Ambulance district reeling from Medicaid costs

EAGLE COUNTY — The local ambulance district is looking at a big hole in its budget, and the culprit seems to be the federal Affordable Care Act. That hole has the Eagle County Health Service District going to voters in a May 3 mail ballot election.

The district provides ambulance and paramedic services along the Interstate 70 corridor between Vail Pass and Dotsero, and also covers the county north of the interstate. In May, voters in that district will be asked to approve a tax increase of 0.75 mill — the unit of measurement for property taxes. For a home with an actual value of $500,000, that increase will total $30 per year.

That increase won’t pay for new facilities, but it will cover what is now a $1.8 million per year revenue deficit, roughly 20 percent of the district’s annual operating budget. Dan Smith, a former district board member and current leader of the tax question campaign, said that deficit comes almost entirely from changes to reimbursements from the state and federal governments.

According to district CEO Fred Morrison, the change came when the Affordable Care Act expanded the eligibility rules for Medicaid, which provides federally subsidized health care coverage for lower-income Americans.

Morrison said under the old rules, only disabled adults and families with dependent children could qualify for Medicaid. With the expansion, some single adults are now eligible.

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More patients, less money

That expansion has resulted in a 300 percent increase in the number of Medicaid patients transported by the district.

But the budget-draining part of the change comes in the service reimbursement paid to the district: 7 cents for every dollar of service provided.

The increase in patients coupled with the decrease in reimbursement created that $1.8 million annual drain on the district’s budget.

Smith said the district has already held salaries and benefits to keep up with inflation and cost increases in the district’s own health care coverage.

In a fact sheet about the ballot issue, Morrison wrote that the district has also reduced spending on training, community outreach and building maintenance.

Smith said those cuts extend to ambulance replacement. Instead of replacing entire vehicles — at roughly $180,000 each — the district has put new engines in ambulances to extend their lives.

But those measures only go so far, Smith said.

“At some point, you need to replace those ambulances,” he said, adding that with population growth returning to the valley, the district at some point will have to increase the number of ambulances and crew members.

“But you can’t save your way out of $1.8 million a year in losses,” Smith said. “Our choices are to reduce services or ask voters (for revenue).”

Cuts in services?

If voters reject the ballot issue, Smith said there will be cuts in services. Smith said the district now answers 90 percent of its calls within 15 minutes. If there are fewer vehicles available, it might take longer to get an ambulance and crew where it’s needed.

Cuts might also mean ambulances make fewer trips to Denver, Smith said.

Morrison said he and the district’s administrative staff are already planning out the “what-if” scenarios if voters defeat the ballot measure.

“We’ll cut as much as possible from the administrative staff,” Morrison said. “But that means we won’t have depth (in ambulance staffing). … Something’s going to have to give — we have several variations of plans, and none of them are very appealing.”

Smith said he’s heard questions from mid- and upper-valley residents about the district’s merger a couple of years ago with the Western Eagle County Ambulance District. That merger doesn’t have much to do with the current fiscal crunch, he said.

“Yes, the upper valley is subsidizing the lower valley,” Smith said. “But (the western district) was broke, and we’re one county.

“We were able to do it, but then we got whacked.”

The ambulance district is one of three local emergency-services districts asking voters for additional funding in May. The Eagle River Fire Protection District is asking voters for a property tax increase to fund a new public safety building in Avon, a new fire station in Edwards and a training facility in Minturn.

In the western valley, the Gypsum Fire Protection District is asking voters for an increase to make up for revenue that was lost when property values declined in the early part of the decade. Values haven’t yet risen to recover that revenue.

“This is your friends and neighbors asking you for things,” Smith said. “Eagle River and Gypsum have their own good reasons for asking, but this was imposed on us from outside.”

Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, smiller@vaildaily.com and @scottnmiller.