Palo Alto Weekly

News - May 9, 2014

Palo Alto mulls new fees for emergency medical services

City considers charging for services that don't require ambulance transport

by Gennady Sheyner

Riding in an ambulance during a medical emergency is rarely a pleasant experience.

Neither is receiving the bill afterwards, which in Palo Alto can top $1,700.

But for the city's Fire Department, which provides paramedic services, charging customers for medical response is in some ways an all-or-nothing proposition: They either transport the victim to a local hospital and charge the requisite fees (which vary based on miles traveled, services rendered and other factors), or they don't transport them anywhere and do not charge them anything.

In the existing system, the reimbursement model is based exclusively on transporting patients. Even if paramedics render aid and use medical supplies, they have no ways of charging for these services.

That, however, may soon change.

On Tuesday night, the City Council Finance Committee discussed a proposal to create a "treat and no transport fee" that would address situations in which someone receives medical care from the city but doesn't need to be taken to the hospital. The committee authorized a request from Fire Chief Eric Nickel to begin conducting community outreach about this proposed fee.

One of the goals of the new fee is cost recovery. Currently, the city sends a fire engine or a ladder truck to all emergency medical calls, which now make up an overwhelming majority of total calls, according to city data. The vehicles, manned by emergency medical technicians and paramedics, often arrive before the ambulance and provide immediate emergency treatment. Yet the cost to deploy these employees and render the service has no recovery mechanism in the current municipal fee schedule.

In his presentation, Nickel said the department wants to be in a position where it can offer services to residents who don't need to go to the hospital and charge them a different fee from the ones that get transported. The new "treat but not transfer" fee would likely be in the range of $375 to $450, Nickel said.

He noted that in many cases, the fees that the city charges patients for transport are reimbursed by insurance companies. By contrast, services that don't require a hospital visit are paid for entirely by the city and, hence, by the taxpayers.

"I personally feel the taxpayer should not be subsidizing the insurance carriers if we do not attempt to recover the cost of our service," Nickel said.

The department is also considering situations in which fees should not apply at all, he said.

"If someone gets into an accident, someone else calls 911, and if the person is not hurt and doesn't want treatment, we'd have a process to waive those fees," Nickel said.

The proposal comes at a time when medical calls are on the rise, a trend that is expected to continue as the large baby boomer generation gets older. According to the city's 2013 performance report, the department received 4,712 calls in the medical/rescue category in fiscal year 2013, up from 4,484 in 2012 (by contrast, the city received 150 calls relating to fire in 2013). The department made 3,523 ambulance transports in fiscal year 2013, up from 3,220 the prior year.

In the vast majority of the cases (91 percent), a Palo Alto responder arrives within eight minutes of the call, compared to the 12 minutes it takes for ambulances elsewhere in Santa Clara County. Residents have been generally happy with the services, with 93 percent ranking them "good" or "excellent" in a recent National Citizen Survey.

Nickel said Monday that in addition to helping recover costs, the new fee would align with the department's objective of providing more services that do not require hospital visits. It would also be consistent with provisions of the federal Affordable Care Act, also known as Obamacare. The act provides incentives for preventative care and alternate treatment options, particularly those that reduce costs, according to a report from the Fire Department.

"We want to not take them to a hospital," Nickel said. "We want them to stay home and be independent."

The four-member council committee unanimously backed Nickel's request to begin doing outreach, though Councilwoman Karen Holman acknowledged she has "mixed feelings" about the cost-recovery argument. She said she was particularly concerned about low-income residents who may have a hard time paying the fees.

"The last thing you need (in that situation) is to get dragged into a small-claims court and get harassing letters," Holman said. "We want to be a compassionate community."

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