HomeMy WebLinkAboutStaff Report 4.ICITY OF PETALUMA, CALIFORNIA
AGENDA BILL �
Agenda Title:
Meeting Date:
Resolution Authorizing the City Manager to Sign an Agreement
July 7, 2003
with Wittman Enterprises LLC to Provide Billing Services for
Ambulance and Emergency Response Services
Meeting Time: ® 3:00 PM
❑ 7:00 PM
Category (check one): ® Consent Calendar ❑ Public Hearing ❑ New Business
❑ Unfinished Business ❑ Presentation
Department:
Director:
Contact Person:
Phone Number:
Finance
W. Thomas
W. Thomas
778-4323
Cost of Proposal:
Account Number:
$126,000
606-400-
Amount Budgeted:
Name of Fund:
$126,000
Ambulance Enterprise Fund
Attachments to Agenda Packet Item:
1. Resolution
2. Bid Documents (Summaries) from Wittman Enterprises and Allied Enterprises (Full text of
proposals are available at the Finance Department
Summary Statement:
The City of Petaluma has traditionally billed for ambulance and emergency response costs internally. One
employee in the City's Finance Department has been assigned this responsibility. The possibility of
outsourcing this task has been discussed on several occasions in the past. Most recently, with the advent of
the new requirements of Health Insurance Portability and Accountability Act (HIPAA) and the requirement
that the City provide medical supplies, this issue came to the forefront and it was decided to pursue
outsourcing this task.
A number of providers were identified and invited to provide presentations to City staff. Of those that
expressed interest, two presentations took place. Those providers were then invited to submit a proposal to
the City, which the City received on June 13, 2003. Based on those proposals, staff is recommending that
the contract be awarded to Wittman Enterprises LLC based on their overall proposal.
Recommended City Council Action/Suggested Motion:
Adopt the Resolution authorizing the City Manager to sign an agreement with Wittman Enterprises LLC
for ambulance and emergency response billing services.
Reviewed by Finance Director:
Revie dt° �rne :
—
_
Approved by City Manager:
k Date:
Date:
Today's Date:
Revision # and Date Revised:
File Code:
#
June 27, 2003
CITY OF PETALUMA9 CALIFORNIA
JuI.Y 7, 2003
AGENDA REPORT
FOR
Resolution Authorizing the City Manager to Sign an Agreement with Wittman Enterprises LLC to
Provide Billing Services for Ambulance and Emergency Response Services
1. EXECUTIVE SUMMARY:
The City of Petaluma has traditionally billed for ambulance and emergency response costs internally. One
employee in the City's Finance Department has been assigned this responsibility. The possibility of
outsourcing this task has been discussed on several occasions in the past. Most recently, with the advent of the
new requirements of Health Insurance Portability and Accountability Act (HIPAA) and the requirement that the
City provide medical supplies, this issue came to the forefront and it was decided to pursue outsourcing this
task.
A number of providers were identified and invited to provide presentations to City staff. Of those that
expressed interest, two presentations took place. Those providers were then invited to submit a proposal to the
City, which the City received on June. 13, 2003. Based on those proposals, staff is recommending that the
contract be awarded to Wittman Enterprises LLC based on their overall proposal.
