HomeMy WebLinkAbout2011/09/13 Item 16
CITY COUNCIL
AGENDA STATEMENT
.=$\ljf:. CITY OF
- CHULA VISTA
September 13,2011, Item_
SUBMITTED BY:
REVIEWED BY:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA TO RECOVER EMERGENCY MEDICAL
RESPONSE PROGRAM EXPENSES THROUGH AN
AGREEMENT WITH LAIDLAW MEDICAL
TRANSPORTATION INC, DBA AMERICAN MEDICAL
RESPONSE.
FIRE CHIEF\YU"i.I.
CITY MANAGER \Q)..~ t &,'-
ITEM TITLE:
4/5THS VOTE: YES D NO 0
SUMMARY
This item submits for COllllCiI consideration an amendment to the existing contract with American
Medical Response ("AMR") that would allow the City to recover a portion of its costs in providing
emergency medical response support services to AMR under that contract. 1bis includes costs of
dispatching Chula Vista Fire Depart:n1ent on medical responses, costs associated with the
use of basic life support equipment and monitor/defibrillators, and costs associated with the
Exclusive Operating Agreement ("EO A") contract administration and oversight.
1bis item does not address the issue of whether or not the City should extend AMR's
existing contract as opposed to going out to bid. 1bis item is currently scheduled to come
back to City Council with a full report and legal analysis on September 20th.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance
with the California Environmental Quality Act (CEQA) and has determined that the
activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines
because the proposal consists of a governmental plan of action related to the City's
preparedness in the event of a natural or manmade disaster and which will not result
in direct or indirect significant physical impacts on the environment. Therefore, pursuant
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September 13, 2011, Item_
Page 2 of5
to Section 15060 (c) (3) of the State CEQA Guidelines the activity is not subject to
CEQA. Thus, no environmental review is necessary.
RECOMMENDATION
That Council approves the resolution.
BOARDS/COMMISSION RECOMMENDATION
Not Applicable.
DISCUSSION
The City of Chula Vista and AMR are already parties to a side letter agreement that allows
the City to be paid by AMR $214,000 a year to pay for the use of Monitors/Defibrillators on
medical calls. This side letter was agreed upon in September 2009. This proposed agreement
continues the payment of $214,000 per year from AMR to the City but amends the existing
contract with AMR to allow the City to recover a portion of its other costs in performing
emergency medical response support services to assist AMR including: dispatching Chula
Vista Fire Department on medical responses, providing basic life support ("BLS")
equipment and monitor/defibrillators, and administering the EOA contract.
Costs Recovered
AMR provides ambulance service to City residents. In conjunction with that service, the
City incurs significant costs in connection with administering the AMR contract,
dispatching City personnel and equipment to medical emergency calls, and providing BLS
equipment, monitors and defibrillators. These services result in the City incurring costs over
and above the costs of providing fire service to the public. In fact, in 2010, approximately
85% of the calls that the fire department responded to were emergency medical response
("EMR") calls. Although AMR pays the City $214,000 per year for the cost of the monitors
and defibrillators under the current contract, the City does not recov.er any of the other costs
associated with providing EMR service. This new agreement adds a method of recovering a
substantial amount of City expenses incurred related to the City's service of supporting
AMR in delivering Emergency Medical care. The total amount to be paid to the City by
AMR per year is $878,407. Specifically, the City is requesting AMR to pay $391,000
annually for the dispatching of units on medical calls. This amount is 85% of the total
dispatch cost incurred by the City with its contract with San Diego Fire Department. The
85% calculation is based on percent of medical calls in relation to total calls Chula Vista
responded to in 2010. The City is requesting $54;000 annually for the use of Basic Life
Support equipment. The City is requesting $219,407 for the cost of administering the EOA
contract based on the City's staff and overhead costs incurred with contract administration.
In summary, the Annual EMR Support Services Payment has been allocated by the
parties among the EMRSupport Services provided by City as follows:
Dispatch $ 391,000
BLS Equipment and Supplies $ 54,000
Defibrillators $ 214,000
Contract Administration $ 219.407
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September 13,2011, Item_
Page 3 of5
TOTAL
$ 878,407
These cost figures were determined after extensive cost analysis by City staff, negotiations
with AMR and consideration of the impacts that City cost recovery would have on rates
charged to customer patients. Cost analysis was conducted in a variety of ways. The
analysis started with base calculations by the [mance department using a pure "full cost
recovery" analysis. Costs were allocated based on the fact that 85% of all calls to the fire
department are emergency medical service calls. Using this analysis, the total cost to the .
