 Wednesday, August 28th 2013 committee of the whole meeting to order Before we take the role just a couple housekeeping things. I believe this is the first meeting other than a council meeting to be on board Docs so with us up here is our HR director Dave Augustine and as we go through the various documents Dave will be placing them on the screen For those of you that don't have them with you here in the audience and also for the benefit of the people at home Being that this is our first meeting under for our this format If there's a couple of glitches with us Mary, would you please call the roll? Here Excuse Here Not excused mr. President you may want to take note of that. I think that's two in a row now Unexcuse the absences. Yes We have a quorum, let's please stand for the pledge Under God I'll entertain a motion to approve the minutes from the last meeting so move Have a motion in a second to Approve the minutes from the last meeting any discussion all in favor Opposed chair votes aye Item 1.5. We have a public forum Each person who wants to speak will be allowed three minutes. Does anybody wish to be heard? We step forward Would you give us your name and address for the record, please? Dulcy Johnson? 1306 North 3rd Street, Sheboygan Thank you, we'll have three minutes I Hadn't planned to speak tonight But then I read the story in the press about the ambulance billing which is the focus of tonight's meeting per mr. Amodio the billing company collected 75.8% of its buildings from January 2011 through December 2012 The citizens need to know That in arriving at that percentage the city considers adjustments or amounts They could have collected in making that calculation even though the city does not receive the adjustments In an email to me last September mr. Amodio said that the most the city could collect is 58% of all claims billed and that the city collected 77% of the 58% in 2011 Actual collections for 2011 were 41% of what was billed and actual collections for 2012 Were 42% of what was billed what is actually Collected is what matters not what could have been collected and if I remember correctly Ems promised to collect 48% of what they billed Again, I must ask you do you think orange cross considers what they could have collected or Adjustments that they had to write off as part of their total collections. I think not What matters is what was actually collected and deposited in the bank and in 2011 that was 41% of billings and In 2012 actual collections were 42% of billings The audit reported that in 2012 $650,000 was transferred to the general fund from the ambulance service Which is about half of what it cost to operate three ambulances 24-7 When total expenses were subtracted from actual Collections the ambulance service loss was over $300,000 in 2011 and over $150,000 in 2012 To say that the city collected 75.8% of its billings is To quote mr. Amodio's email to me last September Misleading it is also disingenuous and gobbledygook Thank you. Thank you. Does anybody else wish to be heard? Does anybody else wish to be heard? Does anybody else wish to be heard cable move on Chairman's comments just have a couple brief ones it's been first of all, I want to thank the men and women of the Sheboygan fire department are our paramedics For for providing an excellent ambulance service over the last five years. We're not here to discuss that tonight We're here to discuss the financials of the ambulance service over the last five years. I Just wanted you to remember a number tonight as we go through the numbers and That is 48% Back when we went into the ambulance service back in 2008 the premise that was used or the information that was used for the council back in 2008 and And the projections that were made by the fire department back in 2008 That the collections were going to be eight forty eight percent and Unfortunately up to this point for five years. We have not reached the forty eight percent mark yet I'm not pointing fingers or blaming anybody. That's a reality the purpose of this meeting tonight is to look at the history of the Of the ambulance collections for the first for the first five years and Hopefully make some improvements in the system to hopefully one day get up to the forty eight percent So that's that's the purpose of the meeting tonight and also the fact that I believe Alderman Heidemann And I are the only Alderman remaining from back in 2008 So I thought this would be a good opportunity for the for the new older persons on the on the On the council to learn more about the ambulance service and how the financials of it work So with that we'll move on to item number two point one item for items for discussion only a Brief history on the Shabuigan fire department ambulance service and a five-year financial report on the Shabuigan fire department Ambulance service for the years two thousand and eight through two thousand and twelve Leading the discussion will be mr. Eric Kiefer of EMS billing associates Fire chief Jeff Herman and C8 CAO Chief administrative officer Jim Amorio, so I'll turn it over to chief Herman and mr. Kiefer and mr. Amorio Thank You chairman borne Chairman borne had asked me to give a brief history of how we got to this point Coincidentally this weekend. I got a call from a press reporter doing an article on the Shabuigan Falls fire department and their hundred and fiftieth anniversary and she asked when the fire Shabuigan fire department began So I look back and that date is 1888 now. I promise. I'm not going back that far tonight But just a bit of history of we realized it's our 125th anniversary this year So just a little history for you The implementation of the ambulance service goes all the way back to about 1985 Back then we were taking a look at where's the fire service going? What's happening nationally? We looked at the national averages and found that 80% of paid departments were actually also running EMS So we found that we weren't really in the norm in that area So at that time we began hiring firefighter EMTs also, so you had to be an EMT also to become a firefighter Moving on to about 1988. There was actually an advisory referendum in the city on a municipal ambulance service And that passed by more than a two-to-one margin 9,265 votes to 4,436 in favor of a municipal ambulance service So that kind of set us in motion as to where we are going in the future So move ahead to about 2002 and by this time we had seen the table of organization in the fire department decrease from a number of 96 in the 80s down to 77 ever tightening city budgets kind of made it clear that we needed to find a revenue source to offset our expenses and and to Continue to have the fire department that we had and maintain our ISO rating. That's very important for the insurance industry moving ahead then to 2007 which was when we put this business plan together and there really were three main operational reasons in my mind that we looked at to begin the ambulance service We already had been responding to every emergency medical call as first responders So we weren't really adding any additional calls. We were just adding some additional revenue for already going to those calls And one that was very important to me was the system control by the council Prior to the fire department taking over the ambulance service The citizens of Sheboygan had seen rate increases of five percent 3.5 3.9 and 10 percent and the council had no Jurisdiction over those increases that all went before the county law committee So I thought it was important to bring that control into the council And then again as I spoke that we had to find a way To bring in some additional revenue to maintain our level of service to the community I know in the past five years there have been numerous inaccurate and misleading statements made in committee meetings at public forum and on the council floor By the end of this meeting my goal is to provide clarity on this issue and Provide you with a clear understanding of what that 2007 business proposal was what the expectations were of the fire department in that resolution and What we've delivered to date in comparison to those expectations So let me begin by explaining there really are three basic ways that ambulance revenues are tracked All three of those are correct all are done for different purposes, and I believe this is where a lot of the Confusion lies. I think this is where a lot of the misinformation is coming from The three ways are by trip also called data service And this is really the only accurate means to account for ambulance collection percentages We rely on our