ORDER-2016-161 : FY17 Ambulance Enterprise Fund Budget in the amount $904,565.70 (Nine Hundred Four Thousand, Five Hundred Sixty Five Dollars and Seventy Cents).

Transcript (~29 min @ 2:13)

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▶ 2:13 Peter D. Mortimer: President Kahn, please.

▶ 2:15 Speaker 1: Yeah, I'd move for concurrent action on this order with Order 2016-161, FY 2017 Ambulance Enterprise Fund Budget in the amount of $904,656. Second.

▶ 2:33 Peter D. Mortimer: President Carter has made a motion for concurrent action with order 2016-165, which I read a moment ago, and order 2016-161, which the President just read. Said motion was duly seconded by Alderman Inferno. All in favor, please say aye. Aye. Any opposed? Hearing none, these orders will be dealt with concurrently. Is there a motion to suspend the rules, please? So moved. Second. Alderman Zwirko has made a motion to suspend the rules, duly seconded by Alderman McIntyre-Mongolis. All in favor, please say aye. Aye. Any opposed? Hearing none, the rules are suspended. Gentlemen, Mr. Mergendahl, Chief Larry, would you come forward and join us, please?

▶ 3:31 Speaker 2: Good evening. Good evening, sir. Good evening.

▶ 3:39 Speaker 3: We're before you tonight to request an adjustment in the ambulance rates. As we've indicated in the past, the rate should be reviewed and adjusted annually. Just a quick update on the service. We're on track to meet our projected number of transports for this fiscal year. As of today, we've had 1,424 transports.

▶ 4:01 Speaker 3: The projection for this year was 1,520. We started carrying a medicine used to treat someone with cyanide poisoning, which is associated with carbon monoxide poisoning. All the medics have been trained in the administration of this drug. This is an optional drug that ALS ambulances can carry, but most services do not because of the expense. We've added a third Lucas device, a CPR machine, to our system, enabling our first on-scene crew to apply the unit so that medics can attend to other patient needs. Right now there's one on each engine and on the ambulance, and the goal is to have one on each piece. And several reasons for the adjustments, cost of supplies continue to increase for the items we use salary and wages line increased due to longevity and contractual step raises we've added a line for structural gear and the bond debt for the new ambulance so the 2014 ambulance has kicked

▶ 4:57 Peter D. Mortimer: in thank you thank you sir are there any questions or comments from members of the board president

▶ 5:05 Speaker 1: khan please yeah um so i i did a re i was reviewing and looking back at this budget since we started chief and it looks like in fiscal 214 it was seven hundred and twelve thousand three hundred and fifty two dollars yeah went up twenty two thousand dollars in the second year to seven thirty four four thirty eight went up another fifty three thousand in 216 to 787 637 and now

▶ 5:32 Speaker 1: Now this year it's going like by $117,000 to $904,565. Seems like we're on a trend where the increases are getting larger and this seems like a fairly hefty increase. What is the reasoning here?

▶ 6:05 Speaker 3: The salary and wages increase was 15,000. We added a gear line, which we never had, was an additional 10,000, and the bond debt, which initially, I believe the first year, we did not have to pay, increased to 35,000.

▶ 6:26 Speaker 3: So that's part of the problem, not so much of a problem that the ambulance is doing well.

▶ 6:39 Speaker 1: Yeah, and I saw that the salary and wage line last year was 542,087. So that's gone up this year to 557,290. And are you fully covering eight firefighters in this budget?

▶ 7:00 Speaker 3: Yes, eight and a half.

▶ 7:02 Speaker 1: Eight and a half.

▶ 7:02 Speaker 3: Yeah, that includes the EMS coordinator's position, half from fire and half from-

▶ 7:10 Speaker 1: And so it's all salary and all benefits are covered in this budget for eight firefighters?

▶ 7:14 Speaker 3: Correct. And how was that? I'm sorry, it also includes the overtime as well.

▶ 7:19 Speaker 1: Okay, so you've got $120,000 in this budget for overtime. Correct. And you've got $120,000 in your fire budget.

▶ 7:28 Speaker 3: The fire budget is going to be up to $315,000.

