Kanawha Ambulance Authority OKs about 200%+ service rate hikes to fix $4M deficit

KCEAA operations

KCEAA is the primary EMS provider for Kanawha County, covering 910 square miles with 13 stations. It operates 42 ambulances and employs 319 personnel, including EMTs and other medical staff. During peak times, approximately 25 ambulances are on duty.

The agency provides a variety of services, including:

• Emergency services, such as 911 response and accident assistance
• Community paramedicine to prevent hospitalizations
• Nonemergency transportation

Addressing the deficit

During its Dec. 17 board meeting, KCEAA approved the rate increases as part of a broader effort to stabilize its finances.

The rate increases, recommended by the Page, Wolfberg and Wirth Advisory Group — a consulting group that was hired by the KCEAA to examine the agency’s finances and operations — aim to bring KCEAA’s fees in line with the market rate. Matt Zavadsky, a consultant with PWW, described KCEAA as one of the most cost-effective EMS systems in the state, noting its efficient expense management.

Still, according to the PWW report, the average ambulance transfer costs $688.59, which is $338 under the national average for the same service in 2021.

Spokesman Tom Susman said most of KCEAA’s $12.6 million in annual revenue comes from contracts with insurers such as Blue Cross Blue Shield, Aetna, Medicaid and Medicare. While contracted rates will remain unchanged until they are renegotiated, noncontracted insurance providers and auto insurers will see immediate rate increases.

KCEAA Executive Director Monica Mason emphasized that the rate hikes primarily affect commercial insurers, not Medicaid or Medicare recipients, who make up about 77% of agency transports. Those insurers pay a flat fee, and the insured patients are not billed after that.

“With the largest amount of the individuals being transported being on Medicare and Medicaid, they’re not going to see those changes at all,� she explained.

Financial assistance is available for those unable to pay, and can be found at bit.ly/KCEAA-Hardship.

The new rates are expected to generate an additional $4 million annually, helping KCEAA close its budget gap.

Commissioner Lance Wheeler, who has been on the KCEAA board since 2021, acknowledged the rates haven’t been updated recently, which is why the agency is examining every billable item, from administering medication to emergency transport, to see if insurance providers are paying their fair share. He also doesn’t feel as if the raised rates will be an issue.

“I can say that insurance [companies] will pay less if you ask for less,� he said. “[We have to] make sure that we are sending the bill to the insurance company and we’re collecting that money because if we don’t ...whatever we lose, the taxpayers are making up.�

Facing financial challenges

According to Zavadsky, the consultant, the KCEAA is doing well with managing its finances. He supported increasing the fees, saying, “They’re very efficient. The problem that the ambulance authority has is a revenue problem. It’s not a cost problem. They’re already so low cost it’s really difficult to do more to reduce costs.�

Currently, nearly one-third of KCEAA’s revenue comes from Kanawha County voters in the form of the safety levy, which Wheeler said is on the county ballot every six years. He said 40% of the levy money goes to the KCEAA, which adds up to about $5.7 million to the agency’s budget.

Despite its essential role in the community, the agency still struggles financially.

“Recently, due to the high costs of operation in anything, especially EMS, we’re seeing a lot more expenditures, and the levy is coming in at exactly the same,� Wheeler said. “We’re not seeing an increase.�

He said KCEAA is trying to provide the same services without raising taxes.

Zavadsky said the financial strain KCEAA is seeing mirrors challenges all EMS providers across the country face. The report from PWW Advisory Group specifically said that low fees, inflation, supply chain issues and post-pandemic workforce shortages have destabilized economic models for many ambulance services.

These conclusions are supported by an August 2023 study from the University of Southern Maine. It states, “The majority of rural ambulance agencies may not break even, particularly when agencies employ paid versus volunteer staff and/or serve in sparsely populated rural areas and/or in areas with a majority of publicly insured residents.�

KCEAA’s 2025 budget projected $12 million in ambulance service revenue and $5.7 million from the county levy, totaling, with other service revenue, $20.2 million. However, numerous costs — including $13 million for salaries — push total expenditures to $24.3 million.

In addition to low service fees, Susman pointed to three factors contributing to the deficit:

• Decreasing insurance reimbursements: Insurance providers are paying less than the actual cost of services
• Fewer nonemergency transport services: Transport to and from nursing home facilities, physician’s appointments and other services are provided to the community, but some facilities have created transport systems and have less need for this service from KCEAA