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TO: Mayor Thomas J. Weisner
FROM: Brian W. Caputo, Chief Financial Officer/City Treasurer
DATE: January 20, 2016
SUBJECT:
Revision of the Procedure for Setting Nonresident User Fee Rates for Ambulance/Paramedic Services.
PURPOSE:
To obtain the City Council’s approval of a change in the procedure for setting nonresident user fee rates for ambulance/paramedic services provided by the city.
BACKGROUND:
The City of Aurora provides ambulance/paramedic services within the city limits. The services are distinguished as basic life support (BLS), advanced life support - level 1 (ALS1), and advanced life support - level 2 (ALS2). BLS consists of providing less complex medical services and can include establishing a peripheral intravenous line. ALS1 consists of providing more complex medical services but not those of ALS2. ALS2 consists of providing at least three different medications or one of the following procedures:
• Manual defibrillation.
• Endotracheal intubation.
• Cardiac pacing.
• Chest decompression.
• Surgical airway.
• Intraosseous line.
The Aurora Fire Department estimates that only about 1% of its ambulance calls require ALS2 services.
Like most municipalities, the City of Aurora charges different rates for patients who are residents and nonresidents. The city has adjusted its ambulance fee rates each year based upon a methodology established in Resolution No. R06-46, adopted by the City Council on February 14, 2006. The resident rates are always equal to the ambulance/paramedic payment rates established for Medicare-eligible persons by the United States Department of Health and Human Services. The nonresident rates were initially equal to the respective averages for nonresident rates reported in the ambulance/paramedic services survey conducted by the City of Naperville in 2005 (i.e., the “Naperville Survey”). The Naperville Survey is an annual survey of over 100 fire departments and fire protection districts in Illinois that provide ambulance/paramedic services. The results of the Naperville survey may be considered to generally reflect the state of the Illinois market with respect to ambulance/paramedic services rates.
Resolution No. R06-46 calls for all of the rates to be adjusted annually by a percentage equal to the annual change in Medicare rates. Based upon this methodology, the city’s rates for ambulance/paramedic services effective January 1, 2016 are:
|
|
BLS |
ALS1 |
ALS2 |
|
Resident |
$378.29 |
$449.22 |
$650.19 |
|
Nonresident |
$502.77 |
$631.28 |
$829.78 |
The city also charges a fee of $7.31 per mile for transports to hospitals. The city’s mileage rate is equal to the Medicare rate. When city paramedics are asked to treat but not to transport a patient to a medical treatment facility, the BLS, ALS1, and ALS2 rates are discounted by 50%.
Ambulance/paramedic fees are typically paid by Medicare, Medicaid, and conventional insurance providers.
The Aurora Fire Department receives approximately 11,000 requests for ambulance/paramedic services per year (9,700 from residents and 1,300 from nonresidents). The delivery of ambulance/paramedic services generates a total of approximately $2.5 million of revenue annually.
DISCUSSION:
As stated above, in 2006, nonresident city rates were set so as to be equal to the averages reported in the 2005 Naperville Survey. In subsequent years, the nonresident rates were adjusted annually by the percentage change in Medicare rates. However, over time, the annual increases have not kept pace with the average rates reported in the Naperville Survey. Below is a comparison of the nonresident city rates with the corresponding averages in the 2015 Naperville Survey.
|
|
BLS |
ALS1 |
ALS2 |
|
Nonresident City Rates |
$502.77 |
$631.28 |
$829.78 |
|
2015 Naperville Survey Averages |
$833.22 |
$1,035.20 |
$1,202.55 |
|
Difference - Amount |
$330.45 |
$403.92 |
$372.77 |
|
Difference - Percent |
39.7% |
39.0% |
31.0% |
The comparison indicates that the averages of the Naperville Survey are substantially higher than the city’s current nonresident rates. The city has fallen behind the market in this regard.
