GFD inches closer to entering program to recoup lost revenue
By Molly Ann Howell
Managing Editor
In a medical emergency, reaching the hospital quickly is vital. While ambulance services provide this critical link, the high cost often burdens patients.
According to GoodRx.com, a basic ambulance transport costs an average of $940, while a ride with advanced life support reaches nearly $1,300.
Gallup utilizes two ambulance providers: MedStar, a private service, and the Gallup Fire Department, a public service.
In a 2024 interview with the Sun, Gallup’s Fire Chief Jon Pairett explained the prices his department charges.
A basic life support call, which happens when emergency medical service staff only transport a patient to a local hospital, costs $512 for the first mile, and then it’s $12.75 for each additional mile. On the other side of things, EMS personnel can provide an advanced life support level 2, which occurs when someone needs immediate, potentially life-saving medication or attention. That service is priced out at $878 dollars for the first mile, and $12.75 for any additional miles.
Private insurance or Medicaid covers at least part of these costs for some residents. Medicaid covers about 30% of the bill, but when patients can’t cover the remaining balance, the city and EMS staff lose valuable revenue—funds that could otherwise purchase supplies for first responders.
During a June 2024 city council meeting, Pairett introduced a program to recoup some of this lost revenue. A year and a half later, the city has moved one step closer to joining the Medicaid Ambulance Supplement program. However, City Attorney Dave Eason still requires answers to a few questions before he gives the go ahead.
Federal authorities introduced the Medicaid Ambulance Supplement program in New Mexico in 2022 to help publicly owned or operated ambulance services receive extra payments. These payments close the gap between actual transport costs and the reimbursements received from Medicaid and mileage fees.
The program only applies to patients with Medicaid insurance.
“The reason why it’s necessary is because right now the taxpayers are paying for the fire department to be here to respond to fire calls and medical calls and any emergency situations,” Pairett said during the June 2024 meeting. “We’re never going to be making a profit; people don’t run a fire department or an ambulance service to make a profit. But the costs of providing these services are going up.”
Pairett told the council during their 2024 meeting that eight other ambulance services use the program in New Mexico, and they had received a total of $11 million, which equals out to a little over $1 million each.
Over the last 18 months, the GFD has worked with the Public Consulting Group to gather the data necessary for enrollment in the program. The City of Gallup expects to recover between $1.2 million and $1.4 million.
After the city pays the Inter-Governmental Transfer fee to the state and compensates PCG for auditing the paperwork, Gallup will likely see an annual net revenue of $700,000 to $900,000, depending on transport volume. For 2025 and 2026, the city will transfer nearly $510,500 to the state to facilitate the program.
WORKING OUT THE LOGISTICS
Before the GFD begins the program, Eason wants to revise the memorandums of understanding. He aims to clarify how the state guarantees reimbursements and how the city may use additional funds.
“It’s no secret to anyone that these kinds of programs are getting looked at,” he said. “There are problems with them and they are subject to legislative action. We don’t want to put in hundreds of thousands of dollars and not get that back.”
Pairett also expressed concern regarding the potential discontinuation of Medicaid.
“Let’s just say Medicaid goes away or this program stops,” he said. “We’re supposed to get the money we put in back if that happens, [but] it doesn’t say that in the MOA, and that’s one of the reasons why the city attorney wants to update the MOU.”
Eason also noted ambiguity regarding fund allocation. The current MOU requires the city to spend additional funds on «Medicaid-related services.» Eason believes this limits the city to spending the money only on emergency responses and medical transports.
The MOU currently states that any additional funds are required to be spent on the provision of Medicaid-related services. Eason said he believes that means the city would be limited to only using the extra money for emergency responses and medical transports.
Pairett said that directive differs from his original expectations.
“When we first learned about this program, they told us that it was basically the concept that these funds went right back to the fire department. As a fire chief, I was like, ‘This is awesome, we’re going to be driving Cadillacs!’” he said jokingly.
In reality, the program designs these funds to improve a jurisdiction’s EMS system.
Pairett said other fire departments around the state have laid out improvement plans, and some of the extra funding will go towards those plans. He said any extra money after that would technically go back to the city’s general fund, since the GFD’s budget is supported by the fund.
“If we can improve the EMS in the city, that’s great. If we can improve other parts of the city, we’re in it as well,” Pairett said. “That’s what we’re here for.”
While the agenda item stated city staff was seeking the council’s approval of MOU, Eason and Pairett said what they would actually be approving that night was for Eason to work with the company to fix the contract’s verbiage, and once that is fixed up, then the GFD can officially move on with the program. Pairett said the council’s approval now would serve as a preemptive measure so that he wouldn’t have to come back to them again on the issue.
The council unanimously approved the amended agenda item, so now City Manager Frank Chiapetti can sign the MOA once Eason gets the verbiage fixed to his liking.
