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TO: Mayor Richard C. Irvin
FROM: Christopher Minick, Chief Financial Officer/City Treasurer
David McCabe, Fire Chief
DATE: November 04, 2024
SUBJECT:
Recommendation to Amend Ambulance User fees.
PURPOSE:
To authorize the Chief Financial Officer to annually adjust ambulance user fees based on data provided by the Ground Emergency Medical Transport (GEMT) program through the State of Illinois. This approach allows the City to better align its revenue structure to recover the actual costs of providing ambulance service.
BACKGROUND:
Resolution R16-030 enabled the Chief Financial Officer to adjust the City of Aurora ambulance user fees to be equal to an average of other municipal provider’s fees as reported in the Naperville survey. This was done without regard to our own costs to provide ambulance services.
In late 2019 and early 2020 the State of Illinois, working with the Illinois Fire Chiefs Association (IFCA) enacted a new program involving the use of federal funding (Medicare/Medicaid) to subsidize/support Ground Emergency Medical Transport (GEMT) providers. The City of Aurora completed all applications for this program and began receiving funds in 2020.
As part of our continued participation in the GEMT program, an annual cost report must be submitted to the Department of Healthcare and Family Services by early October of each year. The GEMT Cost Report is a retrospective analysis of expenditures and EMS transports for the previous calendar year that directly determines the Average Cost per Transport (Attachment 1 GEMT Cost Report, Schedule 9, Line 9) for the City of Aurora.
DISCUSSION:
In reviewing our rates and the rates of other Illinois communities we have found that Aurora rates are substantially less than our comparable communities (Attachment 2, Table 1). As noted in the tables, our current rates are less than our comparable communities with an average difference of $577.64 for non-resident rates and $1,340.98 for resident rates.
The City of Aurora currently has individual rates for the specific types of EMS services rendered while most other communities do not. This appears to be a remnant of when the City of Aurora would balance bill residents for services rendered. The practice of balance billing residents ended with 20-0706, which provided welcome relief for residents, though keeping the Resident / Non-Resident fee structure effectively maintained a steep discount for insurance providers. It is for this reason that we are proposing to eliminate the Resident / Non-Resident fee structure. Regardless of changes to ambulance user fees, residents of the City of Aurora will continue to see zero out-of-pocket costs for utilization of emergency medical services.
The Chief Financial Officer will adjust Ambulance User Fees annually based on the GEMT Cost Report. Since the GEMT Cost Report is a retroactive analysis of the previous year, the Ambulance User Fee for next year will be calculated as the Average Cost per Transport plus an additional 6% (3% year-to-year inflation factor) to project for known and unknown increases in expenses. The Ambulance User Fee is to be updated and effective January 1, 2025 and every subsequent January 1 (Attachment 3).
In addition to the Ambulance User Fee defined above, a mileage charge shall apply to all ambulance transports. This mileage charge will be equal to three times the mileage rate established by the Centers for Medicare & Medicaid Services (CMS) plus 3%. Mileage is automatically calculated in the EMS report and is measured by the distance from the scene of the incident to the receiving facility (Attachment 3).
Note that all the fees above are for transport services, and therefore, ambulance calls that do not involve transport are not subject to Ambulance User Fee or the Mileage Fee.
IMPACT STATEMENT:
The recommended change in fee structure will provide an increase in annual ambulance billing revenue, estimated at $2,100,000.00 for 2025 (Attachment 4). This resolution will also make the updating of ambulance billing a yearly process that will be based on our actual cost to provide the services. Moreover, we will continue to not balance bill our residents, this means the only bill generated for a resident who uses the ambulance services will continue to go to their insurance provider.
RECOMMENDATIONS:
It is recommended that the City Council approve this resolution granting the City’s Chief Financial Officer the authority to annually adjust the City of Aurora ambulance user fees as justified above.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Establishing Procedures For Setting Ambulance User Fees For Emergency Medical Services (EMS).
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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 medical services through its Fire Department; and
WHEREAS, the City currently charges user fees in exchange for the provision of emergency medical services; and
WHEREAS, the City deems that it is prudent to modify its procedure for setting user fee rates for emergency medical services; and
WHEREAS, the City does not balance bill residents for emergency medical services; and
WHEREAS, residents of the City of Aurora will continue to see zero out of pocket costs for emergency medical services;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows:
Section 1. The Ambulance User Fee for EMS transports shall be equal to the Average Cost per Transport as determined by the most recent annual Illinois Ground Emergency Medical Transport (GEMT) Cost Report plus 6%.
Section 2. The Chief Financial Officer/City Treasurer is empowered and hereby authorized to annually adjust the City's Ambulance User Fee for emergency medical services. Adjustments should be made after the GEMT Cost Report is submitted, to be effective next January 1.
Section 3. In addition to the user fee rate described above, a mileage charge shall apply to all EMS transports. The mileage charge for EMS transports shall be equal to three times the mileage rate established for Medicare patients by the Centers for Medicare & Medicaid Services (CMS) plus 3%.
Section 4. The Chief Financial Officer/City Treasurer is empowered and hereby authorized to annually adjust the City's mileage charge for EMS transports. Adjustments should be made after CMS releases the current year’s rates, to be effective next January 1.
Section 5. This resolution supersedes City of Aurora Resolutions No. R16-030 dated February 09, 2016, and No. 20-0706 dated November 24, 2020, in their entirety.
Section 6. This resolution shall be effective for emergency medical services provided by the City of Aurora on or after January 1, 2025.