AMED could become a model for helping solve a knotty funding problem for ambulance and volunteer fire companies statewide, according to AMED Executive Director Gary Watters.

AMED is a rarity among ambulance services in being a municipal authority — an organizational structure that a group of lawmakers have seized upon as a tool for helping rescue ambulance and fire services, both of which are struggling due to COVID-19, according to Watters and a memo describing Senate Bill 1274.

In scaring people into avoiding hospitals, COVID-19 has exposed and exacerbated the problem on the ambulance side, which exists because companies like AMED get paid only when they transport patients — even though most of their costs come from remaining ready 24-7 for both patients and non-patients.

“Everybody needs (the service) to be available, but everybody doesn’t need to use it,” Watters said Monday.

AMED only gets paid when patients use it.

COVID-19 has damaged volunteer fire companies in a different way — by preventing them from holding fundraisers, Watters said.

Allowing for creation of municipal authorities for ambulance services and fire companies might be the vehicle that would allow for sustainable streams of revenue, according to Watters.

The proper mechanism for that is a long way from being settled, however, he said.

Possibilities being discussed include an authority-based fee, a county tax or municipal payments, Watters said.

AMED has managed successfully since 1981 but COVID-related losses have reduced revenues by almost $1 million this year — about 10% of otherwise expected total income, according to Watters.

Yet the service still needs to be available around-the-clock.

AMED is thus struggling, and has allowed 10 full-time positions to remain vacant.

When calls diminish, income diminishes, even as costs tend to stay the same.

It’s different with authorities that operate water and sewer systems, for example.

Those have a service that everyone needs — as well as a product that everyone needs — and they send a bill to all customers every month.

The maintenance of readiness is explicitly part of those monthly charges, as emphasized by the consulting engineer for the Altoona Water Authority in recent times, when he recommended that the authority reorient its charges so that a greater proportion would be dedicated to supporting readiness.

There is nothing like that currently for ambulance companies, Watters said.

Medicare, which provides 60 percent of AMED’s business “has flat-out said they are not responsible to pay for readiness,” Watters said. “They said that is the municipalities’ responsibility.”

Watters isn’t in favor of a new funding mechanism that would totally replace insurance payments.

“I’m a firm believer that people who use the product should pay,” he said. “But there’s got to be a mechanism to ensure (the service) is there when they need it.”

Mirror Staff Writer William Kibler is at 949-7038.