increased by $447,635 since 1991. • Existing FireMed user fees are the lowest in Orange County. • Only non-FireMed members would be affected. Patients who are FireMed members,Medicare or Medi-Cal participants would NOT be affected. Although there has not been an adjustment in FireMed's rates to offset the increase in the above costs, the program has minimized the impact of these increases by improving collection methods and increasing membership enrollment of new City residents. Unfortunately, these methods have fallen short, and a negative cash flow condition exists. An increase in the paramedic fees and the non-FireMed member ambulance fees will reverse this trend. FireMed User Fee Study Page 10 City of Huntington Beach Fire Department Attachment 3 : OC Approved Ambulance Rates - Board of Supervisors - OC Ambulance Association Huntington Beach City Council Meeting November 21, 1994 r 4 •♦0 V NTVO FC: RANGE • TOM URAM 2 1 { ` DIRECTOR s3' H EALTH CARE AGENCY HERBERT RosENZWEiG DIRECTOR OF MEDICAL SERVICES BETTY O'ROURKE EMERGENCY MEDICAL SERVICES EMS PROGRAM DIRECTOR 517 N.MAIN STREET BRUCE E.HAYNES.M.O. SUITE 301 EMS MEDICAL DIRECTOR SANTA ANA,CALIFORNIA 92701 (714)568-4283 FAX(714)568-4302 June 20, 1994 To: Ground Ambulance Service Providers Subject: Revised Emergency Ground Ambulance Service Rates Dear Service Provider: On Tuesday, June 14, 1994, the Board of Supervisors adopted Resolution Number 94-722 which revises the maximum emergency ground ambulance rates chargeable in the unincorporated areas and 22 contract cities. These rates will become effective July 1, 1994. Since , Betty O'Rou ce Program Director Attachment ' • i MAXIMUM EMERGENCY GROUND AMBULANCE RATES July 1, 1994 Type of Charge Basis for Charge Rates Emergency Base Rate Applicable for urgent or Code III 242.75 response at the request of a public safety employee Mileage Per patient mile or fraction thereof 10.05 Night Call Applicable when time of service request 40.90 is between 7:00 p.m. and 7:00 a.m. Oxygen (includes mask or cannula) Applicable when administered 40.90 Standby Per 15 minutes after the first 15 minutes 29.20 and any fraction thereof Expendable Medical Supplies Maximum per response or fair market 13.30 value, whichever is least Resolution 94-722 MJV:ee Disk MJV:94 Rates AAOC - a, -r AMBULANCE ASSOCIATION OF ORANGE COUNTY Professionals Who Care February 28, 1994 Ms-Betty O'Rourke County°of Orange -EMSA 517 North Main Street Suite 301 Santa Ana, CA 92701 Dear Betty, Enclosed please find the AAOC's application for a 1994 rate increase per EMSA policy. The CPI index rose only 2.5%in 1993. As you are aware, new mandate Federal and State OSHA regulations have dramatically effected the fire service and private ambulance services. These governmental mandates have caused our expenses to increase in 1993 per transport as follows: Cost per Transport 1. Each employee receives an additional mandated training in 1993 in bloodborne Pathogens. (Attachment B of section 29CFR 5193 page 5 (5)A,B,C. and page 7 BIOHAZARD D,E,G.) $ 1.52 2. Contamination Kits are used on 25%of ambulance runs, 2 per run. The kit includes disposable safety shield, micro shield, impervious gown,medical gloves,biohazard $ 4.99 waste bag, and antimicrobial hand wipes. (Attachment A 29CFR 1910.1030 and Attachment B Bloodborne pathogens 29CFR 5193, page 2 and 3 (3)A,(I)) 3. Infectious Waste containers are now kept. Weekly disposals are contracted out with a biohazard waste $ 1.44 removal firms as per local regulations. 