billing company to provide these numbers to us They change daily because we're still making collections on 2009 2010 2011 runs, so those are constantly being updated. So that's one of the reasons you see collection percentages constantly changing Second way is by calendar year, which is a way that I do it The city budget runs on a calendar year my expenses run on a calendar year And I offset those expenses by what we collect during that calendar year And then the third way is by the by the city auditors, and that's really a 14-month snapshot The city the auditors come in in the beginning of the year I think it's in February sometime and they draw a line in the sand there and look back at what did we collect in The 12 months prior versus what were our expenses for the calendar year before that So it's three different ways of accounting for ambulance collections All of them have a Different outcome, but all of them are done for a different reason So let me begin by taking you through the 2007 business plan If you go down to About the fourth paragraph there are revenue projections and chairman borne spoke of this There's been a lot of misinformation put out that there was a guarantee of 48 percent collection rate Former chief was tusky was just in town a week ago. I confirmed this with him. That was not a guarantee That was where and you'll see it as I go through the plan that comes up numerous times We based all of our revenue projections off of what the former Provider was collecting which was 48 48 percent at the time If you go down to the sixth bullet point there and this was the one that I thought was really important as to why We got into this service upgrade As I said, we were going to every single call before We were going to those calls as first responders Even though we had paramedics and EMTs on our fire engines by law We could not act up to our level of training all we could do was offer first responder services By taking the service in-house. We now have been able to upgrade all our first responders to the EMT and the paramedic level I think this is huge to Advantage to the system people don't realize that the first responders are a critical part of our response system And then again on the bottom the system control as I explained before Since we took over the service our residents Because of your direction have not seen a rate increase in six years The next two pages are just a copy of that Resolution that was passed in 2007 for your Informational purposes The next page is where we started basing some of our projections off of in 2007 and you'll notice in the top boxed part there. We were figuring a 15% no transport In the five years that we've been running the service were actually at an 18% no transport and you may say well That's bad. We're not transporting as many people What I would tell you is that's good for the system That means our paramedics out in the field are doing what they're trained to do They're assessing people and they're not transferring people to the hospital that don't need to go So that I think that's a good thing that we can be proud of in our system And then in the second box you can see that all of our rate projections Included a 3% increase every year as we went along and as I said before the council has not chosen to do that So you can see our rates in 2013 are the same as they were in 2007 the next sheet that you have in front of you is Again showing all of our projections, but for the five-year business plan and in that top upper column Again, it shows transport revenues assuming a 48% collection rate and the 3% rate increase per year Again, it was not guaranteeing the 48% collection rate that was just going off of numbers that were provided to us And again, we did not increase those rates Every year as it had been projected So as you're moving down that first column in 2008 where you see total projected revenues where we were projecting Six hundred and seventy-five thousand we actually collected 737 thousand that first year and down at the bottom where we projected our expenses at 479,000 they actually were 421,000 so we had projected a net revenue of 195,000 we actually had 316,000 net revenue again in 2009 projected revenues 214,000 they actually were 843,000 and projected expenses 479,000 here we exceeded our expenses. They were 551 and that was due to a Large increase in overtime required that year But again the net revenue on the bottom we projected 234, but we still did exceed that with 291,000 brought in Again in 2010 projected revenue 755,000 actual revenue 857,000 projected expenses 509,000 actual expenses 576,000 and again we exceeded the net revenue. We projected 246,000 and collect and had 280,000 2011 projected revenues 799,000 we actually had revenues of 1,000,000 projected expenses of 544,000 expenses 554,000 again, we exceeded the net revenue where we projected 255 and collected 446,000 2012 projected revenues of 846,000 actual revenues 1.155 million and In this year, this is important to note that we began to bring our expenses under control and a lot of this was due to Negotiating a new contract with the union where we evened out some of our pay scales So at the bottom we had projected expenses of 582. We actually were underneath those expenses at 534 and then our net revenue we projected 263 we actually had 620,000 extra net revenue So for the five years we had projected revenues of 3.7 million and we actually had actual revenues of 4.6 million and then at the actual Excess revenues that we put into the general fund. We had projected at 1.2 million and we actually were at 1.9 million and Then if I can move ahead to 2013 Right now we're on pace for about a 1.35 million in revenue Which will put about 775 Thousand as our net revenue for 2013 The next page that you have in front of us is some graphs that we put together And one of the things that I wanted to look wanted to find out when I looked at our increased revenue was I know that We've had increased number of transports And I wanted to make sure that the increased revenue that we were seeing Wasn't due solely to the extra number of calls that we were going on So this first graph shows you that we've actually seen an increase of revenue per call And the five years that we have that we've been in operation and then again the bottom graph shows The percentage of the fire department budget that is funded now by revenue you can see in 2008 The revenue we were bringing in only made up 1.8 percent of the fire department budget Where in 2012 it's making up almost 17 percent of the fire department budget So again, we accomplished one of the goals. I think that was set out way back in 2002 Then the next page we have a graph that shows general fund contributions from the EMS revenues and again, this is a graph that is trending in the right direction. We started out at 310 in 2008 and it shows the 620 in 2012 and then again, we're trending this year towards about a 775,000 so again that graph is going in the right direction And then again when I saw that our revenues were going up. I wanted to make sure that Our expenses were not outpacing the revenues that we were bringing in and that bottom graph shows that actually The percent of our revenues versus our expense is actually getting better So if you move on to the next page, what does this all mean for? How was how much is the fire department? costing the city taxpayers as you see in 2007. It was roughly 7.4 million dollars when you Took the expense of the fire department offset it with revenues Moving on to 2012 when you took the expense and offset that with the EMS revenues that dropped down to 6.4 million And then what does that do to our cost per capita again that drops? Significantly as does the cost of the fire department from a hundred and forty eight dollars per capita down to a hundred and twenty-nine dollars per capita Then the next Sheet that you have in front of you is just those numbers that I I gave you put into our graph form So it's showing that The revenues that we projected have always been outpaced by the net revenue that we've collected And then again the gross revenues that we projected is Being outpaced by our actual gross revenues that we're collecting And then the bottom graph is showing what I explained before that Our expenses have been up in a number of years, but we brought them down under control in 2011 and 2012 one of the other things that I had asked our billing company to do for us earlier this year Was to do a rate survey amongst? Comparable cities I want to make sure that the rates that we were charging were in the ballpark of where