Funding Your Future Establishing Fee-for-Service Programs in Non-Profit EMS Agencies Central Shenandoah EMS Council in partnership with: Virginia Office

Funding Your Future

Establishing Fee-for-Service Programs in Non-Profit

EMS Agencies

Central Shenandoah EMS Council

in partnership with:

Virginia Office of Emergency Medical Services

Central Shenandoah EMS Council and the Virginia OEMS

Billing for Services is Not New

But it is new for you –

Number of agencies billing in Virginia has

increased dramatically in the last ten years.

Experience is the best teacher – Especially

someone else’s experience

This is an opportunity to see what others

have learned.


Who Thinks We Should Bill?

Joint Legislative Audit Review Commission

(JLARC) 2004 Report on Emergency

Medical Services

“Emergency medical service agencies should

actively consider billing patient’s health insurance

polices for the services and transportation

provided.”


Who Thinks We Should Bill?

Citizens Groups – Who want an alternative

to tax increases to improve services.

Local Governments – Who are continuously

being asked to do more with less funding.

Our Staff Members – Who want to do a

good job for their community – but don’t

have adequate resources


Funding Your Future

Section 1 – Is Billing For You?

Section 2 – Implementation

Section 3 – Marketing

Section 4 – Results


Part I – Is Billing for You?

A. Define the Problem

B. Reimbursable Services

C. Look at your Community

D. Build your Team

E. How Much Does the Solution Cost?

F. Make a Decision


Define the Problem

What will the funds from billing enable your

agency to do?

Increase Staffing

Decrease Response Times

Replace Equipment

Citizens what to know where the money will

go - If you don’t give them something better

will they support Fee-for-Service?


Terminology – it all means the same thing

Billing for service

Reimbursement program

Fee-for-service

Revenue recovery

Seeking payments from insurance carriers

for benefits that individuals have as a part of

their existing policies


Reimbursable Services

Ambulance Transport Fees

Generated for the care and transportation of ill

and injured persons.

Federally sponsored health care insurance

programs (Medicare and Medicaid)

Most private health insurance policies have a

medical transportation benefit.


Reimbursable Services

Rescue Service Fees

Submit claims to auto insurance carriers

Fire Service Fees

Send to homeowner and allow them to submit

to insurance company

Special Service Fees are Frequently

Rejected by Insurance Carriers


Look at your Community

What is the potential financial impact for

your agency?

Revenue is related to call volume

How many ALS? BLS?

Who is the Patient’s Insurance Carrier?

- Medicare

- Medicaid

- Private Health Insurance

- No Insurance


Look at your Community

Who within the community will help you

present the concept to the public?

Local Government Officials

Hospitals and Physicians

Community Leaders


Build Your Team

Committee Membership

Each Local Government

Each Hospital or a Community Physician

Press Relations – Marketing

Community Representative

Agency Leadership


Build Your Team

Committee Goals

Identify Problem

Determine Root Cause of Problem

Identify Contributing Factors

Provide Potential Solutions


Build Your Team Committee Goals – Example 1

Problem

Slow Responses Times M-F Dayshift

Root Cause

Inadequate Number of Personnel

Contributing Factors

Loss of Manufacturing Jobs – Everyone works out of Town

Potential Solutions

Fee for Service – to provide Supplemental Staffing


Build Your Team Committee Goals – Example 2

Problem Difficulty Recruiting and Retaining Volunteer Staff

Root Cause New Volunteers Aren’t Interested in Joining Agency with

- Antiquated Equipment

- Inadequate Support of Educational Needs

Contributing Factors Traditional Fundraising not Adequate to Support Squad

Potential Solutions Fee for Service – Provide Funds for Training and Equipment


How Much Does the Solution Cost ?

Project Cost = Billing Revenue

OK

Project Cost > Billing Revenue

NOT OK

Closely Match Anticipated System

Improvement Cost with Anticipated Patient

Revenue


Make A Decision Will the community benefit from planned

improvements to the EMS System?

Does the estimated revenue match the

cost of the improvements?

Does the committee support the concept of

billing?

YES, YES, YES – You have what is

necessary to proceed


Make A Decision

What if the answers are Yes, No, and We

Don’t Know?

