Five million dollars!

That is what may have been thrown down the proverbial drain through the lack of monitoring of the EMS (Emergency Medical Service) billing program -- according to Ann Massey in a speech made during the Public Forum session of Tuesday evenings City Council meeting.

Massey said she has discussed the issue on numerous occasions concerning the bad debt that is accruing each year and then being written off.

“My concern is pretty simple,” said Massey, “you are not collecting the money that is due the city that could and should have been collected.”

“On average,” Massey said, “you are collecting about $1.3 million a year and writing off $1.3 million in bad debt each year, and you have been repeatedly told that you have close to a 70 percent collection rate, when by your own data (you) are collecting 50 percent. In essence for every two transports made by our talented emergency crews you are only getting paid for one.”

She commented that she was sure each of the business people on the council would agree that this would be unacceptable in their own personal business.

Massey feels that increasing the revenues from the EMS revenue and reducing transfer from the utility fund and sanitation fund could help with the shortfall that the city is currently experiencing in the utility fund. She offered to provide more detail on what she is suggesting and made it clear that she would like to meet with each of the council members to show how $1.2 million presently being transferred out can be reduced and help the bottom line of this fund. Massey has some expertise in this field (Medicare-Medicaid).

In a recent interview with City Manager Connie Standridge and Corsicana Fire Chief Donald McMullan, the pair explained how the EMS billing is done and the results they have seen come in with the percentages of the collection rates and bad debt write-offs.

Standridge said she receives monthly financial reports from the City’s Finance Department on EMS, and it shows all of the payments made to the company for the collections as well as percent of those collections.

“In other words,” said Standridge, “what percent of the outstanding invoices they have collected on.”

At this point, after meeting with the company in early July, she doesn’t see anything out of the ordinary.

“We’ve had a couple of specific individual complaints with regard to some of the billing,” Standridge said, “but after looking into those, they are very explainable.” She could not discuss specific items in those complaints due to HIPAA regulations.

“I can tell you that, to my satisfaction, both of those have been resolved and explained (by the company),” said Standridge.

At one time, according to Standridge, earlier in the year (February or March) she expressed a concern that the collection percentages were down.

According to the information she received, it turned out to be an error in the company’s spreadsheet.

“They had a formula that was off and after they corrected it,” Standridge said, “this month’s (July) collections have come up to a point that’s very acceptable and in fact, in my opinion, excellent.”

She said collections have been running in the 60 and 70 percent range, with the exception of one month where collections were below average.

In that instance, the company had gone back, re-billed some things, and is continuing to work to get the percentages up.

“Overall, the City of Corsicana has a very good collection rate,” Standridge said, in comparison with the City of Marshall, which is similar in size and also has EMS transport.

“The billing company explained to us it was because of our documentation,” said Standridge, as to why the percentage collection rate is higher than other cities. “Our EMT’s and Paramedics do a good job of documenting the calls they make. In last year’s budget we purchased computers and software that would aid in their reporting. When they input the date, they are also given a certain code that prompts them with certain other information that we need in order to get paid for that claim … that has worked out well for us.”

Standridge said they watch the percent collection very closely.

She said some fire departments watch it closer than others, and some don’t watch it at all, referring to other cities similar to Corsicana.

Included in the financials she receives, there is a summary of the Medicare-Medicaid write-offs … specifically Medicare.

“For example,” Standridge said, “an elderly person is transported to the hospital, and let’s say for instance our transport fee is $500. We submit that bill to Medicare, and right off the bat they disallow $300 of that fee. All they’re going to pay is $200 period. So when they do that, this $300 is an immediate write-off for the City of Corsicana.”

Although the money would indeed benefit the city’s budget, realistically, according to Standridge, the city can never hope to collect that because Medicare covers the person, and Medicare’s not going to pay it.

“Every month we produce these summary’s stating Medicare-Medicaid non-allowable cost,” Standridge said. “It’s significant, but it does not go into our percent collection calculation. It does go into our bad debt write-off.”

She added that there’s also an aging report that shows the current aging and current bad debt that the city has in the ambulance service.

“It’s pretty significant,” said Standridge.

“Medicare laws only allow a certain amount for whatever you are doing,” said McMullan. “Whether it’s an ambulance call or medical bills from the hospital, they run into the same thing we do.”

Standridge explained how billing works for people who are not on Medicare-Medicaid, and are covered by private insurance.

“Even if someone is covered by private insurance,” said Standridge, “it’s still not guaranteed all of the money will be paid … some of those have a limit they’ll pay as well.”

Most of Massey’s complaints were addressed during the interview prior to Tuesday evening’s meeting, when she brought up the subject of the continued receipt of bills in the mail from the company.

Massey pointed out at least three discrepancies in dollar amounts from three separate bills she had received for transporting her mother from the nursing home to the hospital, in which Medicare denied the claims.

“I was sent the third bill for $518 because I questioned that it was one mile to the hospital and three miles coming back,” Massey said. “Each time, these three claims were sent to Medicare without the proper documentation, codes and statements that would have justified payment to the city.”

Massey suggested to the council that they appoint an interim study group of health care providers within the city, including nursing homes, clinics, and hospital, along with city staff to present recommendations back to the council.

Standridge actually addressed this same concern during the July interview, and said meetings are held with the company annually to discuss revenues, or whether or not the city needs to go up on rates on transport fees. They also suggest changes for the coming budget year.

“If we are going to go up on our transport rates,” Standridge said, “then now is the time to start thinking about it. I don’t know that we will, but they did suggest a small rate increase and mileage increase on our transports, specifically because of the fuel cost.”

Standridge said suggestions were made concerning an emergency response fee for automobile accidents to cover the cost of the fire truck being there.

“I don’t know that we are going to propose that to the council,” she said, “but these are things they see other cities doing and how it impacts their revenue stream.”

How to handle non-emergency transports from nursing homes was also discussed during the meeting, and how they could improve that billing process so the city could recoup more of that money.

“When people get bills for EMS service, especially the elderly, it is disconcerting to them that they are receiving a bill,” said Standridge. “Sometimes those processes take a while to work out. For example, if someone trips and falls on a step at home and that person requests an ambulance to carry them to the hospital, Medicare can, and has, in some cases said, ‘Well, that’s not medically necessary.’” 

Standridge said those things take time to work out, and in some cases, it has taken up to a year or more for them to settle a claim. They had to file on Medicare … 60 days for Medicare to respond … appeal Medicare … 60 days to get reports from the hospital, etc., which truly can take a year to get worked out.

“I know it worries elderly individuals,” said Standridge, “because they have this bill outstanding and they want to get it taken care of … and it makes them nervous, which is understandable, that they think they owe this bill.

“What we try to do is to let them know that it can take that long,” said Standridge. “You can see on our collection rate that some of these accounts aren’t paid until a year later, so it’s not something that’s “net 30.” It’s something that can be stretched out and we try to work with them as much as we can that even though they are receiving this bill we are working with Medicare to try and get it paid for them.”

Standridge said the billing company is required by contract to send out the bills, and the city understands that it may bother some individuals, but she assures them that the problem is with Medicare payments and that it may take longer than expected for payment to be made to the city.

The city will also accept what the insurance pays if you are a member of the city’s subscription program which costs $48 per year.

If not, then the individual is responsible for the remainder of what the insurance company does not pay. That adds to the bad debt write-off, too, when no one pays that.

According to Chief McMullan, currently, there are approximately 2,000 individuals subscribed to the city’s subscription program.

Even though most of the questions were covered, and explanations given by city and company officials during the July meeting, Massey felt there were still more concerns that needed to be explored further.

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