ems system review report - merced county, california

EMSSystemReviewReport

Submittedby

January25,2017

MercedCounty 2 EMSSystemReviewReport

TableofContents

ExecutiveSummary……………………………………………………………………………………………….3

SummaryofFindingsandOptionsPresented..................................................................................4

Introduction…………………………………………………………………………………………………………..7

Methodology…………………………………………………………………………………………………………8

LimitationsandDisclaimers…………………………………………………………………………………...9

BackgroundDiscussion………………………………………………………………………………………… 11

TheRealityofAmbulanceRevenues…………………………………………………………… 11

TheRealityofEMSOversight………………………………………………………………………18

Findings………………………………………………………………………………………………………………...23

SystemRevenues………………………………………………………………………………………. 23

Deployment……………………………………………………………………………………………… 28

ResponseTimePenalties–EmergencyResponse…………………………….………… 30

ResponseTimePenalties–NETsandIFTs………………………………………………… 33

AmbulanceRates…………………………………………………………………………………………35

EmergencyDepartmentOffloadIssues………………………………………………………...39

CriticalCareTransportProgram………………………………………………………………….45

ALSAmbulanceDeploymentVersusTieredResponse………………………………… 49

WestSideHealthCareDistrict……………………………………………………………………. 52

CommunityParamedicine………………………………………………………………………….. 56

Appendices

AppendixA:InitialListofDocumentsReviewed……………………………………….. 59

AppendixB:InitialListofStakeholdersInterviewed….................................................63

AppendixC:SummaryofSelectedStakeholderComments…………………………. 69

ExecutiveSummary

TheMercedCountyEMSSystemutilizesacountywideExclusiveOperatingAreaforemergency911EMSresponse,aswellasfornon‐emergency,interfacilityandcriticalcaretransports.ThesystemwasimplementedinJanuary2015followinganRFPprocess.The911systemdesignreflectedprevailingindustrystandardsasahigh‐performanceEMSsystemincorporatingresponsetimestandardsandassociatedpenalties.However,numerousclinicallyandpoliticallydesirablebutexpensiveenhancementswerealsoaddedtothesystem,includingresponsetimeandbreachprovisionsapplicabletonon‐emergency,interfacilityandCCTtransports,afull‐time,dedicatedin‐countygroundCCTunit,theimpositionofavarietyoffeesassessedonthecontractor,andnegativesubsidiessecondarytothedesignofthesystem.

Theperformancestandardsinplaceinthe911systemintheCountyarecomparabletootherhigh‐performancesystemsinCaliforniaandnationally.However,stakeholdersareconcernedthatMercedCounty–beingoneofthepoorestcountiesinCalifornia–cannoteconomicallysustainsuchahighperformance911system–ortheenhancementsintheotheraspectsofthesystemasmentionedabove–asincountieswithhigherpopulationdensityandamorefavorablepayermix.ItshouldbenotedthatEMSsystemsarefailingorhavefailedevenincountieswithmorefavorabledemographicsthanMercedCounty.

AlthoughtheMercedsystemisostensiblya“zerosubsidy”EMSsystem,therealityisthatthecontractorissubsidizingaspectsofthesystembeyondEMSresponseandtransport,resultinginaneffectivenegativesubsidy.ExamplesincludeprolongedE.D.patientoffloadtimes;fees,finesandpenalties;CCTandBLSinterfacilityresponsetimerequirementsandothercoststhathavetheneteffectofsubsidizingotherentities,includingtheCountyandtheareahospitals.

InthisreportwebeginwithamacroviewofEMSeconomicsandoversight,thenexaminewhethertherevenuesintheMercedCountyEMSsystematpresentarecapableofsupportingallsystemactivitiesandperformancegoals.Weconcludethatrevenuesfallshortofsupportingsystemrequirementsbyapproximately23%.Weestimatethatadditionalannualrevenueofapproximately$3.3millionisnecessarytosustainthepresentsystemandmeetcurrentperformancegoals.WepresentavarietyofoptionsthatCountydecisionmakerscanconsidertoreachthisgoal,fromwhichtheycanchooseanycombinationofapproaches(i.e.,feeincreases,performanceincentivestoreducepenalties,strategicuseofEnhancementFunds,etc.)

Virtuallyallstakeholdersinthecurrentsystembelieveitisahigh‐functioningsystemthatdeliversqualitypatientcare.Wethereforestrivedtopresentoptionsthatwebelievewillnotmateriallydegradethesystemthatisinplace.DecisionsarecommittedtothesounddiscretionoftheCountypolicymakers.Implicitinthisdiscretionistheneedtomakechoicesontheallocationoflimitedresources,andresourcesinMercedCountyaremorelimitedthanmost.Theoptionspresentedfocusonareaswhere,inourexperience,costsavingscanberealizedwithoutmodifyingthemostsignificantaspectsoftheemergencycareandtransportsystem.Wheretheseoptionsreflectcompetingchoicesandpolicyinterests,wetendedtofavoroptionswhichbolsteredtheemergencyresponsesystemascomparedtothenon‐emergencyandinterfacilitytransportaspectsofthesystem.

SummaryofFindingsandOptionsPresented

Thefollowingisasummaryofthemajorsystemmodificationoptionsthatarediscussedthroughoutthisreport.Pleasenotethatthesearenottheonlyoptions,buttheoneschosenforpresentationinthisreportarebasedonstakeholderinput,thepresentEMSsystemdesign,andanalysisofpertinentdocuments.Belowwesummarizeeachoptionthatisdiscussedinthereportandprovidepagereferencestowherethecompletediscussionscanbefound.

1. SystemRevenues:Additionalsystemrevenuesofapproximately$3.295millionarerequiredannuallytosupportthecurrentsystem,increasedeploymenttoalevelwhereoutlierpenaltieswouldbeavoided,adequatelycapitalizethesystem,andassurecommerciallyreasonablereserves.Theserevenuescanderivefromanycombinationofthevariousoptionspresented,includingincreasingrates,reducingoreliminatingoutlierpenalties,subsidizingCCTstaffing,eliminatingnon‐emergencyandinterfacilityresponsetimepenalties,grantingresponsetimeexceptionsforoffloaddelays,implementingtieredEMSresponseunderprioritydispatchresponsedeterminantsandothers.(Seepp.23‐27.)

2. Deployment:ContractordeploymentissufficienttomeetperformancestandardsunderthezoneFractileResponseTimecriteria.DeploymentisinsufficienttoavoidtheimpositionofOutlierResponseTimepenalties.Theestimatedmarginalcostsforadditionalunithoursnecessarytoachievethelevelofdeploymentnecessarytosatisfythecurrentoutlierperformancecriteria(wereoutlierpenaltiestocontinuetobepartofthesystem)areestimatedtobe$1.25millionannually.(Seepp.28‐29.)

3. EmergencyResponseTimes:Thecontractorhasachieved100%complianceinallperiodsforFractileResponseTimecompliance.SubstantialpenaltieshaveaccruedforOutlierResponseTimenon‐compliance.TheCountyshouldconsiderprovidingaresponsetimeincentivetothecontractortowaiveoutlierpenaltiesforanyzoneinwhichfractilecomplianceimprovesbyaspecificbenchmark(e.g.,92%)foracomplianceperiod.Otheroptionsare(a)thattheoutlierpenaltiesbechangedfrommandatorytopermissive,(b)thattheoutlierpenaltiesbeassessedonlywhenfractilezonecompliancedropsbelow90%foracomplianceperiod,(c)modifyingthemethodologyforcalculating911responsetimesbyaggregatingPriority1and2responsesforeachzone;or(d)eliminationoftheoutlierpenalties(whichwouldthenreducetheneedforadditionalsystemsubsidiesbyanestimated$1.25millionannuallyfortheadditionalrequireddeployment).(Seepp.30‐32.)

4. Non‐EmergencyandInterfacilityResponseTimes:Whileresponsetimerequirementsfor911emergencyresponsesareexpensiveandhavelittledemonstratedclinicalbenefitformostconditions,thereisvirtuallynoclinicaljustificationforimposingresponsetime

penaltiesfornon‐emergencytransports(NETs)andinterfacilitytransports(IFTs).TheCountycanincrease911systemperformancebyeliminatingNETandIFTpenalties,andtherearestillmarket‐basedincentivesforthecontractortomaintainperformancestandardsforNETandIFTservices.(Seepp.33‐34.)

5. AmbulanceRates:Locallimitationsonambulanceratesareperceivedasaconsumerprotection,butgenerallydonothavethateffect.Instead,theyserveprimarilyasasubsidytocommercialinsurancecompaniesinthattheypreventcost‐shiftingfromlossesongovernmentalhealthprogramstohigher‐payingcommercialcarriers.Accordingly,theCountyshouldgrantcontractorrateincreasesand/oreliminatelocalrateregulationfromthesystem.Alternatively,theCountycouldpermitautomaticannualincreasesona“not‐to‐exceed”basis.(Seepp.35‐38.)

6. EmergencyDepartmentOffload:ProlongedE.D.offloadtimeshamperefficientEMSsystemunithourutilizationandlielargelybeyondthecontroloftheambulanceprovider.Hospitalsbearlegalresponsibilityforpatientsoncetheycometothehospital,andaccordinglythehospitalshouldfundanE.D.OffloadCoordinatorpositionforperiodsofpeakE.D.demandsothehospitalcanmeetitlegaldutytoassumeresponsibilityforpatientsuponarrivalintheE.D.Inthealternative,theCountyshouldconsidertheuseofSystemEnhancementFundsforsuchaposition.Also,oncesufficientdataareavailableunderthestate’snewstandardizedAmbulancePatientOffloadTime(APOT)MethodologyGuidelines,stakeholdersshouldestablishaconsensusbenchmarkforacceptableaverageoffloadtimesintheCounty.ResponsetimepenaltyexceptionsshouldbegrantedasamatterofcourseforlateresponsesthatareattributabletoE.D.offloadtimesexceedingthisconsensusbenchmark.(Seepp.39‐44.)

7. CriticalCareTransportProgram:TheCountyCCTprogramisunsustainableascurrentlyconfiguredduetohighoverheadandlowutilization,andfurtherburdensthe911system.TheprogramdoesnotoperateasafacilitypartnershipandthehospitaldoesnotordinarilysenditsclinicalstafftoaccompanyCCTpatientsduringtransportdespitefederallawwhichhasbeeninterpretedtorequireitinsomecases.Asaresult,thecontractorincursdisproportionatelyhighcostswithlittleopportunitytorecoverthesecosts.ThecontractormustthereforeincreaseitsCCTvolumebyseekingbusinessoriginatingoutsideofMercedCounty,which,ifsuccessful,maynecessitatearenegotiationofCCTresponsetimestandardsand/orpenaltyprovisions.Otheroptionstoimprovesustainabilityinclude(1)hospitalstaffaccompanyingCCTpatientsduringtransport;(2)hospitalsubsidiesforCCTnurses;and/or(3)theuseofSystemEnhancementFundsforCCTnursestaffing.(Seepp.45‐48.)

8. TieredEMSResponse:NationalstandardsofcareandfederalregulationsclearlysupporttieredEMSsystemdeploymentwherebythelevelofservicedispatchedisbasedon

medicallyvalid,differentialresponsedeterminants.Asaclinicallyappropriate,protocol‐baseddispatchsystemisalreadyinplaceinMercedCounty,theCountyshouldconsiderimplementingatieredEMSresponsesysteminwhichBLSambulancesmaybedeployedforany911callsforwhichBLSresponsedeterminantsaredeemedappropriateunderthesystemdispatchprotocols,asreviewedandapprovedbytheCounty.TheCountycouldrequirethecontractortoperform100%auditof911BLSresponsesforaprescribedperiodoftime,andconsiderstoppingtheresponsetimeclockforresponsesinwhichaparamedicarrives(forALS‐levelcalls)withintheprescribedtimeperiod,eveniftheparamedicarrivesinanon‐transportALSinterceptvehicle.(Seepp.49‐51.)

9. WestSideHealthcareDistrict:TheoverlappingjurisdictionoftwoLocalEMSAgencies(MCEMSAandMVEMSA)regardingambulancedeploymentintheWestSideHealthcareDistrictcreatesasituationinwhichcontractorcompliancewithbothagencies’directivesisrenderedpracticallyimpossible.ThetwoLocalEMSAgencieswithjurisdictionintheWestSideHealthcareDistrictshouldexecuteaninterlocalagreementsothatperformancerequirementsapplicabletooperationsintheDistrictareconsistent,andtheCountyshouldopenadialoguewithStanislausCountyregardingpossibleincreasesinthespecialtaxwhichsubsidizesambulanceservicesintheDistrict.(Seepp.52‐55.)

10. CommunityParamedicine:Communityparamedicineprogramscanimprovetheeffectivemanagementofmanypatientconditionsintheout‐of‐hospitalenvironment,thusreducingdeploymentcostswithintheEMSsystem.ThoughthereisnoexpressauthoritytoimplementaCommunityParamedicineprograminMercedCountyatthepresenttime,theCountyandthecontractorshouldexplorethefeasibilityofimplementingsuchaprogramattheearliestopportunity,asitappearsthatsystemefficiencycouldbeimprovedthroughCommunityParamedicine.(Seepp.56‐58.)

Introduction

OnJune7,2016,theMercedCountyBoardofSupervisorsapprovedacontracttoengagePage,Wolfberg&Wirth,LLC,anationalEMSindustrylawandconsultingfirm,toconductafocusedreviewofcertainaspectsoftheEMSsysteminMercedCounty.ThisreviewwaspromptedbymonthsofongoingdialoguebetweenstakeholdersintheMercedCountyEMSsystemregardingconcernsoverthesustainabilityandeconomicviabilityofthesystem.

Thebackdropofthisdialoguewasseveralrecenthigh‐profileEMSsystemfailuresornear‐failuresinotherCaliforniacountiesthatnecessitated,tovaryingdegrees,subsidiesandcontractconcessionsduringthetermsofthosecontractstopreventatriggerofthetakeoverprovisions.Takeoverprovisions,whichgivecountiestherighttoutilizethecontractor’sassetsandresourcestomaintaintheoperationoftheEMSsystem,arerightfullyviewedas“optionsoflastresort”andpresenttheirowncomplexandexpensivechallengeswheninvoked.

TothecreditoftheCountyandtheEMSsystemstakeholders,theneedforanunbiasedandindependentoutsideassessmentwasrecognizedasapreemptivemeasuretomaintainahigh‐qualityEMSsysteminMercedCounty.Theoverridingpurposebehindthisproject,therefore,istopresentCountydecisionmakerswitharangeofpossibleEMSsystemmodificationoptionstoreducethepossibilityofanEMSsystemcollapse.

Thestakeholdersinterviewedforthisprojectgaveinsightful,candidandthoroughresponsestoourquestionsinthisprocess.TheCountyisfortunatetobeservedbysuchadedicatedandcooperativegroupofprofessionals.AsummaryofselectedstakeholdercommentsisattachedasAppendixC.

Tothemaximumextentpossible,ourreviewfocusedonpresentingoptionsintendedtopreservetheessentialelementsoftheEMSsystemthatiscurrentlyinplaceinMercedCounty.Itisnotourroletoredesignthesystem;thatisataskthatisproperlyaddressedduringthenextscheduledprocurementcycle.

Methodology

ThisprojectinvolvedprimarilyareviewofdocumentsandinterviewsofidentifiedEMSsystemstakeholders.AlistofthedocumentsthatwereinitiallyrequestedfromtheCounty,thecontractor,andotherEMSsystemstakeholdersisattachedasAppendixA.AlistoftheinterviewedstakeholdersisattachedasAppendixB.

DocumentcollectionandoffsitereviewbyconsultantstaffwasinitiatedinJune2016andcontinuedthroughouttheperiodoftheprojectthroughnumeroussupplementaldocumentrequests,whichwerepromptlyfulfilledbothbyCountystaffandthecontractor.

OnsitestakeholderinterviewswereconductedinMercedCountyovertheperiodAugust16‐17,2016.AsecondonsitevisittoobserveEMSoperationsandevaluatecontractordeploymentinmoredepthwasheldonNovember9‐10,2016.

Thecontractorrevenueintegrityportionoftheprojectwasundertakenbyobtainingfromthecontractorareportofallclosed,paidaccountsfromJanuary1,2015throughAugust31,2016inwhichMedicarePartBwastheprimarypayer.ThecontractorthenutilizedtheRATSTATSstatisticalsoftwareprogram,fromtheUnitedStatesDepartmentofHealthandHumanServices,OfficeofInspectorGeneral,torandomlyselectasampleofthirty(30)paidclaimsforaudit.Followingselectionoftherandomclaims,thecontractorwasaskedtoassemblethedocumentsthatarepertinenttoreimbursementforservices,includingpatientcarereports(PCRs),physiciancertificationstatements(PCSs),beneficiarysignatureforms,computer‐aideddispatch(CAD)reports,ExplanationofBenefits(EOB)reportsandotherrelevantdocuments.AlldocumentswerethenreviewedinstrictaccordancewithapplicablestatutesandthereimbursementrulesoftheCentersforMedicareandMedicaidServices(CMS).

LimitationsandDisclaimers

Thisprojectandreportwereundertakenwithseveralimportantlimitations.Ourfirmwasengagedinaconsultingcapacity,notinalegalcapacity.Accordingly,itisbeyondthescopeofthisengagementforustoprovidealegalanalysisoftheissuespresented.Nevertheless,theoptionspresentedinthisreportmayraiseimportantlegalissuesfortheCountyanditsstakeholders,including,butnotlimitedto:

‐ Whetheranyofthemodificationoptions,ifimplemented,wouldrequireanewcompetitiveprocurementprocess;

‐ Whetheranysuchmodificationswouldbesubjecttolegalchallengeand,ifso,thelikelihoodofsuccessofsuchpotentialchallenges;

‐ Whetheranycontractmodificationswouldbeapproved(orneedtobe

approved)bytheCaliforniaEMSAuthorityand,ifnot,whetherantitrustimmunitywouldbecompromisedwithregardtothecontinuedenforcementofexclusivityintheambulancemarket;

‐ WhetheranyorallsuchmodificationswouldnecessitatechangestoCounty

laws,regulations,resolutionsorordinances

Accordingly,weexpressnoopiniononthelegalityof(1)themechanismbywhichanysuchmodificationsmaybemade;or(2)thelegalityofanamendmentoftheprovidercontractinanysuchregard.WearehappytoprovidesuchlegalanalysisinafutureengagementifdesiredbytheCounty.Otherwise,ifanyoftheoptionspresentedinthisreportaretobeimplemented,itisuptoCountydecisionmakerstodeterminewhethersuchchangescanbeimplementedduringthetermoftheexistingprovidercontract,orwhethersuchchangeswouldhavetowaituntilafuturecompetitiveprocurementcycleafterthecompletionofthetermofthecurrentagreement.

Alsobeyondthescopeofthisengagementistheperformanceofanindependentauditorforensicanalysisofthefinancialstatementsorfinancialrepresentationsofthecontractor.Ourservicesdonotconstitutetherenderingofprofessionalfinancial,accountingorbookkeepingservices.Accordingly,wecannotindependentlyverifyrepresentationsregardingthecontractor’sfinancialsituationortheimpactofspecificEMSsystemstandardsonthecontractor’sfinancialposition.

Therepresentationsofthestakeholdersinthisregardaretakenastrueforpurposesofthisassessment.TheCountyisstronglyadvisedtorequirethatthecontractordemonstrate,totheCounty’ssatisfaction,thefinancialimpactofanystandardsconsideredformodificationaswellastheresultingcostsavingsoftheproposedmodifications.

Methodologiesemployedtoconductthisreview(i.e.,stakeholderinterviewsandreviewofcertainavailabledata)haveinherentlimitations.Stakeholderinterviews,whileimportanttoany

EMSsystemassessment,naturallytendtoreflectbuilt‐inbiasesandpoliticalconsiderationsofthestakeholdersinterviewed.Inaddition,anyassumptionsoroptionspresentedbasedonavailabledatawillinevitablydependupontheaccuracy,completenessandsuitabilityofthedataprovidedbytherelevantstakeholders.

TheClaimsAuditReport,althoughspecificallyintendedtoassessthecontractor’scompliancewithapplicableFederallawsandregulationspertainingtoMedicarebilling,cannotbeinterpretedasaguaranteeofanysuchcompliance.Theclaimsreviewpresentedinthisreportisbasedondocuments,recordsandinformationsuppliedbythecontractorandcannotbeindependentlyverifiedbyus.Thecontractorbearssoleresponsibilityforitsbilling,codingandcompliancepractices,anditissolelyresponsibleforanyoverpayment,judgment,settlementordemand,andlegalfeesandcosts,incurredasaresultofanyaudit,actionorinvestigation.AnyidentifiedMedicareoverpaymentsmustberefundedinaccordancewithFederallawwithin60daysofbeingidentified.

BackgroundDiscussion

TheRealityofAmbulanceRevenues

Attheoutset,itisimportanttoframetheissuethatunderlieseveryEMSsystemdesign:anEMSsystemcanperformonlytotheleveloftherevenuesthatsupportit.AnEMSsystemthatplacesmobileemergencydepartmentswithanemergencyphysicianandcriticalcarenurseevery3milesthroughoutacountywouldbepubliclyandpoliticallydesirable,bututterlyunaffordable.Ontheotherhand,asystemwithoneBasicLifeSupport(BLS)ambulanceserving100,000peoplewouldbehighlyaffordable,butcompletelyundesirablefromapublichealthandsafetyperspective.

