ORDER-2020-92 : Ambulance Enterprise Fund for Fiscal 2021 in the amount of $938,017.12 (Nine Hundred Thirty-Eight Thousand, Seventeen Dollars and Twelve Cents).

Transcript (~21 min @ 1:06:42)

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▶ 1:06:44 Christopher Cinella: Next order, we have the order 2020-92, Ambulance Enterprise Fund for fiscal year 2021, amount of $938,017.12.

▶ 1:07:00 Speaker 1: I'm gonna, Chief, I'm gonna speak to Mr. Mergendahl of panelists as well. Okay.

▶ 1:07:14 Speaker 1: Can you hear us?

▶ 1:07:19 Speaker 7: I can. Can you hear me?

▶ 1:07:27 Christopher Cinella: All right. Well, Mario, do you have any comments on this particular order that's before us?

▶ 1:07:33 Speaker 7: This is a new way to do this, huh? After a lot of years of appearing. But, no, I think Melrose continues to do what it's always done, which is try to match the rates of the users who need the ambulance to the cost of providing the service. And again, you guys continue to do that rather than just have some arbitrary ambulance rate. The thing that's been done since the reinception of the ambulances is to kind of look at the cost and match the fee structure for that. And again, I think that's what we've tried to accomplish this year. There's just, you know, roughly a 3% increase, which matches, you know, the typical, which matches the benchmark for health care spend. The rates remain in line with all the surrounding communities. Full volume and collection were up, actually, for 2019. But 2020 is going to be an interesting time for everybody. because full volume is going to be down. So that's something that, you know, we're going to take a look at as the year progresses. Everyone is in that same spot, but it'll certainly get severe again as the state reopens.

▶ 1:09:09 Christopher Cinella: Any questions?

▶ 1:09:14 Speaker 1: You can raise your hand, Vice Chair McInerney.

▶ 1:09:18 Leila Migliorelli: Thank you, Chairman. Thank you, Mr. Morgendahl for being here tonight. just have a question about the training line item in your budget the 150 percent increase

▶ 1:09:33 Speaker 7: can you talk a little bit about that is that addressed to the chiefs or me uh whomever can

▶ 1:09:43 Leila Migliorelli: sure um why are we talking um the training line five it's towards the bottom under under

▶ 1:09:54 Leila Migliorelli: ambulance other charges 5 4 0 7 0 2 yes that training there is uh is for is

▶ 1:10:21 Speaker 6: gonna be used for the online educational this is for the EMTs and paramedic

▶ 1:10:36 Speaker 6: program so that's something new chief we brought it last year we used to pay the firefighters overtime to go out in search of their education requirements and then we brought it in house and it they're compliant with their needs in

▶ 1:11:01 Speaker 6: hours and we instituted that last okay so the increase is due to the fact that

▶ 1:11:06 Leila Migliorelli: you brought the training in-house different than what you've done in the That's correct.

▶ 1:11:12 Speaker 6: All right. Thank you.

▶ 1:11:14 Speaker 1: Any other questions? Council Gallipay. Hi, Chief.

▶ 1:11:25 Mark Garipay: Can you just talk a little bit about the professional services, the increase in that line item, what goes in that?

▶ 1:11:35 Speaker 6: Sure. So as Mr. Mergendahl said, our run was up last year. that a lot of that is for the pro EMS billing and and we also use that that

▶ 1:12:00 Speaker 6: line item for a leasing of the so when I come goes up the more revenue we bring in the the matrix of the what we have to pay pro for doing our billing for us

▶ 1:12:12 Speaker 7: well most ambulance service billing fees are on contingency so it's a 4% it's a 4% fee for all revenue cash revenues is brought in for ambulance billing services so if call volume goes up revenue goes up that that fees correspondingly goes up where it's a 4% contingency fee on for billing service

▶ 1:12:38 Mark Garipay: thank you I just want to acknowledge your eyes I know it's it's unpredictable but your overtime budget did what was budgeted chief it's doing a good job I know it's great you have actually I know it's you should be commended but you

▶ 1:13:00 Mark Garipay: know a lot of its luck too right I got one other question regarding the billing, Mr. Bergendahl, is there any, with the COVID-19 going on now, and a lot of insurance companies are waiving co-pays and everything, is there any, are you seeing anything that we may not get full reimbursement back from insurance companies when they bill through insurance companies? Have you heard anything on that for next year? Not really. I mean, emergency

