Sierra Medical Services publishes annual report
Dec. 20, 2012 — At the annual Lassen County Emergency Medical Care Committee meeting held Dec. 6, Sierra Medical Services Alliance (SEMSA) Vice President and Chief Operating Officer Klark Staffan presented the company’s Lassen County Annual Operations Report for fiscal year July 2011 to June 2012.
The first part of the report details SEMSA’s response times by month with the average time of response to an emergency call being approximately five minutes — well below the requirement of a minimum of eight minutes in urban areas and 15 minutes outside city limits. SEMSA’s operating contract requires an overall response compliance of 90 percent. The average overall compliance in 2011-2012 was 100 percent utilizing only the three full-time ambulances in Lassen County.
According to the report, SEMSA transported 1,905 patients (about 75 percent from the Susanville area) with the average bill totaling $2,569. Less than 5 percent of transports are true life-threatening emergencies. Due to nonpaying patients, SEMSA shifts costs in order to cover response expenses.
“Medi-Cal pays about $105 (per transport),” said Staffan, “but it costs SEMSA a minimum of $600 to produce the response.”
Since the county and city do not receive subsidies, the ambulance company has to make up the difference somehow. Therefore, because some patients pay less, others pay more. The report stated that 41 percent of Medicare insured transports pay only 61 percent of the average cost per each transport.
“We think the average bill is too high,” said Staffan. “We don’t want to make a profit, we just want to cover costs.”
SEMSA is in the process of navigating a handful of potential financial implications in 2012-2013. According to the report, Congress may be dropping the “Rural Super Bonus” modifier for ambulance service payments, which Staffan said could be a 22.6 percent reduction in the average Medicare payment going forward.
“This matter was continued last year by Congress and there is no final decision yet for the upcoming year. This issue could also have a dramatic effect on our revenue to fund ambulance services,” Staffan wrote.
Additionally the ambulance company is threatened by the possible decrease in Medi-Cal payments. Staffan’s report said 19 percent of Medi-Cal insured transports pay only 18 percent of the average cost per transport.
“The state is still trying to cut our reimbursement rates by an additional 10 percent, even though the current Medi-Cal reimbursement rate is already the lowest in the nation for ambulance services,” said the report.
“We are almost better off dealing with people with no insurance because they tend to pay more than Medi-Cal,” said Staffan.
Staffan said SEMSA is required to respond to all calls recieved, but because the state doesn’t pay all costs associated with the response effort, the company suffers. SEMSA is one of more than 25 ambulance companies involved in a federal lawsuit claiming the violation of fifth amendment rights because of the extremely low reimbursement believed to be an “illegal taking of private property” in addition to many other violations.
On the positive side, Staffan reported SEMSA has very little employee turn over. Currently the company employs one operations manager who also serves as a field paramedic; eight field paramedics, two of which also serve as supervisors; nine field emergency medical technicians (EMTs), one of which serves as a supervisor; and seven part-time paramedics/EMTs. The report stated that “over the past fiscal year of operations, no employees have left” and two part-time employees have been hired.
SEMSA continues to build its reserve fund each year to accommodate the needed funds to assure it meets equipment replacement needs and future obligations to fund employee retirement programs.
“SEMSA continues to grow its nonprofit ground ambulance services in other areas of California … This growth is intended to strengthen SEMSA’s fiscal position to help assure more financial stability for all of SEMSA’s operations,” Staffan concluded in the operations report.
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