Town Ambulance Forecasts Its First Self-Sustaining Year in Bedford

July 6, 2023

Direct costs for operating the Bedford Fire Department’s rescue service are in line to be completely covered by fees, following the Select Board’s approval last week of a 5 percent increase in ambulance rates for fiscal year 2024.

The forecast achieves a target identified 11 years ago when the town transitioned to an enterprise accounting method for the ambulance service.

“Ultimately, the goal of the town is to have a self-sufficient ambulance/paramedic service, and be less reliant on the tax levy to provide this service,” said Fire Chief David Grunes in a memorandum to the Select Board. “Annual review and adjustments cover increases due to collective bargaining agreement and operational expense costs.” 

Ambulance rates are based on three levels of treatment received. Basic life support (BLS) represents routine first-aid during medical transport. Advanced life support (ALS) is associated with cardiac issues, including connection to a heart monitor and administering certain medications. 

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Grunes said in an interview that there is a rarely-used higher level of ALS, involving defibrillation, intubation, and a combination of medications.

The chief provided the Select Board with comparative ambulance transport rates from contiguous towns, with the updated Bedford rates lower than most others:

BLS:

  • Concord – $1,545
  • Bedford – $1,674
  • Billerica – $1,688
  • Burlington – $1,688
  • Lexington – $1,700 

ALS: 

  • Burlington – $2,005
  • Bedford – $2,031
  • Concord – $2,075
  • Billerica – $2,185
  • Lexington – $2,200 

ALS, higher level: 

  • Concord – $2,650
  • Burlington – $2,902
  • Bedford – $2,987
  • Lexington – $3,000 
  • Billerica – $3,565

There is also a charge per mile to the hospital: 

  • Burlington – $30.20 
  • Concord – $35
  • Lexington – $36
  • Bedford – $36.19
  • Billerica – $40.18

“With the rate adjustment and new growth, the town is estimating revenue of $1,078,867 for fiscal year 2024,” Grunes reported. “The town also reinvests a percentage of retained earnings when revenue exceeds or expenses are less than forecasted from the previous year into the budget to offset future service costs.” 

The department projects responding to about 1,800 rescue calls this fiscal year. Through the first 11 months of fiscal year 2023, he noted, rescue service revenue exceeded $1 million; the projected total was $980,000.

“Our rates are driven by our expenses,” Grunes told the Select Board. “Our operating budget is what drives our rates, with the goal being we recover the costs of the service.” One of the main drivers of the fiscal 2024 spending increase is the cost of medical supplies, up 15 percent from last year. The cost increase that resulted in a fuel surcharge last year has stabilized, he added.

“We are absorbing more and more indirect costs in the operating budget,” Grunes told the board. Those expenses include utilities and fuel charges.

The Select Board also approved writing off $26,463.15 in uncollectible ambulance bills, amassed over the past five years, as recommended by Finance Director David Castellarin. The amount for the most recent year was $3,017. The reasons for the failure to pay include death, lack of insurance, and various hardships.

In answer to a question from board member Shawn Hanegan, the fire chief said 26 percent of ambulance calls are covered by commercial insurance. Most of the remainder falls under subsidized coverage such as Medicare or Medicaid.

Grunes said in an interview that transports of VA Medical Center residents are fully reimbursed. However, there is a federal ceiling on payments for outpatients and residents of the Bedford Green apartments, he said.

The department uses an aggressive collection process for overdue payments, Grunes told the Select Board, and 91 percent of overdue bills are paid. “We do not attach liens to any unpaid bills after going through the collection process. We go to the Select Board,” Grunes said. “We don’t bring it before the board until we’ve exhausted every option.”

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