Mass. city owed $375K in fees for ambulance services

By Ray Lamont
Gloucester Daily Times

GLOUCESTER, Mass. — The city of Gloucester expects to collect more than $1.67 million the city is owed for ambulance and other emergency services provided over the 12-month period leading into July 1, a memo from the Fire Department’s emergency services coordinator shows.

But the letter from Sander Schultz to Mayor Sefatia Romeo Theken also indicates the city is poised to write off another $375,901.74 as “uncollectible debt” in reconciling the department’s books for the 2016 fiscal year that ended June 30.

Schultz and Fire Chief Eric Smith both said the debt figures actually represent an improvement over those from the two previous years. Schultz said the write-offs have improved since 2008, when the amount of uncollectible debt the city faced had topped the $1 million mark.

Figures provided by City Auditor Kenny Costa confirm the city wrote off $490,109.30 in uncollectible debt for fiscal 2015 while taking in $1.21 million, and wrote off $401,670.56 in fiscal 2014 while collecting $1.115 million. That’s partly because, through MassHealth insurance coverage and the federal Affordable Care Act, the Fire Department, which includes the ambulance service, encounters fewer patients that have no health insurance, Schultz and Smith said.

Uncollectible debt
Still, the $375,901.74 the city is looking to write off stems from 276 different accounts, and casts a spotlight on the costs of the city’s emergency services.

“This (uncollectible sum) is all debt for which a patient or insurance agency can’t be identified, can’t be found, or when a patient is not insured,” Schultz said. “It’s not as common, but it still happens.”

The accounts are also deemed uncollectible if a transported patient is found to earn below an economic threshold defined by the federal Department of Health and Human Services as twice the federal poverty level.

In his memo, submitted by the mayor to the City Council, and passed on to the council’s Budget and Finance Committee Tuesday night for acceptance or some other resolution, Schultz noted the city does not have a contract with a collection agency. He said he doesn’t recommend one, noting from fiscal 2013 through 2015, when the city used F.H. Cann & Associates of North Andover for collections, Gloucester received a “zero return” from debt that was ultimately written off as uncollectible anyway. The company did not charge the city for those services, he said.

Schultz said it is important for the city to write off uncollectible debt charges on a regular basis so that a growing debt — with no anticipation it will ever be paid — does not reflect badly if the city reaches out to borrow financing for a project.

City Council President Joe Ciolino noted that, as in Gloucester, uncollectible medical services debt plays out in other communities, too.

“It’s inevitable,” Ciolino said of the write-offs. “No matter what you do, there are always going to be a certain number of ambulance transports where, as soon as our crews show up, they know we’re not going to get paid. That’s just the reality. And there’s no way to collect it.”

Who’s billed for what
“A lot of people think the ambulance service generates a lot of revenue and profits, and it does bring in revenue,” Ciolino added. “But it does not generate the level of profit for the city that people might expect.”

Schultz conceded some patients are stunned when they get a bill for ambulance services.

Schultz’s memo outlines the city’s transport policies and fee schedules, with no proposal to alter the charges. The city’s ambulance rates, in general, range from a base of $1,513.84 per trip for basic life support services, plus $46.08 per mile, to a rate of $2,601.58 per trip for advanced life support with added costs for the use of supplies such as oxygen, or an additional EMT if needed.

“Some people think that, because it’s out of the Fire Department, it’s free,” Schultz said. “Also, people are surprised at the costs.” He noted that an ambulance transport is not a ride, but more akin to treatment in a mobile emergency room, with medical personnel on board.

The bulk of the billings are covered by insurance. The city’s medical-based billing services have been handled since 2014 by the global Intermedix Corp., based in Nashville, Tennessee, with one year and an extension option remaining on the current contract, Schultz said.

The city’s ambulance policy calls for billing “all transported patients or their responsible parties,” with three exceptions:

• Obviously deceased persons with no emergency care intervention or transportation.
• Any city employee injured in the course of his or her employment.
• A city employee retired on a job-related disability.

Expensive endeavor
The billing and revenue projections for all city ambulance services are included under budgeting and spending for the Fire Department. The department is pegged to spend $8.7 million out of the city’s $105.1 million fiscal 2017 spending plan that took effect July 1.

“These services do bring in revenue,” said Chief Smith, “but running a Fire Department is an expensive endeavor. We budget to bring in as much revenue as we can, just as police do through collecting parking meter money, for example. But some of this is revenue that we know, for a number of reasons, we can never collect.”

“It’s basically the cost of doing business as a city,” Ciolino said. “I certainly hope I never see the day when we find that we don’t pick up a patient somewhere because they can’t afford to pay. This can be frustrating sometimes, but that’s something that cannot happen.”

Gloucester ambulance rates
What does it cost to be transported via Gloucester Fire Department ambulance? Here are the city’s current base rates and added charges when applicable. All transports are provided only as emergency services; all rates are per trip:

Source: Gloucester Fire Department/EMS

Copyright 2016 the Gloucester Daily Times