4. Hepatitis B vaccines are required for all employees. The average turnover of an employee is three years and the cost of vaccine is amortize for that same period. $ 1.28 (Attachment B Bloodborne pathogens 29CFR 5193,page 5 (1)A.) 5. Additional program administrate personnel such as a Risk Manager or OSHA training officer are required to comply with new regulatory mandate. (Attachment B Bloodborne $2.64 pathogens 29CFR 5193,page 7(2)D,H and AB.) Cost of bad debt and contractual allowances based on 33%. $ 5.89 Total per transport increase: $17.76 8932 Katella Avenue •Suite 201 • Anaheim, California 92804 • (714) 828-7750 Othear essential facts in support of this request are: o Medicare and Medi-Cal patients will not be affected by this increase as those agencies have capped their reimbursement. This type of billing constitutes about 45%of our business. o This request will not affect the current Master Agreement between the county and the ambulance providers(this agreement is at the existing Medi-Cal rate). o The rate increase will not affect 65%of our customers. Based on the above information, the AAOC proposes the following: o A flat adjustment of$17.75 to the base rate only per transport to offset the new OSHA requirements. and o The 2.5% annual increase for all charges using the United States Department of Labor,Department of Statistics Consumer Price Indices Annual Average for Urban Population Los Angeles,Anaheim-Riverside, California area (December to December). The AAOC appreciates the time and consideration given this issue and is happy to answer any questions the board may have. Sincerely, Amb ance Association of Orange County Le R. x Executive Director F��� f:,EDICNL SE r • • TO: OCEMS AGENCY a DATE:OZaS/94 APPLICATION FOR GROUND AMBULANCE EMERGENCY SERVICE RATE ADJUSTMENT List of ambulance services participating in this application for rate adjustment: Bowers Lynch Care Medix Doctors Schaefer Emergency Superior Lifefleet Application prepared by: Ambulance Association of Orange County, Title: Lee Cox.Executive Director ADJUSTMENT FORMULA The following index shall be used for calculating the proposed rate adjustment: Index: U.S.Department of Labor,Bureau of Labor Statistics,Washington D.C.,Consumer Price Index, All Urban Consumers(CPI-U),Los Angeles-Anaheim-Riverside,California. All Items (December to December) The time frame used to determine index changes shall be the most current twelve(12)month period available prior to submission of the application. Current Proposed Current Proposed Proposed Rate X Index Adjustment + Rate = New Rate New Rate (CPI only) OSIIA Requirements dt Index Emergency Base Rate 225.30 2.5% 5.63 225.30 230.90' 248J00' Mileagg 9.80 2.5% .25 9.80 10.05• 10.05 Night 11 39.90 2.5% 1.00 39.90 40.90 40.90 Oxygen 39.90 2-5% 1.00 39.90 40.90 40.90 Standby 28.50 2.5% .71 2850 29.20' 29.20 Exp.Medical Supplies 13.00 2.5% 33 13.00 1330 13.30 *These numbers were rounded to the nearest tenth. ••Includes OSIIA fee of$17.75 on the base rate only. • SOUTHERN CALIFORNIA AMBULANCE RATE COMPARISON BY COUNTY 93/94 COMPANY BLS BASE NICIIT OXYGEN MILEAGE STANDBY/WAIT