City is approximately $20M per year. These costs are broken down as follows.
'.' . ,.' Description . Amount
Fire Administration
Fire Training
Fire Suppression
Fire Communication
Medical Equipment - Lease .
Medical Equipment - Amortized Replacement Cost
Fire Apparatus - Amortized Replacement Cost
Estimated Annual Cost of Providing Medical
Services
$ 607,041
$ 485,336
$ 17,746,930
$ 394,680
$ 172,216
$ 41,784
$ 606,978
$ 20,054,964
For practical reasons, the entire $20 million "full cost recovery" amount carmot be recovered
through payments from AMR or rate increases. If the entire $20 million dollars were to be
collected, based on the average ALS emergency medical service calls per year of 9,900, and
a historical "collection rate" of 16%, full recovery of City costs woUld require a $12,662.50
per transport increase in the existing base transport rate of $ 804.58.
Other forms of cost analysis were also conducted. In each case, the projected annual costs
of providing EMR services exceeded $878,407, the armual amount to be paid by AMR
under the proposed agreement. Staff s presentation to the City Council on this item will
include a discussion of the cost analyses that were conducted.
Corresponding Increase in Rates
In order to fund the contract payments due to City in the armual amount of $878,407,
AMR has requested that the maximum allowable transport rate be increased from
$922.16 to $1,341.60 per transport. This was calculated again using the projected
number of armual transports of 9,900, and a projected collection rate of 16%. The
increase of $419.44 per transport would increase the allowable "maximum" transport rate
to $ 1341.60. With this addition, the breakdown of the new "maximum" ALS base rate
per transport would be as follows:
Maximum Base Rate Calculation
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September 13, 2011, Item_
Page 4 of5
Monitor Lease (part of current base rate)
AMR Base Rate (excludes monitor lease
portion)
Total current Base Rate
Increase for Dispatch Fees (85% of total
fees)
BLS Equipment Costs
Contract Administration
Total Base Rate Including Rate
Increases
$ 118.58
804.58
922.16
246.84
34.09
138.51
$ 1,341.60
Change from Current Base Rate
$ 419.44
This increased maximum rate remains below the County average rate for jurisdictions
under contract with AMR for ambulance service. The average rate is $1,591 per
transport.
Legal Issues
The City Attorney's office has been very much involved in the analysis and preparation
of the proposed agreement. The primary legal issues are summarized below. Although
there are risks with this (and any) transaction, the office believes we have reasonably
addressed those risks.
1. Prop 26 Analysis
Proposition 26 became effective on November 3, 2010. It prohibits a local
government from enacting, increasing, or extending any levy, charge or exaction without
voter approval, unless an exception can be identified. Although the amounts
contemplated by the proposed agreement would be charged to AMR, an argument could
be made that the City is "imposing" a fee by approving the rates AMR will charge to
patients. However, there are several good counter-arguments to this assertion. First, the
City is not setting the rate that AMR will charge, but only approving a maximum rate.
Second, it is likely that the City would not be found to be "imposing" a fee under
Proposition 26 because the amount is being charged directly to AMR, pursuant to a
contract, not to City residents, and only those who avail themselves of AMR's services
would be required to pay AMR. Finally, even if this were determined to be an
"imposition" of a fee by the City, it would likely fall within one of the exceptions to
Proposition 26. Specifically, the second listed exception allows a fee that is "imposed for
a specific government service or product provided directly to the payor that is not
provided to those not charged, and which does not exceed the reasonable costs to the
local government of providing the service or product." [Cal. Const. XIII C S (e)(2).]
AMR only charges those who receive the ambulance service; those who do not utilize the
service would not be charged. In addition, the amounts that the City is recovering from
AMR are well below the cost of the service the City is providing. Accordingly, we
believe there is a low risk of a successful challenge to City Council approval of this
agreement under Proposition 26.