we needed to be So that this page shows you have comparable rates The ones that I would compare would say are in our our service area close to us Would be orange cross and Plymouth ambulance as you can see we we compare favorably to those and Our rates compared to the average art Looks to me like we're right where we need to be I don't believe that the council needs to take any action at this point. I think we're being fair to our citizens Any questions so far? I Just had one chief on one of the graphs here just a little Extra explanation. It was the one where Was the graph where you were talking about Was it negotiating a new contract or something like that was that was that partially due to act 10 that The employees were paying more for their health insurance and into the Wisconsin retirement fund. Did that help any Actually into that or not. Yeah, that is not figured into this This was the contract negotiations where we created a two-tiered wage schedule, which lowered the wages are our new employees That's what that's reflecting So I'd that 10 has not been factored into that that also would have an effect on it Alderman versi. Thank you, Mr. Chairman. Also some of these prices that it's really loud That you have here for different miscipalities Some of these miscipalities that you have listed in here don't itemize like we currently do Some do some don't so I mean the ballpark rate the going rate has to be explained more in-depth on Which which companies itemize their run which don't such as Orange Cross? Does does not itemize like we do Gold Cross does also not itemize like we do and also a Schwaben on and also County rescue up in Green Bay do not itemize and so I mean that's where the price difference You have to make sure the full picture is and I do have those and those are two pages long And we go drug by drug and we make sure that we're in line with them to say they don't itemize is Correct and incorrect a lot of them bundle their charges into one charge a lot of them will take that bundle And there may be 12 items in there being oxygen saline needles whatever and charge individually So yeah, you are correct. We'd be here all night if I brought that out Okay, any other questions before we move on Go ahead chief I got one question what Do you actually classifies an ambulance call because if you get a call for a house that's on fire and You're told that nobody's hurt But once you get there you find out that somebody has inhaled a lot of smoke would that still be considered an ambulance call? There's two answers to that question if we transport them to the hospital That would be considered an ambulance a billable ambulance call If we would treat them on the scene It all would depend on the level of treatment that we give them whether or not we would Charge them, but if they're if they're treated on scene and not transported. That's a much lower charge anybody else proceed Next we're going to hear from mr. Eric Kiefer who is with EMS billing Thanks for joining us. Thank you, mr. Chairman. Thank you for having us And if I may I'd like to just briefly state first of all, thank you for allowing us to present here this evening We're very honored to serve the city of Shevon and I hope we're allowed the opportunity to continue And also I appreciate the committee's indulgence and postponing Tonight's meeting until August here. I know you want to do this last month But I was assisting my daughter through a kidney transplant last month So I was in the hospital diet, so I do appreciate your indulgence and moving it to August so My job here tonight is to explain the revenue from 2008 till 2012 so first of all We have to realize that EMS medical billing was not the billing service for the city of Sheboygan for 2008 2009 and 2010 so in order to represent those dollars. We simply used a city data for those three years which is labeled as page number two on our handout, which should be the next page presentation here and So obviously as as not the billing service for the city of Sheboygan during that time I don't necessarily feel comfortable commenting on that revenue one way or the other I think my job here tonight is to present the data as we began billing in 2011 and cover that year in 2012 Which would be the next page? So the data that we present and we covered it here tonight the chief touched on it There's different ways that data can be reported financially obviously each Individual person that is running those for finance or for fire or for billing will run it in a different way for a different purpose And as the chief stated that the revenue how we report revenue and the way that is reported on this report is by date of service So when I say that something for 2011 it's for any date of service or any EMS run that occurred during the calendar year of 2011 So what I plan to do is to walk you through some of these numbers as well as these categories of numbers is to Kind of simplify the procedure so we all understand the terminology and then allow you to ask any pertinent questions You might have so for 2011 the revenue generated for 2011 dates of service was 1.034 million One zero three four two seven eight to be precise the average collected per call was $398.06 that was taking the run volume and dividing it by the net receivables for the year The gross collection rate Was forty seven point one four percent So of all the charges that were produced during that year for those dates of service forty seven point one percent of revenue were returned But there's another form of a collection rate, which is called the net collection rate Which is more accurate when you're taking a look at how a billion services performing and that collection rate the net collection rate Takes those adjustments that are mandated by Medicare and Medicaid and to take some out of the equation because you couldn't have collected Those by law anyway, and you take only those revenues that you could collect for instance If commercial insurance did not pay for some reason that you can collect that that would count against you Or if you sent a statement to a patient that didn't have insurance and they didn't pay for one reason or another That would count against your net collection rate, but only those Adjustments or only those dollars you didn't collect that you couldn't collect or that you could collect legally are counted against you in the net collection I hope that makes sense because that's how we we report our current net collection rate for 2011 days of service as 79.47% Now when we reported in February that net collection rate was seventy seven point six five What made the difference? Well a number of your accounts that were referred to external collections and to the Wisconsin tax refund intercept program Came through and got paid that increased those dollars for that year Even just in the last few months So as the chief pointed out these numbers are very fluid they do change often They change every day as a matter of fact there is one typo that I will correct later That is because I received data today just in a phone call that I needed to include in the presentation So we'll touch upon that as well So the graph that you see before you for where it's labeled Cheboygan 2011 I think we're all familiar with the payer categories in other words how an ambulance service gets paid for their calls But I'll just briefly walk through it with your indulgence Medicare which is the the Insurance program for the elderly it's through Social Security People have to pay for a part B insurance they get part a through Social Security and so forth that Medicare is your largest payer population Then through the Medicaid program, which is for the poor or under insured Commercial insurance, which is typically tied to employment So if I'm employed through EMS medical billing if I get my insurance through my employer, that's typically where this Pair category Explains itself and private would be self-pay if you don't have insurance your private pay patient other would be considered perhaps a Contrasture relationship we might have with a nursing home or another establishment where you set a contracted price for transports As you can see that's extremely negative negligible in your numbers, but we do account for it with its own category So briefly working right to left And again remember this is for those of you who saw our presentation in February We were really asked to keep things in the exact same format as the previous Presentation just so we can compare numbers so Moving right to left is gross charges. That's exactly what was billed out to the insurance company