TOWER- The costs of maintaining 24/7 on-call coverage for the Tower Area Ambulance Service (TAAS) continues to outpace the revenue the service receives for providing its life-saving work.
At the Oct. 5 quarterly Ambulance Commission Meeting, representatives from the local governments in the ambulance service area heard that the city of Tower has transferred another $5,000 to the operating fund to cover the most recent payroll. This is in addition to the $20,000 transferred earlier this year.
“We only take in a little over 40-percent of what we bill,” said TAAS Director Dena Suihkonen. “Medicare and Medicaid account for over 80-percent of our runs.” Federal reimbursement rates are set at $400 per run, for BLS (basic life support) service. ALS (advanced life support) payments are only $100 higher, Suihkonen said.
The ambulance commission represents the interests of the governmental units that contribute to the ambulance subsidy account, which is the main source of capital for purchasing new ambulances. The current assessment is $15 per capita, though most participants opted to make double payments this year to pay for a new ambulance which is expected to be delivered either at the end of this year, or very early next year. As of yet, there is no funding agreement in place for 2024.
Among the other issues raised at the meeting was the $1.66 per mile fee that the ambulance service pays to the ambulance replacement fund for transfer miles. This fee was added back in 2020 to cover depreciation and other costs of running the ambulances on non-emergency transfer calls. It is billed on the total mileage of the call, not just the “loaded” miles, when a patient is in the ambulance, which are the only miles for which the service is reimbursed.
“My question to the larger group is that we have a township [Greenwood] that hasn’t paid,” said Vermilion Lake representative Frank Zobitz. “They have taken flack.” But then Zobitz wondered how this was any different than the city not promptly paying the $1.66 fee.
“We are robbing Peter to pay Paul,” said Suihkonen. “The only way that $1.66 gets paid is if the ambulance service has the money to pay it. We can’t just add it to the city’s levy.”
Zobitz said that issue should not be a problem for the commission.
“We are here for the money we contribute to the [subsidy] fund. Our job is to give the blessing to say yes to the purchase of a new ambulance.”
Eagles Nest representative Frank Sherman noted that the city was responsible for paying any shortfall between the amount in the subsidy account versus the actual cost of the new ambulance.
“If you didn’t put in the $1.66 per mile, it doesn’t matter to us. I don’t think this has the urgency of the township contributions. I still don’t understand why what Greenwood wants to accomplish has anything to do with paying into the replacement fund.”
Greenwood representative John Bassing noted, several times, it was a matter of trust, and said the ambulance service had presented conflicting information on the actual number of transfer miles in previous years.
“The numbers are all over the place,” Bassing said.
Suihkonen said it looked like confusion between reports on previous years and current years, and Breitung representative Matt Tuchel, who is a member of the ambulance service, agreed.
Bois Forte representative Jeff Damm said they only need to care about “buying a new ambulance, not about how it is being run. Do we need a new ambulance right now? Yes or no? Let’s get the money for it.”
“All the other stuff is just for our information,” Damm said.
Suihkonen also noted that the service has been totally upfront about money owed to the subsidy account that hadn’t been paid in yet.
“Every single meeting, we note we have not been paying that yet,” she said.
Transfer subsidy overpayment
Tower Clerk-Treasurer Michael Schultz was at the meeting, and presented financial information that showed the city had actually paid the mileage reimbursement fees twice for 2020, during a time before he was clerk-treasurer. His research into the issue showed the city had paid $9,550 into the subsidy account in October 2020, and then paid another $12,412 in January 2021, for a total of $21,962 for mileage incurred in 2020. The service actually owed the $12,412 for 2020 transfer miles, so had overpaid by $9,550.
Then the city paid a total of $9,791 for 2021 transfer miles, and another $10,496 in 2022 (another $8,057 owed for 2022 has yet to be paid). Transfer miles in 2021 were quite low due to the pandemic, Suihkonen noted.
So, the ambulance service paid a total of $42,250 for the three years, but owed $40,757, his research showed, meaning the service had paid in full for transfer miles through 2022.
The commission did not act on this new information.
Right now, the subsidy account has about $195,000, but still have 2023 payments on their way from Bois Forte and Breitung. The cost for the new ambulance is about $250,000 minus $17,000 paid in advance.
Finances
Sherman asked how much money the service makes on transfer calls. Suihkonen said it depends on the insurance for the patient who is being transferred. She noted that in previous years, a much higher percentage of ambulance patients had private insurance, which pays a higher rate compared to Medicare or Medicaid.
Suihkonen said the little extra made on transfers does help with staffing costs for the service.
Damm noted that the issues facing TAAS are statewide, not just local.
Bassing said he thinks that eventually the financial costs are going to force a regionalization, such as has been seen with schools and hospitals. But Greenwood’s attempt to force this issue, including funding a study of possible solutions, has gone nowhere.
“Why do we think we can prop up something that is going to be forced by money eventually to consolidate?” Bassing said.
“But in the meanwhile,” asked Sherman, “are we going to see Greenwood coming into the fold?”
Bassing said, “I don’t think so, basic trust for one, as well as indemnification.”
Suihkonen noted that the indemnification issue, where Greenwood is asking Tower to take all the liability for non-ambulance personnel isn’t acceptable to the city. For example, she noted that Greenwood First Responders, who are not members of TAAS, have been taking training to administer certain medications on scene. Bassing appeared to deny this, though the Greenwood Town Board has been discussing these trainings for several months, and supported the advanced level of training for its First Responders.
“If there was that indemnification clause,” she said, “Tower would be responsible if something went wrong.”
Tuchel tried to reason with Bassing, who continued to press for a regionalized service.
“In the meantime,” Tuchel said, “this service is still covering Greenwood. It truly is not fair…To be honest, the ambulance service needs the money. We want to work with Greenwood. Let’s try to find a compromise.”
Bassing said that Chisholm is moving to providing ALS service.
Tuchel said they are “grasping at straws” and losing a lot of money. He said they are making their money on ALS transfers, and are lucky enough to have paramedics, already trained, in their area, as well as being close enough to area hospitals to be able to take on transfers on a regular basis. And even an ALS service, like Virginia, with a larger hospital and many transfers, is suffering financially. Suihkonen said the Virginia service posted a large deficit last year.
News reporting on the Virginia City Council in the Mesabi Tribune in September said the ambulance department had posted a $550,000 deficit, though at their October meeting it was reported that the department had increased its revenue in 2023, which they noted was a good sign.
“We are not in the transfer business,” Tuchel said. TAAS only gets called to do hospital transfers if the “home” ambulance service, like Virginia, Ely, or Cook, is not available.
Tuchel also noted that “regionalization will not eliminate the staffing issues.”
“It comes down to the people in this room,” said Tuchel. “The politicians and the boards managing them. The best case is that everybody in this room puts their money into a study, and then agrees to do whatever the study comes up with.”
The idea of getting a regional tax district to support ambulance services is something that hasn’t happened anywhere in the state.
“Too much politics,” said Damm.