TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Michael Lang, Fire Chief
Steve S. Charelian, Finance Director
Libby Bretthauer, Financial Services Manager
SUBJECT:Title
Consideration of a Resolution Approving Amendment No. 1 to the Agreement with WestMed Ambulance, Inc., dba McCormick Ambulance, for Emergency Ambulance Transport Services (Fire Chief Lang).
ADOPT RESOLUTION NO. 22-0128
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 22-0128 amending the agreement with WestMed Ambulance, Inc., dba McCormick Ambulance, to remove the maximum compensation amount and establish compensation based on an agreed upon cost per ambulance transport.
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FISCAL IMPLICATIONS:
On March 17, 2020, the City Council adopted a resolution approving a three-year agreement with McCormick Ambulance (McCormick) in an amount not to exceed $935,000 to provide emergency ambulance transport services, with the option to extend the contract for two additional one-year periods. Funding for emergency ambulance transports is included as part of the Fire Department Emergency Medical Services program budget. However, due to unexpected increases in the amount of ambulance transports per year, an amendment to the agreement is needed to accommodate for the program’s anticipated service levels. The current estimated annual value is approximately $437,800 but difficult to determine due to the unpredictable nature of ambulance transports.
The proposed amendment establishes a “Cost per Transport” model which would accurately reflect the budgetary impacts of the program and allow for the flexibility to continue providing ambulance transport services without interruption. Under this model, the associated costs for ambulance transport are offset by revenues received through the City’s ambulance billing process. With the change in the model, there is no significant fiscal impact.
BACKGROUND:
McCormick provides Basic Life Support (BLS) ambulance services, which are used for non-life-threatening injuries or illnesses. As part of the City’s current medical response plan, the City’s Firefighter/Paramedics arrive on scene and immediately begin to assess, treat and stabilize the patient for transportation. At this point, if the patient is stable, they may require Basic Life Support (BLS) while they are transported to the nearest hospital by McCormick emergency medical technicians (EMT’s). Utilizing McCormick for BLS transport allows the City’s Firefighter/Paramedics to provide Advanced Life Support (ALS) services in response to other emergency calls for more critical, life-threatening injuries or illnesses.
On March 20, 2020, the City entered into the current agreement with McCormick to provide emergency ambulance transport services based on an estimated amount of 800 transports per year. Although the City pays McCormick based on transport rates that are set by the Los Angeles County Emergency Medical Service Agency, the agreement was structured with a cap to the total amount that can be spent each year.
Due to the unpredictable nature of emergency calls, the number of ambulance medical transports can vary unevenly from year to year. This makes predictions regarding anticipated quantities of annual BLS and ALS ambulance transports difficult to quantify from one year to the next. Increases in the number of medical transports due to the COVID-19 pandemic and its indirect consequences have added to this volatility in recent years. Staff has determined that the average number of transports has increased to approximately 1,100 over the previous three years and that an amendment to the existing agreement is needed to accurately reflect the program’s current service levels.
DISCUSSION:
Under the current agreement, the City manages the billing process and pays McCormick based on the following Cost per Transport:
Year 1 - $380
Year 2 - $389
Year 3 - $398
Year 4 - $407 - optional year
Year 5 - $417 - optional year
Although transport costs are offset by revenues, the original agreement was written with maximum compensation amounts calculated using an average of 800 ambulance transports per year. The most recent fiscal year finished with a total of 1,290 transports, above figure used in the initial estimates. The proposed amendment removes the limits imposed in the current agreement, shifting towards a model wherein revenues are better aligned with program costs.
The original estimate for the current year (Year 3 of the contract) was $318,400. However, utilizing an updated three-year average number of transports (1,100), staff anticipates revised costs for Year 3 to be closer to $437,800, exceeding the cap established for the year under the original agreement.
Under the proposed amendment, the established rates for transport will remain the same, but a “Cost per Transport” model will be established, wherein associated costs are offset by revenue received through the City’s ambulance billing process.
Staff recommends that the City Council adopt Resolution No. 22-0128, approving an amendment to the City’s current agreement with McCormick Ambulance to remove the maximum compensation amount in lieu of continuing to utilize the agreed upon cost per transport. The City may cancel the contract at any time, without cause, if necessary.
PUBLIC OUTREACH:
After analysis, staff determined that public outreach was not required for this issue.
ENVIRONMENTAL REVIEW:
The recommended action has been determined to be exempt from CEQA pursuant to State CEQA Guidelines Section 15061(b)(3), the common sense exemption (formerly the “general rule”) that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question can have a significant effect on the environment, the activity is not subject to CEQA, as is the case with this item.
LEGAL REVIEW:
The City Attorney has approved the agreement as to form.
ATTACHMENTS:
1. Resolution No. 22-0128
2. Amendment No. 1 to Agreement
3. Agreement - WestMed Ambulance, Inc., dba McCormick Ambulance