No, right offs the act dollar value that was billed out Contractual allowances are those adjustments that you have to take off by law with Medicare and Medicaid Those are what's called contractual adjustments or if you have a contractual relationship with an insurance company or a commercial insurance company You would take those adjustments at the time that you bill it and that's where you would report those Revenue adjustments are Well, sometimes we don't bill out the correct insurance the first time So when we get the actual insurance the second time we might have to make an adjustment on that that we build So that's called a revenue adjustment Net charges, that's what brings you down to exactly then what the insurance company is being asked to pay Payments obviously self-explanatory. These are dollars in the bank Refunds refunds are part of EMS billing you build the wrong insurance company or the coordination of benefits gets Tied up where somebody's coverage might have terminated a day or two earlier. It happens all the time So we have to issue refund checks back to patients back to insurance companies quite frequently So you certainly have to keep track of those and apply those towards the net revenue Right offs now. These are different from contractual allowances right offs are Right offs that you take voluntarily because a patient could not pay a bill or they asked for a hardship So they have their own category. So these are Not contractual allowances. These are ones that were taken voluntarily The number of trips well terminology trips and Incidents are synonymous. So the number of ambulance runs is a trip So we've broken out the number of trips during that year by what pair group they belong to The pair of mix the pair of mix this tells us where your money is coming in from in this case 49% of your Your charges are going out as Medicare patients 20% or almost 21 Medicaid and so forth and then the net collection percentage after you take all the mandatory adjustments and you apply that all these categories across refunds and so forth What is your net collection rate on those payers because now you can really identify where your money is And if you're leaving any money on the table, where is it? so if you if you would like to take a look at that column the far-right column on 2011 you can see 98% For Medicare collection rate you might ask why not a hundred percent because there's five six seven claims in any given year that might be Still under review people are still applying for Medicare coordination of benefits are not yet complete So you'll never truly reach 100% you hope to get 98 99% with those and we were achieving those on a regular basis with Medicare and Medicaid Medicaid 98.55 commercial insurance 87.91 Why 87.91 because there are still with commercial insurance companies something called coordination of benefits if you're not able to Establish when coverage was anybody involved in my industry will know the commercial insurance is not exactly the most Prop in responding to requests and so forth So you can have issues drag out over years Including litigation if you are in a car accident and it's going to be in litigation But the primary payer was a commercial insurance company and that's how it's still categorized It might still be hanging out there in the accounts receivable, which That's where these are hanging out and Then private of course the lowest anybody without insurance. Why don't they have insurance? They're probably unemployed They don't have the means to pay those bills So your collection rate on those claims are going to be the lowest of any of your collection group So in 2011 there was a 26.39% collection rate So basically 26 cents on the dollar for everything that you build out to a patient without insurance was paid back So we are looking again in a net collection rate for 2011 of 79.47 again This is on dates of service for that year only and then there's other various Data elements that are below for instance We like to keep track of the billable and non billable calls So you can determine how many claims got billed and how many didn't get billed because they weren't billable So what is a non billable call well if an ambulance? Responds to an incident at a basic life support level Which is a lower level than a paramedic level and they don't provide any services to the patient Currently the city does not bill for that service. So that becomes a non billable call Now an incident where if they were called to a diabetic or an asthmatic and an advanced life support person arrives or a paramedic They provide an IV of dexterous to wake the patient up or Albuterol to help the patient breathe that is an invasive procedure Even though you're not transporting that patient would get a bill So there's difference in transport versus non transport and even whether that patient gets a bill or not depending on the level of service provided And then the gross collection rate forty seven point one percent one four percent and the billable Revenue per billable call. This is how we like to do business and this is when we're competing for business We don't like to say this is our collectorator. That's their collection rate or that's their collection rate because You can calculate collection rate any way you want to to make it look good for you How much are you making every time you turn a wheel on a billable call? That's how we like to do to compare how we're doing business. So right now We're looking at three hundred ninety eight dollars and six cents every time the fire department turns a wheel on a billable call And then the the amount for all calls which include non billable three hundred and thirty four dollars and so forth So that kind of encapsulates 2011 Was there any I know because this is very industry specific language It takes some getting used to with the terminology and so forth. Is there any clarification that I can provide? Or anything that wasn't clear. I have just a couple The I Know on Medicaid because I used to be a Medicaid provider But with medic with Medicaid we definitely have to accept what they pay us on Medicare Do we accept what they pay or is there an opportunity to bill for the difference with with Medicare? Medicare right now requires all ambulance service providers to what they call accept assignment in other words you have to accept what Medicare pays But not payment in full as you know from billing Medicaid You can't balance bill the patient you just take what Medicaid pays and you're done Medicare works a little bit differently They will allow a certain amount on your charges and pay 80% of that Then the 20% copay always gets passed on to the patient or their Insurance so there is an opportunity to collect additional revenue After Medicare, but what you hope to collect is what Medicare originally says this is our allowable amount That would be what we would consider a hundred percent collection rate on a Medicare call So we're not going after the 20% we are. Oh, absolutely. Okay. Good. Absolutely again It's very important for everyone to realize that our fee is we are paid on a percentage of what we collect It would be very foolish for us to leave money on the table, especially money that was legally able to be Then my other observation is under commercial the only the only peer group That we would actually have an opportunity Let's say for example the bill was a thousand dollars the only one out of those those categories where we can get money from The only one we could potentially collect a thousand dollars on a thousand dollar bill would be under the commercial And that's only 17 point one zero of our total business. Yes, sir That's correct on both accounts Okay, it's just It's a little shocking You know when when we would be in a business where we only have an opportunity to collect 17% of Our total bills. It's a little surprising to me, but that's that's the payer mix All the person Donahue Thank you It's my understanding that that of the calls that we make 17% of the payment comes from commercial insurance Correct in other words in the in the pie of a hundred percent 17% of that are people who have commercial insurance. Yes, we don't get to choose that. That's correct So in some ways we're lucky, of course, we're never lucky to have people who are in an ambulance But we're lucky that 49% of our pay or mix is Medicare. That's right. All right, so I think We just need to get in mind it is that it's not that we're collecting just 17% of commercial insurance That is that's the slice of the pie from which our revenues come. That's right So the devil is in the