HomeMy WebLinkAboutItem 2k: PSA: Wittman Enterprises for Amubalance Billing/Collection Services through June 30, 2015 & Electronic Patient Care ReportingSUMMARY
BACKGROUND
Fire Department
DATE: July 20, 2010
TO: Mayor and City Council
FROM: Hue Quach, Administrative Services Director *Y
Tony L. Trabbie, Fire Chief iT
Shannon Huang, Financial Services Manager /City Treasureriv
By: Yvonne Yeung, Senior Management Analyst eifi
SUBJECT: AUTHORIZE THE CITY MANAGER TO ENTER INTO A PROFESSIONAL
SERVICES AGREEMENT WITH WITTMAN ENTERPRISES, LLC, FOR
AMBULANCE BILLING AND COLLECTION SERVICES FOR THE
PERIOD OF AUGUST 1, 2010 THROUGH JUNE 30, 2015
Recommended Action: Approve
The City has been contracting out its ambulance billing and collection services to a
third -party company since 2001. Recently, proposals were requested from twenty -one
(21) professional medical billing companies to continue providing these services. After
reviewing the four (4) proposals that were received, staff recommends that the City
Council authorize the City Manager to enter into a Professional Services Agreement
with Wittman enterprises, LLC, for ambulance billing and collection services for the
period of August 1, 2010 through June 30, 2015.
Ambulance billing and revenue collection is a complicated process that involves but not
limited to gathering patient insurance information, navigating through the Medicare and
Medi -Cal systems for reimbursement, maintaining compliance with governmental
regulatory requirements, and continuous training on the ever - changing health care laws
and Medicare regulations. For these reasons, the function of ambulance billing and
collection services — which used to be performed in -house by the Administrative
Services Department — was outsourced in 2001 to a private medical billing company
with expertise in the realm of ambulance billing. That decision has proven to be an
efficient and cost - effective alternative over in -house billing. Wittman Enterprises, LLC,
has been providing ambulance billing and collection services to the City of Arcadia since
August 2001.
Mayor and City Council
July 20, 2010
Page 2 of 3
DISCUSSION
On June 7, 2010, a request for proposal for ambulance billing services was sent to
twenty -one (21) vendors. Four (4) proposals were received. After reviewing all of the
proposals, staff recommends that the City continue contracting with Wittman
Enterprises, LLC, for ambulance billing and collection services.
Headquartered in Sacramento, California, Wittman Enterprises, LLC, is a national firm
specializing in ambulance billing and collection services. With the majority of its clients
in California, Wittman Enterprises, LLC, has expertise in California based providers and
the know -how to meander through the complex California insurance system of HMOs,
Medical Groups, and sub - capitated payers, resulting in maximized ambulance billing
reimbursement for its clients. In fact, twenty -two (22) of Wittman's existing clients are
located in the Los Angeles County, including neighboring cities such as Alhambra,
Monterey Park, San Gabriel, San Marino, Sierra Madre, and South Pasadena.
Wittman's proposal met and exceeded all the specifications outlined in the request. The
company has been providing excellent customer service to the City for the past nine (9)
years. The work assigned to Wittman is consistently performed in a timely, efficient,
and professional manner, and as a result the City has been enjoying a reliable revenue
source for ambulance billing over the years. The company always keeps City staff
abreast of the latest changes in health care laws and Medicare regulations.
Furthermore, Wittman offers valuable and complimentary training opportunities
periodically, such as the Client Seminar held last year at which City staff received
regulatory and revenue enhancement training.
The four (4) proposals received were as follows:
Company Service Fee % Service Fee Based on $1 Million Collections
Intermedix 5.25% $52,500
Wittman Enterprises 5.3% $53,000
Parastar 5.8% $58,000
Toomay Technologies 6% $60,000
While Wittman offers the second lowest service fee on the current Patient Care
Reporting (PCR) transmittal method, the difference between Wittman's fee and the
company with the lowest fee is $500 per year based on an average of $1,000,000 in
total ambulance collections annually. In this scenario, staff feels a vendor's ability to
collect revenues is a more critical factor than the service fee a vendor charges
especially when the fee difference between the two vendors is minimal. For the past
nine (9) years, Wittman has been proven very successful in collecting revenues on
behalf of the City of Arcadia. Their historical collection rates for the City are
substantially higher than the projected collection rates provided by the vendor with the
lowest fee.
Mayor and City Council
July 20, 2010
Page 3 of 3
In addition, Wittman provides the lowest fee on electronic Patient Care Reporting
(ePCR) among the four (4) proposals submitted. The current PCR transmittal method
involves Fire Department staff scanning each patient care report manually and
transferring the data to the billing company via a secured electronic portal. The process
is highly labor intensive and can lead to billing delays. If the City ever deems it
appropriate to convert to ePCR, or if ePCR becomes a State or Federal mandate, all
four (4) vendors are proposing to absorb all the costs associated with the conversion,
including the licensing fee of the ePCR product the City chooses as well as the
expenses of purchasing necessary computer hardware and software, but Wittman's
proposal offers the lowest fee for doing so. Essentially, Wittman's offer can be viewed
as an "interest -free financing option." The City will not have to pay for any upfront costs
for the ePCR conversion; the expenses will be divided among the remaining duration of
the Professional Services Agreement and deducted annually from the billing revenues
instead. Staff believes ePCR is the future of patient information transmittal, and there is
a potential that ePCR may become a State or Federal mandate within the term of this
Professional Services Agreement. Therefore, by awarding the contract to Wittman
Enterprises, LLC, the City has ensured quality ambulance billing services at a fiscally
responsible cost for the next five (5) years.
FISCAL IMPACT
Based on a historical average of $1,000,000 in collected ambulance revenues every
year, Wittman's proposed fee is 5.3% ($53,000) per year with the current Patient Care
Reporting transmittal method, a savings of over 10% from their previous fee of 5.9%
($59,000). Should the City convert to ePCR during the course of this Professional
Services Agreement, Wittman's proposed fee will be reduced to 5% ($50,000) plus the
startup costs for the conversion. Adequate funds have been included in the operating
budget.
RECOMMENDATION
It is recommended the City Council:
a) Authorize the City Manager to enter into a Professional Services
Agreement with Wittman Enterprises, LLC, for ambulance billing and
collection services from August 1, 2010 through June 30, 2015.
b) Authorize the City Manager to implement electronic Patient Care
Reporting and purchase all necessary computer hardware and software
when deemed appropriate with the understanding that Wittman
Enterprises, LLC, will absorb all upfront costs associated with the
conversion.
Approved: - ,- -0-' -Q
Donald Penman, City Manager