SomewherebetweenthoseextremeexamplesliestheoptimumEMSsystemconfigurationforeachcounty.EMSsystemdesignisalwaysanaccommodationofnecessitybetweenthepublic’sdesireforthefastestEMSresponseandthehighestlevelofcarewiththerealityoftheresourcesavailabletosupportthatsystem.

ThechallengeineveryEMSsystemistofindthatbalance,thatequilibrium.

ToPayers,EMSisaTransportCommodity.EMSis,unfortunately,viewedprimarilyasatransportcommoditybyhealthcarepayers.Insurerspayforambulancetransports,notEMSsystems.Thus,revenuesareavailableonlyforcallsthatresultincoveredtransports.Mostpayercriteriarequirethatthetransportmeetmedicalnecessityguidelines,thatthepatientbetransportedtoacovereddestination,thatthepatientreceivecoveredservicesattheoriginordestination,andotherstringentcriteria.Unfortunately,reimbursementisinsignificantforcancelledcalls,“treatnotransport”responses,standbys,patientrefusalsofcare,waitingtime,extracrewmemberswhenneeded,non‐transportinterceptservicesandotherservices.PatienttransportisonlypartofwhatanEMSsystemdoes,butitcomprisesthevastmajorityoftherevenueavailabletosupportallofthesevitalEMSsystemactivities.

Summary

AnEMSsystemcandeployresourcesandperformonlytoalevelthatisallowedbytherevenuesthatsupportit.

EMSsystemrevenuesderiveonlyfromasubsetofpatienttransports,yettransportrevenuesfallshortofcoveringbroadersystemcosts.IntheMercedCountyEMSsystem,substantialcostsabovethosereimbursedtransportsareaddedviaresponsetimerequirementsnotonlyfor911callsbutalsofornon‐emergency,interfacilityandcriticalcaretransports,aswellas

penaltyprovisions,ahigh‐costbutunderutilizednurse‐basedgroundCCTprogram,andotherfactors.Certainaspectsofthesystemalsohavetheeffectofcreatinga“negativesubsidy”EMSsystem.ThehighlyunfavorablepayermixinMercedCountymakesthecurrentEMSsystemunsustainable,particularlywhentheneedforcapitalreinvestmentandreasonablereservesare

factoredin.OthersystemsinCaliforniahavefacedandarefacinginsolvencyorcollapsewithmuchmorefavorablepayermixesthanthatofMercedCounty.

EvenwhenanEMSresponsedoesresultinapatienttransport,itisimportanttonotethatmanypayersarelimiting,denyingorretrospectivelyrecoupingreimbursementfortransportsthatthepayerbelievesfailtomeetmedicalnecessityandotherpaymentcriteria.ItisvitaltounderstandthatwhileEMSsystemsmustrespondtoall911calls,notevery911patientwillresultinreimbursement–evenwhentransported.ThisisbecauseMedicare,Medi‐Cal,andcommercialpayersoftenrefusepaymentfortransportswheretheyunilaterallydeterminethatthepatientcouldhavebeensafelytransportedbymeansotherthananambulance.Thesimplefactinmostcommunitiesisthatanumberofpatientswhocall911donothavetrueemergenciesanddonotgenuinelyrequiretransportbyambulancefromaclinicalperspective.1Yet,legaldutiesofcareobligateEMSsystemstorespondtoall911calls(withinthemandatedresponsetimes,ofcourse)andtransportthevastmajorityofthesepatients.So,eventhoughEMSsystemreimbursementisavailableonlyforpatienttransports,thereisasubsetofpatienttransportsthatsimplyarenotreimbursable.

Therefore,mostdirectrevenueavailabletoanEMSsystemisstrictlytransport‐related,despitethefactthatmanyresponses–andevensometransports–donotresultinreimbursement.Manyresponsesarenotreimbursable,eventhoughthecostofreadinessforthoseresponsesissubstantial.Thefederalgovernmentisthesinglelargestpayerforambulanceservices,yetfederalstudieshavedemonstratedthatambulancetransportrevenuesfallshortofcompensatingmostambulanceservicesfortheirtransportcosts.Andagain,reimbursementisgenerallynotevenavailableforthemultitudeofresponsesthatdonotresultinpatienttransport.Putsimply,anon‐subsidizedEMSsystemmustsurviveonlyontherevenuesgeneratedbyasubsetofthatEMSsystem’sresponses.Andtherevenuepictureisbleakevenforthosecallsthatdogenerateacoveredtransport.

MostEMSReimbursementFallsShortofCosts.AstudybytheUnitedStatesGovernmentAccountabilityOffice(GAO)2foundthatMedicarereimbursementresultsinanaverageMedicaremarginofnegative6percentforambulanceproviderswithoutsharedcosts.3Putanotherway,theratespaidbyMedicare,whichisthesinglelargestpayerinthepayermixformostambulanceservicesintheUnitedStates,fallsshortofcoveringcostsbyanaverageof6%.Again,reimbursementfromMedicareandmostotherpayersisavailableonlyforcallswhichresultinamedicallynecessaryambulancetransport,notforresponseswhichterminatewithouttransport, 1OnestakeholderwithdirectknowledgeofthisphenomenonindicatedthatsincetheadventoftheAffordableCareAct(ACA),hehasseenananecdotalincreaseinthenumberofpatientswithcomplaintsofquestionablemedicalnecessity,suchas“generalmalaise.”2AmbulanceProviders:CostsandExpectedMedicareMarginsVaryGreatly.UnitedStatesGovernmentAccountabilityOffice,ReportGAO‐07‐383,May2007.3InthecontextoftheGAOreport,“providerswithoutsharedcosts”meantthoseambulanceservicesthatwerenotpartofahospitaloramunicipality.TheGAOconcludedthatitwasimpracticaltoevaluatecostsinEMSagenciesthatwereoperatedasdepartmentsoflargerentitieslikehospitalsorcities.Accordingly,theGAOreportfocusedonindependentambulanceserviceswhoserevenuesandcostscouldbeallocatedonlyamongambulancetransportservicesandnotother,unrelatedproductsorservices.Inthisregard,thecontractorfitsintothetypeofambulanceservicesstudiedinthisreport.

orfortransportsdeemedtobemedicallyunnecessary.Byextension,thecostsformostresponsesthatterminatewithouttransportorthatresultinnon‐coveredtransportsmustthereforenecessarilybeshiftedontothosepatientswhoreceivecoveredtransports.

InCalifornia,theaveragelossesfromthetransportreimbursementofferedbygovernmentalpayerslikeMedicareandMedi‐Calareevenmorepronounced.Onestudyidentifiedtheaveragecostsofaprivatesectorambulancetransporttobe$589.4Medi‐Calpaysanaverageof$130to$150pertransport.Medicarepaysabout$507foranaverageALStransport.Governmentalpayerscompriseabout85%ofthepayermixinMercedCounty,andvirtuallyallofthosetransportsaredoneatalossbasedonthesereimbursementrates.

TheRealityof“Zero‐Subsidy”EMSSystems.Thechallengeofoperatingahigh‐performanceEMSsystemisparticularlyacutein“zerosubsidy”systems;thatis,systemsinwhichtheambulancetransportproviderisrequiredtosubsistentirelyonthetransportrevenuescollectedfrompatientsandthirdpartypayers.Thiscreatesazerosumproposition.However,amacroeconomiclookattheMercedCountyEMSsystemrevealsthatitis,inreality,a“negativesubsidy”system,inthatthecontractorisobligatedtoessentiallysubsidizeotherfacetsoftheEMSsystem.Thisisthroughthedirectimpositionoffees(approximately$100,00peryear)andpenalties(whichcurrentlyexceed$600,000peryear),andthroughindirectsubsidieswhichbenefitotherEMSsystemstakeholders,suchasinterfacilityandCCTresponsetimerequirements,CCTnursestaffing,E.D.offloaddelaysandothercostswhichhavetheeffectofsubsidizingotheraspectsofthesystem.Thisconceptwillbediscussedinlatersectionsofthisreport.

Theneteffectofa“negativesubsidy”EMSsysteminacountywithanunfavorablepayermixisthatsystemfailureortheneedforsubsidiesareinevitable.SuchhasbeenthecaseinotherCaliforniacountiesthathaveevenmorefavorabledemographicsthanMerced.EMSagenciesinCaliforniathatwishtosustainoneormoreExclusiveOperatingAreasmustrecognizethatanEMSsystemcanbarelysustainitselfinthenewhealthcareenvironmentwhenitmustsubsistsolelyontransportrevenues.Whenasizableportionofthoserevenuesmustgotopenalties,feesandsubsidiestoothercomponentsoftheEMSsystem,therecipeisunsustainable.ArecentwhitepaperfocusedonEMSreimbursementinCaliforniapointedlyconcluded,“EMSsystemsinCaliforniamayrequiresubsidies,mayhavetosignificantlyrestructuretheiroperationsorwillbecomeinsolvent.”5

CountyDemographicsCreateBuilt‐inObstacles.Tocompoundthealready‐uglyrealityoftransport‐basedEMSeconomics,systemswhichserveareaswithbuilt‐indisadvantagessuchashighunemployment,anunfavorablepayermix,alargelyrurallowpopulationdensity,andothersimilarsocioeconomicandgeographicfactorsmakethesustainabilityofzeroornegativesubsidyEMSsystemshighlyquestionable.AlthoughtheACAhasostensiblyresultedinahigher 4CaliforniaAmbulanceAssociation,California’sGroundEmergencyAmbulanceTransportation(GEMT)CertifiedPublicExpenditure,July17,2013.5Petrie,M.,EMSReimbursementinCalifornia:DiscerningtheFacts,April2016.

percentageofinsuredpatients,manyofthosepatientsareinsuredbyMedi‐Cal,whichbyfarpaysthelowestreimbursementrateofanypayer(wellbelowthecostofprovidinganambulanceresponseandtransport),andmanycommercially‐insuredpatients,whichusedtobethemostdesirablepayerclass,arecoveredbyhigh‐deductibleplans.Thedeductiblesinsuchplanstypicallyexceedtheentirechargesfortheambulancetransport,whicheffectivelyconvertsthepayerstatusfrom“insured”to“self‐pay,”theneteffectofwhichistoresultinanunreimbursedserviceduetothedifficultyinobtainingpaymentfromthepatient.

In2015,theestimatedpopulationofMercedCountywas268,455.Thepercentofthatpopulationinpoverty,baseduponearninglessthan200%oftheFederalPovertyLevel(FPL),was53.1%.Incomparison,thatpercentageinCaliforniais35.9%andintheUnitedStatesis34.2%.In2014theunemploymentratewas12.8%inMercedCountycomparedto6.8%statewideand5.4%nationally.

In2014,16,048ofMercedCountyresidentswereenrolledinMedi‐Cal,with13,805newlyeligibleduetotheMedi‐CalexpansionbasedprimarilyonthemaximumincomerequirementforparticipationinMedi‐Calincreasingfrom100%oftheFPLto138%oftheFPL.Also,8,403residentswereenrolledinCoveredCalifornia,with94%ofthemeligibleforsubsidies.DespiteAffordableCareAct(ACA)enrollmentincreasingthenumberofMercedCountyresidentsenrolledinMedi‐CalandCoveredCalifornia,38,259patients(25.2%ofallpatients)servedattheMercedCountyhealthclinicsin2014wereuninsured.Also,allofMercedCountyisconsideredaHealthProfessionalShortageAreaduetoaverylownumberofprimarycareproviders.

IthasbeensuggestedthattheimplementationoftheACAshouldbeincreasingproviderrevenues,asmoreindividualsbecomeinsured.However,arecentwhitepaper6onEMSreimbursementinCaliforniastatedthenatureofthisfallacysuccinctly:

_____________________________________________________________________________

“ThesignificantgrowthinthenumberofMedi‐Calinsured,Medi‐Cal’sexceptionallylowreimbursementrate,andMedi‐Cal’sprohibitionagainstbalancebillingsuggeststhatEMSsystemthathavehighproportionsofMedi‐Calinsuredarenotfinanciallysolventnow,orwillnotbefinanciallysolvent,if:(1)theproportionofhighpayingcommercialinsuranceplans

decreases;or(2)theaverageamountpaidbycommercialplansdecreases;or,(3)populationstransitionfromhigher‐payingcommercialinsurancetoMedi‐Cal.Conversely,inthoseEMSsystemswheretheproportionofuninsuredandprivatepaydecreases,whilethe

proportionofMedi‐Calinsuredincreases,andtheproportionandreimbursementofotherpayergroupsremainunchanged,

averagenetrevenuemayincrease.”_____________________________________________________________________________

AvailabledatasuggestthatitisthefirstofthesetwoscenarioswhichisoccurringinMercedCounty.Thatis,thepercentageofMedi‐Calpatientsisgrowing,thepercentageofcommercially‐ 6Petrie,M.,EMSReimbursementinCalifornia:DiscerningtheFacts,April2016.

insuredpatientsisdeclining,andmoreofthecommercialinsurersarepayinglessduetotheimpositionofarbitrary“usualandcustomarycharge”limitationsandthroughtheincreaseinhigh‐deductibleplans.7

Clearly,MercedCountyhasaverypoorpopulation,withlimitedaccesstoprimarycare.Thisisarecipeforincreasedvisitstohospitalemergencydepartments.In2015,11.7%ofvisitorstoMercedCountyemergencydepartmentscitedlackofaccesstocareasthecause.

WiththeincreasednumberofpersonsinsuredbyMedi‐CalandCoveredCalifornia,thecontractorisreimbursedmoreoftenforitsservicesthanRiggsAmbulanceServicehadbeenreimbursed,butthepaymentsitreceivesfromMedi‐Calarebelowitscosts,andmanypersonscoveredbyCoveredCaliforniaareunabletopaytheircost‐sharingamountforanambulanceserviceduetoahighdeductible.Also,thecontractorhasexperiencedadecreaseinthepercentageofcommercialpayersforitsservices,andcommercialinsurersordinarilypayhigherratesthanMedicareandMedi‐Cal.

Thepayermixaspresentedinthe2014RFP,comparedtothepayermixona12‐monthlookbackperiodfrom10/31/16isfoundinTable1.

NoReliefinSightontheRevenueSide.NeithertheEMSAgencynorthecontractoristoblamefortherealitythatbothfindthemselvesfacingwhenanEMSsystemappearstobeheadedtowardcollapse.Thefactisthatthelargestpayersforhealthcareservices–thefederalandstategovernments–havebeenutterlyneglectfulinassuringadequatereimbursementratesthatrecognizetherealitythatEMSismorethanaridetothehospital.Yet,thatistheonlyserviceforwhichthesepayersreimburse,andatanamountlessthancostevenforthatservice.

7Asofthewritingofthisreport,thefutureoftheACAappearstobeindoubt.Itislikelythatduringthetermofthecurrentambulancecontract,theACAMedicaidexpansionwillberepealed,aswilltheavailabilityofACAhealthinsuranceexchangesandtheindividual/employercoveragemandates.However,itislikelythathigh‐deductiblepremiumplanswillpersistandcommercialinsurancecoveragewilldecreasefollowingthelikelyrepealofallorpartoftheACA.Thisislikelytoexacerbatetherevenueproblemsexperiencedbyhealthcareproviders.8AvailableestimatesatthetimeofthisreportsuggestthattheMedi‐CalpopulationinMercedcontinuestogrowandnowexceeds50%.

Table1:PayerMixComparison:2014vs.2016

Payer 2014PayerMix 2016 PayerMix %Change

Medicare 23.85% 25.70% ⬆1.85%Medi‐Cal 31.45% 41.02%8 ⬆9.57%Medicare/Medi‐Cal 21.78 18.53% ⬇3.25%CommercialInsurance 11.50% 9.91% ⬇1.59%PrivatePay 10.45% 4.29% ⬇6.16%Agency 0.96% 0.56% ⬇0.40%

UntilMedicareandMedi‐CalrecognizethatEMSsystemsincurlegitimatecostsforresponse/notransportservices,andforothernon‐transporthealthcareserviceslikeALSintercepts,communityparamedicineandotherintegratedhealthcareservices,thencountiesandEMSagencieswillhavetocontinuetomakehardchoiceswhenitcomestoallocatingalreadyscarceresourceswhendesigningorredesigningtheirEMSsystems.

TheupshotisthatEMSrevenuesbarelycoverEMSresponseandtransportasis.Everydollarthatacontractorisrequiredtopayinfines,penalties,franchisefeesandothercosts,andeverydollarthecontractorisrequiredtousetoeffectivelysubsidizeotheraspectsofthehealthcaresystem,thereisonelessdollartocoverthebasicEMSresponseandtransportsystem.Inthewordsofone(non‐contractor)stakeholderinterviewedforthisproject,“evenacontractorthatisstillintheblackdoesn’ttakemuchtogetpushedintothered.Achestcoldcanbecomepneumoniaprettyquicklyinthisbusiness.”ThataptlydescribesthesituationfacingMercedCountyatthebeginningof2017.Thoughouranalysisshowsthatthecontractorhasnotyetencounteredanegativenetincomepositioninitsyear‐endfinancials,thecontractorhasconsumedtheoverwhelmingmajorityofitscashreserves,andanegativenetincomepositionislikelybasedonthecurrenttrajectory.

MeetingOperatingExpensesisOneThing,MakingCapitalInvestmentsisAnother.Evenwhenacontractorcancoveroperatingexpenseswiththeirtransportrevenues,otherneededinvestmentsinpeopleandcapitalmaylag.Partofeverydollarearnedoughttogotothereplacementofvehicles,medicalequipmentandothercapitalexpenditures,andpartshouldideallybeinvestedincashreservestocovercontingencies.Theseissuesarediscussedlaterinthisreport.Inaddition,investmentisalsonecessaryintheretentionofhumancapitalintheformofbonuses,retirementmatchingandotherincentives.Contractorfinancialreportsandstakeholderinterviewsdemonstratethattheseareasarenotbeingadequatelycapitalized.Asdiscussedinmoredetailbelow,theselonger‐terminvestmentsalsoneedtobetakenintoaccountwhendesigninganEMSsystemthatrequiresthecontractortobeself‐sufficientinrelianceonitstransportrevenues.

TheBottomLine.Thebottomlineoftheseeconomicrealitiesisthatprovidercontractsinlow‐density,poorpayermix,highperformanceEMSsystemsmustbemindfulnottoburdenthesystemwithcostsbeyondthosewhicharealreadyincurredtoprovidetheessentialservicesofEMSresponseandtransport.Moreover,thosesystemssimplyneedtomakepublicpolicyandpublichealthchoicesonhowthoseresourceswillbestbefocused(e.g.,onemergencyresponsevs.non‐emergencytransfers).Systemsinwhichpatientsarebetterinsuredwithcommercialplans,wherethereisahigherpopulationdensity,wheremedianincomeishigherandwhereresourcesaremoreabundantmaybeabletogleansubsidiesoutoftheirambulancetransportcontractorswithoutinvokingfinancialdistress(thoughsystemsinfarricherandmorepopulatedcountiesinCaliforniahavefoundeventheycannotdosowithoutultimatelyhavingtograntsubsidiesorconcessionstotheircontractors).

Tworecentcasesareparticularlynoteworthy:

‐ InAlamedaCountyin2015,thesystemwasdeemedtobeunsustainableandthecontractorwaspaidanoutrightcashsubsidyof$4millionduringthetermofthecontract.

‐ InSantaClaraCountyin2016,concessionsgivenduringthetermofthecontractsuchaseliminationoffranchisefeesanddispatchfees,eliminationofcontractornegativesubsidyrequirementssuchasfundingcountysoftwareandequipmentpurchases,eliminationoflatepenaltiesandothersuchmodificationswereestimatedatavalueof$7millionincontractorsubsidies.

Notably,theSantaClaraCountyExecutive,inhismemostotheBoardofSupervisorsregardingthesecontractualchanges,wrotethefollowingrevealingpassages:

_______________________________________________ __________________________________________________

“Wecontinuetobeconcernedaboutthe “Whiletherehavebeencriticismsregardingsustainabilityofthesystemand[the [thecontractor’s]originalbid…wemustfocuscontractamendment]attemptsto onthecurrentstateoftheEMSsystemandthecontinuebalancingcostsandresponse needtotakestepstoassurethecontinuitytimesisawaythatwebelievestillyields ofeffectiveemergencymedicalservicesintoahighquality,costeffectiveproduct thefuture.”foreveryoneinvolved.” ‐SantaClaraCountyExecutive9

_______________________________________________ _____________________________________________________

9May5,2015andFebruary9,2016memorandafromJeffreyV.Smith,CountyExecutive,totheSantaClaraCountyBoardofSupervisors.

TheRealityofEMSOversight

Ontheothersideofthecoin,EMSoversightagenciesmustensurethattheircontractorsareaccountableandthattheyprovidequalitycareandresponsiveservicetotheirconstituents.WhenaLocalEMSAgency(LEMSA)electstocreateoneormoreexclusiveoperatingareas(EOAs)andutilizesacompetitiveprocesstoawardcontractstoservethoseEOAs,theEMSAgencyhasarighttoreceivethebenefitofitsbargainandensurethatthecontractordeliversonthepromisesitmakeswhenitsubmitsaproposalandsignsacontractwiththeLEMSA.10

TakeoversandSystemProcurementsareExpensive.EMSAgenciesmustbalancetheirdesireforfirmoversightwiththerealitythatifanEMSsystemfails,itisthecountythatisvestedwiththeresponsibilitytoorganizeandmaintainthatsystem.AlthoughtheMercedCountyambulanceRFP,likemostsuchEMSprocurements,containsatakeoverclauseasasystem“safetyvalve,”atakeoverwouldbeanexpensivepropositionforacounty.Inaddition,shouldacountyelecttoreplaceitssystemwithanewcompetitiveprocurementpriortotheexpirationofitscurrentterm,aprematureprocurementaddssignificantcoststothesystemaswell.Therefore,totheextenttheEMSAgencycanlawfullymakenecessarymodificationstoitsEMSsystemandprovidercontractduringthetermoftheagreement,thatmaybethemostdesirableoptionfromthestandpointofminimizingthecoststothesystem.