details here is that we always need to keep in mind What the pies are that we're talking about and not look at percents and say oh my goodness We're only collecting 17% of commercial or 12% of private That is the pay or mix and I just wanted to clarify that just to make sure that I understood it. Yes, ma'am. Thank you Yes, I understand that also but that that also points out that out of that entire pair mix There's only 17. There's only 17 percent of the patients apparently that we have a chance to call get 100 percent Reimbursement on well and and that just happens to be because we can't control who gets sick and who calls for an ambulance For better or for worse nearly 50% of the people who call in the city of Sheboygan for an ambulance apparently are older or disabled people We can't control that. That's not a business factor that we can control so And I will tell you that commercial insurance rarely pays at the charged rate rarely Rarely pays so if the if the charge is $683 the commercial insurance is unlikely to pay $683 again, we need to be clear about What what we're talking about in the in the realm of collection The the the gross the gross charges here. Those are gross charges You can't you you're never going to get those gross charges It's unhappy, but it's true and and no matter how we fuss and fight and fume about it The only people that we can really get a hundred percent from are the poor schleps who don't have insurance Those are the people who are paying the full freight Those are the people who are paying $683 or whatever the the ambulance charge might happen. I just picked that figure whatever the ambulance charge might be the people Who are the least able to pay are the only ones that we can get 100 percent from that slide But typically those folks are judgment-proof unless we are getting tax intercepts and we could do that for one year because if you have your tax refund intercepted one year You're going to make sure in the next year. You don't have a tax refund. So I mean that's just that's life So folks the people who we can bill for a hundred percent are the people who are the least able to pay It's just life. That's the way our rather screwy health insurance industry works Just to follow up on that older person Donnie you I had a neighbor who had to use the ambulance service our city ambulance service And they were billed one approximately $1,000. They're her employer's insurance paid $500 she paid the other $500 so the point I'm making and commercial insurance is out of the 683 if that's what the total bill is their insurance may pay 400 we collect the rest from the person So that that is an opportunity. That's the opportunity under commercial that we do have an opportunity to collect 100 percent And I'm glad that that you have that one example But from the commercial insurance bills that I have reviewed in the course of my work over the years It's rare that typically you're going to have your deductible and your copay and then the The insurance company is going to pay its negotiated rate And you as a as an employee under the plan you don't have to pay the balance typically Unfortunately, your neighbor was not a lucky person to have a decent insurance policy But that's one example and we can't really make our decisions based on one example But we do mr. Kiefer though if the insurance company pays $500 commercial insurance the person is we spend The person in all likelihood is going to be responsible for the balance and you're going to try to collect it Is that correct? That is correct. Okay. That's that was my point. Thank you if there are any further questions on 2011 2012 just a mirror image of the data ahead of it in 2011 However important to realize that 2012 is a lot more fluid than 2012 is a lot more fluid than 2011 is it's that we are still collecting revenue for 2012 dates of service especially through collections and trips So the the revenue generated for 2012 dates of service right now at 1.167 million is still increasing as Is the average collected per call of 386 34 as is the estimated gross collection rate of 42 76% in the current net collection rate of 74% So there's still additional revenue for 2012 obviously that's being worked both in our office actively through coordination of benefits as well as through collections Through our external collection agency and through the tax refund intercept program through the other collection agency that handles that That work excuse me mr. Kiefer. I believe Alderman Carlson. Do you have a question? Thank you Proceed sorry it's quite all right You will obviously take a look the numbers for collection rates are lower again This is proceeding back to my previous statement. It is still fluid We are still collecting money on a relatively aggressive level on 2012 dates of service So you will see collection rates for Medicare at 97.9 increase the same for Medicaid Commercial insurance. I when I before I came here tonight. I looked at 83% Collection rate for commercial insurance and I wanted to know why so I went claim by claim to figure out where those commercial claims Were being held up and I got the answers and most of them are coordination of benefits issues There's some bankruptcies that are still being reported in that that bucket. So there's nothing I answered my questions There's no serious concerns on that. I just expect that Collection rate to increase as the others do as well So the self-pay collection rate substantially less than 2011 However, we are still building those patients and when you're talking about collections and tax refund intercept program That's when some of these revenues can substantially jump your self-pay population because that's where the money is So if you have patients that are on they can't afford to pay the bill and they're on a time pay and they're on a $20 a month you're not going to see these collection rates jump relatively quickly You will see them jump quickly when tax refund intercept program kicks in or when a collection agency gets those accounts begins to actively work them That's when you'll see those accounts start to go up But many trips in 2012 the latter half of 2012 aren't old enough yet to be considered a collections account So we still are working this 2012 relatively aggressively any questions if you turn to page for I Want I included this pair mix and net collection rate comparison one because it was in our February presentation And I wanted to be consistent, but also because in the Sheboygan Press story There was a statement that if our demographics Sheboygan's demographics were different that might somehow affect your net collection rate And I wanted to demonstrate how that is a relatively accurate statement using your pair mix from 2011 and 2012 and comparing them to the two pairs that we presented back in February Which are the city of Franklin and the city of Fond du Lac as you can see their Medicare population is greater Their Medicaid population is smaller The commercial population is larger and their self-pay population is smaller So with those all combined your net collection rate is going to be relatively higher So I just wanted to include that That comparison for your review Alderman versey. Hey, Mr. Chairman So mr. Kiefer so that actually the the optimal Demographics we would really be looking at is higher commercial and higher Medicare That's higher commercial would be would be premium for us And then also the Medicare is keeping the same level but lowering our Medicaid and self-pay Yeah, it's accurate to say the commercial insurance and Medicare are the two-paste hires of the major groups that we bill for that's correct Anybody else? Thank you Alderman versey continue. Thank you, mr. Chairman This is a different item point on the agenda the reimbursement concerns under the Affordable Care Act So I just wanted to before I moved on to that point ask was there any other clarifying questions on the previous point? Which were the revenue? Very good. Well, I wish I had a litany of information that I could provide on the Affordable Care Act, but You'll is from a reimbursement standpoint, and this is I really want to emphasize this from a reimbursement standpoint information that Providers are getting on how much is going to be paid to providers? There is almost no information that is available to providers, especially ambulance service right now There is nothing concrete or specific that's come down from the federal government of what they're going to pay on an ambulance claim Once the Affordable Care Act goes into place So we're not in the speculation business. We're not going to