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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