MEXICO — To explain the new subsidy hike for its 11 towns, Med-Care Ambulance will hold a meeting at 6 p.m. Wednesday, Feb. 25, in its new building at 290 Highland Terrace.

The hike has nothing to do with paying for the new building, Med-Care board President Steve Brown said. Rather, due to several unforeseen changes at the town, state and federal levels, the Med-Care board has had to increase its subsidy rate for Andover, Byron, Canton, Carthage, Dixfield, Hanover, Mexico, Newry, Peru, Roxbury and Rumford, in order to help cover excessive revenue losses.

“We’re not in desperate straits,” Brown said Friday in Carthage. “We just have to work our way through these changes. We’re all in this together. It’s our service.”

The $6 per capita subsidy rate hike — from $18 to $24 per capita — and budget of about $1.8 million starts July 1. Subsidies from the towns represent about 16 to 18 percent of the budget. Med-Care also reduced about $90,000 in expenses during 2014 against what was spent in 2013, Brown said.

“Our calls aren’t down, our charges aren’t down, but money coming from the patients we served over the past two years is down more than $100,000,” he said. “What has been an ongoing trend over the past two years is the impact of the Affordable Care Act and state Medicaid changes on the ambulance service and our reimbursements.”

He said the Affordable Care Act, more commonly known as Obamacare, has revealed that many people who were insured have switched to insurance plans that now have lower premiums but larger deductibles. Insurance companies don’t pay anything until the deductible is met.

“So we’re eating the deductible,” Brown said. “The payments just aren’t happening and ultimately become a bad debt expense, which has reduced our overall revenue.”

In the past, these patients would have had a lower out-of-pocket expense to meet their deductible and have their insurance pay the bill. “Whereas now we are finding that entire ambulance transport bills are assigned to the patient for responsibility of payment,” he said.

Med-Care is dispatched in about 4,000 calls a year, but not all of the calls are billable. Calls are only billable if the ambulance service takes people to a hospital. Brown said they aren’t reimbursed if someone calls for assistance or it’s something their crews can handle without taking the person to a hospital.

Medicare has also changed how it reimburses ambulance services regarding loaded miles. In 2014, Brown said Medicare no longer allowed rounding off mileage for patient transports. Instead, it now reimburses to the tenth of a mile. With about 4,000 calls annually, that added up to a $38,000 reduction, he said.

Medicare also changed its parameters for the types of calls that can be billed at an Advance Life Support rate versus a Basic Life Support rate. In 2014, that was a $22,000 loss, Brown said.

Additionally in 2014, there were more than 50 patients who previously had MaineCare/Medicaid insurance that were no longer covered because Gov. Paul LePage vetoed a Medicaid expansion bill. Maine also cut and tightened eligibility requirements for MaineCare, dropping thousands of people from the program.

He said these patients couldn’t afford health insurance to begin with, which is why they were enrolled in MaineCare. So now they’re falling into a gap where they’re no longer eligible. When they do get insurance coverage through the Affordable Care Act, they have a higher deductible, which they can’t afford.

Yet another change happened with what are called “specialty-care” transports from Rumford Hospital.

“This used to pay well and its numbers dropped last year and that made a hit on us,” he said.

Brown said all of these changes are affecting Maine’s ambulance services.

“We may be more in tune to it because we keep in touch with our reimbursements,” he said.

Lastly, the overall population of Med-Care’s 11 towns has dropped from 17,000 to less than 16,000.

“Where we charge per capita, there was a loss (in revenues) there.”

Even after cutting around $90,000 in expenses, Med-Care was forced for the past two years to dip into its reserve fund once each year to cover payroll costs and borrow money to cover overall operations due to the reimbursement reduction.

“This is not a reasonable long-term solution to operate under for such a critically needed and proven regional service within the River Valley communities,” Brown said.

Through cost-cutting measures and not filling three full-time positions that opened when employees left, the ambulance service paid back its reserve fund.

To ensure the short-term sustainment and long-term viability of Med-Care, Brown said the board of directors determined this month that an adjustment in the subsidy rate to $24 per capita, beginning July 1, is necessary.

“We’re not in desperate shape, but we have to face the facts that our revenues are dropping,” Brown said. “With revenues being tight, we have to bite the bullet and hope things will turn around.”

tkarkos@sunmediagroup.net