2. Federal Anti-Kickback Statute Analysis
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September 13, 2011, ltem_
Page 5 of 5
The federal anti-kickback statute makes it a criminal offen$e to offer, pay,
solicit, or receive any remuneration to induce or reward referrals of items or services
reimbursable by a Federal health care program. [42 USC 9 1320a-7b(b).] The Office of
Inspector General ("OIG") of the Department of Health and Human Services has stated
that "[a]ny municipality requesting money from an ambulance company to award such a
contract and/or any ambulance company providing a fee to the municipality for referrals
of patients may be in violation of the Medicare and Medicaid anti-kickback statute, 42
USC 9 1320a-7b(b)." [Morey L. Medicare fraud alert 91-27.]
In this case, we believe it is unlikely that the proposed agreement would be found to
violate the anti-kickback statute for several reasons. First, the only payments to be made
are in exchange for actual services performed, not for referrals to AMR or for an
extension to the AMR contract. Second, the City does not intend or desire to make
referrals to AMR or to receive any fees for referrals by virtue of the proposed agreement.
Third, the amounts to be paid are less than the estimated actual cost of services to be
performed by the City. Finally, it is intended that the proposed amendment will inure to
the benefit of the public, in that, it will facilitate the expeditious dispatch of qualified
emergency medical responders, irrespective of the patient's ability to pay.
DECISION MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is
not site specific and consequently the 500 foot rule found in California Code of
Regulations section 18704.2(a)(l) is not applicable.
CURRENT YEAR FISCAL IMPACT
The current year fiscal impact to the general fund will be an additional $498,305 which
reflects three quarters of the year and annual contract of $664,407
ONGOING FISCAL IMPACT
It is anticipated that with this contract for services there will be a positive fiscal impact
annually of $664,407 to the general fund, which does not include the $214,000 the City
currently receives from AMR.
ATTACHMENTS
Proposed Agreement
Prepared by: Dave Hanneman, Fire Chief Fire Department
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RESOLUTION NO. 2011-_
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA TO RECOVER EMERGENCY MEDICAL
RESPONSE PROGRAM. EXPENSES THROUGH AN
AGREEMENT WITH LAID LA W MEDICAL
TRANSPORTATION INC., DBA AMERICAN MEDICAL
RESPONSE
WHEREAS, the City is authorized by California Government Code Section 38794 and
Municipal Code Sections 5.10.310-5.10.340 to contract for ambulance services within its
jurisdiction; and
WHEREAS, American Medical Response Ambulance Service, Inc. ("AMR"), formerly
known as Laidlaw Medical Transportation Inc., is currently providing Emergency Medical
Response Services within the City under the terms of that certain Amended and Restated
Original Agreement for Basic and Advanced Life Support Ambulance Services dated
December 11, 2007 (the "EOA Agreement"), whereby AMR agreed to provide
ambulance services for the City, the City ofImperial Beach and the Bonita/Sunnyside Fire
Protection District (collectively, the "Participating Agencies"); and
WHEREAS, as it relates to all the Participating Agencies (including the City), the
EOA Agreement has been extended through September 30, 2011 pursuantto the terms
of that certain Second Amendment to Basic and Advanced Life Support Ambulance
Agreement by and between American Medical Response Ambulance Service, Inc. and
the City of Chula Vista effective May 31, 2011; and that certain Third Amendment to
Basic and Advanced Life Support Ambulance Agreement by and between American
Medical Response Ambulance Service, Inc. and the City of Chula Vista effective June
30,2011; and
WHEREAS, As it relates to the City only, the EOA Agreement has been
amended pursuant to the terms of that certain Amendment to Ambulance Service
Original Agreement by and between American Medical Response Ambulance Service,
Inc. and the City of Chula Vista effective September 1, 2009 ("First Side Letter
Agreement); and
WHEREAS, AMR and City staff negotiated terms for an agreement entitled Side
Letter Agreement for the Provision of Emergency Medical Response Support Services
(Chula Vista) ("EMR Support Services Agreement") to provide for compensation to the
City for certain emergency medical response support services provided to AMR, and to help
fund system enhancements; and
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WHEREAS, that negotiation and Agreement was based upon each party's consideration
of the following facts, as more specifically described in the Agreement: (a) City's lawful
authority with respect to the delivery of emergency medical services within the EOA and the
City; (b) City projections that its annual cost for the EMR Support Services to be provided
exceed the Annual EMR Services Payment to be paid by AMR in consideration for such
services; (c) AMR's determination that the annual EMR Support Services add value to the
services that it delivers within the City under the EOA Agreement that is equal to or greater than
the value of the Annual EMR Support Services Payments; and (d) the parties have determined
that the Annual EMR Support Payments are consistent with the types of payments approved in
advisory opinions issued by the Office of Inspector General of the Department of Health and
Human Services and with the OIG's Compliance Program Guidance for Ambulance Suppliers;
and
WHEREAS, City staff presented the Agreement to the City Council for consideration,
along with substantial information regarding City staff estimates that the costs of the services
provided by City exceed the compensation City is receiving from AMR in consideration of those
services; and
WHEREAS, the proposed agreement recovers only a portion of City emergency medical
service expenses in order to assure that maximum rates charged by AMR to ambulance service
patients remain at reasonable rates.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
hereby:
1. Approves the EMR Support Services Agreement between the City and AMR in
substantially the form presented with such minor modifications or clarifications as may be
authorized or required by the City Attorney, and authorizes and directs the Mayor to execute
same.
