Update: Fire Commissioners Institute Cost Recovery Measure

The Measure Allows Collection of Charges for Emergency Medical Services

Editors Note to readers: This article, originally published on Friday, Aug. 28, 2015, had been removed because of misleading information, due to incompleteness of reporting from official Orcas Fire and Rescue Department documents. We can see how this led to misinterpretation by readers, and apologize to the Fire and Rescue Department, Board of Commissioners and our readers for this mistake. Comments to that first article have been removed from publication.

In order to fully represent the resolution (which can be seen by clicking HERE/2015-07-16-cost-recovery-resolution-adopted-BB.pdf and/or by reading to the end of this article, where the ordinance is fully printed) and what it means to the Orcas Island community,  the following article is written. Thank you for your forbearance.

— by Margie Doyle —

On August 1, 2015 the Orcas Island Fire and Rescue (OIFR) began implementation of a “cost recovery” policy for Emergency Medical Services. This policy was approved by resolution of OIFR Commissioners at their regular session on Thursday July 16, 2015. (You may view the documents on orcasfire.org.)

The signing of the resolution to implement cost recovery came after several years of research, citizens’ panels, several town hall meetings — four of which occurred this year with the last one taking place on June 6, 2015. The commissioners’ decision came following their determination, in the words of Fire and Rescue Commission Chair Barbara Bedell, that “Emergency Medical Services Cost Recovery is a way to have another source of revenue that is no additional burden to Orcas Island residents.”

Bedell adds with emphasis, “This policy must demonstrate its success to the community, or it will be adjusted or canceled.”

Basically, when Orcas Fire and Rescue Emergency Medical Personnel respond to a call, they will ASK the patient to sign a form allowing Orcas Fire and Rescue to share patient data with the patient’s insurance companies for Cost Recovery purposes.

The response and treatment will continue whether the patient has insurance or NOT, whether the patient is an island resident or NOT, and whether the patient signs the form or NOT. The Cost Recovery program has no impact on response, treatment or follow-up.

OIFR is still working to implement the cost recovery process –it took over 20 minutes for Chief Preysz just to sign the initial documents of all the agencies to be sure the program flows smoothly. And there’s more to sign!

Washington state law “allows the district to seek reimbursement for emergency services,” says Preysz. “We will seek insurance reimbursement from all parties. However, island residents will not incur any out-of-pocket expenses, even if they lack insurance coverage.” Residents include property owners, renters and seasonal workers living on the island.

While the Orcas Fire and Rescue resolution 2015-03 states that “a patient … is required to [provide] necessary health information releases and assignments of benefits [for] the district to obtain payment from appropriate third parties and insurers,” and that “Patients may also be requested to provide…proof of residency,” the Fire Commissioners made sure that the District “reserves the right to waive any fee charge on a case-by-case basis.”

This decision will be made at the discretion of the Fire Chief who will respond to any individual hardship letter or discrepancies.

Preysz says, “Legally, we have to spell it out, but if you provide an island address or PO Box number, we will assume you are a resident.”

The Fire Commissioners wanted to make sure that any issues regarding fairness that are outside the intent of the cost recovery policy, are reviewed by the Chief. Further, as it goes forward and the Commissioners review the program, “if they determine that Cost Recovery is not serving the community, the resolution will be revoked and the cost recovery program will be pulled,” said Preysz.

Systems Design of Poulsbo, a provider of Ambulance Billing, EMS Billing, and Accounting Services exclusively for Fire and Rescue organizations throughout the western United States, has been retained to provide administration and billing for the program.

Systems Design is a 29-year old billing company, not a collection agency. In fact, Systems Design will dispute directly with the insurance companies of behalf of the insured and the Fire District. They serve over 90 Fire Departments in Washington State alone.

“OIFR Commissioners have made clear at Commissioner meetings that collection procedures of any sort will not be instituted, either through Systems Design or any other agency.”

In addition, as it is not always feasible to gather accurate information at the time of transport, OIFD would ask that residents cooperate with Systems Design if they receive requests for insurance information in the mail to provide accurate info so that their insurance can be billed. Such requests will be in the form of a letter, not an invoice, and can be responded to by phone, mail or email.

Chief Preysz said that, after considering many such administrative agencies, and narrowing the choice to three, Orcas Fire and Rescue decided upon Systems Design for three reasons:

• the fact that it charges a flat rate of $26 per transport billed;
• its reputation for use of best practices and reliability;
• customer satisfaction ascertained from departments using Systems Design.

The rate schedule reflects the OIFR analysis of the real costs of its calls. The highest billing in the fee schedule, $1,742, represents an average of the variable costs incurred by OIFR when responding to calls.

Preysz projects that the Cost Recovery program may provide an estimated $135,000 to $150,000 to the OIFR budget.

Cost Recovery programs from Fire Districts are commonplace in many locales and have been for many years; over 90 districts in Washington state alone already have cost recovery programs, including  Lopez Fire and San Juan Island EMS Districts.

