Downeast EMS stops financial bleeding, stabilizes operation

Posted Aug. 15, 2011, at 3:58 p.m.

LUBEC, Maine — In answer to concerns about cash-flow problems and the continued viability of Downeast EMS, ambulance officials said Monday that a new focus on prompt billing has stabilized the operation that serves 16 area communities.

Dean Preston, the recently appointed chairman of the board of directors of Downeast EMS, confirmed that until recently, billing was not being done in a timely fashion, which did create a cash-flow problem.

But by installing a new monitoring system, Preston said the organization’s bills are now being submitted almost as soon as the ambulance completes its run. This has resulted in much faster insurance, state and federal reimbursments.

“Over the last five weeks, we have gone from $7,000 to $40,000 in our checking account,” Preston said Monday. Things are progressing so well, that the service hopes to pay off a $100,000 line of credit by Sept. 30.

When the line of credit was approved last February with the backing of county commissioners, the city of Eastport and the town of Lubec, Downeast EMS officials blamed well-documented delays in payments by both state and federal agencies. Many ambulance services, hospitals and other health care entities in Maine were also experiencing similar problems with Medicaid and Medicare reimbursements. In the months since, the state has released massive amounts of payments and the Downeast EMS cash flow has evened out, Preston said.

The small rural communities of Washington County have long struggled with the costs of providing timely and effective ambulance service to residents. Baileyville was basically forced to abandon its local ambulance service in 2010 after the federal Occupational Safety and Health Administration cited numerous violations regarding billing and mandated training of volunteer personnel. The town then signed on with Downeast EMS to provide local ambulance service.

“This is a tough business. That’s why the private sector doesn’t do it,” Preston said.

Downeast EMS was founded in 2001 and has 47 full- and part-time employees. There are six ambulances and they are housed at three base stations in Baileyville, Eastport and Lubec. Last year, the ambulance conducted 1,500 runs, according to Preston. In just the last 30 days, 104 calls have been answered.

Because of concerns about the service’s earlier cash-flow problems, however, Lubec Town Manager John Sutherland — who is on the Downeast EMS board — met with Machias Town Manager Chris Loughlin to discuss possible future ambulance coverage in Lubec.

Sutherland said Monday that the meeting, which was held last week, was exploratory only. He said Lubec was looking for a backup plan should there be any disruptions of the Downeast EMS Service. The Downeast EMS ambulance currently housed in Lubec is owned by the town and leased to the service for $1 a year. “And we have some very capable and quality personnel,” Sutherland said, referring to Lubec residents who could continue to provide ambulance service if necessary.

This positions the town well if there were problems at Downeast EMS, he said.

“If something should happen, we have the ambulance. We have the staff. We would just need to run under Machias’ license while we obtain our own,” he said. Machias has its own ambulance service and is not one of Downeast EMS’s primary communities.

Sutherland stressed that Downeast EMS seems to be doing well right now but that the town would be lax if it did not have a backup plan. “We just wanted to be prepared,” he said. “If something should happen to Downeast EMS at midnight, we need to know what will happen to Lubec residents at 12:01.”

“They got nervous,” Preston said of the Lubec officials. “They have to be responsible to their taxpayers.” But Preston said the new emphasis on timely billing has put the service on firm footing and all participating communities should be reassured.

“We haven’t instituted a new billing system,” he said. “We’ve just finally gotten a handle on billing in a timely fashion. It is clearly working.”

The biggest problem at Downeast EMS was that there was a delay in billing as well as a delay in payment — up to 90 days in some cases — from programs such as Medicaid and Medicare. “We, right now, have $500,000 owed to us as accounts payable,” Preston said. “As that comes in, we will continue to rebound financially.”

Despite the turnaround in the service’s bookkeeping, billing and payments received, Preston said the service will wait until the end of the year to determine whether an increase in the participating towns’ subsidies will be required.

“We are now charging [each community] $19.50 per capita,” Preston explained. “We’d be OK if we ran fat, but we don’t want to do that. To charge, say, $30 per capita is not being fiscally responsible although it would make our day-to-day operations much easier. I figure that the challenge is on the service to try to maintain a break-even rate.”

Preston said all the numbers will be reviewed by the end of the year to determine whether there needs to be a subsidy increase or the rate will remain stable.

Meanwhile, he said, Baileyville Town Manager Linda Pagels-Wentworth has been tasked with ensuring that bills are submitted promptly. “She’s keeping her thumb on the pulse for us,” Preston said. In addition, the Downeast EMS board is meeting weekly, rather than quarterly, to more quickly and efficiently handle any issues that may arise.

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