Reevaluate Community EMS Needs

Seek to Promote Understanding and Gain

Consensus

Explore Other Options


Part II – Implementation Plan A. Make An Announcement

B. Obtain Governmental Support

C. Nuts and Bolts

D. Fees and Policies

E. Insurance Carriers

F. Forms & Flow of Information

G. Revenue and Cash Flow

H. Compliance – Records and HIPAA


Make An Announcement

Letter – notify each group represented on

the billing exploration team

EMS Agency

Local Government

Hospitals


Make An Announcement

Press Release – Issued by Committee

Chair and Agency Leadership

Newspapers

Radio

Television

Be Sure to List Follow Up Contact

Information


Obtain Governmental Support

Resolution of Support

“We Think This is a Good Idea Too”

Creation of an Ordinance

“We Formally Authorize You to Do This”


Obtain Governmental Support

Resolutions are Easy to Change

Ordinances are More Difficult

If your local government is involved in

setting rates – ask that they set rates

using a resolution rather than an

ordinance.


Nuts and Bolts

Internal Billing System

Collecting Patient Data

Billing Staff

Billing Software

Dedicated Phone

Forms and Postage

Interact with Insurance

Companies

Collect, Post and Deposit

Payments

External Billing System

Collect Data

Package Information and

Forward to Billing Service

Deposit Payments

It is easy to see why so

many agencies chose to

use a billing contractor


Nuts and Bolts Pay Per Claim

Flat Fee Per Claim

No incentive for

accuracy or follow-up

Percentage of Net

Receipts

Incentive to work with

patients and insurance

companies to receive

payments

Most agencies pay on

a percentage of net

receipts basis


Setting Fees and Establishing Policies Fees – base on Medicare Fee Schedule

Don’t set fees low now and hope to increase them

later.

Maintain your fee schedule. Review charges at least

annually.

Policies – focus on fairness

All patients who are transported are billed

Establish definition of poverty or medially needy


Membership Programs

Agency accepts a fee as a form of pre-

payment for deductibles and non-covered

charges.

You agree to accept whatever insurance

benefits are paid as payment in full.

Labor Intensive

Membership Revenue should equal what

is written off due to the agreement.


Relationships with Insurance Carriers

Medicare – pays 80% of allowable

charge. Balance due from co-insurance

or individual

Medicaid – pays less than 50% of actual

charge. No patient billing permitted

Private Insurance Carriers – payment is

highly variable. Patient responsible for

remaining balances


Relationships with Insurance Carriers Obtaining Provider Numbers – Your agency

must be a recognized provider of service

In order to bill federally sponsored healthcare

programs

Also some private insurance carriers

Each insurance carrier will have an application

process and require copies of various

documents


Relationships with Insurance Carriers

In Virginia there is a legal requirement

that all ambulance providers be paid

directly by insurance carriers. It is no

longer necessary to become a

participating provider in order to receive

payments directly from the insurance

company.


Development of Forms

What must be collected for the billing process?

Patient Information

Insurance Information

Clinical Impression / Preliminary Diagnosis

Consent to bill patient’s insurance carrier

Authorization to release medical records


Flow of Information

Collect data following transport

Verify that information is complete

Prepare documents for delivery to billing

contractor

Establish schedule for timely delivery


Revenue and Cash Flow

Revenue

Checks arrive at billing contractor and patient

accounts are credited

Checks are deposited by either contractor or

agency.

Cash Flow

It takes approximately 12 months to achieve

stable cash flow – don’t spend too quickly


Compliance & Records

Compliance

Even if you use a billing contractor, your

agency is still responsible for complying with

all laws, rules, and regulations.

Records

Clinical and billing records are your property

and must be maintained. Be sure to recover

your records if you change billing services


HIPAA All staff members need to receive HIPAA

training.

Provide patients with information on how

your agency protects their sensitive

information.

Enter into business associate agreements

with other entities as necessary in order to

legally share information


Part III Marketing the Program A. Common Themes

B. Target Audiences

C. Opportunities to Share Information

D. Providing a Walk Through

E. Dispelling Rumors


Common Themes There are problems with the current EMS

system that need correcting

Traditional sources of revenue aren’t adequate to correct the problems

Ambulance billing is a way to obtain resources using insurance coverage that most citizens already have.


Common Themes Services will be rendered regardless of a

patient’s ability to pay

The billing process will be sensitive to those who don’t have the financial resources to pay their bill


Target Audience Agency Personnel

Our goal has been and always will be to provide the

best possible service to the people we serve

Funding sources that we have relied on in the past

are no longer adequate to meet community needs

We intend to preserve the volunteer system by

alleviating volunteers from fundraising and

supplementing current staffing where necessary


Target Audience Agency Personnel (continued)

Providers must be trained to answer the public’s questions or properly direct their concerns

They are the day to day face of your agency

Create a short list of the most common questions they may be asked and train your providers to answer these questions

Give providers a handout with the answers to these questions and contact information for people that have more information about the BFS process


Target Audience Local Government Officials

Our agency has a long tradition of working with

local government to service the public in an

efficient and reliable manner.

