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CI'C OF SAN .ERNARD~ - REQU~T FOR COUNCIL AOjION
From: Lee Gagnon
Business License Supervisor
Dept: City Clerk
Subject: Set public hearing date and adopt
resolution to increase medical
transportation rates.
Date: January 10, 1985
Synopsis of Previous Council action:
July 13, 1982--Council adopted current rates
Racommended motion: That a public hearing be scheduled for the meeting of
February 18, 1985 at 9:00 a.m. to consider adopting
resolution to increase ambulance rates and that the City
Attorney be instructed to prepare the necessary resolution for
adoption.
Justification for placement on supplemental agenda.
It is necessary to place this item on supplemental
agenda due to the necessity of publishing a hearing
date and setting the hearing date 30 days in advance.
Also, a delay could affect the ability of Courtesy
Services to accept Medicare assignments.
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Si nature
FUNDING REQUIREMENTS:
Amount: N/A
Phone: 383-5036
Ward: N/A
Source: N/A
Contact person: Lee Gagnon
Supporting data attached:
Yes
Finance:
Council Notes:
75.0262
Agenda Item No.
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CI'OOFSAN BERNARDhJo ..REQUOt FOR,COUNeIL AcQON
STAFF REPORT
Meals to be furnished to G & K Management Company are in conformance with the
Nutrition for Seniors Program. Meals represent an expansion of the Nutrition
for Seniors Program by the establishment of an additional congregate site "at
the Beautiful Light Inn. 1365 North Waterman Ave.. a senior residential facility.
This is a federally funded program with no fiscal impact on the City and
utilizing existing personnel.
JUSTIFICATION FOR PLACEMENT ON THE SUPPLEMENTAL AGENDA
Special action specifically requested by the Mayor to expedite delivery of
additional nutrition services to senior citizens "at a newly available residential
site.
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COURTESY SERVICES OF SAN BER.~ARDINO, INC.
Projected Schedule of Operating Expenses
12 Months Ending Feb. 1986
I
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Accounting
Advertising
Bad Debt
Business Promotion
Cash Short/Over
Collection Expense
Contributions
Depreciation & Amortization
Dues & Subscriptions
Employee Welfare
Insurance
Interest Expense
Legal
Licenses & Fees
Meetings & Conferences
Office Expense
Outside Services
Rent
Repairs & Maintenance
Salaries
Payroll Taxes
Property Taxes
Telephone
Utilities
Miscellaneous
Total Operating Expenses
$13,000
5,500
962,069
4,900
20
7,400
24,500
56,216
13,200
78,600
140,933
22,600
9,000
7,375
24,750
49,150
4,900
42,570
36,860
432,300
27,180
4,600
19,900
14,850
100
$2,002,473
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PUBLIC NOTICE REGARDING AUTHORIZED RATES FOR
AMBULANCE SERVICE AND FUNCTIONS REU.TED THERETO
Pursuant to the authority granted him under San
Bernardino County Code section 31.0819(g) as supplemented by
Resolution 84-155 of the Board of Supervisors of the County
of San Bernardino dated April 23, 1984, the Director of
Public Health for the County of San Bernardino has approved
the following maximum rates for ambulance service permittees
operating within the County of San Bernardino, effective
October 8, 1984:
Basic ambulance rate
Additional Charqes:
Mileage rate per patient
mile or portion thereof
Emergency response
Night response (after 7:00
P.M. and before 7:00 A.M.)
Oxygen service rate (per patient)
Additional time charge (for
each additional 15 minute time
increment or portion thereof,
after initial 15 minute time period)
Paramedic service rate
E1ectrocardiogran service rate
All-inclusive Advanced Life
Support service rate (does not
include oxygen, night, mileage,
additional time rates or supplies)
$ 120.00
6.00
54.50
35.00
15.00
..
11.00
75.00
25.00
271.00
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COURTESY SERVICES
OF
SAN BER.~ARDINO, INC.
RATE REQUEST
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Courtesy Services of San Bernardino, Inc. requests the schedule of rates
for ambulance transportation services be amended as follows:
Ambulance Rates:
(a) Response to a routine non-e~ergency
Unscheduled emergency call, additional
(b) Each mile or fraction of a mile
(c) Waiting time per 15 minute period or portion
thereof after first 15 minute period without
charge
(d) Night service charge, 7:00 p.m. to 7:00 a.m.