2. BACKGROUND:
Historically, the City has provided billing services for ambulance and emergency services responses. This task
has been administered in the Finance Department and one employee has been assigned the task. The ambulance
service is accounted for in an enterprise fund (Ambulance Fund) and is accounted for similar to that of a private
business. In that respect, the City charges this fund for the following hard costs:
Firefighters/Paramedics (9.8 positions)
Salaries
$ 803,150
Benefits
411,900
Supplies
230,650
Capital Outlay
30.000
Sub -total
1,475,700
Overhead:
Information Services
27,650
General Services
3,500
Liability
-
Administrative Overhead:
General Fund Support
140,200
General Plan Support
-
Communication Center Charge
384,800
Total Overhead
556.150
Total Ambulance Fund Costs
$ 2.031.850
The total budget for this enterprise fund in FY 2004 is $2,681,850, which assumes a bad debt expense of
$650,000. The specific cost of the ambulance billing function is contained in the "supplies", "General Fund
2
Support", and "Information Services" categories. Although there may be additional costs, the major costs
associated with this task are as follows:
Expense Description
Current
Outsourcing
Employee Salary
$ 47,100
$ -
Employee Retirement and Benefits
12,400
-
Information Services Support
27,650
13,825 '
General Fund Support
525,000
430,413 '
General Services Support
3,500
1,750
Collection Agency Expense
201000
- z
Billing Envelopes and Stationary
2,500
-
Ambulance Billing Services
-
94,050 '
Support of Ambulance Billing Software
31600
-
Postage and Shipping - Billing
3,500
-
$ 645.250
$ 540.037
Gross Revenue (Estimated FY 2003)
$ 1,500,000
$ 2,142,850
Less: Bad Debt Expense (Estimated FY 2003)
236.000
650.000
Net Revenues
$ 1.264.000
$ 1 492.850
Collection Expense to Net Revenue (Estimated FY 2003)
51.05%
36.17%
1 This expense won't go away but will be allocated to other funds
2 Included in Bad Debt Expense
3 Based on 6.3% of Net Revenues
As can be seen from the above, outsourcing the ambulance billing function should provide some relief to this
fund. Expenditures will go down as a result of not having to fund the employee position as well as a reduction
in overhead charges from the General Fund, Information Services Fund and the General Services Fund.
Miscellaneous expenses associated with operating an internal billing function will also be eliminated. Projected
revenues, as explained in the budget hearings, will only go up slightly as a result of this change. This increase
is due to a change in accounting method in which we will now recognize 100% of the billings as revenues and
reduce the revenue through the use of write-downs (the netting effect) and write-offs (bad debt expense). This
is specifically due to the fact that the City, although billing at established rates, only collect what is allowable
under the Medicare, MediCal and HMO policies. In the future we will include those write-downs as part of the
gross revenues. The net revenue number will be that figure less write-downs and write-offs.
Overall, it is anticipated that the ratio of collection expense to net revenue will decrease from 51.05% to
36.17%. Additionally, benefits that will be accrued to the City as a result of this outsourcing include:
➢ Billings sent to the clients within 3 days of receipt. Currently that process could take up to two weeks.
➢ The City will be able to tap into the expertise of the billing agent. This includes:
o Assist clients to sign up for MediCal or Medicare
o Challenge Medicare and MediCal denials
o Review insurance company write-offs and write-downs
➢ Bill for medical supplies that we currently are unable due to staff shortages
➢ Provide management information to the Fire Department
➢ Comply with the current HIPPA requirements
3
➢ Ability to implement a tiered billing process
Given that outsourcing the billing function would make financial sense to the City, the issues that then needed
to be addressed were as follows:
o How would the City utilize the current billing employee to avoid having to lay off that employee
o How is the General Fund overhead decrease mitigated to avoid a decrease in General Fund financing
o How is the Information Services and General Services overhead decreases mitigated to avoid a hit to the
General Fund.
o Select the outside billing service
The employee issue was resolved when the City decided to eliminate the outsourcing of Risk Management
activities. That created a need for a part-time position that would provide support for the Risk Management
activities. Originally proposed as a contracted position, it instead will become part of that employee's duties.
The remaining duties for the employee will be in the utility billing area, especially in the conversion to a new
utility billing system. With the advent of the monthly utility bills, it will create a need for additional staffing in
that area. Overall the position costs will be absorbed into Risk Management (an Internal Service Fund) and
Utility Billing (Water and Wastewater Funds). There should be no impact to the General Fund.
When the billing function is outsourced it implies that Finance staff will not have to be as intimately involved in
the day-to-day activities. There still will remain a significant impact to Finance, as we will be responsible for
the day-to-day management of the contract. In addition, we will be involved in the banking deposits,
accounting and general ledger activities of the Ambulance Fund. However, since our activity will decline the
General Fund overhead charge should also decrease. That decrease ($94,600) will be absorbed in appropriate
charges to the Risk Management Fund and the Utility Funds as Finance responsibilities will be shifted to those
Funds.
The same will hold true for Information Services and General Services. The constant in this issue is that the
current costs for these activities will not decrease as a result of the outsourcing and will need to be shifted to
some other funding source.
