FIRE DEPARTMENT: IMPROVE EMS FEE COLLECTIONS

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FIRE DEPARTMENT: IMPROVE EMS FEE COLLECTIONS

 

Problem Identification:
Efforts to collect fees charged to users of the City’s EMS system have been very unsuccessful.

Recommended Action:
Improve the collection rate of EMS charges, especially from third party payors, to at least 50 percent.

Classification:
Revenue Enhancement

Functional/Operational Area:
EMS

Estimated Annual Impact:
$2,900,000

Estimated Implementation Costs:
Not Determined

Barriers to Implementation:
None

Projected Implementation:
90 – 120 days

Next Steps:
Analyze the existing organizational and operational impediments that limit the success of the Department’s EMS fee collection efforts. Reevaluate the reported failure of the previous attempt to outsource EMS fee collection activities.

Analysis:Over the past five fiscal years, the City has had only minimal success in collecting EMS-related fees:

While the 1997 increase in the fees charged for the Department’s basic life support (BLS) and advanced life support (ALS) services produced a dramatic increase in total EMS billings, the annual collection rate has fluctuated between just 12 and 27 percent. The EMS fee collection industry (private service providers and municipal operations that have performed this function internally) have traditionally experienced high levels of uncollectable billings. Some industry leaders such as the City of Philadelphia, however, have been able to achieve collection levels at or above 60 percent.

It should be noted that there exist numerous factors that influence the Department’s overall collection rate, including:

– Quality, timeliness, and accuracy of billing information;
– Success of data sharing with local hospitals;
– Insurance reimbursement practices; and
– Effectiveness of billing practices.

The quality, timeliness, and accuracy of billing information can be improved through simple steps such as more focused training of Departmental personnel and the installation of mobile data terminals in the City’s fleet of EMS units. Additionally, improved communications between the Department and hospitals receiving EMS patients (See Recommendation 5-D) can accelerate the exchange of billing information.

Finally, there exists a number of service providers willing to manage municipal EMS billing functions. It should be noted that the Department undertook a brief experiment with contracting for its EMS collections, but the initiative was judged unsuccessful and the Department has again assumed internal operational responsibility for this function. Despite this previous setback, strong consideration should be given to revisiting that experiment, assessing the reasons for its failure, and examining the feasibility of contracting with another provider. Agreements can be structured to guarantee the City a minimum annual revenue stream at or above current levels and revenue sharing can occur at levels above the annual guarantee. Additionally, parties that assume responsibility for EMS billings are often willing to make investments with local hospitals and in EMS technology improvements (mobile data terminals) to increase the likelihood of successful collection efforts.

Utilizing the Department’s FY98 EMS billing data as a baseline for developing an estimate of the potential financial impact of improved collection efforts (FY98 represents the most recently completed fiscal year where responsibility for EMS collections was not split between the Department and a third-party provider), were the City to increase the success of its collection efforts to 50 percent, a $2.9 million increase would occur in the level of EMS revenue collection.