Ariola and Kristoff clarify EMS revenue vs. costs

So the executive budget projects significant new EMS revenue annually, beginning in FY27.

Yet FY26, actual revenue came in well below the out-year projection against a substantial total department cost.

This gap raises fundamental questions about whether EMS transport is a net revenue generator or a net cost to the city.

And whether the financial plan's revenues projections are realistic.

The committee wants to understand the state of the ambulance fleet and whether staffing is adequate to meet that demand.

That being said, the executive budget projects $92 million in new EMS revenue annually beginning in FY27.

Yet FY26 actually came in at approximately $254.5 million against a total department cost of $400.8 million.

Does the department consider EMS ambulance transport to be a revenue generating operation or a net cost to the city?

And can you walk through the full revenue cost or the few revenue cost picture?

Yes.

So EMS services are definitely a net cost to the city.

They do not generate revenue beyond their costs.

In fact, historically, EMS revenue has covered about a third of the all-in cost of operating EMS.

So whenever we look at setting rates, we're looking at the total cost.

That's including not just the direct payroll for the EMTs and paramedics staffing the ambulances.

It's also including the fringe cost associated with that personnel.

It's including the OTPAS cost of the medical equipment, the supplies that they use, rent on any leased EMS stations.

It includes debt service for the purchase of ambulances, for the IT systems like the CAD system that are used to support 911 operations,

renovations at EMS stations, and it includes a proportional amount of support staff at the fire department that support EMS services.

So like the mechanics that help repair the ambulances, the IT personnel that work on those 911 systems, the HR people that help hire the EMTs.

Now, there are sort of three different adjustments to EMS revenue being made in the executive budget, one of which is the $92 million that's been referenced a few times.

That $92 million is actually not an increase in EMS revenue.

It is a decrease in EMS revenue and an increase in city funds.

So that was related to a Medicaid supplemental payment program that the city had incorporated into our EMS revenue targets.

You know, many of our transports are for Medicaid.

Medicaid patients, Medicaid pays according to their own fee schedule, which is much, much lower than what our actual costs are.

There is a program that several other states have been able to get in place, referred to as certified public expenditures, where you can essentially show Medicaid

that your costs are much greater than their rates, and they will make a supplemental payment.

That has to go through a state Medicaid plan amendment process, and we actually have two spas in coordination with New York State that have been pending for over five years now

in back and forth with the federal centers for Medicaid and Medicare services.

That hasn't been approved yet.

And you've seen this in prior years where that revenue has been taken down one year at a time.

This plan includes a significant adjustment to take down most of that revenue in the baseline.

The plans are still pending, so it's possible it may get approved, probably at a much lower amount than we thought initially.

But that's why you see that adjustment.

And that's being replaced one for one with city tax levy dollars, so there's no negative impact to EMS operations from that program not going through.

The other two adjustments are our savings initiatives.

So we have treatment in place, which is $10.1 million up, mostly because of Medicaid revenue.

Now that one, in contrast to the CPE that I was just talking about, that SPA, the state Medicaid plan amendment, has already

been approved by the federal government.

So we feel much more confident with that.

That was approved fairly recently, so back in February, and that is mostly what is supporting that 10.1.

Then we have another 24.6 million, and that is tied to the increase in EMS rates.

But when you look at all of those adjustments and you compare what the EMS revenue targets were as of

the preliminary budget to now overall the EMS revenue target is going down because of that large $92 million adjustment.

Right, okay, so if the $92 million number is not correct, right, or not exactly correct.

It's the other way around.

Could be.

So it's not revenue going up, it's revenue going down.

Okay.

City dollars going up.

Okay, so then what is the department's total EMS revenue for FY27, and how does that compare to the total cost of running EMS?

What are the actual numbers?

So the FY27 EMS revenue target is $343.7 million.

And that is still substantially short of the all-in cost of operating EMS, which is in excess of $900 million.

Okay.

And so you're also saying, all right, so the executive budget projects $400.5 million in total EMS revenue in the out years.

Is that correct?

No.

So that number, $400.5, was what it was as of the preliminary budget.

As of the executive budget, it is now $343.7 million.

So it went down.

Okay.

And so the FY26 came, that was actually $254.5 million.

So what accounts for the difference?

What do you think is the major reason for the difference and why it decreased?

Is it because the $92 million is not incremental and it was actually a negative?

So the 92 million was taken down.

So that helps explain part of the difference between the 400 and the 343.

And then the two things going up are the 10.1 for treatment in place and the 24.6 tied to increasing ambulance rates.

Okay, so we're still not working with real numbers and we're still not, we're working on what ifs and how are we supposed to really put a budget plan together when there's not any tangible numbers so far.