HomeMy WebLinkAboutItem 10g - Change Order for Ambulance Billing
DATE: May 21, 2024
TO: Honorable Mayor and City Council
FROM: Henry Chen, Interim Administrative Services Director
By: Doris Chin, Accountant
SUBJECT: CHANGE ORDER TO INCREASE THE PURCHASE ORDER WITH
WITTMAN ENTERPRISES, LLC FOR AMBULANCE BILLING AND
COLLECTION SERVICES IN THE AMOUNT OF $56,000
CEQA: Not a Project
Recommendation: Approve
SUMMARY
On June 5, 2018, the City Council approved a purchase order with Wittman Enterprises,
LLC (“Wittman”), for billing and collection services for the City of Arcadia’s emergency
medical transport services, in an amount not to exceed $83,400 ($66,000 collection fee
plus $17,400 for electronic Patient Care Report (“ePCR”) license) annually, based on
estimated annual collections of $1.55 million. The agreement between Arcadia and
Whittman calls for Whittman to receive a 4.5% fee on the amounts they collect. Due to
higher transport volumes, the collections in the current fiscal year have increased to an
estimated $2.8 million. The original Purchase Order amount is not sufficient to cover the
extra fee on their increased collections. As a result, an increase in the Purchase Order to
cover the increased collection fees is requested.
It is recommended the City Council approve a $56,000 increase to the Purchase Order
with Wittman for the ambulance billing and collection services for the remainder of Fiscal
Year 2023-24.
DISCUSSION
Annually, the Arcadia Fire Department receives over 6,000 incident calls, with 70% of
calls requiring rescue and emergency medical service. Ambulance charges, also called
Emergency Medical Services (“EMS”) fees, are the single largest revenue source for the
Fire Department. The revenues collected for these purposes depend primarily on the
quantity of transported patients by the Fire Department and the type of emergency
medical services rendered to each patient. The Fire Department only bills for EMS calls
that involve medical transport.
Change Order for Ambulance Billing
May 21, 2024
Page 2 of 3
The original Purchase Order amount of $83,400 in FY 2018-19 was determined by prior
years’ total call volume, billable EMS transports, and projected revenue of $1.55 million.
The collection fees remitted to Wittman are a flat rate of 4.25% of net collections, which
equates to $66,000 in fees. The City also reimburses Wittman for their continued payment
of the City’s annual ePCR licensing and storage fees to Digital EMS Solutions. At the time
of contract award, the total ePCR fees totaled $17,200 annually.
Due to an increase in overall transport volume as well as the addition of a basic life
support ambulance program, the collection fees the City is required to pay to Wittman
have increased beyond the original amount the contract was approved for. For FY 2023-
24, projected revenue should total $2.8 million with an estimated 3,200 billable EMS
transports. Under these projections, the 4.25% collection fee to Wittman will also increase
to $119,000. The current annual ePCR licensing and storage fee is $20,400. The table
below summarizes the increase in fees from FY 2018-19 compared to FY 2023-24:
FY 2018-19 FY 2023-24 Increase
Ambulance Collections 1,550,000$ 2,800,000$ 1,250,000$
Collection Fee @ 4.25%66,000$ 119,000$ 53,000$
ePCR License Fee 17,400$ 20,400$ 3,000$
Total Fees:83,400$ 139,400$ 56,000$
The original purchase order amount is not sufficient to cover the collection fee to Wittman
for the increased collections. An increase of $56,000 to the Purchase Order will cover the
additional collection fees and is requested for the remainder of FY 2023-24.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the
environment.
FISCAL IMPACT
In FY 2023-24, it is estimated that Wittman will collect $2.8 million in billing receipts, and
thus, a collection fee of $119,000. The current Purchase Order for $83,400 needs to be
increased by $56,000 to cover the remaining estimated collection fees. The payments to
Wittman are recorded as an offset to revenues, so no additional appropriation is required.
The Purchase Order will be increased in future years to account for higher licensing fees
and the significant increase in emergency medical transports.
RECOMMENDATION
It is recommended the City Council determine this action does not constitute a project
under the California Environmental Quality Act (“CEQA”); and approve a Change Order
Change Order for Ambulance Billing
May 21, 2024
Page 3 of 3
to increase the Purchase Order with Wittman Enterprises, LLC for ambulance billing and
collection services in the amount of $56,000.