Section 4531b2 of the Balanced Budget Act of 1997 added Section 1834l to the Social Security Act (the Act), which mandated the implementation of a national Ambulance Fee Schedule (FS) effective for Medicare Part B ambulance services claims with dates of service on or after April 1, 2002. The Ambulance FS applies to all ambulance services. Section 1834l of the Act also required mandatory assignment for all ambulance services, which means that the provider or supplier will be paid the Medicare allowed amount as payment in full for these services. In addition, the provider or supplier may bill or collect only any unmet Part B deductible and coinsurance amounts from the beneficiary.
The federal government and healthcare systems are linking compensation with quality measures. This is in place for hospitals and physicians and is being implemented for skilled nursing facilities and home health. It is only a matter of time before quality measures will determine reimbursement levels for ambulance services. Many of the recommendations in this report are in preparation for value-based reimbursement – specifically the quality improvement and customer service components.
Three primary sources fund the city’s paramedic program – general fund revenue from taxes, the Inter- Jurisdictional agreements, and user fees associated with ambulance transport.
Table 6 shows SEMS’ FY 2012 average charge and mileage for each type of transport. Note that the emergency and non-emergency rates are the same. Under the CMS Fees Schedule, providers are
authorized to charge more for emergency transports than non-emergency transports. In review of other Texas EMS agencies, charges between emergency and non-emergency rates differ approximately $100. SEMS should consider increasing emergency rates by $100.
Table 4. Averaged Base Charges
Base Rate Mileage Charge
BLS Non-Emergency $890.00 $15.00
BLS Emergency $890.00 $15.00
ALS Non-Emergency $1,060.00 $15.00
ALS-1 Emergency $1,060.00 $15.00
ALS-2 $1,200.00 $15.00
Specialty Care Transports $N/A $N/A
SEMS performs patient-billing services internally. This process appears to be working very well and collection amounts seem to be within industry standards. The key measure to determine the
effectiveness of a collection agency is focused on the percent of billed charges collected. SEMS collects 39.1% of the total billed charges (before contractual). This is an industry norm gross collection rate and is reflective of good process and procedures for obtaining reimbursement, a favorable payer mix (which entity pays the bill, i.e., Medicare, Medicaid, commercial insurance), and below market charges.
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Another indicator is the net collection rate where the total charges are reduced by contractual
allowances. The contractual allowances are those amounts that the service is precluded from receiving. For example, the service has to accept what Medicare allows as payment in full and this amount is significantly below the retail patient charges. The gap is larger for Medicaid recipients where the Medicaid reimburses a small fraction of the charged amount. At SEMS, Medicare and Medicaid contractual allowances represent 19% of the total amount billed. Bad debt and uncompensated care represents 41% of the total amount billed.
Finally, the time it takes to collect from an account is analyzed. This is measured from the date of service until the account is considered satisfied in full. It may include a contractual allowance being applied, a payment by a third party source and/or payment from the patient. This is called an account’s “days in A/R.” SEMS’ billing department has a “days in A/R” rating at 60.7 days, an accounts receivables rating which is well within industry standards for a similar patient mix and service base.
Additional patient care charges will be realized as the healthcare system changes. In the future, EMS systems will receive dollars for not transporting, but caring for patients at home or work. This concept is discussed in a subsequent section of this report under Community Paramedicine.
§ SEMS’ mileage charges are low.
The Consultant review found that SEMS charges are basically designed to cover the current cost of operations and uncompensated care and to be comparable within EMS agencies in Texas. The
Consultant was unable to compare charges of competitors; however, they appear otherwise reasonable given that the system receives government subsidies. Mileage charges can typically generate a
substantial amount of revenue. Although over 38.6% of revenues are fixed by government accounts, an increase in the mileage charge would realize a significant amount of income from private insurance and private pay accounts. The City of Schertz contributes any overall losses between net fees and expenses.
§ SEMS does not consistently follow “safe harbors” billing practices.
In FY 2012, $50 was subtracted from each resident’s base rate by virtue of being a resident. This is not a “safe harbors” practice. Government accounts (Medicare and Medicaid) are required to receive the lowest possible pricing. If any special group receives a gross price reduction, that same deduction must be afforded to government payers. This practice should not be repeated.
§ There is no system-wide compliance program in place.
During the interview process, and in reviewing the bank deposit process, it was noted that the same person handles monies received from the point of pick up to point of deposit. It is recommended that a different person pick up monies received, tally a total of funds, and separate the money for deposit. Backup documents for deposits should be forwarded to a processing clerk and re-tallied for verification. These balances should be reviewed and verified before the end of each day.
§ The billing and collection practices should be documented and verified for consistency and validation with job descriptions and responsibilities for compliance purposes.
Consultants observed staff working in an environment too small for efficient productivity. Several Staff members perform multiple roles such as receptionist as well as processing claims and collecting money. There is no privacy for customers or patients who may want to discuss HIPAA protected information and the handling of money is accessible at the point of public entry into the building. Medical and billing records overflow into boxes stacked along corridors thus making the efficient retrieval of documents difficult and time consuming. The interior has evidence of redesign in the past, but today, just appears to be out of physical space. Consideration of moving the billing and collection functions into larger space which will afford privacy, accountability and adequate record storage and retrieval capable space.