▶ 1:13:27 Speaker 7: the ambulance service is kind of a different piece when it comes to the COVID and the billing and such. You guys already have a policy of waiving co-pays for city residents. So, you know, you're not going to see a big impact there. um so i i you know really the hip is that all emergency services are are seeing ambulance lines the corresponding drop in call volume and transport volume which has been related to the shutdown of the state i mean just just to use my cambridge as an example i mean uh a couple weeks ago we went three days without a car accident that's literally unheard of i mean You know, so that's what we've all kind of seen the last couple months. But, again, it'll rebound certainly as the state starts to reopen. The challenge is that even though call volume is down, the acuity of the calls is up. The amount of PPE you have to use, the amount of preparation you have to use, The amount of time that it takes in the hospital and doing decon, all of that has increased dramatically. So, you know, it's a lower call volume, lower transport volume, but higher acuity in patient care and a lot tougher circumstances throughout, you know, from the start to the finish of the call.

▶ 1:15:13 Speaker 1: Thank you. Councilor Thomas.

▶ 1:15:18 Cory Thomas: Thank you, Mr. Chairman. uh mr mergendahl actually just spoke about what my question was going to be whether call volume was up or down uh during the last three months so i appreciate it thank you

▶ 1:15:32 Shawn M. MacMaster: yeah also mcnaster thank you mr chairman good evening mr mergendahl it's very nice to see you good to see you again if things look differently that's because council the trim and tozy and i have aged and we have uh nine new concerts so there are some new faces um and i think mr mergendahl it might be uh beneficial for the new consulates that understand uh your role as you know we've worked professionally outside of this chamber on uh some matters but you're the ceo of pro ems you've been there for for over 30 years i don't mean to date you but you uh pro ems is really um really the trendsetter in the ems community um not just locally but also uh nationally, and I know you're expected in the EMS field beyond the borders of Massachusetts. And we have been using Pro EMS to actually set our rates as a community. We don't do our own billing. So for the edification of the council and the public who perhaps are watching at home and maybe are not familiar with your role at Pro EMS, can you tell us just a little bit more about yourself how we work with pro EMS as a city and maybe just a little bit about how the metrics are determined that go into setting the rates because that's one thing that you and your team really specialize in your very data-driven analytical organization so if you could

▶ 1:17:03 Speaker 7: just talk about that I appreciate it you're absolutely Tyrannosaurus paramedic us from the early Mesozoic area era the we were brought in back when Melrose reconstituted its its fire based ambulance program and it had gone by the wayside for years and one of the bigger problems was related to reimbursement and trying to match the revenue with the additional cost of returning the service to the fire department so one of the things that we kind of originally in way I think we're going back but I bet the chief and Patrick down me off but I think you know eight or ten years now we need to throw some darts in the beginning but we kind of look there's a couple of things that you look at you look at the payer mix right which is a big thing how what is your percentage of residents that are insured by Medicare by Medicaid by private insurance and then the folks that do not have any insurance that payer mix is a very large driver in what your reimbursement is going to be like Melrose has actually a relatively comparatively high rate of Medicare patients and Medicaid patients roughly 75% of the of the patients in Melrose are Medicare and Medicaid a much higher percentage of Medicare the lower percentage of Medicaid that's roughly 62 percent Medicare 10% Medicaid 24 percent and only 2% of people with no insurance whatsoever but the thing is Medicare Medicaid and people with no insurance are pretty much paying a big Medicare is reimbursing you roughly 40% below what it costs you to roll the ambulance out of the barn medicaid is reimbursing you about 60 less than what it is and someone with no insurance is basically reimbursing zero so the private insurances have to make up the difference which is that cost shift in that balancing act which exists throughout all of health care not just ems but in the hospitals and everywhere um it is a it is a fact of life and it is how the health care system from doctors to hospitals to labs through the entire country functions so we've always driven and started out with okay what is the cost of running the rescue with your enterprise fund which which your folks have pinned down really well and i i have to say yours is the exception not the rule in terms of having a good handle on what it really costs you to run an ambulance most places don't have that most places the costs are very much intermingled is the whole budget and you can't you can't really pick it out but you guys actually do have the costs broken out by virtue of the enterprise fund so consequently we do a model and we look at the historic payer mix we look at the historic call volume and then we set the rates to try to to generate the revenue that would match that it is a two-pronged analysis it is where do you where do you set the rates in order to try to recover as close to the cost of providing the service as possible then the second prong of the analysis is to look at everybody around you is to see if your rates are reasonable now certainly if you did lower call volumes and you had to set your rate at $5,000 to get you to covering your cost. That's not reasonable, right? But you are in a position where with a very low private pay, a decent level of insurance, you actually do okay and you actually have a pretty high call volume for that one rescue that keeps running. And part of that is also because of the hostage rate in the city. So a lot of your transports are going right to MELWAC and and so consequently you have the benefit of having that available quicker and such so we've got some good uh benefits to go along with the more restricted payer mix um but the again the whole point is not to we're not throwing darts anymore so much um because we've got a lot of good historical data we've got a good breakdown of your payer mix We've got great comparisons from all the cities and towns in all of Eastern Massachusetts to kind of look at. We do billing for, at this point, 50, 35 towns in Massachusetts and another 15 in New York. So we've got a pretty good handle on the reasonableness of your charges, and they are. so that's that's a long-winded primer on um what we've done sort of from the beginning and how rates have been established and the theory behind it that's an excellent summary i appreciate it