▶ 7:33 Speaker 1: $315,000. So is that including this 120, or excluding?

▶ 7:37 Speaker 3: No, that's excluding.

▶ 7:39 Speaker 1: Okay, so you have a total of in excess of $425,000 available for open time in the upcoming year?

▶ 7:49 Speaker 3: Yep, 435.

▶ 7:56 Speaker 1: And we've been asking similar questions on enterprise accounts as we work through the process.

▶ 8:03 Speaker 1: How was the determination made to have eight people take it out of this budget, if you know?

▶ 8:12 Speaker 3: I do not know the answer to that. Would Mr. Delarusso be the appropriate person?

▶ 8:20 Speaker 3: Well, my guess would be there's two firefighters per shift that work the ambulance, so that would be the eight firefighters.

▶ 8:26 Speaker 4: So two per group.

▶ 8:28 Speaker 1: What was the methodology to come up with the allocation of the eight firefighters to this budget? I believe originally through the chair that one was adopted was actually part of a grant for firefighters. And then over a period, I believe it was three years, the grant eventually went down. We turned around, brought in BLS, which is basic life support, and then ALS to complement the last portion of the grant that we were going to lose. So eight has been the number. In the prior year, I believe the chief indicated that they were looking to add another person, but half and half. You see, and I'm sure that's in his budget this year also, 8.5, but it was really predicated on a grant that the city had accepted years ago. Okay, and so just in looking at this in the fire budget, approximately 20% of the fire budget is being paid out of this enterprise account. Is that not true?

▶ 9:34 Speaker 1: The employees that are in the fire budget are not in the enterprise fund budget. It's separate. Yeah, but I like to look at it with the, you know, the total picture. Overall. Yeah, overall number of firefighters and this portion. Our expenditure for the fire department looks to me like approximately $5 million and we're up to $907 out of this account. That's all I have for right now. I'll let other people speak.

▶ 10:02 Speaker 2: Thank you, President Kahn.

▶ 10:07 Speaker 2: Alderman Medeiros, please.

▶ 10:08 Monica C. Medeiros: Thank you. Good evening. Thank you. I was wondering if perhaps Mr. Mergendahl could go over the rate calculation for the ambulance. And I know we have the projected revenue.

▶ 10:27 Speaker 4: Yeah, the activity summary?

▶ 10:29 Speaker 5: Oh, yeah, that's good, too.

▶ 10:32 Monica C. Medeiros: It's always nice to have you make sense out of it.

▶ 10:35 Speaker 4: So we went through the same exercise as we've done every year since the inception of the, or the re-inception of the ambulance here, which is doing everything we can to try to peg the rates to cover the cost of providing the service. So in doing that, we are now actually have four or five years of good historic data. So what you're seeing here is a pretty tight pin down of looking at historical past performance and the numbers and how they go. Melrose, as always, as we've talked about in the years past, has a very high percentage of Medicare patients, which certainly makes it harder to raise additional revenue, your payer mix, as the term of art that would be used. And so naturally there's going to be a huge cost shift on those patients who have the third-party insurance because Medicare, Medicaid, and people with no insurance at all, unfortunately, do not nearly cover the cost of providing for ambulance service in Melrose or anywhere else in this nation. So consequently, there has to be this cost shift, and that's how we try to peg your rates, keeping the rates as low as we possibly can while at the same time trying to do a model to project what it is to cover the cost of providing the service and and that's what we've done now I every year I always give my same disclaimer in my same caution which is this is not anything that we can use as a definitive thing if we we can certainly never know the exact number of transports we can never know the exact payer mix but all these numbers here this year are based on historical data over the last five years and that's how we how we got to them and this rate increase that you're seeing this year and and I have to actually compliment Melrose because you're one of the one of the few towns or cities municipalities that that actually does keep a good handle on tracking your costs and the rates and you do it every year and every year we here with this and you're one of the few that actually do this and again looking at last year this year a nominal small rate increase to cover the cost which is always increasing and the other thing to think about that the chief also had Medicare actually went down last year so the reimbursement for Medicare for this year actually went down by half a percent if you can really imagine medic medic the Medicaid rate has not increased in I want to say 10 or 12 years but Medicare which you would normally expect would go up for the cost of living was driven by an inflation charge and the government calculated negative inflation this past year so the Medicare rate also went down half a percent relatively small but still it's down and not up and and there's no no one's costs are down and not up so that's part of the exercise that's what we've done and in using that data to peg the rate increase and and keep it as