Take a look at what might be without pertinent information to pass along to the city so they can make an informed decision, but There was a story in the Sheboygan Press that did touch on this So I did want to reference this where they said that collections could improve under the Affordable Care Act if more Uninsured patients become insured and that I would say is probably an accurate statement if you're uninsured and you now come into an exchange and You are able to get some of that treatment paid for it stands to reason that you could potentially make more Revenue from that pair mix There's also the contrary point of view that you need to consider that if that person had commercial insurance prior and was their employer dump Their commercial insurance coverage to go into an exchange that claim that would have been paid at potentially $700 now might be paid at a much lower Right, so again competing theories. We don't want to get into speculation But we just want I wanted to respond to this the statement that was in the story and then be able to provide a different opinion on that We are investigating other opportunities though through the Affordable Care Act that the fire department can't participate in except But many of those programs are in their infancy stage that I'm not ready to speak on those I have no specific details to share it But we are staying on top of the Affordable Care Act that is our job as a building service to make sure that you are Fully compliant with Medicare and Medicaid and with the Affordable Care Act when it rolls out in 2013 Which the next paragraph does point out just some basic facts Regarding the Affordable Care Act that the marketplace for the Affordable Care Act does open October 1st That's where you will be able to enter into or buy an insurance Policy through an exchange if it's available here in Wisconsin the individual mandate is still scheduled to start 2014 so if you're an individual without insurance you will be required to to enter into that agreement But the employer mandate where the employer provides that care for their Employees has been delayed till 2015. So that is all we feel comfortable sharing at this point as far as anything strategic to look at And the last item on our agenda this evening was to discuss the Wisconsin tax refund intercept Alderman Bellinger Sir it didn't the individual mandate get rolled back a year because Obama didn't want to have it during an election year. So it's not 2014 Just the employer mandate is one I'm familiar with okay the individual mandate from my understanding still goes into effect at the beginning of the year, okay The last item on our agenda was to talk about the Wisconsin tax refund intercept program and for the benefit of those In the audience I may not know what that is I just want to put down a brief definition of what that might be and if I may read it It's Wisconsin statutes authorize the Department of Revenue to intercept taxpayer refunds other refundable credits Lottery credits to be applied against the amount the taxpayers owe to certain state agencies and local governments Agencies and local governments must enter into a written agreement with the Department of Revenue to participate in this program So the city of Sheboygan does have a written agreement and they do participate in this program The current environment in which tax refund intercept program lives in Sheboygan begins with the collections phase So the city of Sheboygan currently sends delinquent EMS claims To be processed through an external collection. You can see that we work with they're called Ameri-collect They're out of Manitowoc the fee for this service is 33 percent of the net revenue collected Now if Ameri-collect is unable or unsuccessful in collecting on a claim after nine months under their roof The account is turned over to another collection agency that we work with that specializes in the trip program They're called CMC or credit management control out of Green Bay and the fee for this service is 17 percent of net revenue collected Now the details accounts listed with trip so far is the city began listing accounts with trip in August of 2012 and from August 2012 through January 2013 $358,000 in change was listed with the tax refund intercept program So far to date $32,775 has been collected which is a 9% collection rate on that 358,000 submitted the fee the city paid for this service was $5571 for dates of service of February 2013 through August 2013 an additional $168,000 in change was submitted to trip However, none of that revenue has yet been paid through trip now What's the significance of that indicating the tax season is pretty much over? So you're not going to get any payments on those accounts until the next go around in 2014 Which leads me to my last statement and this is where my typo was the unpaid amount of and allow me to correct myself 493,000 and $34 because we received a payment today We'll roll over to the 2014 sec tax season and have another attempt at collections along with the new delinquent accounts that we're building up through 2013 so there is going to be a substantial opportunity for additional revenue next year with trip almost to the Certainly over a half a million dollars So no telling what that collection percentage is going to be the next page page six of six in the handout and on it I simply wanted to provide you with a Listing of trip payments from CMC by week so you can see how that money comes in and how it's accounted for It's just there for informational purposes only nothing significant about the spreadsheet. Just this is where the money is coming and When it came in Mr. Keeper just a quick question under refundable other credits That are subject to this trip program are the is the earned income credit one of them or is that exempted from that? For the trip program, I'm sorry. I do not know that I can certainly find out and get back to you Thanks, Alderman Hammond There's any questions on the spreadsheet. It's pretty straightforward as you can see in February 6th, February 2 13th, there's your big deposits coming through in the tax season that were intercepted in January and posted in February Then it dwindles as the months go on That's our understanding that the city is considering bringing this this practice back into house So all I simply wanted to do was put forth Considerations that the city would be considering if they were going to do that one is that each account Must be certified with the Department of Revenue before it's placed with the proper name address phone number employment of the patient So security unit and driver's license number those information pieces are required our collection agency uses a program called Lexis nexus To provide that information It's a relatively expensive product to get that correct information if it's incorrect the first time Rejected accounts must be reworked and according to the DOR's reject code So it's it takes a relatively It takes some knowledge of the tax refund intercept program and the codes that are provided by the state to do that properly Letters must be sent to each account prior to the placement in trip You must complete the trip paperwork on each account with supporting documentation and submit that to the state of course postage and all associated supplies are included in that and The filling of all calls would not then come to our office That's a very important feature that I wanted to share that goes to the entity that is submitting that account to trip So somebody would have to field those calls and then of course you must have a way of tracking those accounts Tracking the payments the refunds and tracking the resubmissions as these are official documents with the Department of Revenue They will be audited so you have to have something relatively stable as a product that you can produce those reports for the state Thank you, mr. Kiefer how many of these accounts have we submitted to the trip program ballpark? I don't need an exact number, but 700 so 700 so roughly our cost and this is about four bucks a An account I didn't do them. I assume you do the math. I'll trust you all so four dollars them. Okay. Thank you Mr. Kiefer can these submissions on the trip program can that be done online or is that is that a hard copy that has to be sent in I Do not know that that's a good question My initial guess would be that it has to be on paper that it's not an online process But I will get that information and get back to you, sir I think our municipal court is involved in the trip program And I think they are doing it in-house, but I'm not familiar with how