$120.00
54.50
6.00
11.00
35.00
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NARRATIYE
INCOME:
Gross income has grown dramatically due to a call volume increase of
17.87. since our last rate increase in 1982. The reason for the call
increase was due to our re-entry into the Paramedic program.
For fiscal years 1982 and 1983 Medi-cal froze ambulance rates.
July Medi-cal increased rates by 37.. The contractual allowance
Medi-cal bad debt is 50.17. of the private rate.
Last
for
Medi-cal also cut the co-insurance pa)~ents for patients on both the
Medicare and Medi-cal programs. Prior to this cut Medi-cal paid the
207. co-insurance on rates approved by Medicare. The cut in essence
totally e1~inated any co-insurance payment for this group of patients.
The net result was an increase in the contractual allowance for Medi-Medi
bad debt from 25.7% to 39.4% of the private rate.
Due to the method of establishing provider profile rates for Medicare,
that program has not increased rates since our last private rate increase
granted by the City. Currently the Medicare contractual allowance for
bad debt is 25.7% of the private rate. We are anticipating a general
freeze in Medicare sometime in Mayor June of this year. For that
reason it is absolutely imparative this rate request move through the
hearing process with little or no delay. If the increase is granted
by late January we will be able to receive an equity adjustment from
Medicare by late March thereby allowing us to continue accepting Medicare
assignments.
County and Medically Indigent Adult Patients (MIA) are paid for by the
County through a contract negotiated with the local ambulance association. ~
The contract provides for payment of emergency services to indigents
when called by a local public safety agency. The rates are generally
set by county budget constraints. Currently the contractual allowance
for County Contract bad debt is 55.57. of the private rate.
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EXPENSE:
Most ex?ense items are in direct relationship with either the sales
figure or number of calls. There are four basic expense items that
should be specifically addressed.
The first is ambulance wages. There is a severe shortage of acceptable
certified field personnel throughout the state. Competition within the
industry to attract and retain these people has elevated to the point
of piracy. Due to this fact we are proposing to reduce the work schedule
for ambulance personnel while maintaining their current wage structure.
This will require us to add six additional positions to the schedule
and increase wages nearly 10% across the board. Also, effective last
November we increased paramedic wages over 16% in order to retain our
current staff. That increase is not totally reflected in the 12 month
profit and loss statement since only one month of that raise is shown.
The second cost center which needs discussion is the provision for bad
debts. Literally 31.2% of all sales are written off as a bad debt due,
primarily, to the differing government health payment programs as discussed
in the income narrative. As various forms of government health care
financing face cutbacks or freezes the bad debt expense is driven higher.
This phenomena is common to all health care industries within the nation.
The third expense item which is unusual is our insurance expense. This
item is projected to increase 155% due to two factors. First, our
liability insurance has skyrocketed from a soft to a hard market. This
year our liability is underwritten by only one carrier for the entire
nation. There is a possibility the industry will have to self insure
within the next t~o years. The second factor is an increase in workmen's
compensation insurance due to the addition of six ambulance positions.
Our current manual rate is $14.10 per $100.00 of payroll.
The fourth cost center needing discussion is the administrative wages.
Due to the increase in ambulance traffic and necessary specialization in
our billing systen it became necessary to completely split dispatchers
out of the accounts receivable process. This has greatly increased
administrative wages.
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RATE INCREASE EFFECTS:
The company has recently moved into a loss position due to continued
increasing expenses and a static rate. By approving the rate in a
timely fashion the net effect will put the company in a profit position
of $116;534 or 3.8% within the next 13 months. This is the minimum profit
necessary to maintain our operations due to growth and equipment replacement
requirements. This level of profit is also substantially below industry
norms.
The actual effect to the average private consumer in San Bernardino
is as follows:
Net
Charge Increase Factor Increase
Response $40.00 100% $40.00
Mileage 1.25 5. 6 mi. 7.00
Night 15.00 36.1% 5.42
Emergency 24.50 64.8% 15..88
On Scene -0- -0- -0-
Total $68.30
,.
The effects of the rate increase will have little direct impact on
the private consumer since we accept all insurance assignments and
over 90% of our privates have insurance. In the event a private patient
has no insurance we will accept monthly payments of any amount without
charging interest or carrying charges. In general, ambulance service
represents less than 1% of the total health care costs to insurance
companies and less than 3% to Medicare, therefore, this increase will
have virtually no effect on third party carriers.
