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EMS service to lay off 361 workers in Indiana

August 21, 2014

An Arizona-based emergency medical services company plans to lay off as many as 361 employees as it ends most of its ambulance services in Indiana.

Rural/Metro Corp. has notified state officials that it plans to close five locations in Indianapolis, Martinsville, Logansport, Anderson and Richmond, affecting up to 277 employees. The layoffs were expected to take place between Aug. 18 and Dec. 31.

In addition, Rural/Metro plans to lay off 84 employees from a billing operations center at 5750 Kopetsky Drive in Indianapolis. Those job losses are expected to occur Sept. 30, as the company intends to outsource its billing.

Rural/Metro blamed its departure on the growing difficulty in serving rural areas and changes in the health care landscape.

"We were losing millions in Indiana. It wasn't a very good market for us," Mark Lashley, Rural/Metro's east division president, told IBJ on Thursday.

"We've been working hard over the last year to restructure our operations and contracts [in the area], and we didn't make the kind of progress we intended with some of the municipalities and counties," Lashley said.

For example, Rural/Metro struggled with some low-volume contracts in which it had two full-time ambulances covering an area that only generated eight to 10 calls per day.

"We were doing that in eight different locations, and the call volume and revenue didn't cover the cost of the truck, supplies and staff," Lashley said.

The company also was squeezed by a growing number of Medicaid and Medicare patients in the area, who tend to have low reimbursement rates.

“Larger amounts of unpaid indigent care and low Medicaid reimbursement rates within Indiana have created a difficult business environment leading to this decision,” wrote Danelle Kelling, Rural/Metro division general counsel, in a letter to state work force officials.

Rural/Metro operates in several counties and communities in metropolitan Indianapolis. Martinsville Mayor Phil Deckard recently said that the firm was ending operations in his city, and the company confirmed general plans to scale back operations in the state.

In addition to metropolitan Indianapolis, Rural/Metro will cease operations in Cass, Wayne and Union counties. The company will continue to offer ambulance services in New Albany.

Based in Scottsdale, Arizona, Rural/Metro provides private ambulance and fire protection services in 21 states and nearly 700 communities, according to its website.

In late 2013, the firm emerged from Chapter 11 bankruptcy and a financial restructuring that reduced its debt by about 50 percent and provided $135 million in new capital for growth.

Lashley said that the company is performing well in other markets. "This was a very localized, Indiana issue," he said.

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