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Cottage Grove asks St. Paul Park for $62,339 subsidy as EMS reimbursements fall short
Summary
Cottage Grove officials told the St. Paul Park City Council on June 16 that rising ambulance costs and low Medicare/Medicaid reimbursements have driven their EMS enterprise fund into a multi-year deficit and requested a $62,339 subsidy and a contract with annual 9% increases as a starting point.
Cottage Grove officials told the City of St. Paul Park council on June 16 that the cost of providing ambulance service has outpaced reimbursements from Medicare and Medicaid, leaving Cottage Grove’s EMS enterprise fund in deficit and prompting a request for a local subsidy.
At a council meeting, John Pritchard, fire and EMS chief for the city of Cottage Grove, and Jennifer Levitt, Cottage Grove city administrator, outlined service levels, costs and a proposed subsidy. Cottage Grove asked St. Paul Park to consider a $62,339 payment to help cover the gap between typical billed transport rates and the lower Medicare/Medicaid reimbursement the ambulance service receives, with a proposed contract escalation of 9% annually for 2026 and 2027.
The request matters because Cottage Grove holds the public service area (PSA) and provides ambulance transport for St. Paul Park, Newport and Grey Cloud Island. Pritchard said Cottage Grove sends a paramedic on every response, and noted the department’s response performance to St. Paul Park in 2024 averaged about 6 minutes 46 seconds (median ~6 minutes) and reached the scene within about 8½ minutes 90% of the time—faster than statewide averages presented by Cottage Grove.
Cottage Grove staff provided numbers to explain the shortfall: in 2024 the city said St. Paul Park required $817,000 of EMS services but Cottage Grove received $207,000 in reimbursement for those runs, leaving roughly $610,000 that Cottage Grove taxpayers effectively subsidized. Levitt said about 71% of transports from St. Paul Park are billed to Medicare or Medicaid, which reimburse a fraction of billed charges in many cases; Cottage Grove illustrated that a basic life-support transport billed at roughly $2,200 might be reimbursed at about $452, while an advanced life-support transport billed at roughly $2,800 might be reimbursed at about $537 under current rules.
Pritchard and Levitt described rising equipment and personnel costs: monitors/defibrillators can exceed $60,000 each, ambulance chassis and upfits have surged (they cited recent purchase pricing and long lead times), and a fully loaded paramedic position can exceed $120,000 annually with benefits. Cottage Grove said it recently experienced a 77% increase in ambulance procurement costs and long delivery lead times of more than three years for new units.
Cottage Grove officials said they are evaluating options beyond a subsidy, including a standards-of-cover study and the possibility of subleasing parts of their PSA to another provider if revenues do not improve. Pritchard explained that subleasing portions of a PSA could mean a different ambulance provider—potentially farther away—responds in some areas, lengthening response times. He said mutual-aid responses already occur when Cottage Grove units are committed elsewhere.
Council members asked about which calls are billed, who pays when patients decline transport, and how often mutual-aid units serve St. Paul Park. Cottage Grove staff said they have begun charging a baseline fee when responders make patient contact; private insurers sometimes pay those charges, while Medicare/Medicaid often do not. Cottage Grove characterized its current position as a multi-year operating deficit for the EMS enterprise fund and said it is seeking shared subsidy commitments from the communities it serves.
Cottage Grove presented the $62,339 figure as a “place to start,” calculated by multiplying the per-run difference between what Cottage Grove would bill a resident and what it currently receives from St. Paul Park transports by the 327 runs made to St. Paul Park in the referenced period. Officials said they would return with more details if St. Paul Park councilors requested them. No formal action or vote on funding was taken by the St. Paul Park council at the meeting.
Why it matters: St. Paul Park relies on Cottage Grove for advanced life‑support ambulance transport. A sustained funding gap could force Cottage Grove to alter coverage or seek third-party providers, which officials warned could extend response times or change the crew composition sent on 911 calls.