Asdiscussedabove,othercountyEMSAgenciesinCaliforniahavealsofacedimminentoractualsystemfailuresbroughtonbyfinancialnon‐viabilityoftheircontracts.Itisalwaysdifficulttoattributepreciselythecausesoffinancialdistressinanylarge,complexentitywithmultiplecostcentersandrevenuesources.Butthesesystemshaveconcludedthatthearrayofpenalties,fees

10ItisundisputedthattheCountyissuedanRFP,thecontractorsubmittedaproposalandwon,andthepartiesenteredintoacontractknowingfullwellalloftheirrightsandobligations.ThepurposeofthisprojectisnottoaddresswhethertheCountyhasthelegalrighttoholdthecontractortoitsobligationsassetforthintheRFP.Thepurposeofthisprojectistoassesswhetherthesystemissustainable,whattheprimarydriversofunsustainabilitymaybe,andhowthesystemcouldbemodifiedtoimprovethelikelihoodofachievingsystemsustainability.

Summary

LocalEMSagencieshavearesponsibilitytothepublictoensurethatprovidersareaccountabletofurnishhigh‐qualitycare.ThatoversightmustoccurwithrecognitionofthefactthatEMSsystemfailures,

takeoversandprocurementsarecostly,andimprovingthesustainabilityofanexistingsystem–wherethatsystemisalreadygood–shouldbeapriority.LocalEMSagenciesmustensurethatprovidersareheldaccountablebyassessingmetricsthattrulyassure

quality.Unfortunately,responsetimesareoftenusedasaproxyformeasuringquality,whentheevidencesuggeststhereislittlecorrelationbetweenthetwoin

mostcases.Responsetimestandardsinhigh‐performanceEMSsystemsconstitutethesingle

biggestcostcenter,yettheirclinicalbenefitisnotwellestablished.Totheextentresponsetimestandards

leadtotheoverutilizationofredlightsandsirens,theyalsoposeanincreasedrisktothesafetyofEMS

providersandthepublic.

andsystemenhancementsrequiredtobepaidbythecontractorhadtobemodifiedtopreventcollapseofthesystems.11

AreWeMeasuringtheRightThings?Onechallengethathasemergedwiththeadventofhealthcarereformandthe“tripleaim”of(1)improvingpopulationhealth,(2)improvingtheexperienceofcare,and(3)reducingthepercapitacostofhealthcare12istheproperroleofEMSAgencyoversightinthepost‐reformhealthcaresystem.Withtheemphasisonevidence‐basedmedicineandoutcomemeasurement,ithasbeensuggestedbymanycommentatorsthatwearesimplymeasuringthewrongthingsinEMSoversight,withexcessivefocusonresponsetimesandinsufficientmeasurementof

outcomes.ThetwolargestitemsofexpenseinanyEMSsystemarepersonnelandvehicles–andresponsetimeperformancestandardsdictatehowmuchofeachwillbenecessaryinanyEMSsystem.MeasuringEMSresponsetimesisattractivebecauseitisrelativelyeasytodo,andthenecessarydataarereadilyavailabletodoso.

Measuringoutcomes,ontheotherhand,isnotaseasy,aselectronichealthrecords(EHR)havenotyetwidelyachievedintegrationbetweenprehospital,hospitalandpost‐hospitalcareproviders.Therefore,whilemeasuringtheimpactthatEMScarehasonpatientoutcomemeasurementslikemortality,lengthofstay,functionalstatusandotherhealthstatusindicatorsisthe“holygrail,”oursystemsofmeasurementdonotyetallowforthistobedoneinameaningfulway.Asaresult,othermetricsserveasaproxyforquality,namely,themeasurementandenforcementofresponsetimestandards.

DoResponseTimesMatter?BecauseresponsetimecomplianceisthesinglebiggestdriverofEMSsystemcost,witheveryminuteofreducedresponsetimesnecessitatingincreasingmarginalcosts,itisimportantforpolicymakerstolookatthestateofthedataandliteraturewhenitcomestoresponsetimes.Inotherwords,decisionmakersshouldhaveagoodhandleonwhethertheexpenseofresponsetimestandardsyieldspublichealthbenefitsfortheinvestment.

11Asmentionedabove,intheAlamedaandSantaClaraEMSsystems,therewerenotableamendmentsmadetoprovidercontractsduringthetermofthoseagreements.InAlameda,theproviderreceiveddirectcashsubsidiesof$4millionpaidbythecounty,andinSantaClarathe$7millionsubsidiestooktheformofpenaltyconcessions,franchisefeeeliminations,zonereclassificationsandothersubstantialchanges.Inneithercasewasthesystemre‐bid,andtoourknowledgetherehavebeennoobjections(thusfar)bythestateEMSAuthorityorbydisappointedbidders.Ofcourse,thisdoesnotmeanthatanymodificationstotheprovidercontractinMercedCountywon’tbemetwithobjectionorlegalaction,butitisnoteworthythatinother,largercountieswithmorevaluableprovidercontracts,nosuchlegalchallengesorEMSAuthorityobjectionswereforthcomingwhenthosecountiesnegotiatedmodificationstotheircontractsthatresultedinmillionsofdollarsofsubsidies,givebacksandconcessionsduringthetermsofthoseexistingcontracts.12InstituteforHealthcareImprovement,http://www.ihi.org/engage/initiatives/tripleaim/pages/default.aspx

TheliteraturesuggeststhereisnostrongcorrelationbetweenEMSresponsetimesandpatientoutcomesforthevastmajorityofmedicalconditionsforwhichEMSisutilized.

Ultimately,MercedCountyshouldconsiderworkingtowardtheimplementationofafullyevidence‐basedEMSsystem.Wheretheclinicalevidencedoesnotsupporthigh‐costfeaturessuchasstringentresponsetimestandards,thosepracticesshouldbecurtailed,de‐emphasizedoraltogetherabandonedinfavorofdesigningasystemaroundmetricsthathaveaprovenpositiveimpactonclinicaloutcomes.Forinstance,metricssuchasdoor‐to‐balloontimesforappropriateSTEMIpatients,door‐to‐needletimesinpatientswithacutestroke,timetoaspirinadministrationwithacuteMIonset,andotherevidence‐basedclinicalmetricsshouldultimatelytaketheplaceofmetricswithdubiousclinicalbenefits,highcosts,andunwarrantedsafetyrisks.

Theassociationbetweenambulanceresponsetimesandpatientoutcomeshasbeendebatedforyears.Severalstudieshavebeenconductedtohelpresolvethedebateanddeterminewhetherthereexistsadirectcorrelationbetweenthelengthofresponsetimeandpatientoutcomes.Manypeer‐reviewedstudieshavearrivedattheconclusionthatresponsetimes,asacontributingfactorofpatientoutcomes,arelargelyarbitrary.Ultimately,butforafewconditions,therehasbeennoconclusiveempiricaldatathatashortenedresponsetimeisassociatedwithbetter

patientoutcomes.Someofthestudiesthatsupporttheconclusionthataresponsetimeisnotindicativeofpatientoutcomearesummarizedhere:

A2002study,conductedinametropolitancountywithapopulationof620,000,examinedthecorrelationbetweenspecifiedresponsetimesandsurvivalinanurbanEMSsystem.TheEMSsystememployedasingletierresponseattheALSlevelanda90%fractileresponsetimespecificationof10:59minutesforPriority1(emergencylife‐threatening)callsand12.59minutesforPriority2(emergencynon‐life‐threatening)calls.AllstudiedcallsresultedinpatienttransportstoaLevel1traumacenter.Thereviewcovered5,424transports.Seventy‐onepatientsdied,butthestudyfoundnosignificantdifferenceinmedianresponsetimesbetweensurvivorsandnon‐survivors.Thestudy’sconclusionwasthat“changingthesystem’sresponsetimespecificationstotimeslessthan[10:59minutesforPriority1callsand12.59minutesforPriority2calls],butgreaterthan5minutes,would[not]haveanybeneficialeffectonsurvival.” 13

Aretrospectivecohortstudypublishedin2005evaluatedtheeffectofparamedicresponsetimeonpatientsurvivaltohospitaldischarge.Thepatientswere

13Blackwelletal.,Responsetimeeffectiveness;comparisonofresponsetimeandsurvivalinanurbanemergencymedicalservicessystem,9AcademyofEmergencyMed.,(2002).

Theassociationbetweenambulanceresponsetimesandpatientoutcomeshasnotbeenconclusivelyestablishedbythepeer‐revieweddata.Response

timebenefitshavebeendemonstratedonlyforaverysmallsubsetofthemostcriticalcalls,suchascardiacarrestandnear‐arrest.

transportedtoasingleurbancountyteachinghospital.Thestudyrevealedthat“aparamedicresponsetimewithin8minuteswasnotassociatedwithimprovedsurvivaltohospitaldischargeaftercontrollingforseveralimportantcofounders,includinglevelofillnessseverity.”14

In2006,theresultsofastudywaspublishedexaminingparamedicaccountsofthe

effectsonpatientcareandontheirownhealthandsafetyinanefforttorespondwithin8minutesofdispatchincasesinvolvingprehospitalthrombolysis.Theconclusionreachedwas“[t]he8minuteresponsetimeisnotevidencebasedandisputtingpatientsandambulancecrewsatrisk.”15

Astudypublishedin2009conductedareviewofmortalityofandthefrequencyof

criticalproceduralinterventionsperformedon373Priority1patients.Thestudywasconductedinacountyinwhichasingle‐tieredALSresponsetimelimitof10:59minuteswasimposedforPriority1calls.Thestudyfoundthatforthose373Priority1patients,patientswhowaitedlongerthan10:59minutesforanambulance,whencomparedtopatientswhodidnotwaitlongerthat10:59minutes,experiencedbetweena6%increaseanda4%decreaseinmortality.Thestudyconcludedthat“[n]eitherthemortalitynorthefrequencyofcriticalproceduralinterventionsvariessubstantiallybasedon[a]prespecified[advancedlifesupportresponsetime].” 16

Aone‐yearretrospectivestudypublishedin2012evaluatedresponsetimesin7,760

casestodeterminewhetheran8minuteEMSresponsetimewasassociatedwithmortalityattimeofhospitaldischarge.Thestudyfocusedonadultswithalife‐threateningeventasassessedatthetimeofthe911call.Forpatientswhohadaresponsetimeof8minutesormore,7.1%died,whileforpatientswhohadaresponsetimeof7:59minutesorless,6.4%died.Thosewhoconductedtheresearchconcludedtherewas“[questionable]clinicaleffectivenessofadichotomous8‐minuteALSresponsetimeondecreasingmortalityforthemajority...[n]otsuggest[ing]thatrapidEMSresponseisundesirableorunimportantforcertainpatients.”17

Theresultsofanotherstudydesignedtodeterminetheinfluenceofshorter

ambulanceresponsetimesonpatientoutcomeswerepublishedin2013.Thestudy

14PeterPonsetal.,ParamedicResponseTimes:DoesitAffectPatientSurvival?,12AcademicEmergencyMedicine,(2005). 15LPrice,Treatingtheclockandnotthepatient;ambulanceresponsetimesandrisk,15QualitySafetyinHealthCare,(2006).16Blackwelletal.,Lackofassociationbetweenprehospitalresponsetimesandpatientoutcomes,13JournalPrehospitalEmergencyCare,(2009).17IanBlanchardetal.,EmergencyMedicalServicesResponseTimeandMortalityinanUrbanSetting,16JournalPrehospitalEmergencyCare,(2012).

wasconductedinanEMSsystemcoveringbothurbanandruralareas.ItreviewedresponsestoPriority1dispatchesforpatients13yearsofageorolderinvolvingmotorvehiclecrashinjuries,penetratingtrauma,difficultybreathing,andchestpaincomplaints.Thereviewcovered2,164transports,569ofwhichweretransportstoatraumacenter.Thestudyfoundthat“[i]ncasesseenatamajortraumacenter,longerresponsetimeswerenotassociatedwithworseoutcomesforthediagnosticgroupstested.”18

Arecent2016studyof503ambulanceresponsetimesforpeople65yearsofageor

olderwhohadfallentothefloorfoundthat8%ofthemdiedwithin90days,butthatthosewhodiedwithinthatperioddidnotwaitsignificantlylongerforanambulancethanthosewhosurvivedwithinthatperiod.19

Takentogether,theseandotherstudiestellusthatultimately,butforafewspecific,criticalandrelativelylow‐volumecases,therehasbeennoconclusiveempiricalorevidence‐baseddatathatashortenedresponsetimeisassociatedwithdecreasedmortalityratesoradropinotherpoorpatientoutcomes.Baseduponthesepeer‐reviewedstudiesitappearsthatresponsetimeasanindicatorofqualityisspeculativeatbest,withthepossibleexceptionofaverylimitedgroupofpatients,suchasthosewhoareincardiacarrestorinimmediateriskofcardiacarrest.20

ItisimportantthatpolicymakersunderstandthatwhileresponsetimemeasurementisthemostcommonproxyforEMSsystem“quality”inusetoday,responsetimestandardsareveryexpensivetoachieveanddonotconclusivelyyieldbetterpatientoutcomesfortheinvestment.AnyEMSsystemthatisfacedwitheconomicconstraintsandfindsitnecessarytomakehardchoiceswouldthusbewell‐advisedtoconsidertheresponsetimedatafromtheliteraturewhendecidinghowbesttoallocaterelativelyscarceEMSsystemresources.

Finally,itshouldbenotedthatresponsetimecomplianceencouragestheuseofredlightsandsirens(RLS)onthevastmajorityof911responses,whentheevidencenotonlysuggestslittleclinicalbenefitfromRLSuse,butasignificantlyhigherriskofaccidents,injuriesanddeathsinemergencyvehiclesdeployingRLS.21ThisshouldconcernanypublichealthagencywithEMSoversightresponsibilities.

18StevenWeissetal.,DoesAmbulanceResponseTimeInfluencePatientConditionamongPatientswithSpecificMedicalandTraumaEmergencies?,106SouthernMedicalJournal,(2013).19EmilyCannonetal.,AmbulanceResponseTimesandMortalityinElderlyFallers,33EmergencyMedicineJournal,(2016).20Areductioninresponsetimeswouldincreasecardiacarrestsurvivalas“[f]asterresponsetimesmeansearlier[interventions].”MarcusEngHockOngetal.,ReducingAmbulanceResponseTimesUsingGeospatialTimeAnalysisofAmbulanceDeployment,17SocietyforAcademicEmergencyMedicine,(2010.);“[I]tispossiblethatrapidresponsetopatientsinimmediateriskofarrestmaybeatleastasbeneficialasrapidresponsetothosewhohavearrested.”ColinO’Keeffeeetal.,Roleofambulanceresponsetimesinthesurvivalofpatientswithout‐of‐hospitalcardiacarrest,10EmergencyMedicineJournal,(2009).21Wolfberg,D.,EMSUseofRedLightsandSirensisaDangerousSacredCow,EMS1.com,June6,2016.

Findings

SystemRevenues

WhyareAdditionalRevenuesNecessary?MercedCountyenjoysahigh‐performing,accountable,high‐qualityEMSsystemdespitethenumerousfinancial,geographicanddemographicchallengesitfaces.Thesystemdesigninthe2014RFPreflectedlong‐establishedindustrystandardsregarding911systemdesign.However,theRFPcontainedadditionalprovisions,suchasadedicatedgroundCCTunit,non‐emergencyandinterfacilitytransportresponsetimestandardsandotherfactorswhich,thoughdesiredbythestakeholders,addedcoststothesystemthatitnowappearsthesystemcannotsustain.Inaddition,changedcircumstancesincludingadeclineincommerciallyinsuredpatients,theproliferationofhigh‐deductiblehealthplans,theeliminationoftheairambulanceEOA(andwithit,thesubsidiesitprovidedforthegroundCCTprogram)andotherfactorshavegivenrisetoconcernsamongEMSsystemstakeholdersthatthesystemisnotsustainable.Thecollapseornear‐collapseofothercounty‐basedEMSsystemsinCalifornia(oneswithconsiderablymorefavorabledemographicsthanMercedCounty,itshouldbenoted)hasalsobeenadrivingfactorinpromptingthisreview.

Asdiscussedbelow,thelevelofcontractordeploymentissufficienttomeetfractileresponsetimestandardsbutisinsufficienttoavoidtheimpositionofoutlierresponsetimepenalties.IftheCounty’sgoalistoassuredeploymenttothelevelofavoidingoutlierpenaltyassessments,itisourjudgmentthatadditionalresourceswillberequired,bothduringthetermoftheincumbentcontractandinfutureprocurementcycles.Further,inourassessment,revenuesareinsufficienttoassureadequatecapitalreplacementandtoestablishnecessaryreserves,aswillbediscussedbelow.Whilethesetwocategoriesarenotdirectoperatingexpenses,theyarenolessimportant.

Additionalrevenuescanderiveeitherfromfeesforserviceorfromdirectorindirectsystemsubsidies.OurreportidentifiesarangeofoptionsavailabletotheCountythatwouldhavetheneteffectofincreasingsystemrevenues,eitherfromfeeincreases,directmonetarysubsidiesorindirectfinancialsubsidiesthatwouldaccruefromthemodificationofcertainaspectsofthesystem.Someoftheseoptionshavedirectmonetaryimpact;othersarein‐kindorindirect

Summary

Asthecontractorreportsthatincomeisapproachingbreak‐evenornegativelevels,systemrevenuesappeartobeinsufficientto

ensuresustainabilityoftheCountyEMSsystemandtomeetestablishedperformancestandards.Additionalannualrevenuesofapproximately

$3.295millionarenecessarytoensureadequatecapitalization,maintaincommercially

reasonablereserves,andsupportadditionaldesireddeployment.Thoserevenuesmustcomeeitherfromdirectsubsidies,indirectsubsidies,increasedincomegenerationthroughrateincreases,oracombinationoftheseoptions.

benefits.WeprovidethisrangeofoptionsbecauseultimatelyitisuptoCountydecisionmakerstoselectthepolicysolutionsthatarebestfortheCounty.

Forinstance,manyofthesystem’sgoalsofsustainability,capitalreplacement,deploymentandtheestablishmentofnecessaryreservescouldbemet,whilemaintainingallcurrentperformancestandards,withoutanydirectcashsubsidiesfromtheCounty,ifrateincreaseswerefullyimplementedandpenaltieswerereformed.Ifrateincreasesarenotgranted,thenecessaryrevenuewouldhavetocomefromothersources,likeeliminationofpenaltytiers.Itissimplyamatterofaligningprioritiestoavailablerevenuesources,whetherdirectorindirect.

ItisworthreiteratingthatAlamedaCountyveryrecentlygaveitscontractoranoutrightcashsubsidyof$4millionduringthetermofanexistingcontract.AnyneedtomodifyanyaspectsoftheMercedCountyEMSsystemwouldbeobviatediftheCountyweretochoosetosimplypayacashsubsidytoitsprovider.Otheroptionsinvolvecontractualconcessionsormodificationsthathaveindirectvalueasopposedtocashsubsidies.Inthissense,theoptionspresentedinthisreportarea“menu”fromwhichtheCountycanselectparts,rejectothers,andcombineoptionstoobtainastateofeconomicequilibriuminthebalancebetweenservicevs.cost.

WhatAmountofAdditionalRevenuesareNecessary?ThenextlogicalquestioniswhatamountofadditionalrevenuesmayberequiredtoensurethesustainabilityoftheMercedCountyEMSsystem?

Beforeaddressingthatquestion,thefirsttaskistoanswerthequestion“whatissustainability”?Itisimportanttodistinguishbetween“survivability”and“sustainability.”Accordingtothecontractor,itsfinancialpositionwithregardtoMercedCountyisapproachingabreak‐evenproposition,withdwindlingcashreserves.Anegativenetincomepositionisforeseeable.IfanEMSsystemismerelybreakingevenwithrevenuescoveringongoingoperationalexpensesandlittleelse,thereisnoabilityforthesystemtoreplacecapitalandmeetunexpectedfinancialobligationssuchaslarge‐scaleMedicareorMedi‐Caloverpaymentrefunds(inanageofincreasingauditsandenforcementactivitybygovernmentalpayers,thisisarealpossibilityinanysectorofhealthcare).RunninganEMSsystemonabreak‐evenbasiswithlittlereservesandscantcapitalfundingisnotaformulaforlong‐termsustainability.

Withthisinmind,weattemptedtolookmorecloselyatthecontractor’soperatingmargins,reservesandcapitalreplacementneeds.Whilethecontractorappearstobemeetingitsoperatingexpenses,22theredonotappeartobesufficientrevenuestomaintainreservesorreinvestinnecessarycapital.

Maintainingcashreservesisimportantforanybusiness,butisespeciallyimportantformission‐criticalorganizationssuchasEMSagencieswith911contracts.Whilemanybusinessadvisors

22Atcurrentlevelsofdeployment,withoutconsiderationoftheeffectofoutlierpenalties,whichhavebeenbilledbutnotcollectedbytheCounty.Collectionofunpaidpenaltieslikelywouldresultinanegativenetincomepositionforthecontractor.

recommendfourtosixmonthsofexpensesinreserve,evenreservesofthreemonthsofexpensesispreferabletozeroornear‐zeroreserves.Ina$14.4millionsystem,athree‐monthreserveconstitutes$3.6million.Thecontractor’scurrentreservescantypicallycoveronly2‐3weeksofoperatingexpenses.Whilethreemonthsisontheminimumendofcashreservesrecommendedforamission‐criticalcommercialoperation,wewillusethisasbenchmarkforpurposesofestimatingrevenuerequirementsinthisanalysis.Thisamountofreservesisnotbeingbudgetedasaone‐yearorone‐timeexpense.Rather,thisisfactoredintotheannualizedsubsidyanalysisovertheremaining8yearsofthecontractassummarizedbelow.

