State taxing ambulance transports

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Intent to increase federal funds for Medi-Cal

The state is using emergency medical transports to garner funding increases for its Medi-Cal program from the federal government that will directly impact the Idyllwild Fire Department. This fall, the state Legislature passed and Gov. Jerry Brown signed Senate Bill 523 that will impose a quality-assurance fee on emergency-medical transports.

“This new tax would have a direct negative impact on our general fund and would result in a decrease of service to our taxpayers,” wrote Idyllwild Fire Chief Patrick Reitz in a September letter recommending that Brown veto the bill.

The emergency-transport fee rate will be 5.1 percent of the charge for the transport, but the actual amount will not be calculated until June 2018. The new revenue will be deposited in a special account for the state’s Medi-Cal program, including emergency-medical transports.

The bill’s authors argued that Medi-Cal transport reimbursement payments have lagged over the past decade and this mechanism will be a way to secure more funding for emergency-transport providers.

Reitz estimates the program will result in a net loss of $25,500 annually to the district.

“For years Medi-Cal reimbursements have only been a fraction of actual costs of transporting a patient to the hospital. For a small, rural district such as the Idyllwild Fire Protection District, this tax amounts to another cut, not an increase, in what little Medi-Cal reimburses for ambulance transport,” Reitz wrote in the letter. “Our constituents should not be subsidizing a Medi-Cal rate increase that will benefit mostly large for-profit ambulance companies.”

Reitz explained that ambulance companies who transport a large number of Medi-Cal patients may receive total reimbursements that could exceed their emergency-transport fee. But IFPD is not in that category.

The revenue generated by the ambulance fee will pay for California’s cost to administer the program, 10 percent will be devoted to healthcare coverage and the balance for increased payment to emergency medical transport providers.

The estimated cost to operate the program is $750,000 annually.

The 10-percent healthcare earmarked is projected to reduce the state’s General Fund costs for Medi-Cal by $3.2 million annually.

The balance, which is forecast to be about $30 million, will be matched by federal funds resulting in about $73 million for reimbursement to medical -transport providers.

“We’re basically paying the state to pay ourselves,” Reitz said. “We pay more for reimbursements, off the backs of local government, to subsidize the state and federal governments.”

As an example, Reitz described the reimbursement for mileage expenses. There are categories: urban, suburban, rural and super rural. Transports greater than 50 miles are considered super rural and are the highest paybacks.

“But they don’t look at time, geography or topology,” he said. “We’re not 51 miles from the local hospitals, but the time it takes to get to them is equivalent and we don’t get reimbursement at super rural from Medi-Cal or Medicaid.”

While IFPD usually has an annual increase in the ambulance and medical services rates, Reitz stressed that it cannot increase rates “to cover the cost of the fees.”

The state already imposes provider fees on managed care plans, hospital, skilled nursing facilities and intermediate care facilities for the developmentally disabled. These fees all contribute to increasing the federal matching share of Medicaid funds.

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