▶ 14:02 Monica C. Medeiros: small as possible thank you and chief Leary I know you mentioned the number of transports that could you just repeat that number again that we had last year

▶ 14:12 Speaker 3: we're on target to the the projection was 1520 and and we're at 1424 right now

▶ 14:23 Monica C. Medeiros: and I see this is based the projection for the rates is based on 1600 so that is a little bit of an increase it is looking at the and I what I base these

▶ 14:33 Speaker 4: numbers on is I looked at me and again there's all there's always timing issues as well but I looked at the numbers from April 1 of 15 to March 31 of 16 trying to get the latest snapshot of numbers and the total number of transports for that time period was 1621 right which is why I kind of shaved it down a little the 1600 we do we do try to make more conservative projections if we can is

▶ 15:04 Monica C. Medeiros: there a time of year where transports are up well it really is is really is

▶ 15:08 Speaker 4: dependent I mean emergency ambulance service can really go anywhere a lot of places you tend to see the the summers slow down a little bit but again usually that's marginal from people just getting out of town and you see the transports on the Cape and islands go through the roof so it really is dependent upon the just the locality and and the way that particular service area works well I

▶ 15:38 Monica C. Medeiros: wanted to point out that you know we have as you've included the past several years the data from the surveys from the department and you know it's consistent that we're receiving really high survey marks and so I just want to compliment you chief and in your department for that and it's in particular it's nice to see the comments that are in there from the people who've been transported and and you know and see that it was a difficult time and that you know they had such positive remarks so that's that's good we do appreciate that this is a service that you know we're providing to the residents I think it's very important that we go through this process and and look at the cost and make sure that we're doing our best to keep you know this tied into what you know keep it down as much as we can because no matter what there are people without insurance and there's people with you know high co-pays and and everything else so that in mind I I did want to one of the things that I've been trying to get a handle on is the indirect costs that we are that are sourced from the ambulance enterprise account into the general fund so if I I see mr. de la Rousseau back there he might be able to sort of explain what

▶ 17:05 Monica C. Medeiros: what's comprised in there I think it's about a hundred and thirty three thousand give or take that's through the chair just please the indirect cost

▶ 17:29 Speaker 1: number of 132 871 of life insurance cost I can provide you this document to write

▶ 17:37 Speaker 1: the health insurance so security pensions auditor treasurer department personal services cost information technology department EPW zero in that case legal services and city insurance costs so I'll provide this as I know

▶ 18:01 Speaker 1: what through the chair that I have to also provide the Mount Hood so I'll put

▶ 18:07 Monica C. Medeiros: them back to back that helps a lot I think they'll help you know keep the process as clear as possible I just and and on the discussion of staff and the that was the set the safer grants that we had received originally I believe that right sounds to save a great to save for grants and I know at the time we were we were hoping that they were going to allow us to because we had increased the staff at that time and we were going to possibly lose one staff member to attrition for retirement is did that work out the way that we had planned and that was going back some years I think that's before it's very

▶ 18:52 Monica C. Medeiros: I'm confused with the question yes sorry I president Khan's a question kind of sparked my memory originally I know we were bringing on I think eight eight new firefighters if my memory is correct and uh it was a little bit more than what we had had in the budget in our regular fire budget and we were going to be making the shift towards to doing the ambulance service at that time and i know that you know the idea was that we would keep the the firefighters on um obviously in paramedics and but that we didn't um we weren't sure how we were going to fund it moving forward and we had somebody that was a planned retirement coming in the future and we were hoping that we i don't we didn't have

▶ 19:41 Speaker 3: any layoffs and i don't recall that was prior to me becoming chief but uh we've sustained all the staff um like i said we used the two two paramedics per shift which also in addition to being paramedics to train firefighters so it augments that staff as well you know should we have a fire