Itshouldbenotedthattheneedforreservesshouldnotbeconsideredaluxuryorafancifulindulgence.Thereareseveralplausibleandrealisticscenariosunderwhichthecashflowofahealthcareprovidercanbesignificantlyinterrupted.ChiefamongtheseisthefactthatcurrentfederallawpermitsCMSandstateMedicaidagenciestoplaceprovidersonprepaymentreview,suspendpaymentstoaproviderincertainsituations,andtounilaterallyrecoverlargeoverpaymentsfromprovidersthroughaprocesscalled“offset,”wherebyfuturepaymentsdueaprovideraredivertedbyMedicaretorepayoverpaymentsthatMedicaredeterminesareowedtoCMS.2324InadditiontodraconianactionsbyMedicareandMedicaidthatcaneffectivelyshutoffaprovider’scashflow,therearealltheotherusualthreatsastherearetoanybusiness.

Asforcapitalreplacement,anEMSsystemisheavilydependentuponassetsthatsufferwearandtearintheusualcourseofbusiness.Vehiclereplacementoccursat250,000milespursuanttothecontractor’sproposal.Expensiveequipmentsuchascardiacmonitorsandgurneyshavelimitedlifespans.Andasmedicaltechnologyevolves,theneedforneworbetterequipmentisalwaysarealpossibility.Tobesustainable,anEMSsystemmustensurethatsufficientresourcesarededicatedtothenecessaryreplacementofcapitalequipment.Thecontractorestimatescapitalreplacementneedsof$5.72millionovertheremainingeightyears25ofthecontract.26

Inthefollowingsectionofthisreport,weexaminethesufficiencyofthecontractor’scurrentlevelsofdeploymentandwhetheradditionaldeploymentisnecessarytomeetsystemdemand.

23Weshouldnotethatthisprojectincludedabillingandcodingauditofarandomsampleofthecontractor’sclaimstoexaminepotentialMedicarecomplianceissuesthatmaycomprisethecontractor’sfinancialstability.Astheattachedclaimauditanalysisdemonstrates,whilewemakenorepresentationsthatthecontractorwillnotbethesubjectofanypayerauditsorotheractions,thecontractor’srevenuecyclemanagementpracticesappeartobesoundandwesawnobasistoconcludethatthecontractorhasanysignificantcontingentliabilitieswithregardtopotentialMedicareoverpaymentsbasedontheinformationpresentedtousbythecontractor.24EvenifaproviderthroughtheMedicareappealsprocessultimatelysucceedsinsecuringarefundofallegedoverpayments,intheshorttermtheoffsetscanhaveacripplingeffectonaprovider’scashflowandthesustainabilityofitsoperationsifreservesareinadequate.25Eightyearsisusedforthisanalysistoincludetheremainingthreeyearsoftheinitialtermofthecontractplusapossibleextensionoffiveyears.26Whilethisprojectdoesnotincludeareviewofthecontractor’sinventoryorassessmentofcapitalassets,aftervettingthisfigurewiththecontractor,itdoesnotseemtobeanunreasonablenumbergiventhesizeandscopeoftheoperationsinvolved.Thecontractorreportsthatthisfigureincludes$4.9millionforreplacementofvehicles,powerloaders,gurneysandcardiacmonitors,and$820,000foranupgradeofitsdispatchcenter(whichwouldincludeadditionalconsoles,softwareandassociatedcosts).

Asdiscussedinmoredetailbelow,itisestimatedthatapproximately$1.25millioninadditionalunithourcostswouldbenecessarytodeployatalevelthatwouldavoidtheimpositionofoutlierpenaltiesifallperformancestandardsaremaintainedatcurrentlevels.Thoseadditionaldeploymentcoststotal$10millionovereightyears.Inaddition,increasingdemandandincreaseddeploymentnecessitatesadditionaldispatchpersonnelestimatedbythecontractortocost$880,000peryear($7.04millionover8years).

TheultimatepolicychoicesaboutEMSsystemconfigurationandachievingequilibriumintheservicevs.costtradeoffareuptoCountydecisionmakers.IftheCountychoosestomaintaintheoutlierpenaltystructure,thisadditionallevelofdeploymentiswhathasbeenestimatedtobenecessarytoavoidthosepenalties.Iftheoutlierpenaltytieriseliminated,theseadditionalunithoursandtheassociatedcostswouldnotbenecessarytoachievepenaltyavoidance.

Toensurethesustainabilityofthesystem,thecontractorindicatedthatadditionalrevenueswouldberequiredandthatanadditionalcostcenterforwhichasubsidymightbenecessarywasthesatisfactionofapromissorynotepayabletotheownerofRiggsAmbulance.27Itisourviewthatthisexpenseshouldnotbeconsideredintheanalysisofanysustainability/improvementsubsidiesthatmayberequiredforthesystem.Wearenotconcludingthatthisisaninappropriateorunreasonablebusinessexpense,orthattheRiggsAmbulancepurchasepriceorfinancingtermsareinappropriate.ForpurposesofthisprojectweareconsideringonlyissuesofEMSsystemsustainability,notcorporateperformance.

Table2belowillustratestheadditionalestimatedEMSsystemrevenuesnecessarytoensureadequatecapitalreplacement,modestreservesandadditionaldeploymenttofullymeetthecurrentsystemstandards.28

27Onthispoint,somequestionshavebeenraisedastomonthlyamountsbeingpaidtotheownerofRiggsAmbulanceServiceunderthebuyoutagreement,itbeingsuggestedthatpartofthecontractor’sfinancialstrainsweredueto$125,000monthlypaymentsbeingmadetoRAS’sowner.OurreviewofpertinentdocumentsindicatesthemonthlypaymentamountforthebalancedueontheRASpurchaseisnowherenear$125,000permonth.Althoughthecontentsofthebuyoutagreementareconsideredtobeproprietary,themonthlypaymentamountisapproximatelyone‐tenthofthatamount,whichdoesnotseemtobecommerciallyunreasonable.28Itmustagainbeemphasizedthattheassumptionsmadeherearebasedonfinancialinformationsuppliedtousbythecontractor;wedidnotperformanindependentfinancialaudit.Despitethefactthatthisprojectdidnotentailsuchanindependentaudit,wedidvetthesenumberswithcontractorrepresentatives.Otherthantheareasofdisagreementnotedaboveaboutwhatitemsshouldbeincludedinthisanalysis,wedidnotfindthecontractor’sestimatestobeobjectivelyunreasonable.Thisanalysisalsopresumesthatthecontractor’srepresentationsofnear‐break‐evenstatus,withforeseeablenegativenetincomepositioninthenearfuture,anddepletedreservesarealsoaccurate.

Table2:EstimatedNecessarySustainabilitySubsidies:

CapitalReplacement,ReservesandIncreasedDeployment,MercedCountyEMSSystem,2017–2024

CostCenter(s) 8‐YearCost AnnualizedCost CumulativeAnnual

SubsidyCapitalReplacement

$5,720,000 $715,000$715,000

AdditionalReserves

$3,600,000 $450,000$1,165,000

AdditionalDeployment

$10,000,000 $1,250,000$2,415,000

AdditionalDispatchPersonnel

$7,040,000 $880,000$3,295,000

TOTALS

$26,360,000 $3,295,000$3,295,000

Basedonthecontractor’srepresentationsthatcurrentlevelsofdeploymentaresustainableonlyasa“breakeven”propositionfromexistingavailablerevenues(withlittleornoallocationstoeithercapitalreplacement,reservesoradditionaldeployment),adequatefundingofthesethreeprioritiesappearstoexceedavailablerevenues.Thismeansthatanannualsubsidyof$3.295millionisnecessarytofundallthreeoftheseprioritiesfortheremainingtermofthecontract.29Putanotherway,thesystem’savailablerevenuesfallabout22.8%shortofthesegoals.

AnyDirectSubsidiesShouldbeTreatedasPublicFunds.ItshouldbenotedthatbecausethisanalysisisfocusedonEMSsystemsustainabilityandnotnecessarilythefinancialwell‐beingofthecontractor(althoughthosetwoconceptsareintertwinedinanyEMSsystem),anysustainability/improvementsubsidiesthattaketheformofdirectcashpaymentshouldinuretothebenefitoftheEMSsystemandnotthecontractor.IntheeventthattheCountyelectsdirectsubsidiestowardcapitalreplacementand/ortheaccumulationofcontractorreserves,attheendofthecontractperiod,anyunexpendedportionofthosepublicly‐subsidizedfundsshouldnotberetainedbythecontractor.AnysuchfundsshouldbeheldinescrowtobemadeavailabletothebenefitoftheEMSsystem.

29Thecontractorestimatesthatapproximately$1‐$1.5millionofthisneededamountwillalreadyberealizedasaresultoftherateincreasesthatbecameeffectiveinJuly2016.Aswillbediscussedinmoredetailbelow,itisimportanttonotethatthisestimateisbasedonlyon60days’worthofaccountsreceivableexperiencefollowingimplementationoftheJuly2016rateincreases.

Deployment

IsContractorDeploymentSufficient?Aspartofitsanalysis,PWWwasaskedtoaddresswhetherthecontractorhadsufficientresourcestomeetdailysystemdemand.Althoughaformal,completedeploymentanalysisisbeyondthescopeofworkofthisproject,wedidaddressdeploymentsufficiencyduringoursecondsitevisitinNovember2016,andmadenumeroussupplementaldocumentrequeststoassessthisissue.

Thesufficiencyofthecontractor’sdeploymentdependsentirelyuponhowsufficientdeploymentismeasured.Intheframeworkoftheexistingcontract,twowaysthataremostlogicalwaystoaddressthesufficiencyofdeploymentare:

(1) Whetherthecontractor’sdeploymentissufficienttomaintaincompliancewithitscontractualfractileresponsetimeobligations;and

(2) Whetherthecontractor’sdeploymentissufficienttoavoidtheimpositionofoutlierpenaltiesunderthecontract.

Underthefirsttest,deploymentissufficient.Underthesecondtest,deploymentisinsufficient.

TherearenumerousothercriteriathatshouldbeassessedtoanswerthequestionofwhetherEMSsystemdeploymentissufficient.Forinstance,withregardto911deployment,theCountyreportsnopatientorcitizencomplaintsregardingresponsetimeperformancesincetheinceptionofthecontract.Patientsatisfactiondataregardingtimelinessofcarearegood.Althoughmutualaidhasbeendeployed,asitwouldbewithanyEMSsystem,nocallshavebeenmissed.

SincetheinceptionofthecontractinJanuary2015,nopenaltieshavebeenassessedagainstthecontractorfornon‐compliancewiththefractileresponsetimestandards.Putanotherway,thecontractorhasmetorexceeded90%complianceforeachemergencyresponsezone.Fractileresponsetimeanalysisistheestablishedindustrystandardmethodologyforassessingemergencyresponsetimecompliance.Therefore,usingthismethodology,thecontractorisdeployingsufficientresourcestosatisfysystemdemand.

Withregardtothesufficiencyofthecontractor’sdeploymentwhenanalyzedunderthesecondtestabove,itisclearthatdeploymentisinsufficienttoavoidtheimpositionofoutlierpenalties.

Summary

Currentlevelsofcontractordeploymentareadequatetomeetestablishedfractileresponsetimestandards.However,deploymentlevelsareinadequatetoavoidtheimpositionofoutlier

penalties.Additionaldeploymentisnecessarytoavoidtheimpositionofoutlierpenaltiesas

currentlystructured.Becausesystemrevenuesappeartobeinsufficienttosupportthismarginalincreaseindeployment,subsidieswouldbe

necessarytoachieveit.

Therefore,thequestionofwhetherthecontractor’sdeploymentis“sufficient”tomeetsystemdemandisultimatelyaquestionforCountypolicymakerstoanswerbasedupontheparticularphilosophytheybringtothatquestion.Asthereisnoevidencethatcallsarebeingunanswered,deployment(plusmutualaid)isensuringthatresponsesarebeingmadetoallcallsintheCounty.Clearly,deploymentissufficientwhenmeasuredbyfractileresponsetimeperformance(whichisconsideredtheindustrystandardbenchmark).Therearefewhigh‐performanceEMSsystemsinwhichcontractorsavoidalloutlierresponsetimepenalties,butifthisisthemethodologydesiredtoaddressdeploymentsufficiency,thenagain,theansweristhatdeploymentisinsufficient.

HowMuchAdditionalDeploymentisNecessary?Asdiscussedearlierinthisreport,EMSsystemdesignisatrade‐offbetweencostandresponsiveness.Reducingresponsetimesbyeveryminutehasanescalatingmarginalcost,meaningthatitbecomesincreasinglymoreexpensiveasresponsetimecompliancegoesupto95,97,98,99andultimately100percent.Thatis,themarginaldollarsrequiredtoanswerthelastcall–theone‐hundredthpercentilecall–withintheprescribedresponsetimestandardaremorethanthedollarsrequiredtoachieve90%.Itshouldbenoted,incidentally,that100%compliancewithprescribedresponsetimestandardsispracticallyimpossibleandthereforepredominantlyatheoreticalexercise.

Itishelpfultoconsiderthemarginalcostsofdeploymentsufficienttoachievealevelofresponsetimecompliancethatwouldavoidtheimpositionofoutlierpenalties.Toaddressthis,weexaminedtheestimatedcostassociatedwiththeincreaseinunithoursthatwouldbenecessarytodeploysufficientresourcestoachievethistarget.Todeployatalevelsufficienttoavoidoutlierpenalties,thecontractorestimatesamarginalannualcostof$1.25million.30Systemrevenuesappeartobeinsufficienttoachievetheselevelsofdeployment.

30Theseestimatesarebaseduponproprietaryunithourcostestimatessuppliedbythecontractor.Again,asafulldeploymentanalysisandassociatedanalyticsarebeyondthescopeofthisproject,wereliedupondataandcostestimatessuppliedbythecontractor.Thoughtheseestimatesarecontractor‐derived,wehavenoreasontoquestiontheiraccuracy.

ResponseTimePenalties–EmergencyResponse

ResponseTimePenaltiesAreSubstantial.Oneofthemost‐discussedsubjectsraisedbystakeholdersintheinformation‐gatheringphaseofthisprojectwasthemechanismfortheassessmentofresponsetimepenaltiesagainstthecontractor.SincetheinceptionofthecontractinJanuary2015,penaltiestotalingover$900,000havebeenassessedbytheCountyagainstthecontractor,averagingapproximately$40,000permonth.31

Thecurrentpenaltymechanismessentiallymandatestwotiersofresponsetimenon‐compliancepenalties:

(1)FractileResponseTimePenaltiesand

(2)OutlierResponseTimePenalties.

Thefractilepenaltiespenalizethecontractorforzoneresponsecomplianceoflessthan90%foranysubsetof911callsinanyemergencyresponsezone(ERZ)intheCounty.Fractilepenaltiesarealsoassessedfornon‐emergency/interfacilitytransfersandCCTs.Theoutlierpenalties(alsoknownas“late”penalties)penalizethecontractorforso‐called“excessive”responsetimesforaparticularcategory.Alateresponseisclassifiedas“excessive”whentheresponseexceedsacertainpre‐determinednumberofminutesassetforthintheRFP.32

Thecontractorstakeholdersinourinterviewsdescribedthetwo‐tieredpenaltystructureasessentiallyimposinga100%responsetimeperformancerequirement.Ouranalysisdiffersfromthatofthecontractor.Becausetheoutlierpenaltiesonlyaccrueafter17:59/29:59(HCD/LCDzones)anddonotaccrueforeachminutetheresponsesexceedthefractilestandards,thistwo‐tieredpenaltystructuredoesnot,infact,createadefacto100%compliancestandard.Tothe

31DuringthecourseofourstakeholderinterviewsforthisprojectwewereinformedthattheCountyhasstayedcollectionofperformancepenaltiesfromthecontractor.Forpurposesofthisanalysis,wedrawnodistinctionbetweenassessedpenaltiesandcollectedpenalties.32Greaterthan17:59forPriority1and2responsesinHCDzones,andgreaterthan29:59inLCDzones.Thesegoto29:59and39:59forPriority3responses,accordingly,andtherearealsoresponsepenaltiesfornon‐emergenciesandCCTsaswell.

Summary

Responsetimepenaltieshavenotaccruedforfractileresponsetimecompliance,buthave

accruedsignificantlyforoutliercompliance.TheCountycanrestructureoutlierpenaltiestobaseitsenforcementonpositiveincentivesthatimproveresponsetimesratherthanpenalize

non‐compliance.Thecontractcouldbemodifiedtoincludeanincentivefortheeliminationofoutlierpenaltiesintheeventthecontractorachieveszoneresponsetimecompliancein

excessofthecurrent90thpercentilerequirements.Forinstance,ifthecontractorweretoachieve92%fractileresponsetime

complianceinaparticularzoneforaparticularcomplianceperiod,outlierpenaltieswouldnot

beassessedforthatperiod.

contrary,thestructureoftheoutlierpenaltiesmeansthatthereareresponsesthatfallintotherangebetween10:59‐17:59(HCDzones)andbetween19:59–29:59(LCDzones)thatareclassifiedaslate,butforwhichpenaltiesdonotaccrue.

Ourreviewoftherecordsrevealsthatthecontractorhasmetorexceededfractileresponsetimerequirementsineverycomplianceperiodinwhichtheyhavebeenmeasured.Allofthepenaltiesassessedfromtheinceptionofthecontracttothedateofthisreporthavebeenoutlierpenalties.

WhilemanyEMSsystemsdoimposeadditionalpenaltiesforoutliereventsinadditiontofractileresponsetimepenalties,thoseadditionalpenaltiesareoftenclassifiedas“optional.”Thisway,theycanbeusedbytheEMSAgencyasadiscretionarytoolincontractoroversight,dependingonthelevelofmotivationthecontractorrequiresforcompliance,andoverallfiscalconsiderationsofthesystem.TheRFPcurrentlyappearstomaketheassessmentoftheoutlierpenaltiesmandatoryontopofthefractilepenalties.

AnotherissuethathasledtotheassessmentofahighamountofpenaltiesistheseparatemeasurementofallemergencyresponsesinboththeHCDandLCDzones.SincetheresponsetimeperformancestandardsareidenticalinbothzonesforPriority1andPriority2emergencyresponses,thesecanbeaggregatedforcalculationpurposes.SincethecontractorhasputinplaceasecondaryPSAPwithMPDSprotocolsandtrainedEMDs,thiswillallowthecontractortheoperationalflexibilitytodeploybasedonacuityandpatientneedwhilereducingthepossibilityofbeingpenalizedforit.ThiswouldlikelyresultinmoreresponsiveservicetomoreacutelyillorinjuredpatientsasthoseconditionsareassessedundertheMedicalPriorityDispatchprotocols.

ConsideranIncentive‐BasedSystemtoImproveResponseTimesandReducePenalties.Inlightoftheabovediscussion,webelievethatthebestoptionistomodifythecurrentOutlierResponseTimePenaltiestoprovideanincentivetothecontractorwhichcanresultintheeliminationofthesepenalties.Forexample,waiversofoutlierpenaltiescouldbeearnedforanycomplianceperiodinanyzoneinwhichfractileresponsetimeperformanceexceedsthe90%benchmark(forinstance,thisincentivetargetcouldbesetat92%orsuchothernumbertobenegotiatedwiththecontractor).33Thiswouldhavetheeffectofincentivizingimprovedresponsetimeperformanceandraisingsystemstandardsratherthanpunishingcomplianceinthemaintenanceofexistingsystemstandards.

Otheroptionswithregardtomodificationoftheoutlierpenaltieswouldbe:

(a)Convertingtheoutlierpenaltiesfrommandatorytopermissiveandutilizingthemjudiciouslyandonlyforextremecases;

33Notethattherearesubstantialbilledbutuncollectedoutlierpenalties.Thecontractorassertsthatthecollectionofthesebackpenaltiescouldposeafinancialhardship.Iftrue,thepartiesshouldconsiderwhethersuchapolicycouldbeappliedretroactivelytotheinceptionofthecontractperiodforanycomplianceperiodsinwhichfractileresponsetimeperformancemetorexceededthisgoal.

(b)Allowingfortheassessmentofoutlierpenaltiesonlyincomplianceperiodswherezonecompliancefallsbelow90%;

(c)Modifyingthemethodologyforcalculating911responsetimesbyaggregatingthePriority1and2responsesinthezones;and/or

(d)eliminatingtheoutlierpenaltytieraltogether.

Whileeachoftheseoptionswouldhavetheeffectofprovidinganindirectsubsidytothecontractor,webelievethattheoutlierpenaltiesdoserveavalidpurposesimplybyfocusingontheimportanceofcontractoraccountabilityinaresponsetime‐basedsystem.So,themostappropriateoptionmaybetokeeptheoutlierpenaltytierbutallowthecontractortoavoidtheimpositionofthesepenaltiesthroughimprovedzoneresponsetimecompliance,coupledwithmodificationofthecalculationmethodology,arethemostconstructiveoptionsthatmeetthetwingoalsofeconomicreliefandsystemaccountability.