▶ 1:22:52 Shawn M. MacMaster: mr mergendahl and again it's very nice to see you in the chamber thank you

▶ 1:23:02 Jen Grigoraitis: thank you and thank you for that summary mr mergendahl i just a follow-up question As we look at the incredible increase in unemployment, both across the state and within Melrose, we've seen unemployment go from 2% in January to 12.5% in April, just in the city, and the rate at the state has been larger. I assume we'll see a shift in an increase in people going on Medicaid and possibly being uninsured. How does that factor into some of your analysis?

▶ 1:23:35 Speaker 7: Oh, it definitely hurts your payer mix dramatically if and when that happens. We don't have enough data yet to be able to pin that down, but that absolutely, you know, hurts your payer mix and your revenue dramatically if that happens. No doubt about it. We are very much in uncharted territory. this is this is everybody this is not just mellows this is everybody in EMS and we're all kind of we're all kind of building the plane as we're flying it as

▶ 1:24:17 Jen Grigoraitis: it were thank you so you do you think it's fair to say that we would likely see the results of that in FY as we build FY 22 I think that's fair to say I

▶ 1:24:25 Speaker 7: think I think you're you're going to see some of it you're going to see some of of it, you know, by the time you look at the numbers for June 30th, now the numbers that you have for June 30th really won't shake out until the end of September. When we look at all medical billing, ambulance especially, you really need to look at a 90-day lag. So a transport that you're doing today, you would really want to look 90 days from now to see where that stands, where what you brought in and look at your numbers so you'll have a much better handle on on FY 20 come September and you know I think we'll know a lot more in terms of where we are with call volume where we are reopening by then also but you're gonna feel it there's no two ways about it everyone is going to is going to feel the drop in the call volume and exactly what you said folks that potentially are losing their health insurance going on to the connector slash Obamacare plans away from the higher paying private insurance you're

▶ 1:25:46 Robb Stewart: definitely going to see that thank you Stuart Thank You mr. chair and thank you Mr. Mergendahl for that information. One quick follow-up question to all that is is this information available online in any form? Which part honestly? They obviously you're getting some of the information about surrounding towns in terms of their rate structure and so forth do you have a lot of the details

▶ 1:26:18 Speaker 7: of this publicly available we can send a we can we typically send a rate comparison chart that we've kind of accumulated over time yeah it's not it's not always perfectly up-to-date honestly because you don't really have a there really is no true mechanism out there for everyone to match their rates and to look at I can send the current rate comparison chart that we have put together to uh patrick and the chief who could forward it on to you guys

▶ 1:26:47 Robb Stewart: that'd be great thank you mr morgan thank you mr chair

▶ 1:26:59 Speaker 1: counselor mcnaught all right uh motion to recommend

▶ 1:27:05 Speaker 7: second which one uh point of order which one

▶ 1:27:10 Speaker 1: we got there's two of them then 2020.92 stop that one yes second

▶ 1:27:16 Christopher Cinella: recommend made by councillor mcnaught seconded by councillor stewart Madam Clerk, can you call the roll?

▶ 1:27:27 Speaker 1: Vice Chair Migliorelli? Yes. Councilor Tramontozzi? Yes. Councilor McMaster? Yes. Councilor McNaught? Yes. Councilor Eccles? Yes. Mayor Payne? Yes. Councilor Stewart? Yes. Councilor Thomas?