2. Finds and determines in connection with such approval that, based on information
presented by staff, that the costs of the services provided by City under the agreement exceed the
compensation that City is receiving from AMR as compensation for such services.
Presented by: .
Approved as to form by:
~ ~~I\~~v\
Dave Hanneman
Fire Chief
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SIDE LETTER AGREEMENT
FOR THE PROVISION OF
EMERGENCY MEDICAL RESPONSE SUPPORT SERVICES
[CHULA VISTA]
This SIDE LETTER AGREEMENT FOR THE PROVISION OF EMERGENCY
MEDICAL RESPONSE SUPPORT SERVICES [CHULA VISTA] ("Agreement") is
entered into effective as of October 1, 2011 ("Effective Date") by and between
AMERICAN MEDICAL RESPONSE AMBULANCE SERVICE, INC., formerly
known as Laidlaw Medical Transportation, Inc., d/b/a American Medical Response
("AlVlR") and the CITY OF CHULA VISTA, a chartered municipal corporation ("City"),
with reference to the following facts:
A. AMR is currently providing Emergency Medical Response Services
within the City under the terms of that certain Amended and Restated Original
Agreement for Basic and Advanced Life Support Ambulance Services dated
December 11, 2007 (the "EOA Agreement"), whereby AMR agreed to provide
ambulance services for the City, the City of Imperial Beach and the
Bonita/Sunnyside Fire Protection District (collectively, the "Participating Agencies").
B. As it relates to the City, the EOA Agreement has been amended
pursuant to the terms of that certain Amendment to Ambulance Service Original
Agreement by and between American Medical Response Ambulance Service,
Inc. and the City of Chula Vista effective September 1, 2009 ("First Side Letter
Agreement); as it relates to all the Participating Agencies through September
30,2011 pursuant to the terms of that certain Second Amendment to Basic and
Advanced Life Support Ambulance Agreement by and between American
Medical Response Ambulance Service, Inc. and the City of Chula Vista
effective May 31, 2011 and that certain Third Amendment to Basic and
Advanced Life Support Ambulance Agreement by and between American
Medical Response Ambulance Service, Inc. and the City ofChula Vista
effective June 30, 2011.
C. The. parties hereto desire to amend the EOA Agreement, as
amended, pursuant to the terms of this Agreement in order to provide for
compensation to the City for emergency medical response support services and to help
fund system enhancements
NOW, THEREFORE, in consideration of the foregoing premises, and for good
and valuable consideration, the receipt and sufficiency of which the parties hereby
acknowledge, the parties agree as follows:
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1. Contract for Services. In order to facilitate performance by AMR of its
obligations within the City under the EOA Agreement, AMR agrees to contract
with City for City to provide to AMR emergency medical response and
transportation support services ("EMR Support Services:"). City supplied EMR
Support Services shall include the following: (1) emergency medical dispatch
services which are purchased by City from the City of San Diego ("Dispatch");
(2) on-scene basic life support equipment, and supplies ("BLS Equipment and
Supplies"); (3) Zoll Defibrillator/Monitors as standard equipment on each of the
first responder engines within the City ("Defibrillators"); and (4) EOA contract
oversight and administration ("Contract Oversight and Administration"). Such
services and supplies shall be provided in accordance with mutually agreed
specifications and protocols.