HOUR 01 SAN BERNARDINO 397.91 80.40 _ 69.64 11.80 100.92 02 SAN DIEGO 290.00 45.00 45.00 11.00 60.00 03 LOS ANGELES 250.00 -- 43.50 - -� 33.75 10.00 --_ 108.00 -__- 04 RIVERSIDE 276.92 61.93 - _ 43.31 11.19 70.30- ORANGE(PROPOSED) 249.70 40.90 40.90 10.05 116.90 05 ORANGE 225.30 39.90 39.90 9.80 114.00 HIGH RATE. 397.91 80.40 69.64 11.80 116.80 LOW RATE. 225.30 39.90 33.75 9.80 60.00. AVERAGE RATE: 288.02 54.13 46.32 10.73 73.56 MEDIAN RATE: 250.00 45.00 39.90 10.03- 70.40 0 BASIC LIFK SUPPORT AMBULANCE STATEWIDE RATE COMPARISON BY COUNTY 92193 - i COUNTY BLS RATE NIGirr OXYCEN MILEAGE STANDIJYlWA1T HOUR 01 KERN 605.00 52.00 62.00 17.00 160.00 02 TRINITY 555.00 100.00 60.00 17.00 290.00 03 LASSEN 540.00 100.00 60.00 16.00 190.00 04 PLUMAS 540.00 95.00 -_- 60.00 �_--18.00 220.00 05 TUOLUMNE 510.00 54.00 50.00 10.00 49-00 06 MARIPOSA 470.00 57.50 40.00 9.00 70.00 07 MERCED 470.00 57.50 40.00 9.00 70.00 08 COLUSA 452.50 67.50 40.00 10.50 100.00 09 GLENN 450.00 100.00 65.00 17.00 240.00 10 SAN BENITO 425.00 45.00 45.00 9.00 100.00 11 ALPINE 400.00 55.00 40.00 12.00 75.00 12 CALAVERAS 400.00 55.00 40.00 12.00 75.00 13 INYO 400.00 50.00 40.00 16.00 240.00 14 STANISLAUS 400.00 50.00 35.00 12.00 60.00 15 SAN BERNARDINO 397.91 80.40 69.64 11.80 100.92 16 SANTA CRUZ 380.00 40.00 31.00 9.16 0.00 17 NAPA 360.00 75.00 48.50 10.50 135.00 18 SOLANO 355.00 85.00 55.00 12.00 300.00 19 PLACER 340.00 60.00 60.00 11.25 200.00 20 SAN JOAQUIN 336.00 56.U0 39.00 10.50 75.00 21 TULARE 335.00 50.00 60.00 12.00 240.00 22 SAN FRANCISCO 325.00 55.00 45.00 11.00 275.00 23 SONOMA 324.08 68.59 66.59 12.21 130.88 24 AMADOR 315.00 52.50 42.50 11.00 105.00 25 KINGS 313.50 55.00 55.00 10.45 240.00 26 MAR1N 310.00 60.00 40.00 12.00 0.00 27 MADERA 310.00 35.00 -40.00 9.00 50.00 28 YOLO 310.00 40.00 50.00 11.75 72.00 29 SANTA BARBARA 306.85 49.60 53.75 11.00 75.00 30 DEL.NORTE 305.00 50.00 40.00 8.25 160.00 31 SAN DIEGO 290.00 45.00 45.00 11.00 60.00 32 MONO 290.00 60.00 50.00 10.00 130.00 33 SANTA CLARA 288.Q0 50.00 50.00 10.80 0.00 34 LAKE 275.00 70.00 80.00 9.00 120.00 35 MONTEREY 274.88 45.20 40.77 9.85 110.68 36 ALAMEDA 273.61 45.29 43.75 9.70 0.00 37 CONTRA COSTA 266.98 49.941 41.72 930 416.00 38 SACRAMENTO 260.00 50.00 46.00 9.90 50.00 39 SISKIYOU 260.00 40.00 30.00 7.75 120.00 COUNTY + BLS BASE N1CI1T OXYGEN MILEAGE TrANDBYIWAIT HOUR ' - a 2 40 VENTURA 256.00 39.00 30.00 9.90 100.00 41 IMPERIAL 255.00 40.00 35.00 10.00 200.00 42 MENDOCINO 250.00 55.00 55.00 11.00 160.00 43 SAN MATEO 250.00 64.20 64.20 13.37 250.00 44 LOS ANGELES 250.00 43.50 33.75 10.00 109.00 45 RIVERSIDE 276.92 61.95 43.31 11.18 70.40 ORANGE(PROPOSED) 248.70 40.90 40.90 10.05 116.80 46 HUMBOLDT 245.00 35.00 35.00 8.20 70.00 47 SUTTER 245.00 50.00 45.00 8.50 200.00 48 ELDORADO 231.00 41.00 30.00 9.00 92.00 49 SHASTA 227.00 50.00 48.00 13.58 192.00 50 ORANGE 225.30 39.90 39.90 9.80 114.00 51 TEHAMA 217.50 0.00 44.50 8.00 45.00 52 MODOC 210.00 40.50 35.25 8.50 299.00 53 NEVADA 210.00 45.00 52.00 9.50 288.00 54 FRESNO 200.00 50.00 50.00 11.00 80.00 55 BU['PE 175.00 50.00 50.00 8.50 0.00 56 SIERRA 140.00 0.00 63.00 7.00 0.00 57 YUBA 132.50 35.00 30.00 6.75 200.00 HIGH RATE. 605.00 100.00 90.00 _ 17.80 416.00 LOW RATE: 132.50 0.00 30.00 6.75 0.00 AVERAGE RATE: 325.91 53.97 47.66 10.94 131.90 MEDIAN RATE: 305.00 50.00 45.00 10.45 108.00