Finance Department

EMS Ambulance Cost of ServiceAnalysis

November 8, 2010Michelle Mitchell, Director

Table of Contents

I. Background

II. Issues– Collection Rates (2009 vs. 2010)– Cost of Services Receivables Outstanding Billed in the

Last 24 Months

III. Recommendations

IV. Response to Community Concerns

V. Process Improvement Detail

VI. Appendix A – New Ambulance Forms– Transport Information Form– Follow Up Information Form – Invoice– Past Due Notice

2

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.

3

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

4

Collection Rates2009 vs. 2010

5

($ In Thousands)

($) % ($) %Medicare 13,324$ 45% 9,080$ 37%Medicaid 6,724 23% 6,307 26%Private Insurance 7,608 26% 6,492 27%Self Pay 3,118 11% 2,754 11%Other (1,129) -4% (278) -1%

Total Collections 29,645$ 40% 24,355$ 36%Total Billings 74,150$ 68,567$ Total Transports 139 131

Collection Type2009 2010

Cost of Services Receivables Outstanding Billed in the Last 24 Months

6

Type Original Charge Balance Due Item Count

Billed Insurance 3,584,557$ 2,887,579$ 6,862Billed Medicare 1,102,660 1,057,040 2,101 Deceased Unbillable 3,288 579 6 Duplicate Transport Record Unbillable 18,143 17,463 36 Inability to Pay 185,395 173,951 345 Medicaid 1,439,044 1,335,990 2,722 Nixie 19,996,593 17,842,142 39,235 On Hold Pending Appeal 158,202 153,454 298 Overpayment 1,740,739 (819,751) 3,217 Payment Plan Account Medicaid 5,146 2,775 10 Payment Plan Account Self Pay 284,010 144,408 539 Self Pay 55,964,894 45,462,735 108,207 Workers Comp Claim Medicaid 86,333 79,142 176 Other 14,423 8,555 27

Grand Total 84,583,427$ 68,346,062$ 163,781

* Data as of September 30, 2010

• 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.

7

Recommendations

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.

8

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.

9

10

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12

13

800-929-6209 Fax: 888-FAX-EMS9ems.customerservice@houstontx.gov Pay by Web: https://www.houstonems-billpay.com

DATE OF SERVICE: BALANCE DUE:

|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

ACS STATE & LOCAL SOLUTIONS3555 TIMMONS LN STE 680HOUSTON, TX 77027-6459

services you or a family member received on

n Please pay this invoice.n

t Please provide us with your Insurance information.t Please pay your portion (the co-pay amount) of this invoice.

n Billing office: 800-929-6209n Email: ems.customerservice@houstontx.gov

Basic Transport FeeBasic Life Support Fee Oxygen & Supplies ECG & SuppliesFluids & SuppliesMisc. SuppliesMileage ($7.50 / Mile)

Total:Insurance MedicareMedicaid

Balance Due:

1. Personal Check/Money Orders: Please make payable to the City of Houston.

2. Credit Card:n By Mail - Please fill-out the information below, and mail in using the enclosed envelope.

VISA Mastercard Discover Card American Express (circle one)

Name on Card

Account Number Expiration Date

Signature

n By Phone - Please call 800-929-6209n On-line at https://www.houstonems-billpay.com

3. You may subscribe to a payment plan consisting of _______ monthly installments of $__________.

You have not responded to the Invoice we sent on for ambulance June 12, 2010

May 12, 2010

Return this portion with your payment and/or insurance information

Why did I receive this

I nvoice?

Retain this portion for your records

If you have Private Insurance, Meidcaid or Medicare not previously provided to us, please do the following:

Incid

entals

Who can I contact if I

have a question?

Invoice Details

What action should I

take?

Insurance company, Medicare, Medicaid or other insurance

provider:

Please

provide this

inf ormation

1/0/1900

CITY OF HOUSTONP.O. BOX 4945

HOUSTON, TEXAS 77210-4945

#REF!

Account Number:

PAST DUE NOTICE POR FAVOR MIRE EL REVERSO PARA ESPAŃOL

Check this box to elect _____ easy monthly installations of $_______ automatically billed to your credit card.

FAILURE TO PAY THIS BILL WILL RESULT IN A REPORT TO A CREDIT BUREAU

Please use one of the convenient payment options listed below in order to pay your bill:

Paym

ents

Pleasenote!