2. Pavment for Services.
2.1 In consideration of City's agreement to provide EMR Support Services,
AMR agrees to make payments to City in the amount of $878,407 per year (the
"Annual EMR Support Services Payment"), allocated as described below.
2.2 AMR shall pay the Annual EMR Support Services Payment to City in
equal quarterly installments of $219,601.75. The first quarterly payment shall be
due and payable in arrears on January 1, 2012, for the period October 1, 2011
through December 31, 2011. Thereafter, subject to any applicable reconciliation
adjustments provided in Section 4, below, each subsequent quarterly installment
shall be due and payable, in arrears, on each April 1 st, July 1 st, October 1 st, and
January 1 st thereafter, throughout the remaining term of this agreement.
2.3 The Annual EMR Support Services Payment has been allocated by the
parties among the EMR Support Services provided by City as follows:
Dispatch
BLS Equipment and Supplies
Defibrillators
Contract Administration
$ 391,000
$ 54,000
$ 214,000
$ 219.407
TOTAL
$ 878,407
Notwithstanding anything herein to the contrary, the payments allocated to
Defibrillators shall be discontinued once the leases on such defibrillators have
been fully paid and the Annual EMR Support Services Payments shall be reduced
by such amount.
2.4 The parties acknowledge and agree that the City's rights to, and the
amount of, the Annual EMR Support Services Payment was negotiated and
agreed to based upon each party's consideration of the following facts: (a) City's
lawful authority with respect to the delivery of emergency medical services within
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the EOA and the City; (b) the City projected its annual cost for the EMR Support
Services it is providing AMR hereunder to be in excess of the Annual EMR
Services Payment to be paid by AMR in consideration for such services; and (c)
AMR's determination that the annual EMR Support Services provide value to the
services that it delivers within the City under the EOA Agreement that is equal to
or greater than the value of the Annual EMR Support Services Payments; and (d)
the parties have determined that the Annual EMR Support Payments are
consistent with the types of payments approved in advisory opinions issued by the
Office of Inspector General of the Department of Health and Human Services and
with the OIG's Compliance Program Guidance for Ambulance Suppliers.
2.5 In addition to the EMR Support Services for which City is compensated
hereunder, City provides additional EMR support services, and incurs additional
costs in connection therewith, for which, currently, City receives no compensation
hereunder. The parties agree to meet and confer in order to evaluate such
additional costs and to determine what, if any, additional compensation should be
provided to City as consideration therefor, consistent with all applicable laws,
generally accepted accounting principles, and the parties mutual. desire to
maintain superior clinical care, meet changes in technology and clinical
advancements, and maintain competitive and reasonably priced medical transport
rates within City boundaries. Any changes under this Section shall be set forth in
a written agreement between the parties.
3. Increase in Maximum Authorized Rate. In recognition of AMR's agreement to
pay City the Annual EMR Support Services Payment, City agrees that AMR's
maximum ALS Transport Base Rate per transport may be increased above the
existing maximum rate by an amount not to exceed $538.02 per transport
("Maximum EMR Support Base Rate Increase") for a total new maximum ALS
Transport Base Rate of $1,342.601 Exhibit "D" of the EOA Agreement, as
applicable to maximum rates within the City, shall be. amended accordingly.
Notwithstanding anything herein to the contrary, the Maximum EMR Support
Base Rate Increase allocated to Defibrillators ($118.58) shall be discontinued
once the leases on such defibrillators have been fully paid, and the maximum ALS
Transport Base Rate shall be reduced by such amount.
4. Reconciliation Based on Collections. The parties acknowledge and agree that the
allowed Maximum EMR Support Base Rate Increase is based upon a projected
ALS Transport collection rate ("Collection Rate") within the City of sixteen
percent (16%). Each quarter Ai\1R shall track and report to City its actual
Collection Rate. Such report shall include any and all back-up data. In the event
that Ai\1R's actual collection rate varies by three percent (3%) or more, up or
down, in the aggregate, over any consecutive two quarter period (a "Material
Note: The Defibrillators cost recovery ($214,000) and corresponding transport
rate increase ($118.58) previously implemented in 2009 has been restated and
reincorporated into this agreement.
