HomeMy WebLinkAboutOrdinance 9856-L 1-7
ORDINANCE NO
AN ORDINANCE DECREASING THE UNDESIGNATED FUND BALANCE
OF THE GENERAL FUND OF THE CITY OF FORT WORTH FOR
FISCAL YEAR 1986 -1987 BY $383,000 AND APPROPRIATING
SAID SUM TO GENERAL FUND ACCOUNT NO 34- 10 -00,
AMBULANCE DEPARTMENT, FOR THE PURPOSE OF PROVIDING
FUNDS TO SUBSIDIZE AMBULANCE SERVICE OPERATIONS IN THE
CITY OF FORT WORTH; PROVIDING FOR A SEVERABILITY
CLAUSE; MAKING THIS ORDINANCE CUMULATIVE OF PRIOR
ORDINANCES AND REPEALING ALL PRIOR ORDINANCES IN CON-
FLICT HEREWITH, PROVIDING FOR ENGROSSMENT AND ENROLL-
MENT, AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS
SECTION 1.
That the Undesignated General Fund balance of the General Fund of the
City of Fort Worth for fiscal year 1986 -1987 is hereby decreased by appro-
priating $383,000 from said fund to General Fund Account No 34- 10 -00, to
provide funds for subsidizing Ambulance Service Operations in the City of
Fort Worth
SECTION 2
Should any portion, section or part of a section of this Ordinance be
declared invalid, inoperative or void for any reason by a court of
competent jurisdiction, such decision, opinion or judgment shall in no way
impair the remaining portions, sections or parts of sections of this
Ordinance, which said remaining provisions shall be and remain in full
force and effect.
SECTION 3
That this Ordinance shall be cumulative of Ordinance No. 9690, and
all other ordinances and appropriations amending the same except in those
instances where the provisions of this ordinance are in direct conflict
with such other ordinances and appropriations, in which instances said
conflicting provisions are hereby expressly repealed.
SECTION 4
The City Secretary of the City of Fort Worth is hereby directed to
engross and enroll this ordinance by copying the caption and effective
date of this ordinance in the minutes of the City Council and by filing
the ordinance in the ordinance records of the City
SECTION 5
That this Ordinance shall take effect and be ins full force and effect
from and after the date of its passage, and it is so ordained
APPROVED AS TO FORM AND LEGALITY
City Attorney
Date
ADOPTED
ADOPTED 76' —
EFFECTIVE
n
City of Fort Worth, Texas
Mayor and Council Communication
WASTER F ` "DA E REFERENCE SUBJECT AMBULANCE SERVICE CONTRACT PAGE
CCGUNTING,' ? 4/07/87 NUMBER MODIFICATIONS
C -10217 _ ' �` 6
_
R;E CPMMF NDAT I ON
.HATER AL*� ;.t11� i � - �
It is recommended that the City Council-
1) Approve a new rate for the average emergency bill of $299,
2) Approve an increase in the ambulance subsidy of $383,000 for the period of
April 1, 1987 to March 31, 1988, resulting in a new subsidy level of
$1,223,000, and
- 3) Approve the substitution of a $200,000 performance bond as security, in lieu
of the letter of credit.
y 4) Adopt the attached supplemental appropri ati ons ordinance, increasing
appropriations to the General Fund O1, Ambulance Department #34- 10 -00, and
decreasing the General Fund's unreserved undesignated fund balance by
$386000.
DISCUSSION
On July 23, 1985 (M &C C- 9153), the City Council voted not to renew its ambulance
contract beyond the scheduled expiration date of March 31, 1986 and authorized
the City Manager to proceed with the necessary steps to select a new contractor.
The City Council's Emergency Medical Services Committee was authorized to oversee
the procurement process. In addition, the City Manager was authorized to enter
into a contract with a consultant, the Fourth Party, Inc., to design a new
ambulance system and manage the procurement process.
primary charge the EMS Committee made to the consultant was to design a
.___,u'"�system that would provide the highest possible level of clinical and medical
control, while minimizing the possibility of disruption of service in the event
of a contractor default. As a result, the consultant recommended implementation
of a Failsafe Franchise Model (FFM) system. This system provides for medical
oversight by an Emergency Physicians Advisory Board (EPAB) that consists of
physicians knowledgeable in the area of pre - hospital care. A Fort Worth
Ambulance Authority (FWAA) was also created to oversee administrative matters,
including those related to rates, subsidy, ownership or control over the system's
account receivables, facility, communications equipment, ambulances and other
equipment. The procurement process attracted bidders from all over the country,
as opposed to the previous solicitation that only had two area companies tc
submit bids. The current system is the only one of its kind in operation
nationwide.
The successful bidder was Texas Lifeline Corporation, a subsidiary corporation
wholly owned by Med- Trans, d /b /a Harst on Ambulance Service and Mercy Ambulance,
Inc. They are operating under the City's registered trade name of MedStar. The
following general terms were agreed to for start -up of the new system on April 1,
1986,
r
A.