Chief Preysz says, “In fact, our own island residents participate in a Cost Recovery program, that benefits Airlift Northwest or Island Air Ambulance, whenever they are transported.” He recalls the time in 1997 when he personally was charged $800 –his out-of-pocket expense — for an emergency ambulance trip by the Bellingham Fire Department (in his taxing district) when his vehicle was struck by a Driver Under the Influence (DUI).

So, what happens after Systems Design recovers money from an insurance company or third party provider? Three things:

1. Patients will receive an Explanation of Benefits from Systems Design confirming the processing of the claim, just as they do for other medical services;
2. The funds are deposited in an Islanders Bank account for the Orcas Fire Department’s General Fund after being signed off by the County Treasurer;
3. Orcas Fire and Rescue is billed $26 for each transport sent for billing on its monthly invoice from Systems Systems Design.

Non-residents will be billed for any balance unpaid by insurance.

The OIFR resolution allows for collection services, but no collection service process is currently in place, at the direction of OIFR Commissioners.

Funds may be transferred out of the General Fund for other Fire Department expenses, for such items as diagnostic equipment, which Chief Preysz says will decrease emergency trips off-island; and for support of the Orcas CARES program.

In this way, says Preysz, “We’re getting money back into the community.”

As our community transitions from country doctors, house calls and all-volunteer fire departments, the OIFR is “always proactive and prepared, rather than reactive,” says Preysz. “We knew these changes were upon us as we transition in medical responses. The difference is we’re not asking the community for any additional funding.”

SAN JUAN COUNTY FIRE DISTRICT NO. 2
ORCAS ISLAND FIRE & RESCUE
Resolution 2015-03
RESOLUTION AUTHORIZING EMERGENCY MEDICAL SERVICES
AND ESTABLISHING SERVICE CHARGE

WHEREAS, San Juan County Fire District No. 2 (the “District”) is from time-to-time requested to
respond to the scene of an emergency that requires the delivery of emergency medical services
that may include basic life support services, advanced life support services, and ambulance
transportation; and

WHEREAS, the District is authorized by statute to provide the required emergency medical
services under such conditions as the Board of Commissioners of the District may prescribe
(RCW 52.12.021); and

WHEREAS, pursuant to RCW 52.12.131, the District is authorized to establish reasonable fees
to cover its costs in providing emergency medical services; and

WHEREAS, the Board of Commissioners of the District has reviewed the cost to the District of
providing specific services and has determined reasonable charges for the use of equipment
and personnel; and

WHEREAS, in establishing the reasonable charges, the District recognizes that residents and
property owners in the District, through the payment of real property taxes directly or indirectly,
already provide a portion of the funds required for the operation of the District and for the acquisition of District property and equipment; and

WHEREAS, the District desires to institute a policy to ensure consistency in billing and the
collection of charges for emergency medical services.

NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of San Juan County
Fire District No. 2 that the following policy is established:

1. Credit for Residents and Property Owners. Bona fide residents and property owners within the District shall be deemed to have paid that portion of the charges incurred that are not payable by third parties and insurers, including, but not limited to, any insurance or medical benefits of any nature available to such resident or property owner. Nonresidents and non-property owners shall not receive this credit and shall be required to pay all charges incurred.1.1 The term “bona fide residents” means persons who, at the time of receiving service, are residing within the District on a permanent or seasonal basis, i.e. minimum of three (3) consecutive months.
   1.2 In order to receive this credit, a patient who claims to be a bona fide resident or property owner is required to cooperate with the District by executing all necessary health information releases and assignments of benefits to enable the District to obtain payment from appropriate third parties and insurers. Patients may also be requested to provide the District with proof of residency or property ownership. Such proof may include property tax statements,
   leases, voter registration cards, or other such documentation as determined
   at the sole discretion of the Fire Chief.
2. Fee Schedule. The Board of Fire Commissioners hereby adopts the reasonable fee schedule attached as Attachment A for providing such services, and directs that the recipients of such emergency services be billed for the services in the manner described in this resolution. [click HERE to access Attachment A].
3. Debt Collection. The Board of Fire Commissioners hereby adopts the Debt Collection Policy attached hereto as Attachment B. [click HERE to access Attachment B].
4. Hardship. The District reserves the right to waive any Transport Fee charge on a case-by-case basis if financial hardship is demonstrated by the patient.
5. Collection Agency and Billing Agency Contracts. Any billing and/or collection
   agency with whom the District contracts will be required to provide the District with
   regular reports on not less than a monthly basis listing the following information:a. Patient by date of transport;
   b. A/R report for each patient transport;
   c. Money collected on behalf of each patient; and
   d. Money paid by the collection agency to the District on each patient account.6. Effective Date. This resolution shall take effect August 1, 2015.
   ADOPTED by the Board of Commissioners of San Juan County Fire District No. 2 (Orcas Island
   Fire & Rescue), at a regular open public meeting of such Board on the ______ day of July,
   2015, with the following Commissioners being present and voting.
   (signed by all commissioners)