Selecting the outsourcing service was accomplished through a series of activities that included identifying
potential companies, formal presentation by interested parties and finally a written proposal from the interested
parties in response to our Request for Proposals. After the initial identification of potential companies, the City
received formal interest from two companies — Wittman Enterprises LLC of Sacramento, CA and Allied
Information and Services Corporation of Oakland, CA. Both of these companies gave a formal presentation to
staff in January 2003. This was followed with receipt of formal proposals from these companies in June 2003.
Based on an evaluation of the proposals, staff is recommending that the City contract with Wittman Enterprises
for billing services. This recommendation is based largely on price since the two companies would provide
essentially the same level of service.
Wittman proposes charging 6.3% of the net revenues. Net revenues refer to total billings less write-downs and
write-offs. Allied proposes a tiered fee structure as follows:
Percentage Net Revenue
4.50%
First $250,000
5.50%
$250,001 to $500,000
6.50%
$500,001 to $750,000
7.50%
$750,001 to $1,000,000
9.00%
Over $1,000,000
9
A comparison between the two
rates for $2,000,000 in net
revenues would yield a cost of
$126,000 for Wittman and
$150,000 for Allied. The
breakeven point between the two
proposals is approximately
$1,100,000 as shown on the
accompanying graph. Since the
City is anticipating a minimum of
$1.5 million in net revenue,
Wittman Enterprises would be
more cost effective. Additionally,
the City's goal is to increase the
revenues in this fund. Since
Wittman's percentage cost does
not increase as the revenue goes up
it will become even more
attractive.
An analysis of both proposals, beyond the "cost" factor, yielded little difference between the two. Both offer
essentially the same service, as follows:
➢ Billing within three (3) days of the receipt of information from the City
➢ Follow-up contact with clients to generate payments before turning them over to collection
➢ Ability to interface with our general ledger to transfer billing information
➢ Expertise in Medicare and MediCal billing and
➢ Revenue enhancement expertise by advising the City regarding optimum billing rate structures
➢ Customer service enhancements which provides a toll-free 800 number for client contact and ability to
provide information in Spanish
➢ Collection rates on billings between 75.1% and 91.5% with an average collection rate between 79.7 and
82%
All of the above are difficult for one person to do, as that is all the resources that the City can now provide for
ambulance billing at the present time. Adding additional personnel so that the City can provide additional
attention to billing would only increase the cost and reduce the net margin for this activity. Based on the above,
staff is recommending that Council authorize the City Manager to enter into an agreement with Wittman
Enterprises to provide ambulance billing for the City's ambulance and emergency services activities.
3. ALTERNATIVES:
Retain billing services through the use of City employees
4. FINANCIAL IMPACTS:
The financial impacts were discussed above. Overall, it is anticipated that the overall cost of outsourcing the
billing process will result in a decrease in the cost when compared to total net revenues. Additionally,
outsourcing the billing process will result in better customer service for the client
5
5. CONCLUSION:
After considerable study of how we currently provide ambulance -billing services and what results may be
obtained by outsourcing this task, it is our recommendation that the City outsource this activity. This is an
opportune time to do so since the employee who is currently performing this task can be utilized in the Risk
Management activities that we are bringing in-house. Additionally, with the advent of monthly utility billing,
there will be a need for additional assistance in the utility billing section of the department. Additional
opportunities may become available as the department is continually evaluating the method and delivery of
services to both the public and internal departments.
C. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESS OR COMPLETION:
Successful transfer of the ambulance billing function from an in-house operation to a contracted service.
