HomeMy WebLinkAboutID-2989
City of Palo Alto (ID # 2989)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 9/4/2012
September 04, 2012 Page 1 of 4
(ID # 2989)
Summary Title: Approval for Contract Ambulance Billing Service
Title: Approval of Contract with ADPI West for Ambulance Billing Services for Up
to Five Years in a Total Amount not to Exceed $900,000
From: City Manager
Lead Department: Fire
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or his designee to
execute the attached Agreement between the City and ADPI West, DBA: Intermedix, for a one
year period through September 30, 2013, with the option to renew for four additional one year
periods.
The total contract amount would not exceed $166,667 per year, or $900,000 over the full five-
year period.
BACKGROUND
The City of Palo Alto Fire Department currently bills for ambulance transports through a third
party vendor. Due to the complex and constantly changing regulations in health care billing, it is
necessary to rely on the expertise of a billing vendor. Outsourcing to a third party billing
vendor has increased revenues for the city.
The City Auditor conducted a study in 2007 that recommended very detailed and increased
oversight of patient accounts. A process was put in place to have a continuous review of
accounts and monthly meetings with the vendor to discuss accounts, and the vendor for this
contract will be required to comply with that process.
DISCUSSION
Service Description
The work to be performed under the contract is for patient billing services when ALS/BLS
transport is provided by the Palo Alto Fire Department. The need for a billing service’s
contractor was necessitated by several factors:
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Insurance industry reporting challenges and changes require unique expertise in the field of
patient billing. At current staffing levels, it is impossible to cope with increasingly complex
billing and coding changes each year.
MediCare’s flat rate billing process requires significant additional documentation and accounts
receivable processing. Current billing software utilized by the City does not incorporate ever-
changing mandated data requirements, such as insurance codes and MediCare rate
calculations.
Inter-facility scheduled transport billing requires significantly unique documentation and highly
detail-oriented accounts receivable processing.
Average collections for the program over the last three fiscal years (08-09, 09-10, and 10-11)
were approximately 2.3 million per year. The City’s experience with outsourcing medical billing
to a third party administrator has demonstrated a significant increase in revenue generation.
Prior to outsource billing the collection rates were approximately 1 million dollars.
Selection Process
The City issued a request for proposal (RFP) for ambulance billing services earlier this year and
had 6 responses. ASD and Fire Department staff reviewed and rated each proposal. The top
three candidates were interviewed on June 20, 2012 and rated on their proposals and services
offered. The vendor selected by the interview panel was Intermedix. Out of a possible 500
points Intermedix received 490, the second vendor received 477 and the third received 443.
Staff seeks to award this contract to Intermedix as this firm offers a wide-range of services that
will best meet the City’s overall needs. Intermedix will provide the City with a comprehensive
package of billing, collection, follow-up, account posting, accounts receivable reconciliation,
financial accounting, receipts management and reporting services, including the capability to
extrapolate data from the current electronic patient care report system currently used by the
Fire Department. In addition, Intermedix will provide the City with customized financial,
demographic, volume, acuity, performance, response and productivity reports on demand. All
services are to be provided on a contingent fee basis with fees paid on a percentage of
collections.
Intermedix holds many municipal ambulance billing contracts within California and the Bay area
with over 30 years of experience. Intermedix was selected due to the vendor’s experience and
qualifications in ambulance billing.
Intermedix has the resources and expertise necessary to appropriately implement and continue
medical billing. Intermedix has proprietary software and technology for paperless, automated
billing. They have a large Bay Area/Northern California presence: City of Alameda, Berkeley,
Palo Alto, San Francisco, South SF, Sacramento and most recently, Paramedics Plus (Alameda
County Ambulance Service) with 90,000 transports a year.
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Intermedix offers extensive and customized reporting capabilities, ensuring the City will have
access to accurate information with which to monitor the program. The city has access to all
account information remotely at any time for spot audits and customer requests.
Intermedix has provided billing services to the City for the past three years and consistently met
the performance measures implemented as a result of the ambulance billing audit over the life
of the current contract.
For their service, they retain a percentage of 4.75% fee for net funds collected. The current
contract expires September 30, 2012. They are currently integrated into City’s electronic
patient reporting software and would need no start up time. The new fee for service would
drop to 4.5% net funds collected. Actual monthly fees paid to Intermedix will vary due to the
flexible collections and call volume fluctuations.
The not-to-exceed amounts proposed for this contract allow for some flexibility for future
municipal fee increases and increases in call volume over the next three years. Although
transports have been flat for the last few years, with the implementation of the EMS Study
recommendations in 2012, we are expecting an increase of transport volumes as we capture
transports that have been turned over to the county ambulance services.
RESOURCE IMPACT
Contract fees are based on a percentage (State Percentage) of funds collected for EMS
transport services; thus, revenue generated during the contract extension period will more
than offset the proposed contract cost.
POLICY IMPLICATIONS
This recommendation is consistent with existing City policies and will allow the City to continue
the outsourcing of ambulance billing at a competitive rate.
ENVIRONMENTAL REVIEW
This contract is not a project under the provisions of the California Environmental Quality Act.
Attachments:
Attachment A - ADPI West Contract 082712 (PDF)
Prepared By: Kim Roderick,
September 04, 2012 Page 4 of 4
(ID # 2989)
Department Head: Dennis Burns, Police Chief
City Manager Approval: ____________________________________
James Keene, City Manager