Los Angelese City Controller Ron Galperin released an audit of the City of Los Angeles Fire Department’s Emergency Medical Service (EMS) billings and collections processes. The report found that billing a larger share of insurance providers, together with the expansion of coverage brought about by the Affordable Care Act (ACA), could generate up to $16.7 million in additional annual revenue—and that this revenue could be used to improve patient services and provide much-needed resources for the LAFD.
“Patient care should be our top priority,” said Galperin. “With so many people now becoming insured under the Affordable Care Act, it’s vital that we update how we deliver medical services—and how we bill for them.”
In 2014, EMS calls made up 84 percent of all Fire Department dispatches. LAFD personnel responded to 361,030 medical incidents, assisting people facing life-threatening emergencies like traffic accident injuries, heart attacks and assaults.
The city bills Medicare, Medi-Cal, private insurers and individuals for EMS services. LAFD’s policy is to bill only those patients who are transported to hospitals—roughly 60 percent of patients served. Gross billings in FY 2013-14 were $271 million, but the city collected $68 million, or 25 percent, of the total billed—due primarily to low reimbursements from Medicare and Medi-Cal, and—until recently—the large percentage of uninsured patients that the LAFD treats.
To make the system more equitable, recoup a greater share of costs, and benefit from the increased ranks of those who have become insured under the ACA, Galperin’s report recommends recovering money from insurers for patients who are treated by the LAFD, but not transported. Auditors project that this change could yield an additional $10 million in EMS revenue annually.
Auditors also examined the impact the Affordable Care Act is likely to have on EMS billings and collections. By 2019, auditors predict 210,684 people in the city will have become newly insured as a result of the ACA, which will likely result in a $6.7 million annual increase in EMS revenues.
“We are looking over the horizon at a much broader base of patients with access to health insurance,” said Galperin. “The extra money we can generate will allow us to enhance services and care.”
Another finding: treating frequent 9-1-1 callers, or “super-users,” can be costly. In FY 2012-13, just 110 frequent callers resulted in 3,772 incident responses at a cost of $2.5 million.
Galperin’s audit was undertaken to assess LAFD’s success with two contracts entered into in 2010: one for billing, processing and collections services; and a second for a Field Data Capture System with handheld devices, which are used by LAFD responders at the point of service to record incidents and to enter billing data.
Auditors determined that the adoption of the vendors’ services and technologies has generally been a success—leading to $189 million in net collections in the first three years—nearly $24 million beyond what was anticipated. The adoption of the systems also led to significant improvements in billing timeliness and patient record keeping.