We understand that it is difficult to shift tax

dollars from other programs.

Billing will enable our agency to use insurance

benefits that most citizens already have to fund

improvements to the local EMS system


Target Audience General Public

When a medical emergency occurs our focus is on

responding promptly and providing the best care

possible.

This care, however, comes at a cost and traditional

funding sources are no longer adequate.

We will continue to respond to all calls for assistance

and provide care regardless of a patient’s ability to pay.


Opportunities to Share Information Press Releases

Be sure to provide a consistent message and provide

contact information for follow up questions

Public Meetings

Hold meetings where the general public can come and

ask questions.

Speakers Bureau

Offer Speakers to Community Groups - Kiwanis,

Ruritan, Garden Club


Providing a Walkthrough

1. An emergency occurs and someone calls 911

2. An ambulance is dispatched

3. EMS personnel arrive, the patient is treated and

transported to the hospital

4. The patient signs a form giving the agency

permission to obtain his or her insurance

information and file a claim with their insurance

carrier.


Providing a Walkthrough 5. The signed consent form, the insurance data,

and a copy of the patient report is forwarded to the billing service.

6. A claim is filed with the insurance carrier.

7. The patient is notified of any remaining balance after payment is received from the insurance company.

8. All statements from the agency will have a telephone number for questions or if additional information is needed.


Dispelling Rumors - Staff Rumor

Loss of Community

Support – Some personnel

feel that community

support for the agency will

decrease due to billing

Response

Most billing programs

produce up to 10 times

more revenue compared to

fundraising. Agency may

consider eliminating or

reducing fundraising if

billing is successful.



Loss of Community

Support – (continued)

Response

With strong public

education, citizens will

continue to recognize

the important work that

you do in the

community



Increased Work for

Field Personnel –

Additional paperwork

will consume lots of

staff time and take

staff away from

responding to calls

Response

Billing paperwork

requires less than ten

minutes per patient.

Crews are already

completing the pre-

hospital patient care

report


Dispelling Rumors – Public and Officials

Rumor

No Money

=

No Response

Response

We respond to all calls

for assistance and

provide care and

transportation without

regard for the patient’s

ability to pay



Rumor

Harassment by Bill

Collectors

Response

Our billing contractor

works for the agency

and has agreed to

accept our direction in

terms of the level of

collection efforts



Rumor

Harassment by Bill

Collectors (continued)

Response

Great efforts have

been made to make

sure that patients who

do not have the

financial resources to

pay their bill are not

harassed or

intimidated


Follow Up Train all providers to educate citizens,

professionally and courteously

Supply agency providers a reference or printed information pamphlets for distribution and/or to assist the public with commonly asked question

Provide contact information to be distributed for those persons with further questions or concerns

Train providers to visit different members of the community while on duty, answering questions and listening to concerns

Funding your FutureLessons Learned





Lessons Learned:

Experiences provided by:

Giles County Life Saving & Rescue Squad

Amherst County Fire & EMS

Chesterfield County Fire & EMS

Roanoke County Fire & Rescue

Regional EMS, Inc.

David Smith


Lessons Learned: Giles County

Do

Use a reputable billing

company

Submit provider

applications early

Determine your

collection strategy

Soft Billing vs. Firm

Billing

Don’t

Fail to designate a

responsible individual

to get paperwork

together for the

contractor

Forget that you must

have a federal tax ID

number


Lessons Learned: Giles CountyDo

Submit information to the

billing contractor on a

regular basis

Understand that

reimbursement will be less

than charges

Low 35% - 45%

Average 40% - 50%

Optimal 50% - 60%

Don’t

Expect rapid payments It

generally takes 6-8 months

to start receiving payments


Lessons Learned: Amherst County Seek Consensus

Agencies need to agree there is a funding source

problem

Government and Agencies need to agree how funds will

be used.

Education – concerning the need for & benefit of

revenue recoveryProviders – internal

Community – external

Governmental leaders – external


Lessons Learned: Amherst County

Education (continued)

It is all about the patients – providing care is

primary focus

We take care of patients first – and collect

insurance information later

Educate early, educate at every opportunity

Community groups

Newspaper & other media sources


Lessons Learned: Chesterfield County

Planning

Determine the need for initiating revenue

recovery

Explain what the funds will support to:

Local Government

An ordinance, authorizing the county Fire

Dept. to bill for service is necessary


Lessons Learned: Chesterfield County Local Government (continued)

Fee schedules should not be included the ordinance

Allows the change of the fee schedule without a public hearing

Billing Operations Use an “ability to pay” scale based on income levels

Establish refund procedures for overpayments

Use electronic data collection software for patient care reportsAllows integration of data directly from a PPCR to the billing

software


Lessons Learned: Roanoke CountyPlanning

Determine the reason for EMS billing

Does the EMS agency have the legal authority

to bill?