To address this anomaly, the methodology for setting the nonresident fee for ambulance/paramedic services should be changed. The current nonresident city rates should be revised to match the corresponding rates in the 2015 Naperville Survey. To keep pace with the market while still retaining reasonable rates in the future, the city should have its nonresident rates equal the averages in the Naperville Survey published during the preceding year. If the Naperville Survey ceases to be conducted, nonresident city rates should be adjusted annually by the same percentage as the change in Medicare rates until another methodology can be developed that ensures that the city’s rates generally reflect market conditions.
We estimate that the proposed change in the methodology for setting nonresident ambulance/paramedic rates will generate an additional $250,000 of revenue per year.
IMPACT STATEMENT:
Not Applicable.
RECOMMENDATIONS:
That the City Council adopt the attached, proposed resolution that will serve to revise the procedure for setting nonresident user fee rates for ambulance/paramedic services provided by the city.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Establishing Procedures For Setting User Fee Rates For Ambulance/Paramedic Services.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, in furtherance of its home rule power, it is necessary and desirable for the City of Aurora from time to time to review and amend various user fee rates to compensate for rising costs; and
WHEREAS, the City of Aurora currently provides emergency ambulance/paramedic services through its Fire Department; and
WHEREAS, the City currently charges user fees in exchange for the provision of ambulance/paramedic services;
WHEREAS, the City deems that it is prudent to modify its procedure for setting user fee rates for ambulance/paramedic services, particularly with respect to setting rates for services provided to nonresidents.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows:
Section 1. The user fee rates for ambulance/paramedic services provided to residents shall be equal to the ambulance/paramedic services payment rates established for Medicare-eligible persons by the United States Department of Health and Human Services for Basic Life Support (BLS); Advanced Life Support, Level 1 (ALS1); and Advanced Life Support, Level 2 (ALS2).
Section 2. The Chief Financial Officer/City Treasurer is empowered and hereby authorized to adjust the City’s user fee rates for ambulance/paramedic services provided to residents annually consistent with changes that the United States Department of Health and Human Services makes in the Medicare payment rates.
Section 3. The user fee rates for ambulance/paramedic services provided to nonresidents per service (i.e., one charge for multiple patients transported in one ambulance) shall be equal to the corresponding average rates for BLS, ALS1, and ALS2 reported in the annual survey of ambulance services published by the City of Naperville, Illinois (the “Naperville Survey”) during the preceding year.
Section 4. The Chief Financial Officer/City Treasurer is empowered and hereby authorized to annually adjust the City’s user fee rates for ambulance/paramedic services provided to nonresidents so as to equal the corresponding averages reported in the Naperville Survey for the preceding year. If the City of Naperville ceases to conduct the annual survey of ambulance services, the Chief Financial Officer/City Treasurer will adjust the City’s user fee rates for ambulance/paramedic services provided to nonresidents by the same approximate percentage that the United States Department of Health and Human Services adjusts Medicare rates.
Section 5. In addition to the user fee rates described above, a mileage charge shall apply to ambulance/paramedic service. The mileage charge for ambulance/paramedic service provided to both residents and nonresidents shall be equal to the mileage rate established for Medicare patients by the United States Department of Health and Human Services. Mileage shall be measured by the approximate distance from the fire station from which an ambulance is dispatched to the incident site to the facility where the patient is ultimately treated by medical professionals.
Section 6. The Chief Financial Officer/City Treasurer is empowered and hereby authorized to adjust the City’s mileage charge for ambulance/paramedic services provided to residents and nonresidents annually consistent with changes that the United States Department of Health and Human Services makes in the Medicare mileage rate.
Section 7. Notwithstanding the previous sections of this resolution, the user fee rates for ambulance/paramedic services provided to residents and nonresidents who decline to be transported to a treatment facility shall be 50% of the otherwise applicable user fee rate. Mileage charges shall not apply in such cases.
Section 8. This resolution supersedes City of Aurora Resolution No. R06-46 dated February 14, 2006, in its entirety.
Section 9. This resolution shall be effective for ambulance/paramedic services provided by the City of Aurora on or after March 1, 2016.
Passed and approved on _______________________________.
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Aldermen Aldermen
AYES _____ NAYES _____ NOT VOTING _____
ATTEST:
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City Clerk Mayor