Orange County Focus is dedicated on Monday to analysis of community news, a look atwhat’s ahead and the voices of local people. : PERSPECTIVE : Medicare Cuts Affect Health of Emergency Supply Funding

When paramedics apply bandages, put on splints and administer drugs during an emergency call, they don’t send the patient a bill for those medical supplies.

But as the result of a sudden, marked change in Medicare policy, one Orange County ambulance service soon will begin doing just that, and other emergency-care agencies are scrambling to cover an unexpected cost.

Until now, hospitals stocked emergency vehicles with medical supplies, then factored in the cost when they calculated patients’ bills. The patients’ private health insurance or Medicare coverage eventually paid part or all of the amount.

Medicare officials notified hospitals earlier this year, however, that starting this summer the program would no longer reimburse them for paramedic van supplies. Only through “transporting agencies” can reimbursement be made, the Medicare policy states.

Hospitals in Orange County responded by halting their practice of providing paramedic supplies, leaving patients, insurers, cities and ambulance services to work out among themselves the details of who pays for what.

Fullerton’s City Council took action last week, voting unanimously to add a $25 medical-supply fee to the charge for emergency transport of people who are not subscribers to the city’s ambulance service. The increase will raise the transport fee for minor injuries to $200 and for critical ones to $300.

“It’s just the cost of doing business,” said Larry Greene, the city’s interim fire chief.

Fullerton estimates that it will have to spend $45,000 a year to stock medical supplies in paramedic vans.

Even though the Medicare reimbursement policy is a departure from the standard procedure of the past two decades, it has been on the books since the early 1980s. Because of mounting pressure to hold down costs, officials said, the agency reviewed all of its procedures earlier this year and decided to begin enforcing the paramedic fee provision.

What other effects the review might have on billing and collecting practices are still unclear, officials said.

“There are a lot of conflicting and interwoven pieces to this puzzle,” said Alysson Blake with Medicare’s Health Care Finance Administration in San Francisco. “What we are trying to do is to put them down on the table and see what fits and what doesn’t.”

Agencies that provide emergency transport services, meanwhile, are faced with a big expense that they had not figured into their budgets.

“This is extremely expensive,” said Emmy Day, spokeswoman for the Orange County Fire Authority, which represents 19 of the county’s 31 cities.

Starting July 1, the Fire Authority began paying for emergency medical supplies out of its operating budget, which is funded by property taxes.

The tab for the first month, Fire Authority officials said, came to $62,000.

Though officials would not project an annual cost based on July’s results alone, they said a 12-month total will certainly be a large portion of the agency’s annual budget of $1.3 million for emergency medical services.

“We can’t eat this cost for long,” Day said.

Fire Authority officials said they are reluctant to follow Fullerton’s lead and adopt a higher fee structure.

“With the county going bankrupt, obviously people are extremely sensitive to anything that looks like a new tax or fee,” said Ruth Grubb, head of the Fire Authority’s paramedic services.

The bill ultimately goes to the patient either way, Grubb said, whether from the emergency transporter or the hospital. “They have been paying this all along. This would just be from another angle.”

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But some health-care advocates say they aren’t so sure.

Officials with the state’s Health Insurance Counseling Advocacy Program, which advises senior citizens about Medicare benefits, said last week they were not familiar with the new policy on reimbursement for paramedic fees and could not say what the ramifications might be.

“We would certainly go to bat for medical beneficiaries if they are being stuck with an out-of-pocket fee for ambulance services,” said Julie Schoen, an attorney for HICAP. “This is one of many changes on the way with Medicare, and we have to try to stay on top of it.”

Hospital officials too say they are trying diligently to keep up with ongoing changes in an industry being bombarded with calls for cost-saving reforms.

St. Jude Medical Center in Fullerton paid for paramedic supplies through July but will no longer do so, officials said.

The latest Medicare modification is “another process the federal government wants us to go through,” said Alain Jourdier, the hospital’s director of marketing. “It’s another welcome to Bureaucracy 101.”