Finance Department EMS Ambulance Cost of Service Analysis November 8, 2010 Michelle Mitchell, Director
Table of Contents • Background • Issues • Collection Rates (2009 vs. 2010) • Cost of Services Receivables Outstanding Billed in the Last 24 Months • Recommendations • Response to Community Concerns • Process Improvement Detail • Appendix A – New Ambulance Forms • Transport Information Form • Follow Up Information Form • Invoice • Past Due Notice
Background • Houston’s ambulance base transportation rate is the lowest in the state of Texas for major cities at $415. Fort Worth charges $1,146; Austin charges $850 and Dallas charges $800. • Houston’s cost of service to transport is approximately $1,128 per transport. 90% of all collections currently come from insurance companies. • Billings and collections are done by ACS, a third party contractor. Currently, ACS receives a fee of 14% of current collections and has an opportunity to earn an additional 6% annually based on productivity targets.
Issues • Houston’s cost of service to transport is approximately twice the amount of our current rate. • Houston is not getting its fair share of available insurance reimbursement dollars. • Medicare and private insurance reimbursement rates are depressed due to Houston’s low base transportation rate. • Current process of billings and collections. • Transports billed vs. gross collection: • 131,000 in 2010 - $68 million billed vs. $24 million collected • 139,000 in 2009 - $74 million billed vs. $29 million collected
Recommendations • Increase the base transportation rate from $415 to $1,000. • The estimated revenue impact from insurance providers is $5.5 million annually or approximately $3.2 million for FY2011 as of 12/1/10. • Eliminate the City’s policy of pro-rating charges for multiple riders in the same ambulance. • The estimated revenue impact is $500,000 annually. • Billings and collections process improvement. • Implement annual fee escalators based on appropriate indexes.
Response to Community Concerns • Implement procedures to identify low income qualifying individuals at time of transport. • Implement procedures to allow low income transport individuals not previously identified to show proof of qualification at time of billing. • Implement procedures to bill the uninsured at a discount rate. • Implement new intake forms for improved clarity and readability.
Process Improvement Detail • Improve transport identification process for billing. • Improve the automated hospital sharing information. • Improve debt collection techniques for transported individuals (e.g. phone calls, mailings, negotiated settlements and credit bureau reporting). • Implement ongoing oversight of the outside billers and collectors ensuring productivity measure are maximized.