▶ 20:06 Speaker 4: thank you thank you thank you thank you alderman Medeiros if if i could double back on just one thing you said just to remind everybody it's something that but years when we first started this this body also adopted a very very humane collection policy to go along with the ambulance rates and what we do so that's another piece for for the for those who are uninsured with the rates everybody decided at that point and and that we would never want to deter anyone from calling 9-1-1 so that policy still remains in force that you guys said at the beginning of having the most humane collection policy possible honestly

▶ 20:40 Monica C. Medeiros: thank you yes and actually I did want to ask in terms of collection and I'm hearing from some other municipalities that they're having difficulty with some of the certain insurance providers that getting the money from the insurance company not necessarily from the individuals yeah it's an ongoing issue

▶ 20:58 Speaker 4: for ambulance service across the country what many of the health insurers are doing is trying to squeeze out of network providers by sending payments directly to the patient trying to get providers to enroll in contract with them that's a probably a good policy for hospitals and such but frankly for ambulance service it's it's one of those ones where ambulance service may be getting swept in with the rest of health care because you know certainly ambulance service emergency ambulance service in particular you know there's really should not be a contracted entity I mean the health insurer cannot say oh we're gonna steer five heart attacks to you today and increase your volume by this much so contract with us so we can pay you less but that that's something that's across the board across the country and we're continually battling

▶ 21:55 Peter D. Mortimer: that issue thank you thank you again mr chairman thank you alderman Medeiros alderman forbes please

▶ 21:58 Scott M. Forbes: thank you mr chairman i think you walked right into my question so um when i look at the activity summary and we spoke before the meeting uh it appears about 80 percent of our trips uh from the ambulance are between medicare medicaid and what you have deemed here i think it's just uh bill patient which i would assume is no insurance correct so out of all the trips that we have there were 324 trips that were actually paid for by insurance can you just go over the the the columns for medicare medicaid because it looks at the gross charges that we actually charge for the service and how much we actually collect it's you know the the numbers are are disparate as far as the difference in what we're getting as far as what we're charging so if you could explain that to us and also for the people watching at home that would

▶ 22:52 Speaker 4: be much appreciated absolutely the the for Medicare and Medicaid patients in particular those rates are set and fixed by the government Medicare fixed by the federal government Medicaid fixed by the state government Medicaid rates have not increased in over 12 years Medicare actually went down last year Medicare is decided on what's known as a fee schedule and it's pegged for all across the country Medicaid and adjusted by geography Medicaid is set by the state and there's just a flat number and frankly both of those rates are far far below what it costs to provide ambulance service so you got just as an example I I mean, your budget is now about $900, so it's costing almost $600 per transport.

▶ 23:51 Speaker 4: The total budget that you have divided by the total number of transports, every time you take someone to the hospital, it costs $600. That's not out of line from anywhere. As a matter of fact, it's actually pretty good, very efficient. And if you take a look at the rate of what Medicare reimburses, they're reimbursing on average of about $430 for that trip. Medicaid is reimbursing on average of about $250 for that trip. So we know what it costs, and we know that 80% of your – and people with no insurance whatsoever are genuinely reimbursing you, generally reimbursing you nothing. They're not going to have insurance, and they're not able to cover it, and they're going to have a lot of other bills. so consequently what you're looking at is the the dramatic thing that exists in all of health care which is this cost shift on to the third party payers and Melrose and ambulance service is actually no difference when you have a large portion that are reimbursing far less than what it costs you to provide the service that money has to be made up somewhere and that's why when your rates are set, that shift takes place onto the third-party payers. It's unavoidable and it's done all across health

▶ 25:08 Speaker 4: care. That's a long-winded

▶ 25:10 Scott M. Forbes: response. No, no, I appreciate it, and I know that we never look at these things from a well, obviously, from a budget perspective, you look at it from a financial perspective, but when it comes to going out and making that call, you can throw all that out the window. I applaud the service that you do. I am a big supporter of the ambulance, and I don't have any further questions at this time thank you mr. chairman Thank You alderman

▶ 25:35 Robert A. Boisselle: Forbes alderman boys L please I'm following up with mr. Forbes Alden Forbes question with the Affordable Care Act that's been in effect now and it's in full effect this year and so forth do you find any relief and not not getting

