Northstar asks Tuscaloosa safety committee to recommend higher ambulance rates after state sets insurer minimums

Tony Smley, chief executive officer of Northstar, told the Tuscaloosa Public Safety Committee that Alabama Act 20 2026-349, which takes effect Oct. 1, sets a minimum commercial-insurer reimbursement for ambulance services equal to roughly 253% of what Medicare allows. He said Northstar’s listed charges are currently below that minimum, and under billing rules the company cannot collect a higher insurer payment unless it raises its own listed charges.

"I'm asking for a rate increase approximately 5% above what the new state minimum reimbursement is," Smley said, asking the committee to recommend the increase so Northstar can accept the higher payments without returning to the committee every year.

Smley provided payer-mix and financial context: about 66% of people Northstar transports are covered by Medicare or Medicaid (payments set by federal law and not affected by the change), about 13% are uninsured, and Northstar recorded more than $4 million in charity write-offs in Tuscaloosa County last year. He said privately insured patients are the principal group affected by the insurer reimbursement change.

Committee members asked whether the requested increase would be automatic in future years and how it would interact with franchise terms that allow smaller automatic annual increases. Smley said the company can take modest automatic increases under the current franchise (about 2.5–3%), but the state-set minimum is a larger jump; for example, Northstar currently bills $650 for an ALS1 non-emergency transport and proposed moving that line to $800, while the state-set reimbursement for that code would be $786.94 beginning Oct. 1 — roughly $13 less than Northstar’s requested charge.

Chief Delk of the fire department said the city is fortunate to have reliable EMS capacity and emphasized the need to preserve service quality and response capacity. Legal and staff commenters noted the state law increases insurer payments but does not itself force the city to change local franchise rates; Smley’s request is to set charges high enough to capture the insurer reimbursements the law allows.

A committee member moved and the committee voted to give a favorable recommendation for the rate change request. Staff said they will prepare a resolution showing the old and proposed new rates; the committee noted the item will return on the July 14 agenda for formal consideration.

Next steps: staff will draft a resolution with a rate comparison for the July 14 meeting so the full council or committee can vote on the formal rate change.