Determine who (within the agency) has the

authority to negotiate contracts

Designate an upper level management person

as the lead for development of all aspects of the

program


Lessons Learned: Roanoke CountyLocal Government

Educate local government & elected leaders at

least 6 months prior to implementation

Ordinance to authorize billing program

Implementation Plan

Soft vs. Firm - Will aid in selecting a third party

billing company

Develop an RFP for selection of a third party billing

company


Lessons Learned: Roanoke County Implementation Plan (continued)

Apply for a Medicare number early

National Provider Identification (NPI)

Process takes 60-90 days

Staff Education

Develop HIPAA & EMS billing policies together

Prevents confusion of providers & duplication of

policies


Lessons Learned: Roanoke County Community Education

Present a clear and concise message to the community is a critical

step to ensure buy-in

Educate anyone who will listen

Civic groups, neighborhood associations, local government employees,

etc

Follow Up and MaintenanceEstablish an oversight committee within the EMS agency

Ensure policies are followed, checks & balances

Remember: the program is ongoing!

Personnel & resources will be required to maintain operations


Lessons Learned: Regional EMS Inc.

Do

Develop and maintain

good financial controls

Avoid the “rich on

payday” attitude –

outputs ($) are only

consistent if inputs

(call data) is consistent

Don’t

Think that revenue

recovery is “magic pill”

that will solve all your

financial problems

Overspend

Overestimate your

revenue


Lessons Learned: Regional EMS Inc.Do

Work to obtain support of

staff

Expect some backlash, be

prepared to manage bad

publicity - May be political

or public displeasure

Don’t

Neglect Staff Education –

Make sure that staff are

properly prepared to

respond to questions from

the public

Forget to follow up to

make sure billing

paperwork is completed on

all calls


Lessons Learned: Regional EMS Inc.

Local Government

Funds from billing should supplement - not

replace current local government support

No one revenue source is sufficient to

maintain EMS operations

Funding your FutureFrequently Asked Questions





What is revenue recovery? Revenue Recovery

Fee-for-Service

Insurance

Reimbursement

Billing

All mean the same thing

The process of

collecting fees for the

treatment and

transport of patients to

the hospital


How does billing work? Following treatment & transport, field staff

collect the data necessary for billing.

Bills are sent out for the services rendered

Fees are primarily paid through Medicare,

Medicaid, private insurance or subscription

programs

Patients are contacted concerning the

remaining balance is one exists.


Why consider billing for service?Costs are increasing faster than our budgets

EMS has faced budgetary cuts from federal, state

& local funding Over the years & across the country

Concurrently, there has been a marked increase in

the costs of EMS expenses

operational, training, etc

Population increases have strained the

resources available to respond to emergencies


What is the patient population?

Who is being transported?

Only 5-8% of the overall population

Insurance coverage will vary based on

location

90% of all patient’s transported have some

form of insurance or governmental

assistance in paying their ambulance bill.


Where does the money come from?

Majority of fees are paid through insurance

companies

Final process of billing is to bill the patient

Approximately 5% of the total funds

collected are paid by individuals


How does billing for service work? Step One:

Bill the insurance

Billing is based on four basic rates, set in accordance with federal

allowable charges

Bill secondary insurance

Step Two:Bill the patient

Agencies determine “firm” or “soft” billing as the standard for pursuing

funds from individuals

Step Three:Write-off of “uncollectible” funds

Based on guidelines set by your agency


How do we handle debt?

Each agency determines their “bad debt”

policy

Firm billing

Strict collections policy

Soft billing

Write off debt per agency policy

Pre- / post-payment plans

“Uncollectible debt”


What does the patient have to pay?Insured:

Co-pay or deductible

Uninsured:

Responsible for full amount of the bill

There are Private Pay Options:

Subscription Plans

Time Pay Programs

Ability to Pay Programs


What are the private pay options?Subscription plans

Pre-payment for ambulance charges not

covered by insurance.

Patients are not responsible for co-pays,

deductibles, or non-covered servicesThe Agency still bills their insurance

Time pay programs

Payments on a set time table for a fixed amount

Usually no-interest, low payments


What are the private pay options?

