Several nonprofit ambulance providers say they will not be able to pay a new tax that is part of a complicated formula for covering the cost of transporting Medicaid patients.
Rescue squads in Bennington, Alburgh, Middlebury and Milton all say they owe several thousand dollars to the state as part of the so-called ambulance tax, and they don’t know where they will get the money to pay it.
Lawmakers passed the tax on ambulance providers during the 2016 legislative session because several ambulance providers complained they were losing too much money from transporting Medicaid patients.
The House Ways and Means Committee, which writes taxes, then worked with the Department of Vermont Health Access, which administers Medicaid, to place a 3.3 percent tax on ambulance revenue, which would be refunded to rescue squads through higher reimbursement rates.
At the time, the Agency of Human Services predicted they would need $1.1 million from 79 ambulance providers to pull down federal matching money. They hoped to raise the amount Medicaid pays for ambulance services by $2.3 million — from 41 percent of what Medicare pays them to 80 percent of what Medicare pays them.
The Bennington Rescue Squad, one of the only vocal opponents of the tax, said in March it would be liable for $70,000 per year in exchange for an additional $138,000 in additional Medicaid money, but feared one day the increased revenue would dry up and they would still be left paying the tax.
The House Ways and Means Committee said early on it would only move forward with the tax if the Vermont Ambulance Association, which testified in favor at the time, was on board. But ambulance providers who are either outside the association or opposed it in the first place now say they were never consulted, and are not going to be able to pay the tax.
Ron Kumetz, the first assistant chief of the Alburgh Fire Department, said his organization lives “hand to mouth,” but now owes $3,000 to the Department of Vermont Health Access for revenue the organization took in from July 1, 2015, to June 30, 2016.
“We all owe them money for the last fiscal year that we didn’t have any chance — we had no real warning about this,” Kumetz said. “We had no way to budget for this.”
“Their excuse is the Vermont Ambulance Association knew,” Kumetz said. “The Vermont Ambulance Association didn’t notify us. We’re not a member, and we don’t really plan on becoming a member because they don’t represent our interests.”
The Alburgh Fire Department is a 501(c)(3) nonprofit organization. According to documents filed with the Internal Revenue Service, the organization took a $77,000 loss in fiscal year 2014, and a $40,000 loss in fiscal year 2013.
“In any other normal place (the Legislature) would have said, ‘Let’s put a 2-cent tax on cigarettes.’ Instead they decided to tax the ambulance services who really needed this more than anything else,” Kumetz said.
Jim Finger, the president of the Vermont Ambulance Association, said the vast majority of ambulance providers are part of the association, and leadership of association consulted its members before agreeing to the new tax.
Finger also said the association has been giving regular updates on the ambulance tax to its members. He said the increased Medicaid payments started at the beginning of fiscal year 2017, so the association advised members to save the extra revenue in order to pay the tax.
“Nobody wants a tax, but the (rescue squads) need the income, and hopefully most all will receive a valuable increase because we’re doubling their Medicaid income,” Finger said. “They’re welcome to call me.”
House Minority Leader Don Turner, R-Milton, is the chief of the fire department and rescue squad in Milton. He said the ambulance service owes between $6,000 and $7,000 for the ambulance tax.
“I have an operating budget to operate our fire department, and now I’ve got to come up with money that doesn’t appear in the budget for a tax that is retroactive,” Turner said.
Turner said he informed the Vermont Ambulance Association during the 2016 session that he opposed the tax. He said he understands that the Legislature was trying to get more federal money for the ambulances, but he worried the Medicaid increases would be temporary and the tax would be permanent.
Further south, Teena Betourney, the chief of Middlebury Regional Emergency and Medical Services, says they owe $27,000. The most recent IRS information shows the rescue service, also a nonprofit, lost $20,000 in fiscal year 2014 and $3,000 in fiscal year 2013.
“We’re trying to figure out what’s the best action to take and who’s the best person to speak to about it,” Betourney said, but every time her organization tries to complain to the state, they get “skirted around and told we should talk to this person or talk to somebody else.”
Steven Costantino, the commissioner of the Department of Vermont Health Access, said in a statement that the state can’t pick and choose which ambulance providers are hit with the tax. But he said the state is trying to be as flexible as possible.
“We have been making increased payments for services provided since July 1, while the tax is not due until later this spring,” Costantino said. “Second, if providers still have financial challenges, the legislation allows DVHA to grant a different payment schedule. Providers in this situation should submit a request to DVHA’s Commissioner in writing.”
(Correction: An earlier version of this story misstated Ron Kumetz’s title.)