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,
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Variation"), the parties shall meet and confer in order to detetmine and implement
(a) a proportionate adjustment, going forward, in AL\1R transport rates and/or fees
paid to the City for EMR Support Services in order to account and compensate for
this Material Variation; and (b) in the event that the Material Variation is. a
Collection Rate increase, a reimbursement and/or reinvestment program for any
"surplus collections" resulting therefrom.
5. Term. Unless earlier terminated as provided herein, the term of this agreement
shall run concurrent with the term of the existing EOA Agreement and any
extension thereof.
6. Relationship to EOA Agreement. This Agreement shall amend the EOA
Agreement as it relates the City and AMR's operations within City boundaries,
but shall not amend the EOA as it relates to the other Participating Agencies. In
the event of any inconsistency between this agreement and the EOA Agreement,
the terms of this agreement shall govern. This Agreement shall also supersede in
its entirety the September I, 2009 side letter agreement between the parties
regarding Defibrillators. Further, this Agreement shall not modify the manner
and scope of AMR's services provided under the existing EOA.
7. Certification of Costs.
7.1 During the term hereof, on or before September 15 of each year, City
shall certify to AMR that the funding received for EMR Support Services in
the prior fiscal year did not exceed the costs to the City.
7.2 During the term of this Agreement, on or before September 15th of each
year, AMR will make available to City financial data showing for the 12-
month period, the payer mix, number of transports, current collection rate and
estimated marginal collection rate for any adjustment to fees. The parties agree
that this information will remain proprietary and confidential and shall be
utilized by City solely to verify AMR's compliance with the terms of the
EOA Agreement and this agreement, and to determine if amounts being
charged are reasonable and necessary. Any statutory or case law exemptions
to the California Public Records Act will apply to any documentation
provided to the City hereunder.
8. Compliance. The parties will comply in all material respects with all
applicable federal and state laws and regulations including, the Federal Anti-
kickback statute. The payments set forth in this agreement and the EOA
Agreement shall be used only for City emergency medical response services or
system enhancements.. The City warrants and represents that the payments
made by AMR to City shall be less than or equal to the City's calculations of
its actual costs to provide those services or system enhancements. No funds
shall be used by the City in a manner that may violate 42 U.S.C. Section
1320a-7b, the federal Anti-Kickback Statute.
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9. Compliance Program and Code of Conduct. AMR has made available to each
party a copy of its Code of Conduct, Anti-kickback policies and other
compliance policies, as may be changed from time-to-time, at AMR's web site,
located at: www.amr.net. and each party acknowledges receipt of such
documents. AMR warrants that its personnel shall comply with AMR's
compliance policies, including training related to the Anti-kickback Statute.
10. Non-Exclusion. Each party represents and certifies that neither it nor any
practitioner who orders or provide services on its behalf hereunder has been
convicted of any conduct that constitutes grounds for mandatory exclusion
as identified in 42 U.S.C.~ 1320a-7(a). Each party further represents and
certifies that it is not ineligible to participate in Federal health care programs
or in any other state or federal government payment program. Each party
agrees that if DHHS/OIG excludes it, or any of its practitioners or
employees who order or provide Services, from participation in Federal
health care programs, the party must notify the other party within five (5) days of
knowledge of such fact, and the other party may immediately terminate this
Agreement, unless the excluded party is a practitioner or employee who
immediately discontinues ordering or providing services hereunder.
11. Referrals. It is not the intent of either party that any remuneration, benefit
or privilege provided for under this agreement shall influence or in any way
be based on the referral or recommended referral by either party of patients to
the other party or its affiliated providers, if any, or the purchasing, leasing or
ordering of any services other than the specific services described herein or in the
EOA Agreement. Any payments specified herein are consistent with what the
parties reasonably believe to be a fair market value for the services provided.
12. General Provisions.
12.1 Authoritv. Each party represents that it has the full right, power and
authority to execute this Agreement and to perform is obligations hereunder,
without the need for any further action under its governing instruments, and that
the parties executing this Agreement on behalf of such party are duly authorized
agents with authority to do so.