they do it, but we could find out also Any other questions? Thank you, mr. Kiefer for joining us. Thank you, mr. Chairman for having us. We appreciate it. Thank you everyone Do you have anything else under that item chief hermit? We're all set. Okay Next we'll move down to item number three items for discussion and possible recommendation of the common counsel counsel agenda item 3.1 counsel document Alderman Hammond did you have something Council document 3.1 council document number 5.4 from July 1 2013 and 3.17 from July 15 2013 a resolution by Alderman Hammond Authorizing extending the contract with EMS medical billing associates LLC of Milwaukee, Wisconsin For providing emergency medical services billing and Collection service for an additional two-year period by letter or agreement to that effect Please see a copy of the contract attached We have that coming up a discussion with fire chief Jeff Herman and chief administrative officer Jim Amorio Alderman Hammond Thank you for discussion purpose as I move to Recommend to the council we approve the contract with the MS billing services We have a motion in a second to a to approve the renewal of the contract with the MS billing under discussion If we could we have the contract up there Anybody who's reviewed the contract are there any questions? I think I had a couple marked off here Could you just go over the how We arrived at the the trip trip system How we arrived at that 17% Commission I Didn't see that I don't believe I saw that written anywhere in the contract. Was that an update that we did? Mr. Chairman, I think that was an amendment to the contract and amendment. I did not bring with me this evening Okay Did that amendment go through the finance committee? I don't remember seeing anything like that on the agenda Do you remember do you remember that Alderman Hammond? That was July of 2012. So no, I would remember something on the agenda from 2012 Mr. Amorio, do you remember if there were do you remember if that went through council? That trips thing for the Commission of 17% or was that just done in-house and then on on page 10 of The of the contract just a bullet point there the city of Sheboygan finance director and the service provider will mutually agree On a plan for pre-authorization of any debt write-off or write-down activity prior to the elimination of any debt I would presume that's on a case-by-case basis The only other question I had if I can find it here and that was with the with the payer group that's That has no insurance no Medicare no Medicaid no insurance Is there any way anything that we could do further? Mr. Kiefer to enhance that? That portion of the collections I know that's a difficult one because those people don't have insurance or anything else and many many times are Indigent, but is there anything that any of your other clients do or is there anything you could suggest to maybe pump that area up a little bit? Well the question Yep, you have to so what is being done to maximize collections from the self-pay population and the best that you can do is Contact the patient as often as you possibly can to arrange a payment set up a payment plan if they can't afford it And there is simply just a there's also a level of our population that doesn't make a payment until they get a collection letter So you have to account for that as well, but the best way to determine is From our perspective from our company's perspective We are doing everything that we can to maximize those payments before they ever leave our office because remember again We're paid on a percentage basis. It is not in our best interest to leave that revenue to somebody else to collect So we would rather collect that in-house and make our profit on that revenue So another question to ask then is if we're not collecting it is somebody else Are we leaving money on the table that somebody else is collecting? Well, the answer to that is you have to take a look at the collection agency that follows you How are they doing? What is their track record? Well right now? America like is collecting five point five percent on what we're submitting to them, which is lower than an industry standard so We are doing a very good job in maximizing the receivables because a collection agency that has more resources Their disposal than we do as far as collecting revenue from people in various different forms is not collecting that money either on any great scale So we consider the fact that the collection rate of 26 percent. I Sympathize I would like to be able to collect more revenue for you to make our company more profitable We'll make you more profitable, but there are simply just some patients that can't afford it Won't pay it and you do your best to maximize that while you've got it in-house while that debt is current instead of Trying to collect that debt when it's not current which is very difficult So the short answer to my very long answer is we are trying everything we can to maximize it From our standpoint our processes are working. I don't see necessarily anything we can do in-house to to maximize that any further I Can't find the process in here in the contract. I apologize, but the other question. I would have maybe it answered in here is How soon is a phone call made to that population? I understand they get a bill And then after 30 days they're billed for for three straight months 90 days Am I correct is my memory correct and then it's somewhere in the process you make me may make a phone call to that person to try To get payment When do we make the first phone call generally a phone call generally comes when that account is 60 days Without any contact with our company So you can talk about number of days old we would consider an account 60 days aged when there's been 60 days of No contact with our company so no attempt on their part to set up a payment plan No attempt to send in a payment and so forth two statements without any contact with us Generally will initiate a phone call from our collections division and we'll take a look at those accounts we consider to be the most collectible amongst the group and Focus in on those with our resources and try to collect that way Okay. Thank you. You're welcome anything else the I think before all of them and We were we were going to consider under 3.2 Possibility of bringing the trip program in-house and I'm wondering if it would be appropriate or its question for maybe attorney McLean to Being that we might want to make an amendment to the contract where we have a motion and a second to approve it Would it be I think it might be appropriate to it to discuss 3.2 to see if it's going to fly bringing it in-house And if it doesn't we can renew the contract as is But if we decide we may want to bring that in-house, we'd have to amend the contract Alderman Donahue I would strongly suggest that the bringing the trip Process in-house First of all we need a whole lot more information before we can make an intelligent decision and that clearly should be done It at the committee level for all of us to sit here and try and figure out whether or not we should be involved in this is Spinning our wheels, so I will say in support of the motion as it stands This is the second time that I've heard the presentation from the gentleman and for the second time. I've been pretty impressed I think that numbers speak for themselves in terms of the fact that we have an agency that is one pretty skilled I mean I they seem to have the agency seems to have its arms around the process Number two they seem to be doing a very nice job for us One of the hard things for all of us lay people to understand is this 42 percent collection rate or 40 says like why should it be so low and When we say that we're collecting 75 percent are we really making those numbers up? Are we lying or whatever? Think back to a bill that you might have seen say your brother falls and he's hit his head And he has a craniotomy and you get the bill for $10,000 and the insurance company is going to pay $2,000 And because of this particular policy, that's all the provider is going to get is $2,000 can't come back to my brother for the additional $8,000 so does the board of directors of that hospital say our collection rates only 20 percent? What's wrong? No, they say we got 100 percent of the allowable charge Now we may want to rail on and on about There shouldn't I mean if if you're billing something that ought to be the amount of money that you get Reimbursed for but it doesn't happen that way and no amount of talking no amount of Wishing that it were so is going to change that at least