DATE REFERENCE SUBJECT AMBULANCE SERVICE CONTRACT PAGE
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C -10217
1. The response time would be 90% of life threatening calls in 8 minutes or
less and 90% of non -life threatening calls in 10 minutes or less.
Failure to meet the response time would result in late run penalties.
(Implementation of this standard would be contingent on having the
agreed upon communication system in operation.)
2. The provider would be the sole provider of both emergency and
non - emergency (transfer) service, except as provided for in the
ambulance ordinance.
3. The contractor would provide at least 17 ambulances, as opposed to the 8
that were used under the old system. ,
4. The City would acquire a facility and communication system for use by
the contractor.
5. The average total bill would not exceed $230.
6. The subsidy would be reduced from $1,100,000 to $840,000, with the
remaining $260,000 being used to finance the cost of the facility and
communications system.
7. The contractor would be notified of any changes in the rate of subsidy)
level on or before April 1, 1987.
SYSTEM PERFORMANCE
Prior to the start -up of the new system, two local ambulance companies filed a
suit requesting a temporary injunction to prevent the City from implementing the
system as planned. The primary challenge was whether or not the City had the
right to enter into a contract in which there would be a sole provider of both
emergency and non - emergency ambulance service. After a federal district judge
ruled in the City's favor, the case was appealed to the Fifth Circuit Court where
it was also upheld.
One of the major changes from the old system was the elimination of the "average"
response time standard and the use of "actual" time from when a call is received
until the unit arrives on the scene. Although the contract calls for 17
ambulances, MedStar currently has 20 in operation. Because problems were
initially experienced with the installation of the communications system as
designed, a 10 minute response time for both life threatening and non -life
threatening emergencies was used until December, 1986. Since that time, the more
strict 8 minute standard has been used for all life threatening calls. Although
the response time standards is one of the most demanding in the country, it is
currently being met by the contractor.
DATE REFERENCE SUBJECT AMBULANCE SERVICE CONTRACT PAGE
4/07/87 NUMBER MODIFICATIONS
„11 , 3 of 6
The Emergency Physicians Advisory Board (EPAB) is fully functional. The clinical
requirements for the system are constantly monitored, regular audits of field
work are performed, response time is being reviewed, tests to evaluate the level
of proficiency of field personnel have been developed and are in the process of
being administered, medical research to assure that the most up-to-date medical
protocols are employed is taking place and any complaint regarding the quality of
care received by a patient is investigated. The Medical Director also serves on
the Ambulance Authority to make sure there is adequate communications about any
proposed changes to the system that EPAB recommends.
Although the clinical and response time performance is well ahead of
expectations, the current system is experiencing unanticipated financial
difficulties. In order to determine what, if any, adjustments should be made,
the Ambulance Authority requested the system designer, Mr. Jack Stout of the
Fourth Party, Inc., to review the system's progress to date and suggest any
adjustments or corrections that may be considered appropriate.
CONSULTANT'S EVALUATION
Although the problems associated with system finances can be traced to several
sources, the primary one is the low collection rate. The successful bidder based
its bid on a 63% collection rate, assuming that a low emergency collection rate
could be offset by higher non - emergency collections. For the purpose of
calculating subsidy reduction options, the request for proposal (RFP) used a 70%
collection rate variable, which is a generally acceptable target for ambulance
systems similar to Fort Worth's. However, the overall rate has been about)
46.7 %. The consultant has estimated that MedStar has lost about $1,000,000
during the first year of operation.
Other factors that have contributed to the problems include
1. ORDINANCE VIOLATIONS. Although MedStar was granted exclusive rights to
all ambulance business originating within the City limits, except that
which is excluded by ordinance, there has been evidence that other firms
have continued to operate in violation of the ordinance. City staff,
including Police, Fire, the Chief Prosecutor and EMS Coordinator, have
developed a monitoring process that is designed to identify and
prosecute violators.
2. "WHEEL CHAIR TRANSPORT" PROBLEM. Since MedStar is prohibited from
refusing transportation to any patient, it is frequently called upon to
transport wheel chair patients as though they were ambulance patients,'
even though no life threatening emergency exists. This situation has
contributed to the reduction in the overall collection rate. Since'
MedStar is unable to certify the medical necessity for ambulance
transport, it is unable to collect from third party payors. EPAB has
DATE NUMBER REFERENCE SUBJECT AMBULANCE SERVICE CONTRACT PAGE
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been requested to develop a better definition of a "wheel chair
transport patient" and the City Attorney's office will be recommending
an amendment to the ordinance to allow for wheel chair transport
companies.
3. MEDICARE CUTBACK. Effective January 1, 1987, Medicare implemented a new
reimbursement rate that is significantly lower than the one their
officials represented would be available when they appeared at the
pre -bid conference in 1985. At that time, everyone was told that the
rate for both emergency and non - emergency transports would be $143.50.
