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May 13, 2010

RE: Proposed State Budget Reduces Ambulance Reimbursement

Dear Mayor:

In the fiscal year 2011 proposed State Budget for the Department of Human Services, a cut in the reimbursement for ambulance services is proposed. The Medicaid Division of the Department of Human Services has identified $3,841,000 to be cut from the State’s FY 2011 Budget for what is commonly called the Medicare/Medicaid crossover. Mayors and Chief Financial Officers of all local governments that bill for ambulance service need to evaluate their loss and take appropriate action.

An ambulance trip for a patient who has Medicaid only is paid for a $58 base rate (additional money may be paid for miles transported, oxygen, etc.).  These rates have not increased since 1994.  Beginning in 2006, Medicaid paid the crossover for Medicare co-pays and deductibles of dually eligible patients with both Medicare and Medicaid.

This cut has a greater impact than the just dollars cut from the State budget.  New Jersey Medicaid’s $3.8 million leverages Federal dollars into the State’s medical transportation industry and local government.  We have been told that with the federal match, the economic loss to the people of New Jersey is close to 10 million dollars and even greater when Medicaid managed care payments are considered.  Although not specified in the 2011 budget, revenues lost from Medicaid managed care beneficiaries should also be evaluated since Medicaid HMOs working in New Jersey can reduce their payments to the level that State Medicaid program pays.

The transportation work load does not decrease with this cut.  Emergency medical services must still be provided.  Only the reimbursement and funds available to the system are reduced. Governments relying on a contracted provider will likely see rate increases.  Those towns that get 9-1-1 service from non-profit rescue squads that bill for service may see a stability problem due to revenue reductions.  Non-emergency ambulance may see a reduction in availability that could, in the worst case, spill over to emergency services.

The State is about to cut one of the smart ways it budgets.  The crossover leverages well over 100% of its value and brings Federal money to our state that we will not otherwise see.  This cut will affect the bottom line of municipalities that seek ambulance service reimbursement in order to cover more costs and not rely solely on taxes to pay for emergency medical services.

We urge you to review the impact of this cut on your budgets. If appropriate, we urge you to contact your Legislators and inform them of the impact. Also, please let us know if and how the cuts affect your municipality.

Please direct your information to Jon Moran at 609-695-3481, ext. 121 or

Very truly yours,

Hon. Chuck Chiarello, Mayor                                             William G. Dressel, Jr.
Buena Vista Township;                                                       Executive Director
League First Vice President; and Chairman,
League Emergency Management Preparedness
Task Force


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