SR 01-09-2018 3F
City Council Report
City Council Meeting: January 9, 2018
Agenda Item: 3.F
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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
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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
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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
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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.
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Prepared By: Terese Toomey, Principal Administrative Analyst
Approved
Forwarded to Council