%. RECOMMENDATION:
Adopt the resolution.
g:/forms/2003 agenda bill
2
RESOLUTION AUTHORIZING THE CITY MANAGER TO SIGN AN
AGREEMENT WITH WITTMAN ENTERPRISES, LLC TO PROVIDE
AMBULANCE AND EMERGENCY SERVICES BILLING SERVICES
WHEREAS, the Finance Department in conjunction with the Fire Department
has researched and analyzed the current practice of billing for ambulance and emergency
services, and
WHEREAS, that research determined that it would be cost effective for the City
to contract out this task to an outside source, and
WHEREAS, the analysis of the current billing practice is unable to adequately
handle the increased needs of Federal and State regulations, and
WHEREAS, the Finance Department requested and received two proposals from
billing services, and
WHEREAS, the bid from Wittman Enterprises, LLC was determined to be the
most cost effective bid,
NOW, THEREFORE BE IT RESOLVED, that the City Council hereby
authorizes the City Manager to sign an agreement with Wittman Enterprises, LLC to
provide ambulance and emergency services billing for the City in accordance with the
Proposal submitted to the City by Wittman Enterprises, LLC
Wittman Enterprises, LLC
2. Collection Rate (Net of Write Offs and Write Downs)
Wittman Enterprises, LLC is proud of our overall net collection rate of 79.70%
for entire client base. Of the clients listed above, our highest net collection rate is
with the Sacramento Metropolitan Fire District at 91.52%, our lowest is with the
City of Santa Ana Fire Department at 75.13%.
We proudly provide for you here a copy of the minutes of the meeting of the
board of directors of Sacramento County Fire Protection District, (prior to its
becoming Sacramento Metropolitan Fire District), dated 06/08/2000. The
previous year we had won the contract from Allied Information Services. This
dramatic increase in revenue was achieved without any rate increases by the
County. It is purely a direct result of our personal attention to detail.
City of Petakuna Page
il'Minan Enterprises, LLC
3. Collection Agency Used
At this point Wittman Enterprises, LLC would like to emphasize the importance
of having a collection agency. The use of a collection agency is imperative to the
City to collect dollars that otherwise may be lost. Collections agencies have the
ability to set up liens, garnish wages, and file suits, if necessary on your behalf
and even get a debtor to pay when the account is extremely old.
Wittman Enterprises, LLC is not connected to any one -collection agency. We
have worked successfully with many, including electronic transmission of
collection accounts to the agency, thus cutting down on their costs, which should
result in a fair and equitable fee for the City. We believe that it is imperative that
we have no direct ties to any collection agency in order to avoid any appearance
of collusion or impropriety in the referral of accounts to collections. Wittman
Enterprises, LLC provides below, the names of the agencies that we observe to be
fair and diligent in the pursuit of our clients' funds.
Alternative Resource
Management
Gary Harris
916-349-1508
800-500-1508
Vengraff, Williams, and American Capital
Associates Enterprises, Inc.
Harley Marchbank James Rodgers
949-263-1300 909-695-3372
888-374-2600
City of Petaluma Page
6Vihlman P,nlerorises, LLC
4. Billing Procedures
Wittman Enterprises, LLC pledges to bill the patient, Medicare, Medi -Cal, and
private insurance within 3 days after receipt of the Patient Care Report. Follow-
up procedures used to elicit payment from Customer or Patient is as follows. A
data file for each patient is established from which information regarding the
transport, billing and payment can be recorded and retrieved, and for which
patient information can be updated. All patients are referenced by name, date of
service, transport ticket number, account number, social security number and
insurance identification number.
Our first call to a private account occurs immediately after data entry of the
transport ticket into the system. This "Verification" call allows us to determine if
the patient may have insurance or any special circumstances that will make it
difficult to pay the bill in a reasonable amount of time. This early establishment
of contact with the patient can be most beneficial. At this point, handling of the
account becomes very individual.
Promises to pay in installments, litigation situations, and alternate pay sources can
all be determined by personalized telephone contact. We are fully equipped to
produce attorney liens and track settlement of litigation.
Wittman Enterprises, LLC's, billing collection program enables the Customer
Service Representative to access all pertinent information in the Accounts
Receivable files for the purpose of follow up with insurance companies,
Medicare, Medi -Cal and patients. This program' automatically "tickles" the
customer service rep. to make the next contact.
"Pay source" or, financial class categories drive the software utilized by Wittman
Enterprises, LLC. The appropriate categories are set up in the maintenance area
of the software, including a "charge code file" or "charge plaster" that not only
sets the charges but also tracks the Medicare allowable as they change from year
to year. The Charge Code File maintains several years of allowable history so
that payments can be processed with the appropriate Medicare write off achieved
and tracked. Further, if the City obtains an insurance or hospital contract, our
system is capable of fully handling any unique billing requirements that this "pay
source" might demand.
