The South Metro Fire Department and HealthEast will continue to share ambulance territory in West St. Paul and South St. Paul after resolving differences that threatened to end their unique and long-standing cooperative arrangement.

HealthEast Medical Transportation recently announced that it had signed a new, two-year contract with South Metro, the merged fire department for the two cities.

The renewed contract allows South Metro to continue to operate as a first responder for all medical calls and provide basic life-support ambulance transportation. HealthEast Medical Transportation, the primary service-area license holder, will continue to provide advanced life-support ambulance transportation.

A year ago, HealthEast had questioned whether it wanted to continue the arrangement and notified South Metro of plans not to renew the contract that was due to expire at the end of 2013. In a letter to the fire department, HealthEast said it could provide "the highest quality of service in the most cost-effective manner" by providing all the service itself.

"From a clinical standpoint, South Metro always has done an excellent job," said Laura Olson, director of HealthEast Medical Transportation.

Olson said the concerns that led HealthEast to question continuing the sharing arrangement were "operational" issues, including meeting billing, documentation and road safety standards.

An example, she said, was making sure that South Metro's employees were attending all required training sessions. "As a contractor, our goal was to make sure that the emergency medical service that South Metro provides is consistent with what [HealthEast Medical Transportation] provides," she said.

'Met in the middle'

Representatives of South Metro and HealthEast met several times in recent months to iron out their differences. "Our communication improved quite a bit," Olson said.

"We were able to resolve our issues," said Mark Erickson, South Metro assistant fire chief. "It's not so much that records weren't being kept; it was more how we do business and how they did business."

"We changed a few things, HealthEast changed a few things and we kind of met in the middle," said Dan Niederkorn, a South St. Paul City Council member and member of South Metro's board. "The good part is that the two cities still have the high-quality service they have demanded and deserve."

Big piece of the budget

An end to the partnership could have put a large hole in South Metro's budget. HealthEast has paid the department about $240,000 a year to reimburse it for basic life-support transports. Last year the reimbursement income for the department totaled about $260,000, Erickson said.

Erickson said the department has budgeted $275,000 in reimbursement income for 2014. He said the expected increase comes from a projected rise in the number of transports — following an upward trend in recent years — and a slightly higher reimbursement payment included in the new contract. South Metro will pay HealthEast a monthly fee of $1,395 to cover billing a, Erickson said.

"We're elated that this new contract allows us to really continue doing business under the model we've had for more than 20 years," Erickson said.

The arrangement means that sometimes South Metro and HealthEast show up for a call, but Erickson defended the practice. As a first responder, the department can quickly determine whether patients need HealthEast's advanced life-support ambulance services.

"When call volume is up, we can be transporting more patients together than just HealthEast could do by themselves," he said.

Star Tribune Staff Writer Laurie Blake contributed to this story.