Tenn. county writes off $13 million in unpaid ambulance bills
A third party billing company now handling the county's EMS billing recommended the action to remove the noncollectable bad debt
By Gary Nelson
Crossville Chronicle, Tenn.
CUMBERLAND COUNTY, Tenn. — The Cumberland County Budget Committee voted to write off more than $13 million of bad debt owed to the county through old ambulance service bills dating back as far as 1992.
The action was taken by the committee after a recommendation was made by advisers with AMB Mars Billing, the third party billing company that is now handling the county's emergency medical service/ambulance service billing.
"The total dollar amount of Cumberland's legacy (accounts receivable) we have imported into our billing system is $13,835,324.72. That amount breaks down as follows: $8,974,323.61 -- insurance balances that are over one year old. This amount in uncollectible, but we need your approval to write it off. $4,367,571.61 -- patient balances that are over one year old. We recommend adjusting this off as 'bad debt,' but we need your approval. Approximately $650,000 -- balances that are less than one year old (combined) insurance and patient balances. We estimate a possible 10 percent return on this amount," Nikki Fuller of AMB wrote in an email to Jeff Dodson, Cumberland County fire chief and EMS director.
"I thought I would bring this to you. Everything is going well with new billing system. But something needs to be done with old AR accounts," Dodson said.
Cumberland County Finance Director Nathan Brock said, "The ambulance AR (accounts receivable and billing) function is in the EMS department -- not in finance. It's like a stand alone cost center. Over the years it's been going up and up. This is a culmination of many years and should have been written off a long time ago. The purpose of the review (by AMB) was to get accuracy on the amount and determine the collectibility."
Brock and Dodson both said they were unsure as to why the old uncollectible accounts hadn't been acted on or written off before.
Sonya Rimmer, 8th District commissioner and budget committee chairman, said, "So, this is all uncollectible and bad debt? Around $13 million?"
Dodson said yes.
Brock said of the $650,000 that is collectible, only about 10 percent is estimated that will be collected.
"Well, that's still $65,000 for the county," Allen Foster, 4th District commissioner said.
Brock said that he felt it was important that AMB looked at the old debt because the company deals in this every day and knows what they can and can't collect.
"They have a vested interest in this. They get a percent, too. So, they're not pushing us to write off accounts," Brock said.
It also gives a much more clean and accurate budget, Brock added.
Roy Turner, 7th District commissioner, then made a motion to take AMB's recommendation and write off $13,835,324.72. of the bad debt.
Foster supported the motion.
Dave Hassler, 3rd District commissioner, suggested an amendment to make an exception to the accounts that people are paying on locally. It was unanimously approved and will now go to the full county commission for its consideration.
©2014 Crossville Chronicle (Crossville, Tenn.)