City of Nohow Page )
Wittman Enterprises, LLC
In addition, each pay source has an associated billing schedule that automatically
sets the timetable for billing events that are appropriate for each source; i.e.,
Medicare: electronic submission immediately, then automated follow up for
payment in 14 days.
After payment by the initial source, our system automatically transfers the balance
into the next appropriate accounts receivable pay source and sets up the next
automatic billing functions. Billing schedules associated with each account
receivable pay source set up automatic follow up. A sample private bill schedule
includes:
➢ Invoice Immediately
Statement 30 Days
➢ Past Due 50 Days
➢ Final Demand 65 Days
Wittman Enterprises, LLC is capable of customizing a private bill schedule to
reflect the City's needs.
Our invoices contain customized language with up to 560 spaces for specialized
messages and payment instructions. An additional 100 spaces are available for
one time or special messages on all statements and collection notices.
Our Customer Service Representatives have a database of letters appropriate to
each collection situation. As part of follow up, these letters can be scheduled to
address a particular situation. This process adds a personal touch to collections.
Our computer program has fields that are filled with next of kin infornlation, as well
as employer information, so that reaching the patient or family members for
additional information is routine.
For Insurance companies Wittman Enterprises, LLC is billing primary insurance
electronically. This practice was abandoned in 1996 when the insurance
companies and HMO's began requiring copies of Pre Hospital Care Reports on
every run. The insurance companies have found that the cost to them for this
requirement has been excessive and have agreed in this last year to accept
electronic transmission of EMS claims without the unreasonable requirement.
City of Petaluma rage 0
Willman Enterivises, LLC
Wittman Enterprises, LLC has purchased the module that transmits insurance
claims and effect payment, in some cases, in as little as two weeks. Follow-up is
done at 45 days when some sort of adjudication needs to be done by the insurance
company. Claims are followed up on for status of payment, denial, or additional
information.
Wittman Enterprises, LLC submits claims to all government agencies. All initial
Medicare and Medi -Cal claims electronically to insure the City a quick turn
around for payment. Wittman Enterprises, LLC also produces billings for all
secondary insurances and co -payments automatically upon posting of Medicare
payment. If a claim is denied then our Medicare Specialists will review the claim
and if warranted file an appeal.
City of Petaluma _ Page
Wiltntan Enterprises, LLC
5. Technology
Wittman Enterprises, LLC software is capable of providing reporting
electronically that will interface with your Financial Management Software.
There may need to be some adjustments needed to "speak" to each other, but we
are confident that the flexibility of our software will provide the City the access it
requires.
We presently interface with Toomay Technologies, Recognition Solutions
Imaging, and the proprietary program used by Marin County for electronic PCRs.
Our software has interfaced with many CAD programs as well. We are confident
that if the City wants to send the information to us electronically, we will be ready
to accept it.
One other point we would like to make regarding tecl-rnology and how it benefits
the City is that our software is commercially available. Therefore, should the City
decide in the future to take the billing back in house, the software can be
purchased, our database can be backed tip as is, and the City, would take up where
we leave off with no interruption in revenue. A Proprietary software does not
provide this feature.
City of Petaluma Page
lVilnnan Enterprises, LLC
6. Payments to the City
At Wittman enterprises, LLC payments are received daily and posted to the
proper account within one day noting the source of that payment. Wittman
Enterprises, LLC provides an Accounts Receivable Maintenance program that
allows for establishment of a data file for each patient from which information
regarding the transport, billing and payment can be recorded and retrieved. All
charges applied to a patient's account are retained as a pennanent record of that
patient's medical history.
Wittman Enterprises, LLC will receive direct payment, posting, and depositing of
cash receipts within one (1) day of receipts. Bank deposits receipt will be faxed
to the City's designated representative for verification. These Deposits are made
in person to the bank of the City's choice. Wittman Enterprises, LLC shall have
no access to the proceeds of the receipts. All funds are under the exclusive
control of the City. We do require deposit slips and a check stamp in order for
this process to take place.
