Communities across central Maine are reconsidering their partnerships with Delta Ambulance, and their emergency services as a whole, after the company recently announced plans to raise its rates for the second time in two years.

Delta, a private company that provides ambulance services to 13 towns in Kennebec, Somerset and Lincoln counties, said the fees are necessary to make up for budget shortfalls, and common across the industry.

But officials from some communities worry that they’ll lose their sole EMS provider if they can’t foot the bill, and that the cost of contracting with Delta will only get higher. Some say they may be better off operating their own ambulance service.

Delta Ambulance assessed a service fee to towns for the first time last year, instituting a charge of $15 per resident. Delta previously relied on insurance reimbursements and people paying bills for service in order to run operations. They raised rates again this year to $25 per resident, citing rising inflation, increasing labor costs, and low reimbursements from insurance.

Delta says the rate increases were prompted by a combination of factors that have shaken rural emergency medical providers nationwide. According to Chris Mitchell, Delta’s executive director, the company has been battered in recent years by a combination of staffing shortages, thinner profits and a shrinking market.

“Everything basically exploded in cost over the last four years — payroll being the biggest one,” Mitchell said in a recent interview. “Now to operate an ambulance service, it’s just much more expensive.”

Oakland helped lead an effort among Delta’s 13 towns to negotiate a lower rate of $20 per person. The town-proposed effort fell apart after only five communities — Albion, Benton, China, Fairfield and Oakland — signed on to it. Many of the towns were concerned that if they didn’t pay Delta, they wouldn’t get ambulance service, according to Oakland Town Manager Kelly Pinney-Michaud.

Delta’s annual budget is around $7 million, operating a fleet of 16 ambulances and intercept vehicles out of its stations in Augusta and Waterville, though Mitchell said the company earlier this year sold its Augusta depot and is now leasing it from the new owner as a money-saving tactic.

Delta has about 80 people on staff, which is down from 130 a few years ago, Mitchell said in a January presentation to the China Select Board. The company received less than 10,000 calls for service last year, down from more than 17,000 just five years ago.

“We’re basically to bare-bones administrative staff and we’ve tweaked stuff as much as we possibly can,” Mitchell said. “We’re at a point now where if we were to reduce anything any more, it would start to impact the service we can provide.”

The bills for about 25% of the calls Delta responded to in recent months have also gone unpaid, Mitchell said, as the company sees an increasing amount of “nontransport calls,” in which patients refuse transport to the hospital. That, he said, is placing increased pressure on the company’s already-stressed budget.

“We could be there for half an hour, or an hour, doing interventions and things, but at the end of the day, if we don’t transport them, we can’t charge them for it and insurance won’t pay for it,” he said. “The cost of providing a service is a lot more than what the insurance will pay.”

Delta’s struggles are not unique. Several EMS providers have shut down across the state in recent years, threatened by the same factors cited by Delta.

In 2022, the state Legislature convened a Blue Ribbon Commission with the goal of studying Maine’s emergency medical services and recommending policy that would create better patient care. The commission eventually concluded that “EMS services in Maine are at the edge of a cliff, or over it,” and that providers across the state are in dire need of increased funding to stay afloat.

The commission initially set aside about $70 million in annual funding for Maine EMS providers, but Mitchell said that was cut down to about $10 million, and that the state capped the amount providers can receive at $200,000. He says Delta has yet to receive any of that money.

“This process has been very drawn out, and the amount we’re actually getting is very small,” Mitchell said. “We still haven’t seen it. We know it’s coming relatively soon, but in the big picture of an $8 million budget a year, it doesn’t go very far.

“The commission found that nobody’s breaking even based on billing alone,” he added. “Everyone needs a subsidy.”

‘A KNEE-JERK REACTION’

Officials from many of the municipalities affected by the rate increase have pushed back against it, saying Delta’s decision places an unexpected burden on taxpayers that smaller towns may be poorly equipped to handle.

Oakland Town Manager Kelly Pinney-Michaud said recently that the town is planning to pay Delta roughly $155,000 in fees, a 40% increase over last year. Though she said the new rate will not affect Oakland residents’ tax bills, Pinney-Michaud said Delta has indicated that it plans to continue raising its rates in the future, which will disproportionately impact the smaller, more rural communities it covers.

“Chris Mitchell came and spoke to our council and explained the situation,” she said. “He said they should be at $40 per capita, but they felt going from $15 to $40 would be too drastic, so they decided to go to $25.”

Pinney-Michaud, the Oakland manager, said she believes more central Maine communities need to embrace “regionalization,” in which smaller groups of towns in the same area band together to operate an ambulance service. She cited Waterville and Winslow as examples of communities that have successfully started their own regional ambulance services.

“Our services need to be regionalized; I think that’s how we’re gonna save money,” Pinney-Michaud said. “I think the pandemic, the increase in costs and the increase in salaries just caught up with (Delta). They now have to charge us a fee, and it’s sad that it’s come to this, but I mean, we can’t not have ambulance services.”

Vassalboro Town Manager Aaron Miller disagrees. Miller, who joined Delta’s board of directors last year, said recently that the effort to renegotiate rates and regionalize care would further splinter central Maine’s ambulance services and likely end up costing patients more money.

Small-scale regional ambulance providers are often unable to sustain themselves long term, Miller said, as small populations and low call volumes make it near impossible for them to stay afloat.

“My understanding is that it costs about $1 million to run one ambulance for one year,” said Miller. “Let’s say we have four towns get together for one ambulance, but we kind of need more than one in the event that we get two calls. So for two ambulances and the staff and everything, that’s $2 million. If I had four towns paying in on that, that’s $500,000 a year — not $100,000, which is about what Delta is asking these towns for.”

Miller said that both towns and the state could avert future fee increases by finding other sources of funding for EMS providers, potentially by adding marginal taxes on purchases of alcohol and cannabis.

“I think it’s a knee-jerk reaction,” Miller said of the municipal pushback to the Delta fees. “We have to find creative ways to support these programs at the local level rather than moving towards regionalization, because regionalization is likely going to prove more costly.”

‘NO LONGER SUSTAINABLE’

Delta’s struggles have become particularly difficult to address because they are both common and incredibly complex, according to former Maine EMS and Maine Ambulance Association director Jay Bradshaw.

Rural EMS providers across the country have been facing similar issues for some time, he said, but Delta was unique because it declined to charge its municipalities for its services. And while Delta charged towns a rate of $15 per capita last year, many rural towns across Maine were paying anywhere from $40 to $70 per resident for similar services.

“What’s happening now is a discussion that should have happened five years ago,” he said. “The majority of ambulance services operate on some formula or a per-capita basis, and Delta had done it for the better part of 50 years free of charge to those municipalities, but that model is no longer sustainable.”

On top of widespread staffing shortages and a rapidly changing industry, Delta and similar ambulance providers that serve smaller communities are at a financial disadvantage because of their smaller, often uninsured customer base and low call volumes, according to Bradshaw.

He and other EMS advocates in Maine have been working with the Legislature for years to provide aid for rural ambulance services. But Bradshaw said that work has been slow moving because of how many stakeholders are involved in the process.

Until Medicare, Medicaid and insurance companies raise reimbursement rates to match the cost of ambulance services, Bradshaw said, rural EMS providers across the country like Delta will likely need higher fees and more subsidies.

“If it was a simple question to answer, then we’d be sitting here talking about something completely different,” he said. “It’s kind of like eating an elephant. You look at how big it is and go, ‘OK, how in the world are we gonna do this?'”

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