12.2 Counterparts. This Agreement may be executed in multiple copies, each
of which shall be deemed an original, but all of which shall constitute one
Agreement after each party has signed such a counterpart.
12.3 Entire Agreement. This Agreement, together will all other agreements
expressly referred to herein, constitutes the entire agreement between the parties
with respect to the subject matter contained herein. All prior or contemporaneous
agreements, understandings, representations, warranties and statements, oral or
written, are superseded.
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12.4 Governing Law. This Agreement shall be govern,ed, interpreted,
construed and enforced in accordance with federal law, as applicable, and the
laws of the State of California.
12.5 No other inducement. The making, execution and delivery of this
Agreement by the parties hereto has been induced by no representations,
statements, warranties or agreement s other than those expressed herein.
12.6 Severability. If any term, provision, covenant or condition of this
Agreement is held to be invalid, void or otherwise unenforceable, to any extent,
by a court of competent jurisdiction, the remainder of this Agreement shall not be
affected thereby and each term, provision, covenant or conditions of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
[Signature Page Follows]
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SIGNATURE PAGE
TO SIDE LETTER AGREEMENT
FOR THE PROVISION OF
EMERGENCY MEDICAL RESPONSE SUPPORT SERVICES.
[CHULA VISTA]
IN WITNESS THEREOF, the parties have caused this Agreement to be
executed and effective as of the Effective Date.
"CITY"
CITY OF CHULA VISTA
Cheryl Cox,
Mayor
Attested By
Donna Norris,
City Clerk
Approved as to form By
Glen R. Googins,
City Attorney
"~,,
RESPONSE AMBULANCE SERVICE, INC.
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MEMO
Finance Department
DATE: September 13, 2011
~<<r~
~.~:.
____
CITY OF
CHULAVISfA.
TO: Honorable Mayor and Council
FROM: Maria Kachadoorian, Finance D' ector/ City Treasurer
VIA: Jim Sandoval, City Manage
SUBJECT: Cost of Providing Emergent Medical Response Support Services to AMR
This memo supports the cost of service analysis discussion included in the City Council Agenda
Statement considering an amendment to the existing contract with American Medical Response
(AMR). This amendment would allow the City to recover a portion of its costs incurred
providing emergency medical response support service to AMR under that contract.
In order to estimate the annual costs to the City of providing emergency medical response
support services to AMR, the Finance Department prepared three analyses.
These analyses were based on the following data sets, assumptions and documents:
1. Council adopted operating budget for fiscal year 2011-12
2. City's current cost allocation plan
3. The actual 2010 percentage of total fire calls for service attributable to medical response
(85.8%)
4. The estimated annual number of medical transports (9,900)
5. Estimated annual amortized replacement cost of all City fire apparatus, based on a 15-
year replacement schedule
6. 2010 Fire Facility, Equipment and Deployment Master Plan for Chula Vista Fire
Department, updated January 2011
To follow is a brief summary of each analysis prepared. Additional detail is available upon
request.
Analysis 1: Full BLS Proeram Costing
The first analysis prepared by staff considered the full cost to the City of providing Basic Life
Support (BLS) services, on an annual program basis. The full cost of providing this program
annually is estimated at $20,054,964, as summarized by program area in Table 1 below. This
analysis reflects the annual maximum amount recoverable by the City for the provision of BLS
services.
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Table 1 -Full BLS Pro
Descri tion Annual Pro ram Cost
Fire Administration $607,041
Fire Training $485,336
Fire Suppression $17,746,930
Fire Communication (Dispatch) $394,680
Medical Equipment -Lease $172,216
Medical Equipment -Amortized Replacement Cost $41,784
Fire Apnaratus -Amortized Renlacement Cost $606,978
Total 520,054,964
Analysis 2: Modified BLS Proeram Costin¢
The second analysis prepared by staff reflects all program costs included in the first analysis,
with the exception of the `Fire Apparatus -Amortized Replacement Cost'. This analysis
identifies recoverable costs totaling $19,447,986, as summarized in Table 2 below.
