Barely a month ago, a governor-appointed task force heralded the joint fire department of West and South St. Paul as one of a handful of innovative departments that successfully shares fire and rescue services between jurisdictions.
Now, city officials are worried that they'll have to make changes to the department's ambulance service, a major money-maker, at a time when the cities are already cutting costs.
The South Metro Fire Department (SMFD), which serves West St. Paul and South St. Paul, acts as a first responder providing paramedic services in both cities. It frequently transports patients to hospitals in its three ambulances, collecting an average of $650 for each transport. SMFD generates about $330,000 a year from ambulance transports alone.
But all that might soon change.
HealthEast Medical Transportation, which has the primary service area license granted by the state for West and South St. Paul and several other southern suburbs, wants a new contract with the SMFD that gives it more control of the ambulance service.
HealthEast already responds to emergency calls along with the fire department and transports patients with more serious problems -- those in need of the more intensive care it can provide en route to hospitals.
After about a year of negotiations, HealthEast is insisting that it take over all the billing for ambulance services. It's proposing reimbursing the fire department for each ambulance trip -- but only $240 per trip.
If the department doesn't like that idea, HealthEast says it could begin providing all ambulance service, including the less serious cases. But that would cost the fire department a large chunk of revenue.
"If you think about it, we already have an ambulance there," said John Kvasnicka, senior director for HealthEast. "That's an unusual arrangement to have two ambulances come to a scene. So I think that we need to consider whether it's the best arrangement."
The new arrangement would cut ambulance costs for patients, Kvasnicka said.
The department has a third option: It could choose to cut ties with HealthEast. But that would mean spending the time and money to revamp the department to handle all ambulance calls.
"They [HealthEast] hold all the cards," said Dave Wright, a West St. Paul city council member who is on SMFD's board of directors. "All of the leverage is theirs."
'A brick wall'
HealthEast says the $240 per-transport fee it's proposing is what it would spend to provide the same service.
But the lower rate would have a major financial impact. SMFD's budget for 2011 includes $323,000 in revenue from ambulance transports, which amounts to 7 percent of the department's budget. The changes would mean an estimated drop of $152,000, a figure which takes into account the department's savings of $24,000 that it now spends on billing as well as an annual subcontractor fee to HealthEast.
"It hasn't been antagonistic or it hasn't been bitter," Wright said of the negotiations. "It's just that we each have our position and we each have our own side and we both feel like we've got really good points ... We somehow have agreed to disagree."
West St. Paul and South St. Paul City Attorney Kori Land was more blunt: HealthEast has been "a brick wall" during the negotiations, she said.
Besides the billing changes, the department would also have to participate in HealthEast training, purchase about $30,000 worth of road safety equipment and create a computer interface that is compatible with HealthEast's.
If HealthEast doesn't budge, it would be difficult for SMFD to make up for the reduction in revenue, said SMFD Chief John Ehret. The fire department has already adopted its budget for next year, and the department would have to cut its budget or ask South St. Paul and West St. Paul for more funding.
"We are remaining focused on hopefully maintaining a partnership with HealthEast," Ehret said.
The SMFD board of directors is having a special meeting Nov. 3 to discuss the contract, which will have to be settled before the end of the year.
Nicole Norfleet • 612-673-4495