There will be no effect on the elderly and poor because we accept all
Medicare and indigent program assignments.
The rate increase will generate a 36% increase in total sales but due
to the various contractual allowances in bad debt expense from the
various payment source the net increase per average patient will be
16%.
The requested rates are slightly below the state wide average for EMT
level service. Although we provide paramedic service we still do not
charge for that level of service in the city.
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SUPPORTING DATA
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The following data is enclosed to support the rate increase:
1. 1983/1984 Patient Payment Distribution
2. Projected 1984/1985 Patient Payment Distribution
3. 1983/1984 Profit and Loss Statement
4. 1984/1985 Projected Profit and Loss Stat~ent
5. Comparative Rate Surveys
6. Approved San Bernardino County Rate Schedule
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PAYMENT DISTRIBUTION
SAN BERNARDINO CITY
12/83 through 11/84
PATIENT PATIENT AVERAGE
RATE POPULATION. DISTRIBUTION PAYMENT
Kaiser 826 7.2% $175.58
Private 1480 12.9% 149.35
Medi-Ca1 1825 15.9% 76.82
Medi-Medi 2296 20.0% 93.58
Medicare 1860 16.2% 116.08
County 1068 9.3% 67.41
MIA 356 3.1% 71.57
Uncollectable 1768 15.4% -0-
Totals 11,479 100% $ 90.12
TOTAL SERVICE AREA
"
12/83 through 11/84
PATIENT PATIENT AVERAGE
RATE POPULATION DISTRIBUTION PAYMENT
Kaiser 1124 7.4% $177 .63
l'r:l.vate 2096 13.8% 149.64
Medi-Cal 2414 15.9% 79.54
Medi-Med:l. 3067 20.2% 96.47
Medicare 2323 15.3% 118.44
County 1443 9.5% 69.02 .,
MIA 395 2.6% 78.05
Uncollectab1e 2323 15.3% -0-
TOTALS 15,185 100% $ 92.61
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COURTESY SERVICES OF SAN BERNARDINO, INC.
Operations Income & Expense Statement
12 Months Ending Nov. 1984
Sales
Cost of Services:
Ambulance Repairs & Maintenance
Gas & Oil
Depreciation Expense
Ambulance Supplies
Employee Training
Radio Expense
Ambulance Wages
Ambulance Payroll Taxes
Total Cost of Services
Gross }largin:
Less: Operating Expenses
Income From Operations
Other Income (Expense):
Income Before Taxes
2,268,147
54 J 771
66,028
43,696
31,985
518
5,651
518,440
52,642
773,729
1,494,418
1,547,376
(52,957)
45,132
(7,826)
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COURTESY SERVICES OF SAN BERNARDINO, INC.
Schedules to Operating Expense
12 Months Ending Nov. 1984
Accounting
Advertising
Bad Debt
Business Promotion
Cash Short/Over
Collection Expense
Contributions
Depreciation & Amortization
Dues & Subscriptions
Employee Welfare
Insurance
Interest Expense
Legal
Licenses & Fees
Meetings & Conferences
Office Expense
Outside Services
Rent
Repairs & Maintenance
Salaries
Payroll Taxes
Property Taxes
Tel.ephone
Utilities
Miscellaneous
12,184
5,192
708,342
3,627
20
6,190
22,459
42,564
11,188
68,924
55,186
22,595
6,570
4,182
18,827
38,454
3,561
39,781
27,475
385,180
27,800
4,591
18,829
13,709
(54)
Total Operating Expenses
547,376
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COURTESY SERVICES OF SAN BERNARDINO, INC.
Projected Income & Expense Statement
12 Months Ending Feb. 1986
Sales
$3,083,554
Cost of Services:
Ambulance Repairs & Maintenance
Gas & Oil
Depreciation Expense
Ambulance Supplies
Employee Training
Radio Expense
Ambulance Wages
Ambulance Payroll Taxes
62,273
68,234
31,320
36,392
900
6,745
745,473
74,880
Total Cost of Services
$1,026,217
Gross Margin
$2,057,337
Less: Operating Expenses
2,002,473
Income From Operations
$
54,864
Other Income (Expense):
61,670
Income Before Taxes
$ 116,534
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