The new rates provide for a reimbursement of $145.90 for emergency runs
and reduces the reimbursement for non - emergencies to $91.50. In order
to address this problem, Medicare has been requested to grant a one time
equity adjustment that would bring the rates more in line with the costs
incurred for providing service.
4. REFUSAL TO PAY. The Texas Debt Collection Act: does not allow practical
avenues for collection of bills owed by individuals unwilling to pay,
such as liens, garnishment of wages, etc. Since MedStar cannot refuse
service to anyone, there is a significant number of system abusers and
individuals who have the ability to pay, but refuse to. MedStar will be
working with the EPAB on developing and implementing a program to reduce
the number of abuses, but there is little that can be done about those
who refuse to pay unless State Law is changed.
5. LOCAL ECONOMIC CONDITIONS. Although the impact of this factor is
di ffcult to measure, the slowdown in the Texas economy is believed to
have had an impact on the collection rate.
All of the problems identified above need to be resolved in order for the system
to perform as designed.
FORT WORTH AMBULANCE AUTHORITY RECOMMENDATIONS
During the past couple of months, the Ambulance Authority has been briefed on
system finances in an effort to determine what, if any, adjustments to make.
After reviewing information provided by MedStar and the consultant, the Ambulance
Authority met on March 25, 1987 and recommended that the following short -term
adjustments in the ambulance contract be submitted to the City Council for
approval
1. Increase the average total rate for emergency service to $299 per
patient transport.
2. Increase the subsidy by $383,000, resulting in a new subsidy level of
l
$1,223,000.
I
DATE REFERENCE SUBJECT PAGE
NUMBER AMBULANCE SERVICE CONTRACT 5 6
4/07/87 C -10217 MODIFICATIONS o+
a) The increased subsidy will be eliminated after twelve months. A
decision will be made at that time on how much the original subsidy
of $840,000 can be reduced.
b) $149,076 of the increase will be used to provide two clinical
upgrades that have been recommended by the EPAB. An Emergency
Medical Technician- Defibilat or (EMT -D) program will be implemented
for Fire Department personnel serving as first responders. In
addition, an ETAK system which provides automatic vehicle location
information has been recommended.
c) A portion of the increase will be used to conduct a new
subscription, or membership program. The proceeds above the cost of
conducting the campaign will be used to offset the $383,000 subsidy
increase.
d) The ambulance budget will still include about $260,000 to pay for
the infrastructure that is owned by the City, in particular the
facility that was purchased and the communications system.
3. Allow MedStar to substitute a performance bond for the $200,000 letter)
of credit.
4. Conduct a new subscription program. The City will work with MedStar in
offering a new subscription program. A budget will be submitted to the
Ambulance Authority for approval and the cost of the campaign wil cone
fran the $383,000. The revenue generated over expenditures will be used
to offset the subsidy increase.
5. The City and MedStar will continue to work on the problem areas
identified by the consultant.
6. F1edStar will make quarterly financial reports to the Ambulance Authority
on the impact of the changes recommended above.
SUMMARY
The medical community has rated the emergency medical service system that the
City now has in place as superior. For the first time, they have been able to
take an active part in determining the level of clinical care in the field. The
contractor has performed according to the standards that have been imposed by the
EPAB and there is a joint effort to assure that the latest in protocols and
equipment is made available to the citizens of Fort Worth. Although the system
has sufferd financially, the quality of service has not.
1
DATE REFERENCE SUBJECT AMBULANCE SERVICE CONTRACT PAGE
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C -10217 of
It is impossible to anticipate all of the factors that will have an impact on a
new system. However, even with the proposed changes in the rate and subsidy
level, the system is extremely cost effective, when compared to jurisdictions
with systems in place similar to Fort Worth's (see attached system comparison
chart) .
In its meeting on March 25, 1987, the Ambulance Authority voted unanimously to
forward the above recommendations to the City Council for approval.
FINANCING
A supplemental appropriation to the General Fund 01, Ambulance - Department,
#34 -10 -00 from the General Fund unreserved undesignated fund balances will be
necessary to fund this contract increase. The General Fund's unreserved
undesignated fund balance will be $25,5,605 after the supplemental
appropriations. Index Code #290650, "Other Contractural Services" will be used.
BT /sfqqq
Attachment
SUBMITTED FOR THE
CITY MANAGER'S
OFFICE BY /
ORIGINATING
DEPARTMENT HEAD:
Bob Terrell
APPROVED BY
CITY COUNCIL
':s Fuel
APR 7 1967
City Secretary of the
City of Port Worth, TexcA
DISPOSITION BY COUNCIL:
❑ APPROVED
❑ OTHER (DESCRIBE)
PROCESSED BY
CITY SECRETARY
I
CONTACT DITIONAL INFORMATION B. Terrell X6143 IAdOpted Ordinance N0. DATE I