ResponseTimePenalties–NETsandIFTs

NET/IFTResponseTimeStandardsDivertResourcesFrom911Response.AnotherpolicychoicereflectedintheRFPistheassessmentofpenaltiesforlateresponsesfornon‐emergencytransports(NETs)andinterfacilitytransports(IFTs).

CertainlytheawardofacountywideEOAforalllevelsofservice,includingemergency911,NETsandIFTsnecessitatesaccountabilitystandardswithregardtotheexclusiveprovider.34However,becausetheRFPcontainspenaltyandbreachprovisionsthatapplyequallytoresponsetimedeficienciesforNETandIFTresponsesasitdoesforprehospital911responses,theeffectisallocationofresourcesawayfrom911deploymentsoasnottoincurperformancedeficienciesfortheNET/IFTresponsesandplacethecontractorinapotentialbreachsituation.

Theresponsetimeperformancestandardsforeachlevelisasfollows:

Table3:ContractorResponseTimePerformanceStandards,NET/IFTs

PriorityLevel Compliance HighCallDensity LowCallDensityNET

90% <19:59 <29:59

+/‐ 15minutesofscheduledtimeor<59:59

NET/IFTResponseTimeRequirementsareaNegativeSubsidy.Moreimportantly,assetforthintheBackgroundDiscussionsectionofthisreport,theeconomicrealityofimposingresponsetimestandardsontheNET/IFTcallsistoprovideanindirectsubsidytothehospitalsand

34WenotethatthecontractualresponsetimestandardsarenottheonlymeasureofaccountabilityregardingIFTresponses.Unlikethe911aspectofthecontract,thereismarket‐basedaccountabilityintheIFTservicesofthecontractor.Thecontractorprovideswheelchairvanandothernon‐emergencypatienttransportationservicesthatarenotregulatedbytheEOAcontract.Shouldthecontractor’sperformanceonIFTsbedeficient,itsfacilitycustomerswouldbefreetodiscontinueusingthemforthesenon‐ambulancemedicaltransportationservices,sotheNET/IFTsystemisnotwithoutmarket‐basedperformanceincentives.

Summary

While911responsetimerequirementsareexpensiveandthereisscantevidencethatresponsetimestandardsimprovepatient

outcomes,thereisevenlessclinicalevidencetosupporttheimpositionofresponsetime

penaltiesfornon‐emergencyandinterfacilityresponses.Accordingly,theCountycan

improvesustainabilityofthe911responsesystembyeliminatingresponsetime

performancestandardsfornon‐emergencyandinterfacilitytransports.

healthcarefacilitiesthatservetheCounty.Promptnon‐emergencyandinterfacilitytransportationimprovesfacilitythroughput,whichhasvaluetohealthcarefacilities.Asdiscussedearlierinthisreport,thishastheeconomiceffectofimposinga“negativesubsidy”onthecontractortothebenefitofotherstakeholdersintheCountyhealthcaresystem,i.e.,thehospitalsandotherfacilitiesthatservetheCounty.

Itisrelativelyunusual(thoughnotunheardof)foranEMSoversightagencytoimposeresponsetimeperformancestandardsonnon‐emergencyandinterfacilitytransports.Underthecurrentcontract,thefailuretomeetNETandIFTresponsetimerequirementsforthreeconsecutivemeasurementperiodsisanexpressconditionofbreach.Therefore,thecontractorcanbeincentivizedinsomeinstancestodivert911resourcestonon‐emergencytransportswhennecessarytoavoidperformancedeficienciesontheNET/IFTservices.

ThereisnoClinicalJustificationforNET/IFTResponseTimeStandards.Asdiscussedabove,theevidence‐basedcorrelationbetweenresponsetimesandpatientoutcomesinthe911contextishighlyquestionable;whenitcomestoresponsetimestandardsforNETsandIFTs,theevidenceofpatientbenefitsimplydoesnotexist.TheimpositionoftheseNET/IFTresponsetimestandardswasoverlyambitiousgiventheperformancestandardsapplicableto911calls.ThisisaluxurythattherevenuesoftheMercedCountyEMSsystemdonotappeartoafford.

OneoptiontheCountymaywishtoconsiderasanindirectsubsidyistheeliminationoftheresponsetimeperformancestandardsforNET/IFTcalls.Thereisnodemonstratedclinicalbenefitforthesestandards.Thesestandardscandetractfromcompliancewith911responsetimestandards,andhavetheeconomiceffectofsubsidizinghealthcarefacilitiesattheexpenseofanEMSsystemthatisalreadystrugglingforsustainability.

AmbulanceRates

AmbulanceRateRegulationintheCurrentSystem.Section3ofthecontractstatesthat“allratesandchargesforservicesbytheContractorshallbeapprovedbytheDirectorofPublicHealth,”andthat“allbills…forservicesrendered…shallnotexceedtheratesandchargeswhichhavebeenapprovedbytheDirectorofPublicHealth.”Inaddition,Section(IV)(G)(3)(b)oftheRFPcontainsprovisionsregardingadjustmentstothecontractor’sapprovedrates.Notably,thissectionoftheRFPprovidesthat“changedcircumstances”whichsubstantiallyimpactcostsorrevenuescanserveasabasisforconsiderationofrateincreases.

Invokingthe“changedcircumstances”provision,thecontractorrequestedrateadjustmentsinMarch2016.IncreaseswereapprovedforALS‐Emergency,BLS‐Emergency,MileageandNightFee.IncreaseswererejectedforBLSNon‐EmergencyandCriticalCareTransports,basedontheCounty’sfindingthattheproposedfeeswere“wellaboveindustrystandard.”35

Table4onthefollowingpagesummarizesthehistoryofcontractorratesunderthe2015agreement.

RateIncreasesAlreadyApprovedAreProvingtobeBeneficial.Forthelevelsofserviceforwhichrateincreaseswereapproved,thoseratesbecameeffectiveasofJuly1,2016.Aspartofourreviewofthisissue,weaskedthecontractorforinitialdataregardingtherateincreasesandtheresultingimpactonrevenues.Using60days’worthofdatafromaccountsbilledsincetheincreasesbecameeffective,thecontractorprojectsanannualincreaseof$1‐$1.5millioninrevenueresultingfromtheapprovedrateincreases.36

35CertainlythecontractoritselfbearssignificantresponsibilityfortheunusuallylowBLSNon‐Emergencybaserate.EventhoughtheapprovedrateatthetimeoftheRFPwas$1375,thecontractorbid$400initsproposal,presumablyinordertomaximizepointsintheproposalscoringprocess.Nevertheless,forthereasonsenumeratedhere,thereislittletobegainedforthesysteminmaintainingtheBLS‐NErateatthecurrentlevelof$400simplybecausethecontractorunderbidtheBLS‐NEratesinits2014RFPproposal.36Sincetherewereonly60days’worthofdataonwhichtobasetheseprojectionsatthetimeofthewritingofthisreport,theseestimatesshouldbeverifiedwithadditionaldatapriortoanydecisionsbeingmadebasedonrevenuesderivingfromratemodifications.

Summary

Aslocalratecontrolshavelittleeffectonprotectingconsumersfromout‐of‐pockethealthcarecosts,theCountyshouldapprovethecontractor’srateincreaserequestsforBLSNon‐EmergencyandCCTlevelsofservice,approvefuturerateincreasesandeliminaterateregulationfromfutureRFPs.Inthealternative,anannual“not‐to‐exceed”capshouldbeimposedtoallowcontractorrateincreasesuptothatlevelwithouttheneedforapproval.Increasedrevenuesrealizedbyanysuchincreasesshouldoffsetbyequalamounts

anysustainabilitysubsidiesthatmightotherwiseberequiredtoachievethedesired

levelofsystemperformance.

Theprojectedneteffectoftherateincreaseapprovalsispronouncedandiftheseprojectionsturnouttobeaccurate,thegrantingofrateincreasescomprisesasubstantialportionoftheprojectedsubsidies($3.295million)necessaryforincreaseddeployment,capitalizationandreservesthatarediscussedearlierinthisreport.

Table4:ContractorRateHistoryUnderCurrentAgreement,

January2015–Present

Level of Service

Initial Rate

3/16 Request

Current Rate

ALS ‐ Emergency Base Rate

$2,000 $3,500 $3,500

ALS – Non‐Emergency Base Rate

$2,000 $ ‐‐‐‐ $2,000

BLS Emergency Base Rate

$2,000 $3,500 $3,500

BLS Non‐Emergency Base Rate

$ 400 $1,600 $ 400

Critical Care Transport Base Rate

$3,500 $15,000 $3,500

Mileage (per loaded mile)

$ 45 $ 59 $ 59

Treat/No Transport*37

$ 300 $ ‐‐‐ $ 300

Night Charge*

$ 100 $ 200 $ 200

Oxygen Fee*

$ 100 $ ‐‐‐ $ 100

LocalRestrictionsonAmbulanceRatesareNottheConsumerProtectionsTheySeem.Inourview,theapprovalofrateincreasesisakeyareainwhichthesustainabilityoftheMercedCountyEMSsystemcanbeimprovedwithoutdirectsubsidyfromoraddedcosttotheCounty.Thisisbecausethevastmajorityofpatientaccountsarereimbursedbygovernmentpayersthatpayaccordingtoafixedfeescheduleandnotonprovidercharges.Inotherwords,theprovider’schargesareirrelevantundertheMedicareandMedi‐Calfeeschedules;theamountofreimbursementisprospectivelyestablishedbyfeeschedule,andthedifferencebetweentheprovider’schargesandtheapprovedfeescheduleamountsis,bylaw,deemedanuncollectable“contractualallowance.”

37*Itshouldbenotedthatsomeoftheseitemizedcharges,includingnightcharges,oxygenfees,andtreat/notransportchargesaretypicallynotrecognizedbythemajorhealthcarepayers,mostnotablyMedicareandMedi‐Cal.

Thoughlocalcontrolsandlimitationsonproviderrateincreasesareperceivedasbeingbeneficialconsumerprotections,therealityisthattheselimitationsprimarilybenefitoneconstituency:thecommercialinsuranceindustry.Putanotherway,whenproviderchargesareartificiallysuppressed,itis,inreality,asubsidyforcommercialinsurers.

Becauseover85%ofthecontractor’spayermixismadeupofMedicareand/orMedi‐Calbeneficiaries,thosepatientsareautomaticallygrantedtheprotectionsfromout‐of‐pocketchargesthatcomewiththemandatoryfeeschedulesimposedbythosepayers.Providersareprohibitedbylawfrom“balancebilling”thesepatientsforanyamountsabovethoseapprovedunderthefeeschedules.TheonlyamountsthatmaybebilledtoaMedicarepatientareunmetcopaymentsanddeductibles,notthefullbalanceoftheprovider’scharges,andapproximately86%ofMedicarebeneficiarieshavesupplementalinsurancetopaythesecost‐sharingobligations.38

Because85%oftheMercedCountypayermixareMedicareandMedi‐Calbeneficiaries,thisleavesabout10%ofpatientswhoarecommerciallyinsured,andabout4.3%ofpatientswhoareclassifiedasuninsuredor“self‐pay.”Theself‐paycategoryisarelativelysmallpercentageofpatientsinoverallambulanceutilizationinMercedCounty.Inaddition,thecontractorfollowsafinancialhardshipwaiverpolicywhichpermitsthewaiverofout‐of‐pocketchargesforpatientswhomeetestablishedfinancialcriteria.39

Thebottomlineisthatmostpatientaccountsarenotself‐pay,andnopatientissubjectedtocollectionactionforout‐of‐pocketexpensesiftheymeetthefinancialhardshipguidelinesandcannotaffordtopay.Therefore,theneteffectofrateincreasedenialsistobenefitcommercialinsurancecompanies,whichcompriseabout10%ofthecontractor’spayermix,ascommercialpayersaremorelikelytoreimbursetheprovideratahigherratethangovernmentinsurers(though,asnotedearlierinthisreport,morecommercially‐insuredpatientsareshiftingintohigh‐deductibleplans,andfewercommercialplansareautomaticallypayingtheprovider’sfullbilledcharges).

LocalRateControlsBenefitInsurers,NotConsumers.BecausegovernmentalpayerslikeMedicareandMedi‐Calreimburseaccordingtofixedfeeschedules,andbecausethoseamountsgenerallyfallshortofcoveringprovidercosts,asdiscussedabove,theresultisthathealthcareprovidersmustshiftcostsfromgovernmentalpayersanduninsuredpatientstotherelativelysmallpercentageofaccountsthatarecoveredbycommercialinsurersandreimbursedathigheramounts.Inreality,ratecapsinhibitthisinevitablecost‐shiftinginwhichprovidersmustengagetoensuresustainability.

38KaiserFamilyFoundation,APrimeronMedicare:KeyFactsAbouttheMedicareProgramandthePeopleitCovers,2015,http://kff.org/report‐section/a‐primer‐on‐medicare‐what‐types‐of‐supplemental‐insurance‐do‐beneficiaries‐have/39Thisfinancialhardshippolicywouldapplytoanypatientbalances,specificallytoincludenon‐coveredservicesandunmetcopaymentordeductiblecharges.

Toenforcelocalcapsonproviderchargesthereforeofferslittlebenefittoconsumers,mostofwhomdonotpayfortheseservicesoutoftheirownpockets.Localratecapsofferawindfalltocommercialinsurers,whothereforepayfewerdollarsinclaimsandretainmoreoftheirpremiumdollarsasprofit.And,inthecaseofambulanceservices,thesechargesaresuchanegligibleportionofhealthinsurancebenefits40thatthereisnodocumentedassociationbetweenambulanceratesandincreasesinhealthinsurancepremiums.Therefore,totheextenttheCounty’sregulationofthecontractor’sratesisperceivedtohelpholdthelineoncommercialhealthinsurancepremiumincreases,whileallhealthcarecostsnodoubteffectpremiums,thereisnodirectcorrelationbetweenretailambulanceratesandcommercialhealthinsurancepremiums.Inaddition,inthepost‐ACAhealthcareenvironment,marketforcesmuchlargerthanambulancechargesarereshapingthehealthinsurancepremiumlandscape.

ThereforetheCountyshouldreconsiderandapprovethepreviously‐deniedrateincreasesforBLSNon‐EmergencyandCriticalCareTransportlevelsofservice,andapprovefuturerateincreaserequestsunderthecontract.Inaddition,thedeletionofsimilarlocalratecontrolprovisionsintheRFPsforfutureprocurementcycleswouldbewell‐advised.Inreturn,itisappropriatefortheCountytorequireanaccountingfromthecontractoroftheeffectoftherateincreasesonrevenues,andforthoseincreasedrevenuestooffsetotherareasofprojecteddirectorindirectsubsidiesnecessarytosustainthesystem.Forinstance,themorerevenuethecontractorderivesfromfeeincreases,thelesssubsidywouldberequiredintheformofpenaltyrelieforotherconcessions.

IfaMorePoliticallyDesirableAlternativeisNeeded…Werealizethatthisoption(removingrateregulationfromthecontract)maynotbepoliticallypalatable,eventhoughwestronglybelievethepublicisnotprotectedbylocalambulancerate‐settingandwouldbebenefitedbyremovingratecaps.Itwouldbeourhopethatthepubliccouldbeappropriatelyeducatedonthispoint.However,itmaybemorepoliticallypalatabletolimitautomaticrateincreasestoacertainamount,forinstance,nomorethan20%onanannualbasis.Increasesinexcessofthisamountwouldberequiredtogothroughanapprovalprocess,butincreaseswithinthatpredeterminedrangewouldbeavailabletothecontractorasamatterofcourse.

40UsingCMSdata,ambulancechargescompriselessthan1%ofallMedicarehealthcarebenefitexpenditures.https://www.cms.gov/research‐statistics‐data‐and‐systems/statistics‐trends‐and‐reports/medicare‐provider‐charge‐data/physician‐and‐other‐supplier.html

EmergencyDepartmentOffloadIssues

“Emergencydepartmentoffload”referstotheprocessofambulancesarrivingatahospitalemergencydepartment,transferringcaretoE.D.staff,andreturningtheambulancetoservice.OneoftheareasconsistentlymentionedbystakeholdersintheinterviewsconductedforthisprojectistheprolongedE.D.offloadtimesbeingexperiencedatMercyMedicalCenter(MMC)inMerced,thefacilitytowhichthevastmajorityofpatientsaretransportedintheCounty.

AlthoughThereisVariabilityinCurrentOffloadTimeMeasurement,StakeholdersAgreeThatDelaysareaProblem.AlthoughtherewassignificantvariationintheE.D.offloadtimesbeingreportedbyhospitalstakeholderscomparedtothosebeingreportedbythecontractorandothersystemstakeholders,andthestakeholderssuggestthatthisissueisimproving(atleastatpresent),therealityappearsthatoffloadtimesareafactorinEMSsysteminefficiencyinMercedCounty.41Inaddition,a2014statewidereportindicatedthat“verysignificant”or“extremelysignificant”offloaddelayswerebeingreportedinMercedCounty.42

TherearenumerousreasonsforE.D.offloadinefficienciesandthepurposeofthisanalysisisnottoassignblame,buttoidentifycontributorstotheunsustainabilityoftheMercedCountyEMS

41SomeevidenceofthevariabilityofthestakeholderreportsonthisissuewereseenintheaverageoffloadtimesreportedbyMMC(lessthan5minutesaverage)anddataprovidedbytheCounty(showingbetween11and37minutesonaveragedependingonthetimeperiod)andanecdotalreportsbythecontractor(whichreportedthatoffloadtimesexceeding60‐90minuteswereoccurringwithmoderatefrequency).Ourreviewofthehospital’smethodologysuggeststhatMMCisunderestimatingoffloadtimes,astheclockisbeingstoppedwhenaroomassignmentismade,eveniftheroomisnotyetphysicallyreadyforthepatient.42ToolkittoReduceAmbulancePatientOffloadDelaysintheEmergencyDepartment,CaliforniaHospitalAssociation,August2014.

Summary

ProlongedE.D.offloadtimeshamperefficientEMSsystemunithourutilizationandlielargelybeyondthecontroloftheambulanceprovider.Hospitalsbearlegalresponsibilityforpatientsoncetheycometothehospital,andaccordingly

thehospitalshouldfundanE.D.OffloadCoordinatorpositionforperiodsofpeakE.D.

demandsothehospitalcanmeetitlegaldutytoassumeresponsibilityforpatientsuponarrivalintheE.D.Inthealternative,theCountyshouldconsidertheuseofSystemEnhancementFundsforsuchaposition.Also,oncesufficientdataareavailableunderthestate’snewstandardizedAmbulancePatientOffloadTime(APOT)

MethodologyGuidelines,stakeholdersshouldestablishaconsensusbenchmarkforacceptableaverageoffloadtimesintheCounty.Responsetimepenaltyexceptionsshouldbegrantedasamatterofcourseforlateresponsesthatare

attributabletoE.D.offloadtimesexceedingthisconsensusbenchmark.

systemandofferoptionsforimprovingsustainabilityoverthetermofthecurrentEOAcontractandbeyond.

SomeofthereasonsforE.D.offloadinefficienciesinclude:

‐ LackofaccesstoprimarycarecausinginappropriateE.D.demand;

‐ PhysicalE.D.design;‐ Hospitalthroughputissues;‐ Lackofhospitalbedsanddelayedbed

turnover;‐ Nursestaffingissuesandnurse‐patient

ratios;‐ Decreaseincommunitymentalhealth

resourcesleadingtoincreasedE.D.utilizationforpsychiatricholds;

‐ Delaysinradiology,laboratoryandotherhospitalancillaryservices.

But,regardlessoftheunderlyingcauses,theresultingimpactontheEMSsystemisindisputable.Whereambulancesaretiedupatthehospitalforprolongedperiodsoftime,unithourutilizationisreduced,responsetimeslengthen,penaltyassessmentsincrease,andtheEMSsystembecomeslessefficient.

OffloadDelaysHaveSubstantialEMSSystemCosts.Nationaldatarevealedanaverageincreaseinoffloadtimesfrom20minutestomorethan45minutesoveraten‐yearperiod.43ThecoststotheEMSsystemresultingfromoffloaddelaysaresignificant,directandquantifiable.Forexample,offloaddelaysinanEMSsystemwith10,000annualE.D.transportsexperiencingthenationalaverageoffloaddelaysof45minutesandcostsof$150perunithourofdeploymentwouldleadtoadirectcostof$1,125,000inthatsystem.

E.D.offloaddelayscanbeseenasanotherexampleofa“negativesubsidy”inaction.WhereambulancecrewmembersarerequiredtoremainwithpatientspriortotheE.D.staffassumingcare(apracticeknownas“waitingonthewall”or“walltime”44),thehospitalcanemployfewerstaffandrelyupontheprehospitalpersonneltomaintainresponsibilityforthepatientuntilthehospitalisreadytoassumethetransferofcare.

EMTALAPresentsanIssuefortheHospital.Despitethefactthatambulancecrewsareoftenpressedintowalltimeservice,theCentersforMedicareandMedicaidServices(CMS)hasindicatedthatsuchpracticescanresultinaviolationoftheEmergencyMedicalTreatmentand

43ToolkittoReduceAmbulancePatientOffloadDelaysintheEmergencyDepartment,CaliforniaHospitalAssociation,August2014.44See,e.g.,http://www.latimes.com/opinion/op‐ed/la‐oe‐newton‐wall‐time‐waste‐in‐fire‐department‐20140818‐column.html

ActiveLaborAct(EMTALA)bythehospital.InaJuly31,2006memofromtheDirectoroftheCMSCenterforMedicaidandStateOperationstoStateSurveyAgencyDirectorsregarding“ParkingofEMSPatientsinHospitals,”45CMSstated:

____________________________________________________________________

“TheCentersforMedicare&MedicaidServices(CMS)haslearnedthatseveralhospitalsroutinelyprevent

EmergencyMedicalService(EMS)stafffromtransferringpatientsfromtheirambulancestretcherstoahospitalbedorgurney.ReportsincludepatientsbeingleftonanEMSstretcher(withEMSstaffinattendance)forextendedperiodsoftime.Manyofthehospitalstaffengagedinsuch

practicebelievethatunlessthehospital“takesresponsibility”forthepatient,thehospitalisnotobligatedtoprovidecareoraccommodatethepatient.Therefore,

theywillrefuseEMSrequeststotransferthepatienttohospitalunits.

