ew York, NY – New York City will begin charging private hospitals as much as $1 million a year for hospital ambulances dispatched by the city’s 911 system, a controversial initiative that some medical professionals fear will prompt hospitals to stop providing the service.

Mayor Michael Bloomberg approved the new fee as part of his administration’s effort to combat a multibillion-dollar budget deficit in the fiscal year beginning July 1. The Fire Department, which runs the city’s emergency medical services, began alerting hospitals to the policy change earlier this month.

The Fire Department has agreements with 25 private hospitals to provide voluntary ambulance services in the five boroughs. These hospitals account for roughly 37% of the ambulance tours in the city.

Beginning in January 2012, the administration plans to charge these hospitals fees based on the number of scheduled ambulance tours they operate in the 911 system. The annual fees are expected to range from about $73,000 to $1 million per hospital.

“The 911 system cost-sharing initiative would allow the city to recoup the costs associated with 911 system dispatch and telemetry that are currently borne by the city, namely, the costs associated with the staffing and operation of the Emergency Medical Dispatch Center and Online Medical Control (Telemetry) center,” John Peruggia, FDNY’s chief of EMS command, wrote to one of the hospitals.

Lewis Marshall, chairman of emergency medicine at Brookdale University Hospital and Medical Center in Brooklyn, said this new fee may cause hospitals to stop providing ambulance service.

“Hospitals such as ours in underserved areas would most likely think of not participating because of the added cost,” Dr. Marshall said. “If a lot of hospitals drop out, then patients are going to suffer because of longer wait times.”

Dr. Marshall said the city has pegged Brookdale’s annual fee at nearly $300,000. “We’re already a financially strapped hospital,” he said.

Brian Conway, spokesman for the Greater New York Hospital Association, a trade association representing area hospitals, said hospital executives were “floored by the letter telling them of this onerous new fee.”

Most of these hospitals are safety-net providers, operating on razor-thin margins or even running deficits, in vulnerable communities citywide, Mr. Conway said.

“It’s a fee that if implemented will cause serious financial hardship,” he said.

Frank Gribbon, a spokesman for the Fire Department, said the hospitals benefit from bringing in patients. The city views the fee as “cost sharing.”

“The goal here is not to drive anybody out,” he said. “The goal is to share the burden and the cost.”

The city has 967 eight-hour ambulance tours scheduled every 24 hours. Of those the Fire Department handles 614 of the tours and the private hospitals’ ambulances handle 353 of them. If the private hospitals were to drop out of the system, the city would be forced to pick up the slack or sign agreements with other institutions to meet the demand.

Last month, the mayor unveiled $585 million of new budget cuts in the current fiscal year and $1 billion for the following fiscal year. Charging the hospitals these fees will save $8.7 million annually.

In his letter to hospitals, Mr. Peruggia acknowledged the “important contribution made by voluntary hospitals” participating in the 911 system.

But “difficult financial times have forced the city,” he wrote, “to make difficult decisions and take measures to help face these challenges.”

“These decisions are often hard to make, but necessary to ensure continuity of operations,” he wrote.

(Source: WSJ)