City Staff, Council To Debate Best Use Of MediCal Reimbursement Funding For Its Ambulatory Services

By Tiffany Rider - Senior Writer

June 19, 2012 – A bill passed by the California Legislature last year that allows the City of Long Beach to recoup expenses for providing emergency medical transport to Medi-Cal patients, could help reduce the proposed $4.8 million in cuts to the Long Beach Fire Department in fiscal year 2013.

Assembly Bill 678, written by Democrat Richard Pan and signed by Gov. Jerry Brown in October 2011, allows local agencies to apply for federal funding that would fill a reimbursement gap left by the state. In California, city ambulatory services are partially reimbursed for providing to individuals on the state-run Medi-Cal healthcare program. This bill would use federal dollars to pay for 50 percent of the total amount uncompensated by Medi-Cal.

However, city staff, the council and firefighters are not in agreement as to how these funds should be allocated. John Gross, the city’s director of financial management, told the Long Beach City Council on June 12 that the General Fund currently “subsidizes” medical transport. City Manager Pat West seemed to agree with this idea, telling the council, “We’re very excited about this legislation. We have been subsidizing our ALS (advanced life support) and BLS (basic life support) for quite some time. This is welcome revenue.”

Gross said he expects the city to receive about $3.6 million in retroactive payments for the services, “and we will be recommending to council the use by the fire department with this money for gender accommodation retrofits.” The city would likely earn $1.3 million annually in reimbursements thereafter; a sum Gross said would likely be used to maintain existing services.

“What I want to point out is that the $1.3 million will reduce what is, in fact, a multi million-dollar subsidy for ambulance services,” Gross told the council. “Even with this $1.3 million per year, there will still be a very large subsidy for ambulance services that is made up by the General Fund. That directly results in reduced services elsewhere in the city to provide ambulance services. That makes the action for AB 678 all the more welcome because it serves to reduce the financial pressure on the city by allowing ambulance services to be more self-supporting than they currently are, and lessens the overall General Fund subsidy and service reductions.”

While he agreed that there is a need for “gender equity” in infrastructure accommodations within the fire department, 1st District Councilmember Robert Garcia said it is just as important to “look at some of the holes in our current paramedic service that we have in the city.” Fifth District Councilmember Gerrie Schipske, who brought the item to council, agreed, acknowledging that the discussion was not on how to use the money but that the money is coming and is something to consider during future budget discussions.

“I know we’re not going to get into it tonight, how we are going to use the money, but I would hope that this is to supplement what we use in terms of monies for medical transport,” Schipske said. “That we, in fact, perhaps look at adding that. This would, as I understand, relieve having other types of equipment on scene because we actually just need to send a paramedic.”

That sentiment was echoed in written form during the city’s state legislative committee meeting on June 11, at which 4th District Councilmember Patrick O’Donnell, the committee chairman, received letters from State Senators Ted Lieu, Alan Lowenthal and Roderick Wright, all Democrats, urging the council to use the funding to support fire department staffing levels.

“The passage of AB 678 was clearly intended to give fire departments a net gain in their respective budgets and was intended to help support fire department staffing levels,” Lieu wrote. “It was my understanding that the passage of this legislation would help restore desperately needed Long Beach fire department sworn staffing levels.”

Rex Pritchard, president of the Long Beach Firefighters Local 372, expressed concern over the city staff’s view of how the AB 678 funds should be used. “Due to the economy, everyone has been cutting back. Here is an opportunity to help restore services at no cost to the city,” he said. “When we’re facing a $4.8 million cut this year and you’ve got $3.6 million coming in retroactively, it makes zero sense to me taking that money and not addressing our staffing levels or potential cuts. With $4.8 million, you’re looking at approximately two fire engines and a paramedic rescue unit, so you are talking about station closures. Why you would invest in infrastructure yet close stations baffles me.”

Pritchard said the estimated $3.6 million in retroactive reimbursement is a conservative estimate. He also questioned the idea of the city’s General Fund subsidizing the emergency medical transportation services. “I find that laughable from the standpoint of that being what we do as a fire department; we care for the safety of the citizens,” he said. “That’s the job of the city to do that.” When asked what could be done with an extra $3.6 million, Pritchard said the department could add a much-needed rescue unit.

“I think you’ll start seeing in this summer’s budget sessions that our response times are going up, in my opinion, dramatically,” he said. “To use that money for anything else clearly goes against the intent of that legislation.”

According to Anthony Cava, spokesperson for the California Department of Health Care Services (DHCS), the department “has not yet received final approval from the federal government for implementation of this program.” The department is seeking approval from the U.S. Centers for Medicare & Medicaid Services on the cost allocation methodology outlined in AB 678. Once the methodology is approved, the supplemental reimbursement procedure, annual cost reporting method and cost settlement process will be finalized and the DHCS can then send a program enrollment packet to applicable providers.