ThispracticemayresultinaviolationoftheEmergencyMedicalTreatmentandLaborAct(EMTALA)and

raisesseriousconcernsforpatientcareandtheprovisionofemergencyservicesinacommunity.Additionally,thispracticemayalsoresultinaviolationof42CFR482.55,theConditionsofParticipationforHospitalsforEmergencyServices,which

requiresthatahospitalmeettheemergencyneedsofpatientsinaccordancewithacceptablestandardsofpractice.”

‐CentersforMedicareandMedicaidServices____________________________________________________________________

ItisclearthatunderFederallaw,hospitalsareresponsibleforpatientsoncetheyarriveintheE.D.46CMSinasubsequentpolicymemoindicatedthat“ahospitalwillnotnecessarilyhaveviolatedEMTALAifitdoesnot,ineveryinstance,immediatelyassumefromtheEMSproviderallresponsibilityforthe[patient].”CMSnotedthatwhenE.D.staffisoccupiedwith“multiplemajortraumacases”itmightbe“reasonableforthehospitaltoasktheEMSprovidertostaywiththe[patient]”untilE.D.staffisavailable.47(Emphasisadded.)ItiskeythatCMSspecificallyusedtheword“ask”inthiscontext;thehospitalcannotlegallyrequiretheEMSprovidertostaywiththe

45https://www.cms.gov/Medicare/Provider‐Enrollment‐and‐Certification/SurveyCertificationGenInfo/downloads/SCLetter06‐21.pdf46Infact,EMTALAappliesassoonasthepatientiswithin250yardsofthehospital’sproperty.42C.F.R.§413.65.47 https://www.cms.gov/Medicare/Provider‐Enrollment‐and‐Certification/SurveyCertificationGenInfo/downloads/SCLetter07‐20.pdf

patient.Inotherwords,thepatientclearlyisthehospital’sresponsibilityunderFederallawuponarrivalatthefacility.48

SinceitisclearthatpatientsarrivingintheE.D.aretheresponsibilityofthehospitalupontheirarrivalatthefacility,itisthehospital’sresponsibilitytoassureithasadequatestafftosatisfythislegaldutyofcare.Atpresent,stakeholdersindicatethatMMCdoesnot.Thecontractor(andthustheEMSsystem)isthereforesubsidizingthehospitalwhenambulancecrewmembersareservingasproxyhospitalstafftocareforpatientsduringprolongedwalltime.This“negativesubsidy”hasdirectandsubstantialcoststothecontractorandtheEMSsystemaswediscussed.ThehospitalshoulddeployduringtimesofpeakE.D.demandan“OffloadCoordinator”–adedicatedclinicalstaffpersonintheE.D.–whosesoleresponsibilityistomonitorpatientswhoarewaitingonthewallpriortoreceivingabedassignment.

Theimplementationofthebulkofthestrategiesnecessarytomitigatehospitaloffloaddelaysmustnecessarilyrestwiththehospital.StrategiesidentifiedinaseminalCaliforniaHospitalAssociationreportareidentifiedinTable5.

Table5:E.D.OffloadMitigationStrategies49

E.D.Intake E.D.Throughput E.D.Output E.D.Overall

Bedsideregistration Effectiveorderingoflabandimaging

Acceleratedinpatientintakeprocess

ManagementofE.D.throughputmetrics

Ordersfromtriage Innovativestaffingutilization

Dischargeczar/accelerator

E.D.management“rounding”

Acceleratedintakeprocess

HospitalCodeAlertforE.D.overcrowding

UseofClinicalDecisionUnit(CDU)

ChargeE.D.physician‐nurseconcept(shiftleaders)

“Directtobed”policy Dischargeinstructionsuponarrival

UsepharmacistinE.D.

Wenotethatthehospitalstakeholdersduringourinterviewsseemedtobesincereintheireffortstoaddresstheoffloaddelayproblem.Again,thisisamultifacetedproblemthatisnotsolelyahospitalproblemoranEMSsystemproblem;itprimarilyreflectslargerhealthcaresystemissues.

48IthasbeensuggestedthatanEMSproviderwholeavesapatientinanE.D.priortotheE.D.staff“acceptingresponsibility”forthepatientwouldcommitthetortofabandonment.Legally,itwouldbeextremelyunusualforacourttoholdanEMSproviderliableforpatientabandonmentwhenanotherprovider,i.e.,thehospital,hastheaffirmativelegaldutytocareforthepatient.Whilethismaybeaninterestingtheoreticalquestion,therearenocasesofwhichweareawareinwhichanEMSproviderwaseverfoundtobeliableforpatientabandonmentonthesefacts.49ToolkittoReduceAmbulancePatientOffloadDelaysintheEmergencyDepartment,CaliforniaHospitalAssociation,August2014.

WhattheCountyCanDo.SincetheEMSAgencyhasnoregulatoryjurisdictionoverthehospitalinthisregard,itcannotrequirethedeploymentofanOffloadCoordinatorormandatethatthehospitalimplementanyoftheseotherstrategies.Therefore,intheremainderofthissectionwewilldiscussstrategiesthatarewithintheCounty’scontroltoaddresstheE.D.offloadproblem.

TheCaliforniaEMSAuthorityhasdevelopedstandardizedAmbulancePatientOffloadTime(APOT)MethodologyGuidelinesformeasuringE.D.offloadtimes.Weanticipatethatthiswillresultinmuchmorereliableandstandardizeddata,thoughdataunderthatmethodologyisnotavailabletouspresentlyforpurposesofthisreport.AssoonastheAPOTMethodologyGuidelinesareimplemented,theCountyshouldensurethatallstakeholdersreportthisdataandthatitbemeasuredandmonitoredovertime.OnceAPOTproducessufficientdatafromwhichreliabledeterminationscanbemade,thestakeholdersshouldagreeuponanacceptableaverageE.D.offloadtime.

Suchabenchmarkshouldbedevelopedwithinputfromallstakeholders,withtherecognitionthatoffloadtimesareasignificantcontributortodecreasedEMSsystemefficiency.InAlamedaCounty,forinstance,a30minutebenchmarkwasestablished.InContraCostaCounty,“optimal”E.D.transfertimeis15minutesorless;transfertimeisconsideredtobe“delayed”after30minutes;andtransfertimeinexcessof60minutesisdeemedtobea“neverevent.”50AccordingtotheCaliforniaHospitalAssociation,theoffloadtimeintervalstandardmostfrequentlyusedbyLocalEMSAgencieswas15minutes.51

OnceaconsensusaverageE.D.offloadbenchmarkforMercedCountyisdecidedbythestakeholders,penaltyexceptionsshouldbegrantedasamatterofcourseforanylateresponseswhichexceedresponsetimerequirementsandareattributabletoE.D.offloadtimeswhichexceedthisconsensusbenchmark.

Wenotethatvariousstakeholders(bothCountyandcontractor‐affiliated)indicatedthatSectionIV(C)(6)(b)oftheRFPprohibitedtheconsiderationofoffloaddelaysasacriterionforgranting“goodcause”exceptionsforresponsetimedeficiencies.However,thecontractspecificallyindicatestheagreementofthepartiestointerpretthatprovisioninamannerwhichpermitsoffloaddelaystobeconsideredagoodcausecriterionwhen“reviewedandapprovedbytheLEMSADirector.”52Yetstakeholdersindicatedduringtheinterviewsthatoffloaddelayswere“notpermitted”asgoodcausecriteria.Ifso,thisCountypolicyappearstobecontrarytotheagreement;thecontractclearlypermitsE.D.offloaddelaystobeconsideredforgoodcause

50CountywideEmergencyDepartment911AmbulancePatientTransferofCarePerformanceReport,ContraCostaEMS,February11,2016,https://cchealth.org/ems/pdf/Hospital‐Transfer‐of‐Care‐Performance‐2016‐0211.pdf51ToolkittoReduceAmbulancePatientOffloadDelaysintheEmergencyDepartment,CaliforniaHospitalAssociation,August2014.52Section31ofSeptember9,2014contractbetweenMercedCountyandSEMSA.

exceptions.Giventhefactthatthisproblemforthemostpartliesbeyondthecontractor’scontrol,thesedelaysshouldbeconsideredforgoodcauseexceptions.53

IfthehospitaldoesnotdeployanOffloadCoordinatororimplementotherstrategiestomitigateE.D.offloaddelays,anotheroptionistoutilizeEMSSystemEnhancementFundstoaddressthemitigationofthisproblem.Forinstance,enhancementfundscouldbeusedtopurchaseextraambulancecotsandtosupporttheE.D.OffloadCoordinatorpositionsuggestedabove.ItisalsopossiblethattheR.N.assignedtodutyontheCCTunitcouldfulfillthisfunctionwhennotengagedinCCToperations.

Ofcourse,theseareessentiallytemporaryor“bandaid”solutions;theabilitytotrulysolvetheoffloaddelayproblemrests,bynecessity,primarilywiththehospitals.

53Wealsonotethatthe“orderofprecedence”clauseinSection1ofthecontractprovidesthatintheeventofconflictsbetweentheRFP,proposalandthecontract,thetermsofthecontractgovern.Therefore,thisnegotiatedlanguagewhichpermitsoffloaddelaystobeconsideredforgoodcauseexceptionsshouldbeutilizedasamatterofcourse.

CriticalCareTransport(CCT)Program

LowCCTVolumesMaketheProgramUnsustainable.TheRFPprovidesthatthecontractorshalldeploy(orsubcontractfor)adedicatedCriticalCareTransport(CCT)unittorespondtoCountyhealthcarefacilitieseither(1)within15minutesofthepreviously‐scheduledpickuptime,or(2)within90minutesofunscheduled/urgentrequests.Whilethedeploymentofanin‐CountyCCTunitiscertainlydesirablefromaclinicalstandpoint,thelow‐volumeofCCTs,whencoupledwiththehigheroverheadofstaffingaCCTunit,maketheoperationofadedicatedCCTunitinfeasibleandcontributestotheoverallunsustainabilityoftheMercedCountyEMSsystem.

ThelowtransportvolumeoftheCCTprogramwastobeexpectedand,accordingtostakeholders,wasfactoredintothesystemasreflectedinitsRFPresponse.However,thecurrentunsustainabilityoftheCCTprogramresultedfrompost‐contractchangesintheairmedicalcomponentofthesystem.Priorto2016,theCountyrecognizedanEOAforairmedicalservices.TheEOAwaseliminatedduetoconsiderationsoffederalpreemptionoflocalregulationundertheAirlineDeregulationAct(ADA).54Becausethecontractorimplementedanintegratedair/groundapproachtocriticalcarestaffing,deploymentandoversightthroughaclinicalandoperationalpartnershipwithAirMethods,revenuesfromitsairmedicaltransportvolumedirectlysubsidizedthegroundCCTprogram,whichisunsustainableonitsown.TheeliminationoftheairEOAhasreducedtheairmedicaltransportvolumeand,withit,greatlyreducedtherevenuesavailabletosubsidizeCCTdeploymentatthelevelsrequiredunderthe

54AlthoughananalysisoffederalpreemptionoflocalairambulanceregulationundertheADAisbeyondthescopeofthisproject,inbrieffederallawpreemptslocalorstateregulationoftherates,routesandservicesofaircarriers.However,federalcaselawhaspermittedstate/localregulationoftheclinicalaspectsofairambulanceservices.Thelinebetweenwhatisconsidered“clinical”regulationand“rate/route/service”regulationisnotanentirelyclearmatterunderfederallaw.

Summary

TheCountyCCTprogramisunsustainableascurrentlyconfiguredduetohighoverheadandlowutilization.Theprogramdoesnotoperateasafacilitypartnershipandthehospitaldoes

notordinarilysenditsclinicalstafftoaccompanyCCTpatientsduringtransport

despitefederallawwhichhasbeeninterpretedtorequireitinsomecases.Asaresult,the

contractorincursdisproportionatecostswithlittleopportunitytorecoveritsinvestment.

ThecontractormustthereforeincreaseitsCCTvolumebyseekingbusinessoriginating

outsideofMercedCounty,whichifsuccessfulmaynecessitatearenegotiationofCCTresponsetimestandardsand/orpenaltyprovisions.Otheroptionstoimprovesustainabilityinclude(1)hospitalstaff

accompanyingCCTpatientsduringtransport;(2)hospitalsubsidiesforCCTnurses;and/or(3)theuseofSystemEnhancementFundsfor

CCTnursestaffing.

contract.ThiswasasignificantchangeincircumstancescomparedtowhentheRFPandproposalswereoriginallysubmittedandthecontractexecuted.

ImprovingSustainabilityRequiresIncreasingVolume.ThegroundCCTprogram,onaverage,respondstolessthan20callspermonth(lessthanoneperday),yettheprogramisrequiredtoprovidededicated,nurse‐levelstaffingona24/7basis.GiventheeliminationofthesubsidizingeffectofanairEOA,theprimarymechanismtoensuresustainabilityoftheCCTprogramistoincreasetransportvolume.

However,thevolumeoriginatingfromwithinMercedCountyisarelativelyfixedandstaticnumber;theneedformorerevenuescannotincreaselegitimateCCTdemand.Therefore,thecontractorisleftwiththeoptionofregionalizingitsCCTprogrambyseekingvolumeoriginatingoutsideofMercedCounty.CertainlytheCountybearsnoresponsibilitytoincreasethecontractor’sCCTvolume,andwhetherthecontractorsucceedsinforgingnewfacilitypartnershipsorexpandingitsCCToperationisabusinessconsiderationforthecontractorandnotanoversightconsiderationfortheCounty.

TheCountyhasaninterestintheCCTprogramremainingsustainable.IfsustainabilityoftheMercedCCTprogramnecessitatesthecontractorincreasingCCTvolumefromfacilitiesoutsideofMercedCounty,theresponsetimerequirementsapplicabletoCCTresponseswilllikelyposeaformidableobstacletosucharegionalizedapproach.IntheeventthecontractorissuccessfulinestablishingnewbusinessrelationshipstoregionalizeitsCCTservices,itwouldbeinthebestinterestsoftheCountyEMSsystemtorevisittheCCTresponsetimestandardsandeitherreformthestandardsorallowforexceptionsincaseswherethecontractorisalreadyengagedinprovidingCCTservices(evenifthoseservicesarebeingfurnishedoutsideoftheCounty).

ATrueCollaborativeCCTModelDoesNotExistinMercedCounty.Again,whilemuchofthesustainabilityoftheCCTprogramrestsonthecontractor’sabilitytonegotiatenewbusinessopportunities,thereareotherareaswhereCountypolicycanaffecttheongoingviabilityoftheprogramandminimizethenegativeeffectsthatthishigh‐cost,lowvolumeprogramhasonthelargerEMSsystem.TheRFPoutlinedacollaborativemodelwithcountyhealthcarefacilitiesasamodelwhichcouldbeutilizedforthededicatedCCTunit.

Nationally,acommonmodelforCCTdeploymentisthatbasestaffingforaCCTunitconsistsofadriverandaCCTparamedic,withhospitalnursingstaffaccompanyingCCTpatientsduringtransportwhenthepatientrequirescareatthatlevel.However,stakeholdersreportedthatMercyMedicalCenterhas,forthemostpart,notalloweditsnursingstafftoaccompanypatientsonCCTsoriginatingfromtheirfacility.ThismeansthatthecontractorisrequiredtoemployorcontractwithnursesdirectlytofulfillitsCCTobligations,whichcreatesaddeddifficultiesduetooverallemergencynurseshortages.Totheextentthestakeholders’reportsaboutMMCrefusingtosenditspersonneltoaccompanypatientsonCCTsareaccurate,thispracticecanbeinconflictwiththeprovisionsoftheEmergencyMedicalTreatmentandActiveLaborAct(EMTALA)insomecases.

EMTALAhasbeeninterpretedtoplaceresponsibilityforthecareofapatientonthesendinghospitaluntilcareisassumedbythereceivingfacility.Thishasbeeninterpretedtomeanthatinsomecasesthesendinghospitalitselfbearstheresponsibilitytosenditsownclinicalpersonnelalongwiththepatientduringtransport.55See42U.S.C.1395dd(c)(2)(D).5657Iftrue,thehospital’srefusaltopermititsstafffromaccompanyingpatientsduringtransport(exceptinextremecases)alsopresentsanotherexampleofthecurrentsystemcreatinganegativesubsidy,inwhichthecontractorisrequiredtosubsidizeotheraspectsofthehealthcaresystem.Here,fromamacroeconomicstandpointtheEMSsystemisessentiallysubsidizingthehospitalintwoways:(1)itsubsidizeshospitalstaffingbynecessitatingfewerhospitalemployeessincenoneareordinarilyrequiredtoaccompanyCCTpatientsduringtransport;and(2)therapidavailabilityofanunsubsidized,dedicatedin‐CountyCCTunittotransferpatientstoout‐of‐countyfacilitiesforspecializedcareobviatestheneedforthehospitaltoinvestinspecialtycarecapabilitiesin‐house.Thehigh‐costofdeployingadedicatedCCTunitdivertsresourcesthatcannotbeotherwisedeployedinthe911system.58GiventhatthehospitalisavoidingboththeclinicalandfinancialresponsibilitiesofsendingitsownproviderstoaccompanyCCTpatientsduringtransport,thereareafewoptionsthatcouldimprovethecontinuingfeasibilityoftheCCTprogram.59OptionstoImproveCCTProgramSustainability.First,thehospitalcouldreviseitspracticeofnotsendingitsclinicalpersonneltoaccompanyCCTpatientsduringtransportsanddeployitsprovidersonCCTtransportswherethepatientrequiresalevelofcarebeyondthescopeofaparamedic.60ThiswouldplacetheresponsibilityforadvancedclinicalstaffingontheappropriateentityandhavetheaddedbenefitofimprovingthesustainabilityoftheCCTprogram.Inaddition,CCTsshouldbemonitoredthroughtheQIprogramonanongoingbasistodetermineifnurse‐levelstaffingisappropriateorwhethersomepatientscansafelybetransportedwithALSresources.

55Thisinterpretationisnotnecessarilylimitedeventonursingstaff.InBurdittv.U.S.DepartmentofHealthandHumanServices,934F2d1362(5thCir1991),thecourtruledthatthehospitalwasrequiredtosendaphysiciantoaccompanythepatientwhenitwasclinicallyrequired.56SeealsotheaccompanyinginterpretationinEMTALA.com(http://www.emtala.com/faq.htm,#18).57WecannotconcludethatallCCTpatientswhoaretransferredfromMMCtootherhospitalsarenecessarilycoveredbyEMTALA.However,inourexperience,theverynatureofCCTsmakesitlogicaltoconcludethatasignificantproportionofCCTsaresubjecttotheprovisionsofEMTALA.58Stakeholdersreportedthatinsomecases,additionalunitsaredivertedfromthe911systemtosupplementCCTservices(forinstance,whentheCCTnursebelievesanadditionalALSprovidermightberequiredontheCCT,anALSunitisdispatchedtoassistwiththeCCT,thusremovingitfrom911service,oftenforaprolongedperiodoftime,asCCTsordinarilyinvolvetransportstoout‐of‐countydestinations).59WerecognizethattheCountydoesnothaveregulatoryauthorityoverhealthcareinstitutionsinordertorequirethehospitalstonecessarilyagreetoanyoftheseoptions.Nevertheless,wepresentthemhereinordertomaximizetheoptionsavailabletotheCountytonegotiatewithallrelevantstakeholderstoimprovethesustainabilityoftheEMSsystem.60WenotethatmanysystemsutilizeCCT‐trainedparamedicstofulfillthisrole,whichisalsoexpresslypermittedunderCMSregulations(42CFR§414.605),thoughnecessaryapprovalsfromtheStateEMSAuthoritywouldberequired.

Second,thehospitalcouldsubsidizethereasonablecostofthenurse‐levelstaffingontheCCTunit.Afterall,forasubstantialsubsetofCCTpatients,thehospitalbearsthelegalresponsibilityunderFederallawforthecareofthepatientuntilcareisassumedbythereceivingfacility.Third,theCountycouldutilizeSystemEnhancementFundsforthenursestaffingonthededicatedin‐CountyCCTprogram.Althoughsomebenefitsofthismayinuretothecontractor,italsobenefitsthehospitalandimprovesdeployment–andthereforebenefitstheEMSsystemasawhole.

ALSAmbulanceDeploymentVersusTieredResponse

All‐ALSDeploymentisRequired,ButUsuallyNotNecessary.MercedCounty’sEMSresponsesystemrequiresanALSambulanceresponsecoupledwithafiredepartmentfirstresponderBLSresponsefor911calls.

AllcontractorambulancesthatrespondtothesedispatchesarestaffedwithaparamedicandanEMT.UnderasubcontractthesameappliestoWestSideHealthcareDistrictwhenitrespondsinMercedCounty.Thefiredepartmentsdonottransportpatients.IfthereisadelayintheALSambulancerespondingtothescene,afiredepartmentEMTwillattendtothepatient’semergencycareneedswithintheEMT’sscopeofpracticeuntiltheALSambulancearrivesandthecareofthepatientcanbetransferredtotheALScrew.

