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Taxpayers save with ambulance billing scheme

Taxpayers save with ambulance billing scheme

Through an innovative method of filing claims directly with insurance carriers for ambulance service fees, the city of Plano (Texas) Fire Department has
  • Written by American City & County Administrator
  • 1st February 1996

Through an innovative method of filing claims directly with insurance carriers for ambulance service fees, the city of Plano (Texas) Fire Department has recouped approximately $850,000 for fiscal 1994-95 and projects to generate more than $1 million in revenue for FY 1995-96.

Fire Chief William Peterson says this method of seeking reimbursement from insurance companies will continue to have an effect on local taxpayers in Plano. “That curbs the need to raise property taxes to run the fire department-operated ambulances,” he says.

In order to increase service to customers and reduce the customer burden of filing paperwork with their insurance carriers, the city decided early in 1993 to bill insurance companies directly for ambulance services.

The reason was clear: About 75 percent to 80 percent of Plano residents who were receiving ambulance services had medical insurance that would reimburse municipalities for costs related to their hospital transport. “If we don’t bill third party insurance carriers for ambulance services, it amounts to a taxpayer subsidy for insurance carriers,” Peterson says.

That year, Plano collected approximately $358,000 in ambulance fees. Fees were figured at $200 per person and $400 per family for residents and non-residents.

The collection rate was 60 percent. In August 1993, the city contracted with Corpus Christi’s Texas Medical Data System to assume ambulance billing operations from the city.

The company was expected to file reimbursement claims electronically with insurance carriers, whereas previously, customers were billed directly for the service by the accounting department, and the customers, in turn, would have to contact their insurance companies for reimbursement.

Bruce Testa, city controller, says the decision to contract for billing and collection was a matter of cost avoidance. “The EMS had grown so much that the accounting department couldn’t handle the increased claims without upgrading a computer system and adding staff members,” he says.

In 1993-94, more than $669,000 was generated through ambulance services. Fees were raised to $250 for residents and $300 for non-residents, in addition to a $4-per-mile charge. That fiscal year, the collection rate increased to 65 percent.

In 1994-95, the city generated more than $850,000 in revenue for ambulance services, with a collection rate of more than 70 percent. Per-person fees remained the same; however, the per-mile charge was increased to $5.

The city also incorporated a fee structure for other services.

A $30 fee was charged for the administration of oxygen and $25 for a second attendant where cardiovascular pulmonary resuscitation was per, formed and in situations in which the patient weighed more than 300 pounds or had to be carried up and down stairs.

In addition, Peterson says, the patient delivery area was expanded to meet requests by customers who preferred to be transported to area hospitals that are within their insurance network and may be outside Plano. The fire department expanded the number of hospitals to which it would transport patients from the two local hospitals to I 0 area hospitals.

The fire department is projecting revenue in excess of $1 million next fiscal year (1995-96), Peterson says. Service fees will be raised to $275 for residents and $330 for non-residents. The per-mile charge will be $7. Other fees will remain the same.

This innovative approach to insurance reimbursement for ambulance services is on the cutting edge of maximizing revenue potential, according to Peterson. “Very few municipalities recognize the potential here,” he says. “The attitude among many taxpayers is that they pay taxes and, therefore, ambulance transportation should be free. But they are paying twice for the same service because they pay taxes, and they pay insurance.”

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