for the current time so right now as Far as I can tell This organization this agency that we've contracted with is doing really a pretty superb job Now if you compare us with the other With the village of Franklin and the city of Fond du Lac the demographics are different There's not much we can do about that The people in Franklin seem to be older the people in Sheboygan seem to be poorer There's not much that we can do about that so given what we have it seems that This agency is doing an excellent job for us My sense is they're probably doing a really good job on the trip thing and if it's only four dollars a claim I'm just here to tell you and I think staff people here could agree four dollars to submit a claim like that That's pretty cheap, and it's why you it's why we it's why Steve McLean is not doing this job of collecting all the ambulance fees It's because it would take just a little more Unless you want to do it Steve is just leaving the room but so They seem to be doing a good job the finance committee has given this long hard Look it's been discussed I was on the finance committee when this came to us in 2012 and I would just urge your support for passage of this contract turn McLean I Can address I believe chairman's question about whether You would need to modify the contract if you took the trip Intercept program collections in-house, and I think the answer is no I'm looking at page 16 of the It's part of the exhibit a the scope of work and responsibilities The top paragraph says service provider which is EMS or authorized external collection agency will forward delinquent accounts to the Wisconsin tax refund intercept program trip upon request of the client so the way I read that is if We extend the contract for another two years, and we at some point decide to we want to do the trip intercept program in house we would notify EMS billing service that we're going to do it in house and That portion of the pie would not be done by them, but would be done by us without having to amend the Thank You attorney McLean Is there anything a couple points, oh, I'm sorry I Think the trip discussion needs to take place in finance. I think that's the Division of city government that's going to be asked to do the extra work. I think at the point. I'm at I'm happy where it is I think it's a good flow To keep that all with one agency, but again that's counsel's decision And I think that's a discussion that the finance department needs to have Everybody wants to maximize the most amount of revenue that we can get out of here, and we focus on What's our collection rate? It's in the 40% We need to remember that city's health insurance As negotiated with our network, and I believe it's a 52% discount And we're really happy about that when we're getting that discount And I don't remember exactly what my bill was when I had knee surgery was $10,000 or something for the doctor. I think he got $4,600 That's a pretty big discount. It's just the medical system that we deal with The other thing I'd like to say is I'd like to express my support of renewing this contract The service that we've gotten from this company Compared to the company that we were with before as far and above what we had seen They're at our doorstep whenever we request additional training for our paramedics the help they gave us with Transitioning to the field bridge and electronic patient care Reporting they were up. I think it was a month. They came up and trained our paramedics We never saw that from our other billing company And if I called tomorrow and asked for another training session, they'd be there When we look back three years to when we were discussing this original contract with EMS billing The figure of 80 to 85 percent and net collections was tossed out there We're going to get there. We're at 79 percent for 2011 and that's going to go up yet We're going to be in that 80 to 85 percent. So I think they've delivered what they said Even with the paramedics that we're dealing with so I think they've done a good job and I am in support of renewal Thanks, chief Just to follow up on some comments that all our person Donahue made Any business any business you're in whether it's the private sector or Public sector, I hope is that after after a number of years And you've projected a certain amount of revenue and those revenue projections for net money in the bank in the checking account Are not met sooner or later. You have to make a business decision And we're stuck with this patient mix. I understand that But sooner or later, you have to make a business decision with this patient mix and the amount of money That's going in the bank every year. Is this a business that we continue want that we can continue to want to be in and Business people make that decision every day For example in the insurance business Alderman Hammond, you can tell me if I'm wrong I'm sure you you've set goals for your commercial division and that person that runs the Commercial division point of order. Mr. Chair. This conversation is about the contract and renewing it now Whether that we should be in the ambulance business or not in the ambulance business. I appreciate where you're going with this But I asked that we focus on the contract not on the viability of that That's for a different discussion on a different day. Thank you Can I continue or not? And I guess I'd be inclined to allow all the born to go In you on you know, thank you Like in any other business event the day comes when you've got a you've got a History of however many years it is and your expectations were one thing when you went into the business and that's what we were told The expectations are going to be That's a proper motion decision from the chair I Think I've made I think I've made my point so I won't have to go any further, but I've made my point So your second second All in favor of Calling the question opposed Chair votes aye. We'll take a vote on three point one Did you call the roll Mary? Hi I Motion carries now if we can down just go down to three point two briefly I just before first I would entertain a motion if somebody wants to make it to refer that to the finance committee for further study We have a motion in a second To send this to the finance committee under discussion I did have I think there was something that was on the attachments that I received from the From the city of Fond du Lac Their accountant in their office and on this trips thing and I believe as mr. Kiefer indicated earlier I believe Fond du Lac also uses EMS billing And it's just a paragraph. I'll just read it quickly Once ambulance accounts go into collections and all collections efforts have been exhausted We put them on the state of Wisconsin tax refund intercept program trip We have an employee that works with the city's other accounts receivable collection accounts So we have her work the ambulance collections Accounts also She will put them on trip instead of having it done by EM the by EMS billing We find that putting these accounts on the state trip system We are able to increase our collections because trip is the last option for these accounts That would have otherwise been written off So far in 2013 we have collected approximately $50,000 that we would have not collected if these accounts were not on trip Probably this may be the first year that they are on trip. Were you handling trip for them before mr. Kiefer? Or is this this is the first year they're on it? Okay? Okay They didn't make any reference in this document to how much of a commission they would have paid. They're just saying that Up up to this point They have made $50,000 that they would have not collected had they not been on trip So I'll let the finance committee hash that out But I just wanted to pass on the discussion I had with the woman from fondle act that apparently for them It's working out pretty well and as I mentioned previously our municipal court is on the trip program and They may have be a good resource for how labor-intensive it is for them to do it I would presume they're probably have the same ground rules for Doing a municipal court trips program But anyway, that's a resource that we have right here in the city already that they're doing it So anyway, I look forward to that discussion in finance We have a motion and a second to refer 3.2 to finances or any further discussion If not, would you please call the roll? I? Closing of the meeting the next meeting date will be to be determined. I'll entertain a motion to adjourn We have a motion and a second to adjourn all in favor Chair votes. I we are adjourned. Thank you everyone