▶ 25:49 Speaker 4: any of this payment and so forth um honestly no and and the reason being is is that it's a double-edged sword you will see some patients move from uninsured to having insurance while at the same time you'll see other patients moving from a traditional third-party private insurance into a maybe even a Medicaid managed care third-party insurance so you see a tremendous swing sometimes in the amount that it reimburses just based on the coverage type so it can cut both ways honestly it has definitely reduced the number of patients who are private pay patients by a couple of percentage points which is great but it's not it's not a windfall to the system overall for ambulance service also there's many patients that also ended up in what's known as health safety net it's free care so it's a type of insurance that covers you in the hospital and for inpatient stuff but health safety net does not cover emergency ambulance service or any ambulance service and so consequently even with that and even with universal coverage quote close quote it's not

▶ 27:01 Speaker 1: always universal thank you Thank You mr. chairman Thank You alderman voice out

▶ 27:08 Gail Infurna: alderman Inferno please in my day job I work a lot with these insurances so I understand exactly where you're coming from and the Medicare and Medicaid and you know it's it's amazing but certainly chief thank you in your department for doing such a great job I hear nothing but you know good things about the Melrose EMTs when they come to to service our people in their homes and you know what I don't think we like anything better than to have a Melrose fireman you know or EMT come to the house and they know exactly what they're coming into a question that we I get often as I'm down on Main Street or something and the fire engines go by and then the ambulance will go by or vice versa and I hope you'll give me just a little bit of lead way because this does kind of go into the budget I wonder if you allow it thanks I wonder if you could just give me a little Reader's Digest and help educate the public why you send a fire engine and an ambulance because people will say no why why are they doing that you know and this is where we can be cost-effective and you know so if you can maybe help educate the public very readers digest version

▶ 28:19 Speaker 3: of why you do that the three tiered response so the police respond the fire engine the nearest piece of fire apparatus responds in the ambulance and every all those people the first responders so the closest person is going to initiate aid first and they'll assist whether it be the police with traffic or to help the patient while the paramedics are treating the injuries the The EMTs and firefighters that are on the fire trucks also assist in the patient care to expedite their transition to the hospital. And at times we'll need a third rider because if it's, say, a cardiac arrest or something where all hands are needed, then that additional person will ride in the ambulance with them. All the fire trucks, everyone, we're all first responders trained in CPR, first aid, so that even if if there's a delay with the ambulance or unable to get there somebody's going to get there quick and administer aid I mean as a nurse I

▶ 29:16 Gail Infurna: understand every second counts and all hands on board I certainly want that but it's just funny what you hear from people you know as they see you know the emergency vehicles go down we'll see now this is where we could cut back and blah you know and so I just thought it would be good to get the word out there as to why you know all you want all hands on board no matter what so thank you for that quick one and once again thank you again for all your work if I could put

▶ 29:41 Speaker 4: my operational paramedic hat on for a second the the the last thing that any of you would want to do is go to an emergency and have to play catch up and have to wait for more help to come to execute something that you have to do in an emergency situation you would rather have more help there and that help is there in the station it is a very marginal marginal cause to have them also respond and the last thing you'd want to do is play catch-up in a situation that is a true life-and-death situation and and the idea that two people can manage a life-and-death situation and then have to wait for two or three more folks to come you know in dire circumstances is not the time that you want to be waiting you would rather send the maximum response and and be able to handle the emergency or just even send send somebody home who hasn't had to do much rather than play catch-up in those times that you really need it

▶ 30:34 Gail Infurna: thank you very much thank you mr. chairman for that little bit of lead way

▶ 30:41 Peter D. Mortimer: but it was budget related certainly Thank You alderman Inferno alderman Suarco please oh I'm sorry alderman MacMaster my goal thank you I just had a

▶ 30:49 Mary Beth McAteer-Margolis: question on the the fee survey that you provided us with and it wasn't quite clear to me where we sort of stood in the grand scheme of things on the first page it lists Melrose ALS 1650 should that be the BLS 1650 because then the next the next two pages have us also with the ALS which I assume is one and