Glasgow Daily Times, Glasgow, KY

May 14, 2014

Emergency Medical Services needs reliable funding stream

Glasgow Daily Times

GLASGOW — The head of the company that handles billing for Barren-Metcalfe County Emergency Medical Services reinforced Wednesday what EMS staff has said for months – that many ambulance services need steady funding to operate most effectively.

“I know of maybe one or two ambulance services that operate in the black that don’t receive any type of subsidies at all. It’s just not something ambulance services do,” said Bill Harrod, CEO for Medical Accounts Receivable Services, a Paducah-based company that handles billing for several ambulance services around the country, at a special meeting of the Barren-Metcalfe ambulance board.

“I’ve got two clients that don’t receive any subsidies, and they operate right, I mean right there, on the edge of black and red – right there on the edge. It’s still a public service. It’s not going to be making money, but it doesn’t need to be losing a whole lot either.”

The board met Wednesday to talk to Harrod about the company’s billing practices. The questions were prompted by a series of events in recent months – Barren-Metcalfe EMS Director Mike Swift asked to hire part-time crews to handle peak hours, and soon after that, Glasgow City Councilman Wendell Honeycutt suggested the city is paying more than its share of the service’s deficit. That led to a joint meeting of the council’s finance committee and a specially formed ambulance committee of Barren County Fiscal Court. From that joint meeting came a recommendation that an outside consultant be hired to examine whether the ambulance service and the billing company are operating as efficiently as possible.

The board’s agenda Wednesday also called for “discussion of the requested additional ambulance crew,” but it was mentioned only briefly and no motion was made to move forward with it.

Barren County Judge-Executive Davie Greer asked Harrod how the four entities that cover the service’s annual deficit – Barren County, the city of Glasgow, T.J. Samson Community Hospital and Metcalfe County – should projecting what they budget for it.

Harrod recommended taking the average number of billable runs per month and multiplying that by the average amount collected per run. In the last fiscal year, MARS collected an average of $314 per run, and so far this fiscal year, which ends June 30, the average collection is $327, he said.

The deficit is the difference between the total estimated collectible amount and the service’s expenses, 30 percent of which is covered by both Barren County and Glasgow governments and 20 percent by both Metcalfe County – which collects the money through a taxing district specifically for the service – and T.J. Samson.

Melanie Watson, an ambulance board member and chief compliance officer for the hospital, asked whether it is becoming more difficult for the company to complete billings with regard to medical necessity, and Harrod said it is. Harrod estimated the “clean claim” rate – the ones that are approved the first time they are submitted to the insurance provider – at 93 percent.

But he pointed out that a large portion of what’s billed is not collectible. After checking with Nancy Jolly, office manager for the service, he said the average charge per run for Barren-Metcalfe EMS is $700, but the allowable Medicare charge for a basic life support emergency call is $384, 20 percent of which is up to the patient to pay. The difference is a contractual allowance.

“There’s nothing we can do about that,” he said.

Board member Bill Bucher asked about the performance guarantee the company offered when it started. Harrod said it was only for six months but that the amount collected has “actually done nothing but increase.” The average number of billable monthly runs in the current fiscal year is 557, with two months left. If that average holds, the projected collectible amount would be $182,215 for the year, roughly $600 more than last year, but about $800,000 more than the cash guarantee average.

Bucher said the board was considering adding another $92,978 to its annual expense budget for the proposed added staffing. With MARS’ collecting an average of $327 per run, he figured it would take 283 calls per year for the new crews to nearly break even.

Bucher’s expense amount was based on an estimated cost of $153,895 for four additional emergency medical technicians who would alternate schedules in pairs, minus nearly $63,000 that the ambulance service estimates it misses in revenue each year when it doesn’t have the staffing to cover the run and has to call in another service. That would already have 208 calls factored in per year.

Harrod said he wasn’t there to tell the board how to run its business, but that he’s seen how other services run their business.

“The ambulance service is not a money maker. … It is a public service,” he said. “Now, there are private ambulance services that make money at it, but let me tell you how they make money at it. They skimp on payroll. They skimp on supplies. They skimp on trucks. They skimp on everything imaginable.”

He said if board members look closely the next time they see a private ambulance service, they might expect to see “a truck from the ’90s, barely holding up. It’ll break down any moment.”