Write-Off due to Inability to pay

Sliding Scale based on

household size

patient’s income

If a patient has a family size of X and an

annual income of Y – all charges beyond the

insurance payment are written-off.


What is the Office of Inspector General?

The OIG: Government agency to detect and

prevent Medicare/Medicaid fraud

Their opinion on waiving fees:

Concerns about long-term/routine plans to waive

deductibles or co-paymentsAs costs ↑ and reimbursement ↓ you may have to start

firm collections - may affect acceptance of your program

later

Law permits Medicare patients with financial

need to have the cost-sharing amount waived


Will an ambulance show up?

Members of the public must not be afraid

to call 911 because of a fee! – EMS

providers will always treat and transport to

hospital regardless of ability of patient to pay

for the transport


Will insurance premiums go up? No historical data supports the claim that

insurance premiums will rise as a result of EMS

billing for services

Insurance premiums rise annually for many

reasons

Research reveals it is not related to EMS billing for

services

Economy (inflation), family size, health status, age


Will insurance premiums go up?

Insurance carriers provide subscribers with

ambulance coverage riders

Funds are available, cannot be re-directed

Ambulance fees account for less than 1% of

all health-related Medicare costs


What are the steps in the billing process?

Step One:Patient is given HIPAA rights & must sign a release of

information for insurance company to be billed

No signed form: Patient gets the bill directly

Step Two:Insurance companies are billed, in order by primary,

secondary, etc

Notice of bill to insurance sent to patient

At present, all Virginia agencies have outsourced to a

billing agency


What are the steps in the billing process?

Step Three:Patient is billed for the remainder of the

balance unpaid by insuranceBills may vary for patients with subscription plans

Step Four:Unpaid debt is handled according to the “bad

debt” policies and private pay options Soft billing: usually send at least 3 invoices.

Can’t automatically write off all bad debt


How will billing change my agency?Expectations will shift

There will be a higher level of accountability

across the board

There will be both Internal and External

changes for your agency

Internal – personnel

Additional training and documentation

requirements

Success will require commitment at all levels


How will billing change my agency? External – government

They will give your agency the legal authority to bill

Have close ties to the public and will have similar

concerns

External – public

This will change the public’s perception of your agency

You must ensure that that change is positive

Fee for service = higher expected quality of service

Dispel the myths


How will billing change my agency?

Expectations will shift

Internally – personnel

Externally – government

Externally – public

What does not have to change:

501 c3 status

staffing (volunteer, combined, career, etc)

non-profit status


Can Volunteer Agencies Bill for Service?

Many volunteer agencies bill for services

Yes

Personnel management is an agency specific

decision

No requirement or expectation for career staff

Fund use & disbursement is an agency decision

No rules, regulations or laws decreeing how an agency

will utilize funding


Can we maintain our 501c3 status?

501 c3 pertains only to the tax-exempt

status of a non-profit agency

Billing for services does not = for profit!

Billing for services is used to fund an agencies

operational costs!

NOT to fund private shareholders or political

campaigns


Can we maintain our 501c3 status?

501 c3 regulations are designed for:

Public safety organizations

Organizations chartered for a charitable cause

Visit the IRS website for more details:

http://www.irs.gov/charities/charitable/article/0,

,id=96099,00.html


How much money should we expect? Varies by agency, region, area, etc.

Dependent upon demographics & other specifics

of the locality

Percentage insured

Population

Average number of calls

Resources & research

Billing companies

Other agencies that currently bill for service


What will the money be used for?

Varies by agency based on needs:

Ambulances

Equipment

Training & education

Supplies

Salary & benefits of career personnel


Will donations drop off? Agencies & billing companies alike have reviewed

donations before & after

No evidence to support the claim

Donations are still deductible as a non-profit

Public education programs can explain benefits &

costs

Address questions & concerns early!

Universal goal in billing for service is to improve patient

care


How will BFS benefit the community? Increased availability of personnel

More time for running calls

Improved response times

Hiring of career staff

Increased level of education & experienceBetter provider retention

More funds available for training

Improved equipment Better patient care

Improved QA/QI systems


Wrap Up Billing for service is becoming a more

frequently used method for increasing funds

Billing for services is a serious undertaking,

requiring significant man hours before, during &

after implementation

Billing for service should not be considered

without considering risks & benefits to the

agency, personnel & public

Documents

Funding Your Future Establishing Fee-for-Service Programs in Non-Profit EMS Agencies Central Shenandoah EMS Council in partnership with: Virginia Office