The common practice of setting up a trust account and then remitting a monthly
payment to the client is contrary to Medicare Law and is not a practice that
Wittman Enterprises, LLC employs.
City of Petaluma Page
Wimnan Enlerprises. LLC
7. Cost
Wittman Enterprises, LLC as stated in our previous presentation again states that
the charge for full service billing to the City would be at a rate of 6.3%. Should
you prefer the per ticket fee, our rate would be $27.50.
Petaluma RFP Cost Discussion
Wittman Enterprises, LLC has demonstrated a superior collection rate with all of
its clients. Based on the proposed rates provided to us in previous discussions, we
believe that the City of Petaluma, given its payer mix, should expect the higher
end of gross collections at 68% in 2004. This number is based on our proven
collection rates with our other clients with similar payer mixes. I want to repeat
that these high collection rates are directly attributable to our commitment of
resources to the collection process.
In our 2004 projection, we predicted revenue of $1,492,850 based on the
proposed tiered rates. Our fee at 6.3% nets the City $1,396,314 in revenue. Since
our competitor has never attained a collection rate higher than 4% below ours,
their collections would be nearly $90,000 less; they would have to charge a fee of
no more,than 1.45% in order to net the City the same revenue. This fee would be
below costs of even the most minimal services provided and if offered could not
be taken seriously.
City of Pelahana 1 age 10
II'Ntnfnn Entrrprises, LL(,
REVENUE ENHANCEMENTS
Subscription Programs
We find that these programs can be quite helpful in defraying the costs of an entire
program. In our experience these programs seem to work best in those communities that
run an open enrollment, then apply the charges to a monthly billing that is connected to
another City bill, for instance, the water bill. It becomes somewhat passive and those
who sign up one year are automatically renewed unless they state otherwise. The costs to
produce the promotional material vary; but the number of participants seems to be
directly attributable to the effort put forth. We will provide the City with a few clients
who provide these programs, so that you will have ample help.
Further, in a recent. OIG opinion from the federal government, subscription programs that
are actuarially sound pose no anti -kickback problems.
Tiered System
Since the City experiences a high level of trips covered by insurance, a tiered system will
be beneficial. Insurance typically have policies that pay a percentage of the billed
amount. Therefore, the same insurance company may cover say 85% of your resident or
non-resident rate; thus netting more dollars in the door for non-residents. Income from
Medicare and Medi -Cal would show no change since those reimbursement amounts are
fixed.
ltemizina for Supplies
As we have discussed, supplies are not reimbursed by Medi -Cal and will soon not be part
of Medicare reimbursement. However, insurance will continue to pay, at least for a
while. If you must purchase your supplies, you may want to charge a fee for them;
collecting the percentage, that insurance pays per policy as mentioned above. I believe
my recent study of this possible revenue source indicated a possible increase of up to
$90,000 per year.
City of Petaluma _ Page
Willman Bnlerprises, LLC
Billing for Non Transports
These calls totaled 554 for fiscal year 2002. If you consider that 75% of the calls resulted
in some kind of medical aid, the potential is to charge for 416 calls. Some programs also
bill a tiered level here, billing $150 for a low level of medical aid and up to $300 for a
higher level of aid. Keep in mind that Medicare and most health insurance do not pay for
non -transports. However, auto insurance will pay. Our experience is that over all about
40% of these calls are reimbursed. If you take an average of $150 per call at 40%
collection, the City could realize additional revenue for $24,960.
City of Petaluma Page
our Job Is To Save Lives.......
Our Job Is To Manage
A Complete Revenue Recovery
For You
PROPOSAL IN RESPONSE TO RFP FOR
AMBULANCE BILLING AND COLLECTION SERVICES
CITY OF PETALUMA
COPV
EMERGENCY
MEDICAL SERVICES
REVENUE RECOVERY
Submitted by
ALLIED INFORMATION & SERVICES CORP.
June, 2003
Allied Information & Services
Corporation
Highest Collection Rate:
Lowest Collection Rate:
Average Collection Rate:
City of San Francisco 89%
Truckee Fire District 89%
Lakeside Fire District 75%
82%
Proposalfor
Ambulance Billing Services
June 2003
As you noticed, I've also included the Net Collection Rate for each of the above references.