Ithasbeenrecognizedthatthevastmajorityof911callsdonotrequireanALSintervention(lessthan5%),thatpatientsincardiacarrestaccountforfewerthan1‐2%ofcalls,andthatfewerthan15%ofpatientsrequireanytypeofALSprocedureorevenALS‐levelmonitoringbyALSpersonnel.6162IfthesefiguresapplyinMercedCounty,about15%ofthepatientsforwhomanambulanceresponseisdispatchedthroughthe911systemrequireALScare.TheEMSneedsoftheremainingpatientscouldbeprovidedbyEMTsperformingBLSskillswithintheirscopeofpractice.IfanALSambulanceresponseisrequestedonlywhentheconditionofthepatientisreportedasrequiringALS,thenparamedicswouldberespondingtofewercalls,asthosecallsthatclinicallyrequireonlyaBLSresponsewouldbehandledbyEMTs.AclinicaladvantageofthismodelwouldbemorefrequentexposurebyparamedicstopatientswhorequiretheperformanceofALSskills,thuscombatting

61PepePE,MattoxKL,FischerRP,MatsumotoCM.Geographicalpatternsofurbantraumaaccordingtomechanismandseverityofinjury.JTrauma.1990;30:1125‐32.62ForadiscussionoftheadvantagesanddisadvantagesofbothanallALSandatieredresponseambulancesystemseeStoutJ,PepePEandMosessoVN.All‐AdvancedLifeSupportvsTiered‐ResponseAmbulanceSystem.PrehospitalEmergencyCare.January/March2000,Vol.1,No.4.

Summary

NationalstandardsofcareandfederalregulationsclearlysupporttieredEMSsystemdeploymentwherebythelevelofservicedispatchedisbasedonmedicallyvalid,

differentialresponsedeterminants.Asaclinicallyappropriate,protocol‐baseddispatchsystemisalreadyinplaceinMercedCounty,theCountyshouldconsiderimplementingatieredEMS

responsesysteminwhichBLSambulancesmaybedeployedforany911callsforwhichBLS

responsedeterminantsaredeemedappropriateunderthesystemdispatchprotocols,asreviewedandapprovedbytheCounty.TheCountycouldrequirethecontractortoperform100%auditof911BLSresponsesforaprescribedtimeperiod,andconsiderstoppingtheresponsetimeclockforresponsesinwhichaparamedicarrives(forALS‐levelcalls)withintheprescribedtimeperiod,eveniftheparamedicarrivesinanon‐transport

ALSinterceptvehicle.

theerosionofsuchskillsduetoinfrequentuse.Also,havingasmallergroupofparamedicsmightenhancetheabilityofthesystemmedicaldirectorstofocusonspecialareasofconcern.

UsingparamedicstorespondtoacallwhenonlyBLSservicesarerequireddoesnotgenerateanymorerevenuethaniftheresponsewashandledbyEMTsonly.MedicareandMedi‐CalarepayersformostoftheambulanceservicesprovidedintheCounty.RegardlessofwhetherthereisanALSresponse,ifonlyaBLSresponseisrequiredbasedonthedispatchedconditionofthepatient,theypayattheBLSrateofreimbursement,notthehigherALSrateofreimbursement.Also,asdiscussedearlierinthisreport,reimbursementfromthosegovernmentalpayersforambulanceservicesislessthanthecostsofprovidingthoseservices.

ThecostsofemployingparamedicsanddeployingALSambulancesaregreaterthanthecostsofemployingEMTsanddeployingBLSambulances.AddedtothosecostsisasigningbonusthecontractorpaystonewparamedicemployeesthatisduetotheshortageofparamedicsintheCounty.BecausetheyuseparamedicstorespondtocallswhereonlyBLSskillsarerequired,thecontractorisincurringgreatercoststhanwhatiswarrantedfromaclinicalperspective.And,asmentionedabove,reimbursementisnotbaseduponthelevelofvehicle(BLSvs.ALS)thatisdeployed;itisbaseduponthedispatchandtheservicesrequiredbythepatient.Therefore,thereisalargesubsetofresponsesforwhichcomparativelyexpensiveALSunitsaredeployedwhenonlyBLS‐levelreimbursementisbeingreceived.Thisisanotherexampleofhowtheeconomicrealitiesoftransport‐basedreimbursementfailtocoverthecostsofsystemdeploymentatanall‐ALSlevel.

TieredEMSResponseisaRecognizedStandardofCare.Ithaslongbeenrecognizedasanindustrystandardofcarethatmedically‐validateddispatchprotocolswithdifferentialALS‐BLSresponsedeterminantscansafelyandeffectivelysupporttieredEMSsystemdeployment.ThecurrentcontractrequiresthecontractortooperateasecondaryPublicSafetyAnsweringPoint(PSAP),whichutilizesMedicalPriorityDispatchProtocols.Theseprotocolsareimplementedatsignificantexpense(includingtrainingEmergencyMedicalDispatchers,payinglicensingfeesforuseoftheprotocols,etc.),yetthesystemisnotreapingthebenefitsthatcancomefromthatinvestment.Inotherwords,thesystemisalreadyinplacetoallowfortieredEMSresponse,buttheperformancestandardscurrentlyinplacedonotpermitthesystemtocapturethosebenefits.

Accordingly,MercedCountyshouldconsidertheimplementationofALS‐BLStieredresponseandpermitBLSresponsesforthosecallsinwhichthesystem’svalidateddispatchprotocolspermitaBLS‐levelresponse.Becausethisisafundamentalsystemdesignissue,thisisachangetheCountymaywishtoconsiderinthenextscheduledprocurementcycleasopposedtochangingthroughamodificationoftheexistingcontract,weretheCountytobeinclinedtomakesuchachange.Althoughtiereddeploymentisalong‐recognizedstandardofcareinEMS,theCountymaywishtoalsodirectthecontractortoperform100%QAreviewsof911BLSdeploymentsforaprescribedtimeperiodtoensurethattheresponsedeterminantsareresultinginappropriateBLSresponses.

TheCountyshouldalsoconsiderstoppingthecontractor’sresponsetimeclockforanyALS‐levelcallsinwhichaparamedicisplacedonscenewithintheprescribedtimeperiods,regardlessofthevehicleinwhichtheparamedicarrives(i.e.,ambulance,supervisorvehicle,non‐transportparamedicinterceptunit,etc.)Complianceinthisregardwouldbepatient‐centered(i.e.,theprimaryclinicalgoalbeingtogetanadvancedlifesupport‐levelprovidertothepatientwithintheprescribedtime)andnotsystem‐centered(i.e.,theplacementofanALStransportresourceonthescenewithintheprescribedtime).

WestSideHealthcareDistrict

Background.TheWestSideHealthcareDistrict(WestSide)comprisesanareaof475squaremiles,virtuallyequallydividedbetweenthesouthwestpartofStanislausCountyandthenorthwestpartofMercedCounty.Itwasestablishedin1957,initiallyastheWestSideHospitalDistrict.

Between1937and1956WestSideCommunityHospital,asmallruralgeneralacutecarehospital,operatedinwhatisnowWestSide.Thehospitalclosedin1956duetofinancialproblems,butresidentsofthecommunityconcernedwiththelackofemergencymedicalcarefacilitiesintheareaformedacommunitygrouptoestablishahospitaldistricttopurchaseandreopenthehospital.

Theproposedhospitaldistrictwasapprovedbythevoters,ahospitaldistrictwasestablished,andthehospitalwaspurchasedandreopenedinNovember1957withtheaidofspecialtaxeslevieduponthedistrict’spropertyownersinbothStanislausandMercedCounties.Onceagainthehospitalencounteredfinancialproblemsandwasrequiredtoclose.

ThroughoutthisentireperiodtheambulanceserviceoperationsthathadbeenconductedbyWestSidecontinued.ThoseoperationsremainineffecttodaysubsidizedbythespecialtaxeslevieduponWestSide’spropertyowners.

WestSidehastwoadvancedlifesupport(ALS)ambulances.BothambulancesarestationedatthelocationoftheformerWestSideCommunityHospital,howevertheyarerequiredtomoveuptolocations,vacatedbyotherambulances,ifdispatchedtodoso.ThelocationwheretheambulancesarestationedisinMercedCounty,buttheofficialaddressofthelocationisaCityofNewmanaddress.TheCityofNewmanisinStanislausCounty.

WestSideHealthCareDistrict’sContractwithMountain‐ValleyEMSAgency.Mountain‐ValleyEMSAgency(MVEMSA)istheLEMSAforStanislausCountyandservesastheLEMSAforWestSide’sambulanceoperations.IthascontractedwithWestSideforWestSidetoprovideemergencygroundambulanceservicesandALSgroundambulanceservices,onanon‐exclusivebasis,inthatpartofthehealthcaredistrictthatisinStanislausCounty.Thisincludesnon‐

Summary

TheoverlappingjurisdictionoftwoLocalEMSAgencies(MCEMSAandMVEMSA)withregardto

ambulancedeploymentintheWestSideHealthcareDistrictcreatesasituationinwhichcompliancewithbothagencies’directivesis

renderedpracticallyimpossiblebythecontractor.ThetwoLocalEMSAgencieswithjurisdictionintheWestSideHealthcareDistrictshouldexecuteaninterlocalagreementsothatperformancerequirementsapplicabletooperationsintheDistrictareconsistent,andtheCountyshould

openadialoguewithStanislausCountyregardingpossibleincreasesinthespecialtaxwhich

subsidizesambulanceservicesintheDistrict.

emergencyinterfacilitytransfersrequiringALStransportwhendispatchedbyanauthorizedEMSdispatchcenterandprivaterequestsforambulanceservicesreceivedbyWestSidewhenreferredtoandthendispatchedbyanauthorizedEMSdispatchcenter.

ThecontractrequiresWestSidetoprovideemergencymedicalcareandtransportservicesinitsassignedarea24hoursaday,sevendaysaweek,andimposesresponsetimerequirementsonWestSideandfinancialpenaltiesforfailingtomeetthoserequirements.Inaddition,amongotherfinesthatmaybeimposed,thecontractprovidesfortheimpositionofper‐incidentfineswhenWestSiderefusestorespondtoaCode3or2call,orarequestformove‐up,mutualaidorapostlocation.

ThecontractalsorequiresWestSidetoredeployambulancesoraddadditionalambulancehoursiftheresponsetimeperformancestandardsarenotmet.ResponsetimerequirementsareexcusedwheneverWestSideparticipatesinadeclareddisaster.Thiscontractalsoallowsaresponsetimeexemptioncausedbyadelayintransferringcareinanemergencydepartment.

ThecontractpermitsWestSidetorespondtoanMVEMSAauthorizedmutualaidrequestifithasanambulanceandcrewavailablebutonlyifsuchresponsedoesnotinterferewithWestSide’sprimaryresponsibilitytoprovidethecontractedforambulanceservicesinitsassignednon‐exclusiveoperatingareainStanislausCounty.ItalsopermitsWestSidetoperformworkoutsideofthecontract,butdoesnotpermitsuchworktoexcuseWestSidefromsatisfyingitsobligationsunderthatcontract.

ThecontractrunsthroughApril30,2018,andimposesuponWestSideanannualEmergencyAmbulanceCallVolumeFeeof$3,504,anannualMonitoringFeeof$1,000,and$2foreachpatienttransport.

WestSideHealthCareDistrict’sSubcontractwithSEMSA.PursuanttoSEMSA’scontractwithMercedCounty,SEMSAsubcontractswithWestSidetoprovideambulanceserviceinthenorthwesternpartoftheCounty,Zone24D,whichisalsopartofthehealthcaredistrict.ThisincludestheunincorporatedareasofGustine,Stevinson,SantaNella,varioussectionsofHighways33and152,theInterstate5CorridorandtheSanLuisReservoir.

TheCounty’scontractrequiresthatSEMSA’ssubcontractwithWestSideimposeuponWestSidealloftherequirementstheCounty’scontractwithSEMSAimposesuponSEMSA.SEMSAhasdonethat.Therefore,WestSidemustrespondtoall911andotheremergencydispatcheswithinZone24DwithaparamedicandEMT‐staffedambulanceandtheCounty’sFractileResponseTimePenaltiesandOutlierResponseTimePenaltiesthatapplytoSEMSAalsoapplytoWestSide.

SEMSA’scontractwithWestSideprovidesthatthedeploymentofWestSide’sALSambulancesshallbeconsistentwithMercedCounty’sspecificationstobeutilizedforEMSresponsesdescribedinthecontractandshallonlyberelocatedoutsidetheWestsideZoneformove‐uporforemergencyEMSresponsesasdirectedbytheMercedCountyEMSDispatchCenter.ItfurtherprovidesthattheEMSDispatchCentermaydivertarequestforemergencyresponsefromthe

primarydispatchedALSambulancetoasecondaryALSambulanceifthesecondaryambulanceisincloserproximitytothescene.

ThecontractalsoprovidesthatWestSideshallrespondtoallinterfacilitytransportrequestsasrequestedbySEMSAasspecifiedinMercedCounty’sInterfacilityTransfersPolicy.ItfurtherprovidesthatduringanyperiodthatWestSidehasinsufficientambulancesavailableforserviceinthezonedesignatedinthecontract,WestSideshallprovidenoticetoSEMSA.ThiscontractrunsthroughDecember31,2019.

WestSidehascontractedwithSEMSAtoprovidemanagementservicesforit.SoSEMSAisresponsibleforensuringthatWestSidecomplieswithitsresponsibilitiesunderbothitscontractwithMVEMSAanditssubcontractwithSEMSA.

TheZone24DDilemma.AmajordilemmaforWestSide,andinturn,theMercedCountyEMSSystem,isthatWestSidehastwocontracts—onewithMVEMSAandonewithSEMSA—andcompliancewiththetermsofonecontractmaycausenoncompliancewiththetermsoftheothercontract.WestSidesometimesviolatestheFractileResponseTimeandOutlierResponseTimerequirementsinMercedCounty.Thisisduetoitsambulancesbeingusedforlongdistantnon‐emergencyinterfacilitytransports,delaysinoffloadingpatientsathospitals,MVEMSArequiringitsresponsestoLevel3and2callsinStanislausCounty,andmove‐upstootherlocationswithinMVEMSA’sterritoryandMercedCountyvacatedbyotherambulances.WhenWestSideisunavailabletorespondtoacallinZone24DaSEMSAambulanceisgenerallydispatched.

FewpeopleinZone24Dhaveambulanceservicescoveredbycommercialinsurance.Consequently,thepayermixisverypoor.WhileWestSidereceivesthepreviouslyreferencedsubsidy,thatwiththelimitedrevenuesitcollectsforambulanceservicesisbarelyenoughtokeepitafloat.SEMSAreceivesnoneoftheWestSidesubsidymoney.

PursuanttoWestSide’scontractwithSEMSA,ifSEMSAdeterminesthatamaterialbreachofthecontractbyWestSidehasorwilloccur,oristhreatened,suchthatthepublichealthandsafetymaybeendangered,SEMSAmaybringthemattertotheMercedCountyEMSAgency.IftheMercedCountyEMSAgency,afterinvestigationdeterminesthatathreattothepublichealthandsafetyexists,itistogiveWestSidenoticeandareasonableopportunitytocorrecttheproblem.

Ifnocorrectionoccurs,thematteristothenbepresentedtotheMercedCountyBoardofSupervisors.IftheBoardagreesthatamaterialbreachhasoccurredandhasnotbeencorrected,andthatthepublichealthandsafetywouldbeendangeredbyallowingWestSidetocontinueoperationsinMercedCounty,SEMSAistothentakeoverforWestSideinZone24DandMercedCountymayinitiateactiontorequirethatthespecialtaxesfromMercedCountypropertyownersbeprovidedasasubsidytoSEMSAtosupportitsoperationsastheambulanceserviceproviderinZone24D,orinitiateactiontoeliminatethespecialtaxforMercedCountyresidents.

TheWestSidesubsidyforambulanceserviceoperationshasbeendecreasingandthepayermixforambulanceservicesprovidedintheMercedCountypartoftheWestSideHealthcareDistrictissignificantlylowerthanthepayermixinStanislausCounty.

InlightoftheuniquechallengesofprovidingambulanceservicesintheWestSideHealthcareDistrict,wepresenttwooptionsfortheCounty’sconsideration.

Options.First,MercedCountyshouldnegotiatewithMVEMSAtoexecuteaninterlocalagreementregardingthedeploymentofWestSideambulanceswithintheWestSideHealthcareDistrictthatwouldsupersedeprovisionsinWestSide’scontractswithMVEMSAandSEMSA,andSEMSA’scontractwithMercedCounty,thatcausesWestSidetoviolateoneofcontractsbycomplyingwiththeother.

Second,theMercedCountyBoardofSupervisorsshouldopenadialoguewiththeStanislausCountyBoardofSupervisorstoreevaluatetheadequacyofthespecialtaxassessmentsthatsubsidizesWestSide’sambulanceserviceoperationsandagreetoincreasethoseassessmentstoadequatelyfinancetheambulanceserviceoperationsofWestSidedue,inpart,todecliningpayerrevenues.

CommunityParamedicine

CaliforniaPilotProjects.InDecember2014theEMSAuthorityannouncedapilotprogramforcommunityparamedicineat12sitesinCalifornia,beginningwithtraininginJanuary2015.ThepilotsitesareinAlameda,Butte,LosAngeles,Orange,SantaBarbara,SanBernardino,SanDiego,Stanislaus,SolanoandVenturaCounties.63

Throughthesepilotprojectsparamedicsreceivespecializedtrainingtofunctionascommunityparamedicsoutsideoftheirtraditionalambulanceresponseandtransportroletoenhanceaccesstoprimarycareformedicallyunderservedpopulations.Theyoperateunderphysiciandirectionandtightlymonitoredprotocolsdesignedtohelpfilllocalhealthsystemneeds.Someoftheservicesincludeprovidingfollow‐upcareatpatienthomesforpatientsrecentlydischargedfromahospital,particularlythosewithchronicconditions;transportationtourgentcareandmentalhealthclinics;hospicesupport;follow‐uptreatmentoftuberculosis;andassistingindividualswhofrequentlyvisitemergencyroomsfornon‐emergencycaretoreceiveneededcarefromprimarycarepractitioners.

Attheconclusionoftheseprojects,whichisanticipatedtobein2017,aprojectevaluationteamfromthePhillipR.LeeInstituteforHealthPolicyStudiesandCenterfortheHealthProfessions,UniversityofCaliforniaSanFrancisco,willevaluatetheperformanceoftheprojects.64Ifthereportconcludesthattheexpandedroleofparamedicsintheseprojectsdemonstratesanappropriateandefficientuseofhealthcareresourcestoenhancehealthcareformedicallyunderservedpopulations,itispossiblethattheCaliforniaLegislatureandtheGovernorwillenactlegislationtoincludecommunityparamedicineasanewauthorizedhealthcaredeliverymodelinCalifornia.

IsThereaNeedforCommunityParamedicineinMercedCounty?AnincreasinglysignificantportionoftheMercedCountypopulationparticipatesinMedi‐CalinpartduetotheAffordableCareActexpandinghealthcareinsurancecoveragetomanypreviouslyuninsuredpersons.ManyotherMercedCountyresidentsareindigentoruninsured.Amajorityofallresidents,and2out

63“CommunityParamedicinePilotApprovedinCalifornia.”(Pressrelease)EmergencyMedicalServicesAuthority.December17,2014.64Id.

Summary

Communityparamedicineprogramscanimprovetheeffectivemanagementofmanypatient

conditionsintheout‐of‐hospitalenvironment,thusreducingdeploymentcostswithintheEMSsystem.ThoughthereisnoexpressauthoritytoimplementaCommunityParamedicineprograminMercedCountyatpresent,theCountyandthecontractorshouldexplorethefeasibilityofimplementingsuchaprogramattheearliest

opportunity,asitappearsthatsystemefficiencycouldbevastlyimprovedthroughCommunity

Paramedicine.

of3childreninMercedCountyarelivingatlessthan200%oftheFederalPovertyLevel.65SeveraloftheseresidentsdonotroutinelyseekprimarycareandothersseekcareathospitalemergencyroomsduetocostconsiderationsorbecauseofthelackofprimarycarephysiciansintheCounty.

MercedCountyisahealthprofessionalshortagearea.In2015theCountywasranked43outofthe58Californiacountiesonprimarycare‐to‐patientratioand11.7percentofemergencyroomvisitswereattributedbyrecipientstolackofaccesstocare.66Theproblemisgettingworse.In2012only1.8percentoftransportstoemergencyroomswereattributedtolackofprimarycare.67

Duetothesefactors,amongothers,thereisanexcessiveuseofambulancetransportstohospitalemergencyroomsinMercedCounty,particularlytotheMercyMedicalCenter(MMC)emergencyroom.Onoccasion,especiallyinthewintermonthsofJanuarythroughMarch,MMCisnotabletoprocesspatientsthroughthehospitalquickenoughtopreventabackloadofambulanceswaitingtounloadtheirpatients.Thishasaripplingeffect.Ambulancesbackedupathospitalscannotrespondtoemergencycallsuntiltheirpatientsareoffloaded,andthereareonlysomanybackupambulancesandcrewsthatareavailable.Whenthesehospitalbackupsoccur,firedepartmentcrewsrespondingtodispatchedmedicalemergenciesasfirstrespondersarestuckatthepatientscene,sometimesforlengthyperiods,waitingforanambulancetoarrive.

