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SR 01-09-2018 3F City Council Report City Council Meeting: January 9, 2018 Agenda Item: 3.F 1 of 5 To: Mayor and City Council From: Bill Walker, Fire Chief, Fire Department Subject: Award RFP# 144 for Emergency Medical Patient Transport and Billing Services Recommended Action Staff recommends that the City Council: 1. Award RFP#144 to Westmed Ambulance INC. DBA McCormick Ambulance, a Colorado based company, to provide emergency ambulance and billing services for the Fire Department; 2. Authorize the City Manager to negotiate and execute a cost recovery agreement with McCormick Ambulance, for three years, with two additional one-year renewal options, on the same terms and conditions over a five-year period. Executive Summary A private ambulance contractor has provided emergency ambulance transport and billing services for the Fire Department since 2004. Following a competitive bidding process, staff recommends a contract with McCormick Ambulance to provide emergency ambulance and billing services for a three-year term beginning February 1, 2018. McCormick Ambulance bills the patient directly for transported services resulting in the Fire Department’s anticipated annual cost recovery of $800,000, as reflected in the FY2017-18 Budget. Background On April 10, 2017, the City posted a Request for Proposals (RFP) for Emergency Ambulance Services and Patient Billing, seeking proposals from ambulance service contractors interested in providing emergency (911) ambulance transportation and patient billing services for the Santa Monica Fire Department (SMFD). One potential proposer notified the City that they would not submit a proposal due to their inability to comply with the City's Living Wage Ordinance (LWO). City staff subsequently reached out to other service providers and concluded that industry standard pay, including that 2 of 5 of the City’s current provider, does not comply with the City’s LWO. In light of the information received, staff cancelled that RFP. Staff identified that emergency ambulance services providers have specific challenges that differentiate them from other City contractors. Additionally, the City is not currently prepared to provide emergency transport services. As a result, on July 11, 2017, Council adopted Living Wage Ordinance amendment 2458 CCS that exempted ambulance services from the living wage for a limited time which sunsets on June 30, 2020. This action has ensured continuous provision of effective emergency services. Impacted vendors must still comply with the City’s minimum wage law. Contractors who provide emergency ambulance services to the City are different from other City contractors subject to the LWO because emergency ambulance providers do not control rates for the services they provide. Rather, the Los Angeles County Board of Supervisors sets rates for all emergency transport services. The Board adjusts rates annually based on changes to the medical care and transportation line items of the Consumer Price Index for All Urban Consumers and, starting July 1, 2017, the percentage change of the Los Angeles County minimum wage change. The County rates are the maximum allowable ambulance rates chargeable to the general public. Thus, while there is an established methodology for increasing rates that takes into account some wage changes, these factors do not include the higher Santa Monica living wage. Additionally, revenue collected by ambulance companies is dependent on the insurance payer mix of the patients transported. Payer mix varies from community to community, and in Santa Monica, approximately one third of payers are Medicare and another third MediCal recipients. These payers pay considerably less to the ambulance company than what is billed. All of these factors, in addition to employee wages, influence the bottom line of any ambulance company providing services in this community. The City is currently under contract until January 31, 2018, with Ameri-Care Ambulance as its ambulance provider and ambulance-related billing services provider. Ameri-Care has successfully provided ambulance services for the past five years. However, they 3 of 5 are not recommended as the best qualified firm based on their proposal but will continue to provide their high-level of service until the completion of their contract and until their billing services are complete. Discussion The City has utilized an emergency ambulance and billing service company since 2004 to provide emergency medical transport and billing services for the response, assessment, treatment and/or transportation of members of the public by Fire Department paramedics. Charges are assessed based on the Advanced Life Support Assessment Fee adopted by City Council on June 15, 2004. The Advanced Life Support Assessment Fee is the difference between the Los Angeles County approved Advanced Life Support (“ALS”) rate and the Los Angeles County approved Basic Life Support (“BLS”) rate as set forth in the most current Los Angeles County Emergency Services Agency General Public Ambulance Rates. On the City’s behalf, McCormick Ambulance will bill approximately $796.00 per transport based on the current fee structure, excepting Medi-Cal and Medicare patients. The Fire Department responds to over 16,000 emergency medical calls annually and calls for patient transport have increased 5% as compared to the previous year. Currently approximately 7,500 patients are transported annually to local hospitals. The Fire Department’s response model includes six paramedic engine companies, two rescue ambulance paramedic non-transport unit, and other support units deployed as needed. The department also maintains two additional rescue ambulances that are mainly used for special events and non-transport responses. Contracted emergency ambulances are used to transport patients on behalf of the Fire Department with Santa Monica Fire Department paramedics on-board to provide patient treatment in the ambulance while en route to a medical facility. Contractor Selection In October 2017, the City issued a Request for Proposals (RFP) for an emergency ambulance and billing services. The RFP was posted on the City’s on-line bidding site, and notices were advertised in the Santa Monica Daily Press in accordance with City Charter and Municipal Code 2.24.072 Best Bidder provisions. Two Los Angeles County 4 of 5 approved ambulance providers submitted proposals. Proposals were evaluated on experience, technical competence, training and continuing education of staff, billing and collection systems, business stability and references, value added and breadth of service, fleet and equipment quality and maintenance, capability and completeness of proposal to meet request for proposal requirements, and operational systems. After a thorough review, the five member selection committee comprised of representatives from the Fire Department and Finance Department recommended McCormick Ambulance as the best qualified firm based on the evaluation criteria. McCormick Ambulance’s proposal demonstrated their depth and breadth of experience and their organizational structure displayed their highly qualified personnel. McCormick’s fleet is expansive including 83 ambulances, 3 specialty disaster units, 2 high-risk ambulance units which can serve as isolations units for chemical exposures or suspected infectious diseases, a mobile command and communications trailer, and a mobile generator and fuel tender all of which could be utilized by the City in the event of a large-scale emergency or for special events. McCormick also operates an in-house, full service and fully accredited maintenance facility in Los Angeles County. McCormick currently meets all applicable minimum wage laws including the City’s Minimum Wage Ordinance (MWO), Santa Monica Municipal Code Chapter 4.62. McCormick’s proposal also identified their extensive employee training and continuing education program. The Fire Department is presently working with the current and prospective ambulance transport providers to ensure a smooth and seamless transition. Financial Impacts & Budget Actions There is no immediate budget or financial impact related to this staff report. McCormick Ambulance’s compensation is not a direct payment from the City; the provider bills the patient directly. McCormick Ambulance will also bill the patient on behalf of the Santa Monica Fire Department for services provided by the Fire Department; $800,000 in cost- recovery has been included in the Fiscal Year 2017-18 Budget. 5 of 5 Prepared By: Terese Toomey, Principal Administrative Analyst Approved Forwarded to Council