Monterey council weighs first-responder fee to help close $10M deficit; insurers, equity and deterrence worries surface

Monterey — Faced with a projected $10 million structural budget deficit, Monterey city staff on Dec. 16 presented a proposal for a first-responder fee intended to recover some costs of the fire department’s paramedic services — a program that staff say would not replace ambulance transport billing, but would recover the cost of paramedic treatment provided at emergency scenes.

Assistant Fire Chief Pat Moore told council the fee is typically calculated from a ‘‘fully burdened’’ cost model that includes crew cost (three-person engine company), average on-scene time, EMS supplies and an administrative fee. Staff modeled two approaches: option one (bill insurers only) and option two (bill insurers and, if insurers do not pay, bill patients). Moore cited experience in other California jurisdictions and information from third-party billers (Whitman & Enterprises), reporting option-one net returns are low because most insurers will not pay a separate paramedic treatment fee; Kaiser and some HMOs are exceptions.

"Insurance companies typically are not paying this fee for a couple different reasons. One is they're not required to and two is there's really no billing code for it," Moore said.

Staff’s modeled results estimated a very low net recollection rate on option one (single-digit percent) and a substantially higher gross collection for option two (modeled at about 40–45% gross, roughly 42% net after billing costs), though Moore said jurisdictions that pursue patient billing face substantial administrative loads: reconciling records, operating compassionate-billing waivers, staffing questions and public inquiry management.

Councilmembers questioned whether the fee would deter 911 calls, how many calls would qualify (staff estimated about 3,716 medical calls in Monterey per year), and whether county EMS parcel taxes or other revenue sources already support paramedic services. Staff said the county EMS tax is separate and did not directly feed into the modeled fee, and that more research on pre/post data from other cities is needed to evaluate whether fees reduced 911 use.

Public commenters were divided. Some residents warned a patient-billing approach could discourage timely 911 use among people living paycheck-to-paycheck or among those losing Affordable Care Act subsidies. Others urged cost recovery without raising property taxes and noted auto insurance medical-payments coverage as a possible reimbursement source. Several speakers asked the council to study alternatives and to ensure broad, easily administered compassionate waivers to protect low-income residents.

Council discussion reflected a range of views: some members expressed a willingness to continue studying option two as a revenue source to shore up advanced life-support capacity, while others opposed any measure that could impose direct bills on patients or deter calls for emergency care. Several councilmembers urged staff to pursue a legislative route — through the League of California Cities or state lawmakers — to create standard billing codes or statutory requirements obligating insurers to pay paramedic-treatment fees (an approach staff said might mirror Illinois’ model where treatment and transport are separately coded).

No ordinance or fee was adopted in the meeting. Council provided direction for staff to continue analysis, to explore legislative options and best practices (including data from jurisdictions that have implemented similar programs), to identify compassionate-waiver criteria and to return with refined models and an outreach plan.

Next steps: Staff will return with additional data on billing outcomes, options for compassionate exemptions, potential carve-outs for certain types of calls, and the implications of county EMS tax revenue. Councilmembers asked staff to examine whether targeted approaches (e.g., billing for particular types of transported patients or certain high-cost interventions) or an insurer-focused legislative strategy could improve net revenue without creating public-safety deterrents.

At the meeting, no votes were taken to adopt the fee; council direction was to continue study and pursue legislative and program design options before making a policy decision.