EMSsystemsareanessentialpartofthehealthcaredeliverysystem,buttheyhavehistoricallynotbeenwellintegratedintothatdeliverysystem.Communityparamedicineprogramscanhelpmitigatethegapbetweenthedemandformedicalcareservicesandtheworkforceshortageavailabletoprovidethoseservices,decreasehealthcarecostsinMercedCounty,andfacilitateabetteruseofexpensiveemergencyroomresources.

ImplementingCommunityParamedicineinMercedCounty.MercedCountymaynotbeabletoimplementacommunityparamedicineprogramintheCountyatpresentduetoalackofstatutorylanguageexpresslyauthorizingsuchprogramsinCaliforniaandMercedCountynothavingbeenselectedbytheEMSAuthorityforapilotprojectcommunityparamedicineprogram.Regardless,theCounty,SEMSAandotherstakeholdersintheMercedhealthcaresystemshouldseriouslyinvestigatethemeritsofimplementingacommunityparamedicineprogramintheCounty.TheCountyshouldbepreparedtoquicklyimplementsuchaprogram,ifitdeterminessuchaprogramisfeasible,shouldtheLegislatureandtheGovernorenactlegislationtoauthorizesuchprogramsorshouldtheEMSAuthorityelecttoexpandthecommunityparamedicinepilotprogramtoincludeadditionalpilotprogramsites.

TopursueacommunityparamedicineprogramMercedCountyanditshealthsystemstakeholderswillneedtoconductacommunityhealthneedsassessmenttoidentifyhealthcare

65TheMercedCounty2016CommunityHealthAssessment,p.2.MercedCountyDepartmentofHealth.July2016.66Id.,pp.6,7.67Id.,p7.

deliverygapsintheCounty.AfterthosegapsareidentifiedtheywillneedtofocusonhowEMSandotherhealthcareandsocialserviceproviderscouldcollaboratetofillthosegaps.AsinthecurrentCaliforniapilotprojectsparamedicscouldbetrainedtoprovidehealthcareandotherservicesoutsideoftheirtraditionalrole.Theycouldbetrainedtomakehomevisitstorecentlydischargedpatientsandcheckonthemtoensuretheyaretakingtheirmedicines,keepinghealthcareappointments,andotherwisecomplyingwithdischargeinstructions.Theirservicescouldalsoincludetransportingorreferringpatientswhoseconditionsdonotrequireemergencycaretosettingsmoreappropriatethanhospitalemergencyroomsforthecaretheydorequire.ThesearejustafewexamplesoftheservicescommunityparamedicscouldprovideintheCounty.

Reimbursementforcommunityparamedicineservicesmustalsobeconsidered.ItbearsrepeatingthatanEMSsystemcanonlydowhattherevenuesthatsupportitallowtobedone.Providingcommunityparamedicineserviceswillbecheaperforanambulancecompanytoprovidethanambulanceservices,yettheintroductionofcommunityparamedicineservicesshoulddecreasethenumberofambulancetransportstoemergencyroomsand,inturn,decreaserevenuesderivedfromambulancetransports.However,thereductionofunnecessaryambulanceutilizationwillalsoovertimenecessitatelessintensivedeploymentof911resources,whichcangeneratesignificantcostsavingswhileatthesametimeimprovingtheappropriatenessofcare.

Governmentpayers,suchasMedicare,donotatpresentreimbursecommunityparamedicineservices;theyreimburseonlyforambulancetransportsoftheirbeneficiaries.Consequently,othersourcesofrevenueforcommunityparamedicineservicesmustbeidentified.ForsomeprogramshospitalspayfortheservicesandtheyhavefoundthatthoseservicesreducehospitalreadmissionsofMedicarebeneficiariestosuchanextentthatpayingforthoseservicescostslessthantherevenuestheyhadbeenlosingundertheMedicareReadmissionReductionProgram.

Communityparamedicineprogramsareoperatinginotherstates.ThosethathavebeenoperatinginNevada,TexasandMinnesotahaveclaimedimpressiveimprovementinefficiency.Expandingtheroleofparamedicstoincludehomevisitstoassistinthemanagementofpatientswithchronicconditions,andtotransportthemtodestinationsalternativetohospitalemergencyroomswhenappropriate,coulddecreaseambulancetransportstoemergencyroomsbyasignificantamount.ShouldthatoccurinMercedCounty,hospitalstackupofambulanceswaitingtounloadpatientscouldbegreatlydiminished.

AppendixAInitialListof

DocumentsReviewed

EMS System Review

Merced County Department of Public Health

Initial Document and Data Request

June 17, 2016

Category Requested Documents

A. Ground EMS Documents

1 RFP for most current ground EOA competitive procurement 2 Proposal of winning bidder for ground EOA competitive procurement 3 Final, current ground EOA contract 4 Any ground EOA contract amendments 5 Any current mutual aid agreements 6 Any current first response, response time tolling or intercept agreements

B. Air Ambulance Documents and Data

1 RFP for most current air EOA competitive procurement 2 Proposal of winning bidder for air EOA competitive procurement 3 Any current LEMSA air ambulance contracts 4 Any LEMSA air ambulance contract amendments 5 Air ambulance utilization policy/protocol 6 Air ambulance utilization data (since ground EOA contract inception, by month, including air ambulance requests and air ambulance transports)

C. Ground EOA Contractor Performance Documents (all data should be monthly from the period of contract inception to report date)

1 Contractor self‐dispatch data (all emergency response requests received directly by contractor) 2 Response data (all contractor responses) 3 Transport data (all contractor transports) 4 Call declination data (all calls for which contractor was unable to respond and utilized mutual aid) 5 Service mix (contractor level‐of‐service transport data by HCPCS code) 6 Response time compliance data (including response time performance by month, deviations from required standards and financial penalties assessed by month)

7 Average transport distance (contractor data of average loaded mileage per transport for HCPCS code A0425. If possible, include overall average loaded mileage‐per‐transport, and average loaded mileage‐per‐transport for each level of service – A0428, A0429, A0427, etc.) 8 Average total call time (contractor and/or dispatch center data measuring average interval of time responded through time available, both overall and for each level of service 9 Ambulance offload time data (if specifically measured; if not specifically measured, then average time interval from arrival at facility until time available for next response is a suitable proxy. If possible, provide overall average offload intervals and intervals by specific levels of service) 10 Transports originating at healthcare facilities (total number and percentage of total transport volume)

D. Dispatch Documents and Data

1 Current 911 center EMD protocols (no copy necessary if using standard MPDS version 11.1 or later, unless locally modified) 2 Current contractor internal EMD protocols (if different from 911 center EMD protocols) 3 Emergency dispatch data – contractor (all 911 dispatches of contractor) 4 Emergency dispatch data – mutual aid (all 911 referrals for mutual aid)

E. Clinical Documents

1 Current ground EMS clinical protocols 2 Applicable transport destination protocols (trauma, STEMI, stroke, peds, etc.)

F. EMS Resource Inventory Documentation and Data

1 Total number of contractor transport‐capable ambulances dedicated to in‐county utilization 2 Total number of contractor transport‐capable ambulances dedicated exclusively to 911 response 3 Identification of all contractor station and substation locations (including # of ambulances garaged at each location and staffing at each)

4 Total number of contractor transport‐capable ambulances stationed out‐of‐county that are utilized for in‐county 911 response 5 Total number of air ambulances based in county 6 Total number of air ambulances based outside of county regularly utilized for in‐county response 7 Total number of ground transport‐capable ambulances based outside of county but utilized for in‐county mutual aid (non‐contractor owned) 8 Contractor staffing plan and/or staffing schedules

G. Hospital Resource Inventory Documentation and Data

1 Total number of hospital‐based EDs in county (including number of facilities and estimated ED bed capacity) 2 Total number of out‐of‐county based hospital EDs that regularly serve in‐county patients (including number of facilities and estimated ED bed capacity) 3 Designated specialty hospitals serving the county (trauma, PEDS, STEMI, stroke, etc.; include LEMSA‐designated facilities as well as “verified” facilities) 4 Non‐designated specialty care facilities serving the county (behavioral health, etc.) 5 Hospital E.D. payor mix data

H. Contractor Revenue Cycle Data

1 Total billable transports 2 Total billable transports by level of service 3 Chargemaster or contractor list of retail charges, by level of service 4 Identification of payor contracts to which contractor is a party (including payor and rates, by level of service) 5 Contractor financial hardship policy and forms 6 Contractor write‐offs (including hardship, bad debt, etc.) 7 A/R aging report by payor 8 Payor mix (contractor revenues by payor) 9 Net collection percentage (total and by payer) 10 Average revenue per transport (total and by level of service)

I. Stakeholder List

1 List of stakeholders recommended for interview (include names, titles, agency affiliation and contact information)

AppendixBInitialListof

StakeholdersInterviewed

260 E.15th Street, Merced, CA 95341-6216 (209) 381-1250 (209) 381-1259 (FAX) www.co.merced.ca.us/health

Equal Opportunity Employer

Kathleen Grassi, RD, MPH Director of Public Health LEMSA Director Ajinder Singh, MD, CPE EMS Medical Director James Clark, MICP EMS Administrator, MHOAC

DEPARTMENT OF PUBLIC HEALTH

Emergency Medical Services Agency

S T R I V I N G F O R E X C E L L E N C E

July 26, 2016 I-1 List of Stakeholders recommended for interview (include names, titles, agency affiliation and contact information).

1. Philip Brown, RN – 30 minutes Emergency Services Director Mercy Medical Center, Merced 333 Mercy Ave, Merced, CA 95340 (209) 564-5183 – Office (209) 564-4699 – FAX Philip.Brown@DignityHealth.org

2. Theresa Azevedo, RN – 30 minutes

EMS Liaison Nurse Mercy Medical Center, Merced 333 Mercy Ave, Merced, CA 95340 (209) 564-5182 – Office Theresa.Correia@DignityHealth.org

3. Jennifer Nunes, RN – 30 minutes

Emergency Services Manager Los Banos Memorial Hospital (Sutter Health) 520 W. “I” Street, Los Banos, CA 93635 (209) 826-0591 ext 56306 NunesJ1@sutterhealth.org

4. Jeff Pate, RN – 30 minutes

E.R. Manager Los Banos Memorial Hospital (Sutter Health) 520 W. “I” Street, Los Banos, CA 93635 (209) 826-0591 ext 50255 PateJ@sutterhealth.org

5. Billy Alcorn – 30 minutes

Battalion Chief Merced City Fire Department 99 E. 16th Street, Merced, CA 95340 (209) 600-2814 – Office Cell alcornb@cityofmerced.org

6. Shawn Henry – 30 minutes

Fire Chief Merced City Fire Department 99 E. 16th Street, Merced, CA 95340 (209) 385-6891 - Office henrys@cityofmerced.org

7. Tim Marrison – 30 minutes Fire Chief City of Los Banos Fire Department 333 7th Street, Los Banos, CA 93635 (209) 827-7025 – Office Tim.Marrison@losbanos.org

8. Mason Hurley – 30 minutes

Assistant Fire Chief City of Los Banos Fire Department 333 7th Street, Los Banos, CA 93635 (209) 827-7025 – Office Mason.hurley@losbanos.org

9. Jeremy Rahn – 30 minutes

Deputy Director – Administration Merced County Office of Emergency Services 3500 N. Apron Ave, Atwater, CA 95301 (209) 385-7548 ext 4866 jeremy.rahn@fire.ca.gov

10. Kevin Daniel, SEMSA Strategic Deployment & Compliance Manager – 30 minutes

100 Riggs Avenue, Merced, CA 95341 (209) 725-7034 – Office kdaniel@riggsambulance.com

11. DeeAnn Dion, SEMSA Director of Clinical Services – 30 minutes

160 Country Estates, Suite 3, Reno, NV 89511 (775) 737-4200 – Office (775) 544-6681 - Cell deeann@sierramed.org

12. Carly Alley, Operations Supervisor – 30 minutes 100 Riggs Avenue, Merced, CA 95341 (209) 728-5477 – Cell alleyc@riggsambulance.com

13. Mark Lawson, CAL FIRE Division Chief – 30 minutes

Merced County Fire Department 3500 N. Apron Ave, Atwater, CA 95301 Mark.Lawson@fire.ca.gov

14. Brian Neely, CAL FIRE Battalion Chief – 30 minutes Merced County Fire Department (209) 761-1974 – Cell Brian.Neely@fire.ca.gov

15. Jerry O’Banion, County Board of Supervisors – 30 minutes 2222 ‘M’ Street, Merced, CA 95340 (209) 385-7434 - Office Dist5@co.merced.ca.us

16. Deidre Kelsey, County Board of Supervisors – 30 minutes 2222 ‘M’ Street, Merced, CA 95340 (209) 385-7434 - Office Dist4@co.merced.ca.us

17. Barbara Hutchins, Westside Healthcare District – 30 minutes

President, Board of Directors 731 Peloquin Court, Newman, Ca 95360 (209) 862-5188 - Home (209) 595-5976 - Cell barbhuchins59@gmail.com

18. Bryan Donnelly, Professor – 30 minutes

Merced College, EMT Training Program 3600 ‘M’ Street, Merced, CA 95348 (209) 386-6769 – Office (209) 201-1504 – Cell Donnelly.b@mccd.edu

19. Ajinder Singh, MD, CPE – 45 minutes Merced County EMS Medical Director 260 E. 15th Street, Merced, CA 95341 (209) 233-1467 singhajinder@aol.com

20. Eric Rudnick, SEMSA Medical Director – 45 minutes

eric@sierramed.org

21. Richard Murdock – 60 minutes Executive Director, Mountain-Valley EMS Agency 1101 Standiford Ave, Modesto, CA 95350 (209) 566-7203 rmurdock@mvemsa.com

22. Dan Lynch – 60 minutes

EMS Director Central California EMS Agency Fresno County Dept of Public Health 1221 Fulton Mall, 5th Floor, Fresno, CA 93721 (209) 600-3387 DLynch@co.fresno.ca.us

23. Dale Dotson – 60 minutes EMS Specialist Central California EMS Agency Fresno County Dept of Public Health 1221 Fulton Mall, 5th Floor, Fresno, CA 93721 (209) 600-3387

DDotson@co.fresno.ca.us

24. Roy Cox, Mercy Air Field Operations Manager – 60 minutes Air Methods Corporation 7211 S Peoria St Englewood, CO 80112-4199 (303) 792-7400 - Office rcox@airmethods.com

25. Patrick Smith, SEMSA President – 60 minutes P.O. Box 18920 Reno, NV 89511 (775) 232-0180 pearlygates@mac.net

26. Mike Williams, SEMSA Vice President and COO – 60 minutes

P.O. Box 18920 Reno, NV 89511 (775) 224-9208 – Cell (775) 737-4200 – Office mike@sierramed.org

27. Kraig Riggs, SEMSA Executive Director of Public Affairs – 60 minutes 100 Riggs Avenue Merced, CA 95341 (209) 777-0007 – Cell kraig@riggsambulance.com

28. Steve Melander, SEMSA VP California Ops – 60 minutes

100 Riggs Avenue, Merced, CA 95341 (209) 725-7000 – Office (209) 769-8760 – Cell steve@riggsambulance.com

29. Rob Smith, SEMSA Merced General Manager – 60 minutes 100 Riggs Avenue, Merced, CA 95341 (209) 386-1974 – Office (209) 769-4392 – Cell rob@riggsambulance.com

30. Bill Tripp, SEMSA Merced Operations Manager – 60 minutes

100 Riggs Avenue, Merced, CA 95341 (209) 628-9620 Bill@riggsambulance.com

31. Nancy Koerperich, CAL FIRE – 30 minutes

Merced County Fire Chief Director, Merced County Office of Emergency Services Nancy.Koerperich@fire.ca.gov

32. Mark Pimentel, CAL FIRE – 30 minutes

Battalion Chief, Atwater Fire Department (209) 761-6520 Mark.Pimentel@fire.ca.gov

33. Chuck Mosley, Lieutenant, California Highway Patrol – 30 minutes

Emergency Medical Care Committee Member, Law Enforcement Representative cmosley@chp.ca.gov

34. Mike Harris, Former Riggs Ambulance Service General Manager – 30 minutes Emergency Medical Care Committee Member, Supervisor District 1 Representative (209) 357-5566 mike@mstracing.net

35. B.J. Jones, Captain, Operations Division – 30 minutes

Merced County Sheriff’s Office (209) 385-7310 BJones@co.merced.ca.us

AppendixCSummaryofSelectedStakeholderComments

SummaryofSelectedStakeholderComments

HospitalRepresentative:WehaveagreatworkingrelationshipwithSEMSA.Wetrusttheirmedicsandtheirinstincts.

ContractorRepresentative:Progressisbeingmadeonemergencydepartmentoffloaddelays,butweneedtocontinuetoimproveonthisasatotalEMSsystemissueinvolvingallstakeholders.

EMCCMember:AllALSisawaste.FollowingtheEMDresponsedeterminantsmakesthemostsense.

ContractorRepresentative:MercedCountywantedadedicatedCCTunit.ItwouldnotletususearegionalCCTunit.Itcostus$1milliontoestablishaMercedCountydesignatedCCTunit.

EMSPhysician:TheEMSSystemisbeingstressedtothepointofcollapse.Thereareonlyaboutfourconditionswheretimematters:cardiacarrest,realtrauma,stroke,STEMI.

BoardMemberofWestSideHealthcareDistrict:WestSidewasstruggling3yearsago.Itwasreadytoclose,butSEMSAprovidedmanagementserviceformonthswithoutchargebeforechargingfortheirmanagementservices.WestSideisnowintheblack.

ContractorRepresentative:Weneedtobeabletogettherightresponsetothepatient.WeshouldbeabletodeploybasedsolelyonEMDprotocols.Wearestrippingthe911systemtomeetcomplianceonnonemergencytransports.NoncompliancewithresponsetimefornonemergencytransportscanputSEMSAinmaterialbreachofitscontract.

FireChief:OneofthebiggestEMSSystemissuesduringcertaintimesoftheyearareambulancesstackingupatMercyMedicalCenter.Hehasseen6or7ambulancesbackedupatthehospital.OurdepartmentrelationshipwithSEMSAisexcellent.

CountySheriffRepresentative:WehaveagreatrelationshipwithallpartiescomprisingtheCounty’sEMSSystem.

FireChief:Onascaleof1to10,with10beingthebest,ourrelationshipwithSEMSAisa9.SEMSAisverycommunityoriented.SEMSAmanagementisveryaccessiblecommunitywhichmakesiteasytogetproblemsresolved.

LawEnforcementRepresentative:HasstrongrelationshipswiththefiredepartmentsandtheambulanceserviceprovidersinMercedCounty.HehasneverhadanyissueswithSEMSA.

EMSProvider:TheallALSresponserequirementisfrustrating.Fromaclinicalperspectiveaparamedicdoesnotneedtorespondtoeverycall.Staffingofall911ambulanceswithaparamedicisahugeissue.

ContractorRepresentative:HospitaldelayshaveseverelyimpactedSEMSA’sperformanceandhavealsocausedproblemsformutualaidresponders.ParamedicshortagehaspromptedSEMSAtoprovidea$5,000sign‐onbonus.

FireChief:WehaveaverypositiverelationshipwithSEMSAandlawenforcement.Firedepartmentpersonnelarerequiredtowaitwithpatientuntilambulancearrives,andsometimesthewaitislong.

FireOfficer:Hospitalstackupisaproblemacoupleoftimesamonth,butmoreofaprobleminJanuarythroughMarch.Allfiredepartmentsbelievethathospitaloffloaddelaysareasignificantproblem.Allfiredepartmentsareconcerned,becauseofthegoodrelationshipwithSEMSAthatifSEMSAfindsarenewalofthecurrentcontractisnotfinanciallyfeasible,SEMSSwilldecidenottorenew.

HospitalRepresentative:Thehospitalaveragesabout34ambulanceoffloadsperday,butbetweenJanuaryandMarchitaveragesabout55‐60offloadsperday.BelievesthatacommunityparamedicineprogramintheCountycouldhelptoreducethesenumbers.

FireChief:HasgoodaccesstoSEMSAmanagementifissuesarise.NotsureifthereareenoughSEMSAambulancestomeettheneedsoftheCounty,particularlyinsomeareas.BelievesfiningsystemundertheSEMSAcontractwithMercedCountyisexcessive.

NeighboringEMSAgencyRepresentative:GeneralperceptionisthatthenumberofambulancesinMercedCountyperpopulationislowincomparisontothatinthecountiesunderCentralCaliforniaEMSA’sjurisdiction.MercyMedicalCenterthroughputissueisamajorissueforambulancesprovidingmutualaidinMercedCounty.

ElectedOfficial:InadequatehealthresourcesisachronicprobleminMercedCounty.Acommunityparamedicineprogrammayhelp.

FireOfficial:Therehasbeenanincreaseinthenumberofpeoplewhocallforanambulanceanddonotneedanambulancetransport,inpartduetotheexpansionofMedi‐Cal.Communityparamedicinemaybeagoodoptiontohelpaddressthisproblem.ExcellentpartnershipofparticipantsintheEMSSystemasbestreflectioninthecoordinatedresponsetoarecentbusaccident.

FireOfficer:WorkingrelationshipwithSEMSAisexcellent.Finesareextremelyhigh.

EMSOfficial:SEMSAisgoingaboveandbeyondwhatisneededforcriticalcaretransports.Insteadofhavingacrewavailableforcriticalcaretransportsforbothairtransportsandgroundtransports,itmakesmoresense,anditismorecosteffectiveforSEMSAtohaveonecrewavailableforeitherairambulanceorgroundambulancetransports.

ems system review report - merced county, california

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