Report 98109 Summary - January 1999

County Emergency Medical Services Funds:

Although Counties Properly Allocate Money to Their EMS Funds, County Policies and Legislative Requirements Unnecessarily Limit Reimbursements to Emergency Medical Care Providers

RESULTS IN BRIEF

To compensate health care providers for emergency ser- vices for the uninsured and medically indigent and to ensure this population has continued access to emergency care, the Legislature enacted Chapter 1240, Statutes of 1987, allowing counties to establish an Emergency Medical Services (EMS) fund. Through EMS funds, counties can reimburse these providers for up to 50 percent of their losses. To date, 43 counties have established EMS funds, which they finance through penalties assessed on certain criminal and motor vehicle fines and forfeitures.

We reviewed the administration of EMS funding and the counties' compliance with laws governing the use of the funding, focusing on a sample of six counties of varying sizes-Humboldt, Los Angeles, Sacramento, San Bernardino, San Francisco, and San Joaquin. While the six counties appropriately allocate penalty assessments to their EMS funds, annual deposits into their funds have decreased significantly since fiscal year 1990-91. This downward trend is primarily due to the adverse effects of legislation that diverted money from the EMS funds. EMS fund deposits from state tobacco tax revenues have also declined because of a decrease in cigarette and tobacco purchases.

Additionally, although the counties ensure that reimbursements to EMS providers are consistent with state law, the financial support providers receive is often less than it could be. Because of their own policies and legislative constraints, counties are not fully utilizing EMS funds to reimburse providers. Consequently, the six counties we reviewed have accumulated balances totaling $30.3 million in their EMS funds. As a result, the counties may deprive health care providers of cost reimbursement when providing emergency medical care.

Finally, we noted weaknesses in the counties' management of EMS fund administrative costs. Although the six counties we visited routinely allocate 10 percent of their EMS revenue for administrative costs, two of the counties could not fully substantiate their administrative charges. Moreover, some counties did not spend the entire amount allocated for administration. Rather, they retained the excess funds in a sub-account to reimburse subsequent years' administrative costs instead of reallocating the funds to other EMS program accounts. The law states that counties can use up to 10 percent of the EMS funds for administration; however, it does not allow counties to carry over the entire amount of unspent administrative funds to cover administrative costs in subsequent periods. As a result, these counties are violating the law's intent by not reallocating the unused administrative funds to all EMS accounts. Further, because they do not reallocate unused administrative funds, counties are not maximizing the benefit to EMS providers by increasing the reimbursement rate for unpaid provider costs.

RECOMMENDATIONS

To maximize financial support for emergency medical service providers and better achieve the objectives of the EMS statutes, we recommend the following actions:

  • San Bernardino and Los Angeles counties should consider increasing their existing reimbursement rates in order to fully utilize their growing EMS fund balances. Moreover, all counties with EMS funds should periodically review the status of their EMS fund reserve and adjust reimbursement rates accordingly.

  • The Legislature should consider revising the current statute to allow counties the flexibility to exceed the 50 percent maximum reimbursement rate for EMS providers when counties accumulate increasingly large EMS fund balances. Moreover, the Legislature should consider expanding the type of medical services allowed under the current law to enable counties to provide financial relief to other medical service providers incurring unreimbursed costs.

  • San Joaquin County should initiate disbursements of the EMS revenues accumulated from court penalty assessments. Additionally, San Joaquin County should make the disbursements on at least an annual basis.

  • All counties should use EMS administrative funds solely for EMS program expenses and maintain these funds in separate accounts. They should also reallocate unused administrative funds in a given fiscal year to all EMS accounts based on the percentages described in the Health and Safety Code.
  • San Bernardino County should begin depositing interest earned on EMS fund balances from court penalty assessments back into the EMS fund. Moreover, the county should calculate the unpaid interest earned on such EMS balances since January 1, 1992, and deposit those funds into the EMS fund.
AGENCY COMMENTS

We received comments from five of the six counties we reviewed. Humboldt County chose not to provide written comments to the report. In general, the counties agreed with our conclusions and recommendations. However, Los Angeles and San Francisco counties disagreed with our conclusion regarding increasing emergency medical service provider reimbursement rates when available resources exist. San Francisco County also disagreed with our conclusion that the law does not allow counties to carry over unspent administrative funds solely to cover administrative costs in subsequent periods. We provide our comments to these and other concerns raised by the counties after their respective responses.


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