Collection rate is net of Write -Offs and Write -Downs.
City of Petaluma Page 4 of 38
Allied Information & Services Proposal for
Corporation Ambulance Billing Services
June 2003
3. COLLECTION AGENCY
As with all aspect of our work, all collection efforts are done in-house.
As an option to each individual client, the City can contract with an Agency for further
collection efforts at the end of our billing cycle. After the given the amount of time
allowed by the City, each account will receive a final audit. Those accounts that made no
attempts to make payments or ignore all our contacts are considered delinquent. At this
time, according to the City's policy, AIS can forward all delinquent accounts to the City's
Collection Agency. If the City does not currently contract with an Agency, or would like
to review other Agencies, AIS can recommend one of the eleven agencies we currently
work with. If none of these agencies meet the requirements of the City, AIS will assist
the City in finding an agency that best meets the City's requirements.
City of Petaluma Page 5 of 38
Allied Information & Services Proposal for
Corporation Ambulance Billing Services
lune 2003
AIS is proposing to establish a designated PO Box to receive all payments and mailings in the
name of "City of Petaluma". Upon receipt of all of payments and mailings, AIS will make same
day deposits to a bank account pre -established in the name of the City of Petaluma and will
perform the detailed, day-to-day work as follows:
■ On the same day of the deposit, AIS will fax a copy of deposit slip to the City as their
notification and as an additional audit control.
■ All revenue documents, checks, Explanation of Medical Benefits, and other documents are
reviewed for account identification. All monies received are identified and posted to specific
accounts on the same day. Along with amount posted, source of payment, check date, check
number, identification number and deposit date are recorded on the patient's account. If a
payment is from Medicare, the allowed amount and the paid amount are posted separately.
This enables accurate representation of the legal balance due on residual billing to Medicare
beneficiaries.
■ Electronically scan all payment records for perpetual storage.
■ Payment without proper identification will be contacted for proper credit.
■ Research all returned mail.
■ Overpaid accounts and erroneous payments will be documented with payment history and
submitted to the City for refund approval.
■ Returned check will be debited to the patient's account and collection activities will resume.
Any bank fees and return -check fee imposed by the City can be added to the amount due
according to the City guidelines and policies.
■ AIS can process payments from Medicare by electronic means. This will cause revenue to be
deposited directly to the City account, and account reconciliation and updates will be
downloaded via modem from Medicare.
Each month, AIS summarizes all bank account activities with reports detailing each payment in
the cycle and submit them to the City for reconciliation. Please review samples of our financial
reports located in Exhibit H Sample Reports.
At all times the City will maintain full control and monitoring of the bank account established.
AIS will have deposit only access to this account.
As an option to the City, similar to the City of Sacramento, the City can remain as the designated
receiver of all payments and mailings. In this option the City will handle all mailings and
deposits. AIS will establish procedures with the City to receive notification for posting and
handling of accounts. Upon notification, AIS will still perform the day-to-day work as listed
above.
City of Petaluma Page 22 of 38
Allied Information & Services
Corporation
7. COST
Proposalfor
Ambulance Billing Services
June 2003
Our fee is all-inclusive without any additional cost, no up -front cost and no hidden fees. If the
City of Petaluma wishes to receive payment from charge cards, the City is responsible for all
bank fee associated with MasterCard, Visa or other charge card processing.
The Proposed Pricing is
Percentage Net Revenue
4.5%
First $250,000
5.5%
Next $250,000
6.5%
Next $250,000
7.5%
Next $250,000
9.0%
Over $1,000,000
This gradual schedule has a built-in incentive and self policing functions. According to this
schedule, AIS will have a lower percentage for the "easy to collect" revenue and incentive to
work more attentively on the "harder to collect" accounts. By including an incentive program to
the cost of the service assures the City will maximize their revenue as opposed to a flat rate
program.
"Net Revenues" are defined as the total sum of all monies collected by the Contractor less
amounts refunded or credited to user or third party payers as a result of overpayments, erroneous
payments or returned checks.
City of Petaluma Page 23 of 38