An outside billing firm was hired by Oxford Twp. last week to help the fire department recover costs associated with providing emergency medical and fire services.
Township officials voted 5-2 to approve a billing service agreement between AccuMed Billing, Inc., of Riverview, Michigan, and the fire department.
Basically, AccuMed will handle all the billing and paperwork associated with cost recovery for emergency medical runs and fire runs involving the use of specialized equipment. The majority of these costs are paid by insurance companies and Medicare.
‘I want to emphasize that this is to offset the depreciation cost on our equipment and to replace the expendable supplies,? said Fire Chief Jack LeRoy.
?(Cost recovery) basically pays for our materials, wear and tear on the truck, to replace trucks when they need to be replaced,? explained Assistant Fire Chief Pete Scholz. ‘The cost recovery is nowhere near a tenth of what it actually costs to do the whole thing.?
In return for their services, AccuMed will receive 9 percent of the monthly revenue collected.
‘This means that we don’t get paid until the Oxford Fire Department gets paid,? according to a Jan. 17 letter from Michael J. Todd, a retired fire chief working in client development for AccuMed.
LeRoy said, ‘Most of your surrounding, transporting fire departments use this firm,? including Brandon, Addison, Oakland and Independence townships. AccuMed’s been in business for more than 16 years.?
Todd gave an example of a cost recovery scenario involving Medicare to officials. He said Medicare establishes a rate they allow EMS providers to charge and ‘typically, it’s somewhat less than what the EMS providers bill out for normal services.?
Under Medicare, Todd said a senior citizen ‘would only be responsible at most for a 20 percent difference between what Medicare pays and what they allow.? If Medicare allows a provider to charge $200 for a Basic Life Support run and will only pay 80 percent (of $160), then the senior is responsible for the remaining 20 percent (or $40).
And if ‘they have a secondary insurance, then we would certainly bill them,? Todd said. ‘So that could possibly be paid.?
How much is charged will depend on ‘what the township advises (AccuMed) they want to charge? and on ‘what level of care is received,? Todd explained. He said typically $300 is charged for a Basic Life Support run. The reason is Blue Cross and other commercial insurance providers ‘pay a higher amount that Medicare does.?
Trustee Charlie Kniffen asked if the senior in Todd’s example has to then pay $140.
Todd said no because according to Medicare rules ‘if that person only had Medicare insurance and no Blue Cross, no other types of insurance, the maximum you can expect to gain from that person is 20 percent (or $40 of the $200).?
‘And pay the millage tax that we’re charging them on top of that,? Kniffen said.
Trustees Kniffen and Sue Bellairs were opposed to the idea of cost recovery because residents already pay millages for fire/EMS services.
‘I just think that’s what our taxes are for,? said Trustee Sue Bellairs. She likened it to having all the neighbors get together to buy mowing equipment and pay operational costs for one kid to cut all of their lawns, then he charges them $50 each time.
‘It’s just like they’re paying in vain,? Bellairs said.
Scholz explained that the millages pay for the ’employees to be there, to come out and provide service.?
‘The millage pays for the people to drive the truck,? he said. ‘You pay for the manpower to be there. That’s what the millage is getting for us.?
‘Cost recovery allows us to recover the cost of the materials we’re using,? Scholz explained, noting it ‘helps keep taxes from having to go higher? by offsetting the cost of supplies and future truck replacement.
Cost recovery is an alternative to the fire department ‘having to come back to (the voters) in another three years and say the ambulance is worn out. Now, I need another $100,000 or $200,000 to buy an ambulance.?
Supervisor Bill Dunn used the example of parks and recreation in response to Bellairs. He said residents pay a parks and rec. millage, ‘but if you want to play soccer, baseball or whatever, you pay an extra fee.?
It was noted that Oxford’s current private ambulance provider American Medical Response (AMR) charges residents for cost recovery. ‘It’s no different really than what is occurring now except that the private provider is the one that they’re paying,? LeRoy said. ‘We’re really transferring where the cost is being paid. They’ll get billed from us as opposed to AMR.?
‘Instead of that (money) going to a private provider and the township not recouping any of it,? Scholz said, ‘That money money comes back to the township? to help offset future costs to taxpayers.