Table 2 - Modifed BLS Pro
Descri tion Annual Pro ram Cost
Fire Administration $607,041
Fire Training $485,336
Fire Suppression $17,746,930
Fire Communication (Dispatch) $394,680
Medical Equipment- Lease $172,216
Medical E ui ment -Amortized Re lacement Cost $41,784
Total 519,447,986
Analysis 3: BLS Service Costive (Blended)
The final analysis prepared by staff calculates the estimated cost to the City of directly providing
Basic Life Support (BLS) services. This contrasts with the first two analyses, which look at total
program costs, including stand-by time. This analysis considers only time spent directly
responding to medical calls, excluding stand-by time.
The first step in this analysis was the calculation of the cost of service to respond to an average
medical call. The cost per call was calculated by identifying the staff which responds to medical
calls, the fully burdened hourly rate (FBHR) for said staff, and an estimate of the service time
spent responding to an average medical call. The cost per call was then multiplied by 9,900, the
estimated annual number of medical transports to calculate an estimated annual cost of
responding to medical calls for service. This annual cost is included in Table 3 below as `Fire
Staff -Emergency Medical Call Response'. Additional detail supporting this calculation is
included as Table 4.
In addition to the direct cost of staff responding to medical calls for service, this analysis also
considered the cost to the City associated with AMR contract administration and support. The
cost to the City of providing this service was determined by applying the percentage of total calls
attributable to medical services (85.8%) to the annual full cost of two City staff positions tasked
with AMR contract administration and support. These contract administration and support
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positions are a Battalion Chief and a Facility and Supply Specialist. 'The estimated cost to the
City of providing this service to AMR is included in Table 3 as `Fire Staff -Contract
Administration and Support'. Additional detail supporting this calculation is included as Table 5
below.
The costs to the City associated with fire communication (dispatch) and medical equipment
(including lease and amortized replacement costs) are unchanged from the first two analyses. As
with Analysis 2, this costing excludes the annual amortized fire apparatus replacement cost. In
total, $5,236,970 in estimated annual recoverable costs are identified in this analysis, as
summarized in Table 3 below.
Table 3 -BLS Service
Annual Cost
Fire Staff -Emergency Medical Call Response $4,356,014
Fire Staff -Contract Administration and Support $272,276
Fire Communication (Dispatch) $394,680
Medical Equipment -Lease $172,2]6
Medical Equipment -Amortized Replacement Cost $41,784
Total $5,236,970
Table 4 -Fire Staff - Emer enc Medical Call Res onse
Fire Fire
Descri lion Ca lain En ineer Firefi titer Total
Full Time Equivalent (FTE) 1.00 1.00 1.00 3.00
Fully Burdened Hourly Rate (FBHR) $159.20 $135.79 $113.68
Turn Out Time (Minutes) 1.33 1.33 1.33
Travel Time (Minutes) 3.27 3.27 3.27
Response Time (Minutes) 60.00 60.00 60.00
Total Time (Minutes) 64.60 64.60 64.60
Total Time (Hours) 1.08 1.08 1.08
Full Cost of Response,
per Medical Transport Call $171.41 $146.20 $122.40 $440.00
Annual Medical Calls for Service (Est.) 9,900 9,900 9,900 9,900
Est. Annual Cost Attributable to $1,696,913 $1,447,386 $1,211,715 $4,356,014
Medical Calls for Service
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Table 5 -Fire Staff -Contract Admir
and
1 Battalion Chief Facility & Supply
Description (112 Hrs) Specialist Total
FTE 1.00 1.00 2.00
Salary $112,803 $48,193 $160,996
Differentials & Benefits $50,129 $27,398 $77,527
Overtime $4,183 $0 $4,183
Departmental OH $23,770 $10,155 $33,926
Citywide OH $22,317 $9,534 $31,851
Building Use Allowance $6,204 $2,651 $8,855
Total Estimated Annual Cost $219,407 $97,932 $317,338
of Est. Annual Cost Attributable to
Medical Calls for Service 85.8% 85.8% 85.8%
Est. Annual Cost Attributable to $188,251 $84,025 $272,276
Medical Calls for Service
If approved by Council, the proposed contract amendment with AMR would result in annual
reimbursements to the City for costs incurred providing medical response support service
totaling $878,407. This amount is significantly lower than the annual recoverable costs
identified in all three cost of service analyses prepared by staff.
Should you have any additional questions, I can be reached at extension 3636.
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