The Audit found that all billing records are "properly maintained" at the Fire Department and at Allied Information and Services (AIS-the Department"s EMS billing service) and that billing is done in a timely fashion. This is consistent with the Department"s assessment that the EMS Administration Section should continue to provide oversight for the Emergency Medical Services revenue program.

The Audit recommends the creation of a new collections fee "work order agreement" with the City"s Bureau of Delinquent Revenue (BDR). All pre-merger and post merger accounts up to June 30, 2001, were processed pursuant to the San Francisco General Hospital / BDR M.O.U. The EMS Division Administrative Section and BDR staff recently developed a new Memorandum of Understanding, between the SFFD and BDR. This MOU is based on a 25% flat fee that is debited from collected gross revenue. The Department believes that changes in accounting practices created by this agreement will increase annual net revenue by as much as $300,000.

Many of the Audit"s recommendations involve the timeline for the transfer of delinquent accounts from Allied Information Services to the Bureau of Delinquent Revenue. The current agreement with AIS requires accounts to be transferred at the end of 180 days. The Department supports this practice and will work with AIS and BDR to ensure that accounts are transferred within this timeline.

The Audit also recommends transferring all non-billables and uncollectable accounts under $300 to BDR. These accounts have not been transferred in the past. The Department agrees with this recommendation.

The Department has found that AIS has consistently met all revenue targets, complied well with all contractual obligations, and has been responsive to requests for information and assistance.

· Recommendation of Auditor"s report

4.4.1 Direct AIS to transfer non-billable accounts of more than $300 to BDR if they remain uncollected by AIS 90 days after the provision of EMS service.

· Assessment of Department

The Department agrees with some portions of the recommendation of the audit.

The Department agrees that non-billable accounts over $300 should be transferred to BDR for collection. This has not been a past practice. Both the Department and BDR believe that there is not a significant revenue collection potential from these accounts. However, it is worthwhile to utilize the more extensive collection methods available to BDR to attempt to collect on these accounts.

The Department, AIS, and BDR all agree that due to the complexity and length of the medical billing cycle, AIS needs 180 days to exhaust all reasonable methods of collection.

· Department Action Plan and timeline

The Department has directed AIS to forward all non-billable accounts over $300 to BDR within 180 days. The Department has also met with BDR and has secured their agreement to this new procedure. There is no applicable action step to change the timeline to 90 days.

· Recommendation of Auditor"s report

4.4.2 Direct AIS to transfer non-billable accounts of $300 or less to BDR if they remain uncollected by AIS 90 days after the provision of EMS service. As noted previously, the City Attorney advises that the transfer of such accounts is allowable and BDR notes that it has accepted such accounts in the past from other departments.

·Assessment of Department

The Department agrees with some portions of the recommendation of the audit.

The Department agrees that non-billable accounts under $300 should be transferred to BDR for collection. This has not been a past practice because AIS and the Department felt they were in compliance with San Francisco City and County Administrative Code (Section 10.38). Both the Department and BDR believe that there is not a significant revenue collection potential from these accounts. However, it is worthwhile to utilize the more extensive collection methods available to BDR to attempt to collect on these accounts.

The Department, AIS, and BDR all agree that due to the complexity and length of the medical billing cycle, AIS needs 180 days to exhaust all reasonable methods of collection.

·Department Action Plan and timeline

The Department has directed AIS to forward all non-billable accounts under $300 to BDR within 180 days. The Department has also met with BDR and has secured their agreement to this new procedure. There is no applicable action step to change the timeline to 90 days.

· Recommendation of Auditor"s report

4.4.3 Direct AIS to transfer billable accounts of more than $300 , which are currently transferred to BDR, on a more timely basis. Such transfers should if such accounts remain uncollected by AIS 90 days after the first billing Exceptions to this 90 day rule should be allowed for (1) accounts for which AIS anticipates payment from a third-party, but such payments have not yet been received; and, (2) accounts for which a third-party has denied claim, whereby AIS should be allowed an additional 90 days to bill the patient for the balance.

·Assessment of Department

The Department disagrees with the recommendation of the audit.

The Fire Department recommends that AIS continue current practices of holding and working on all accounts for a period of 180 calendar days. Medicare, Medicaid, and Private Insurance reimbursement make up ninety percent of SFFD total revenue.

Allied Information and Services, a certified and expert reimbursement submittal corporation, is equipped to deal directly with all third party payers. A 180-day cycle allows patients time to recover from their illness or injury and allows the aged and infirm time to seek help with the discharge of their financial obligations. The 180-day cycle must be preserved to allow third party payers a reasonable billing and response timeframe. This is a common sense and sympathetic approach to public debt, an approach which has proven successful in the past.

The AIS/SFFD contract is an incentive based one, i.e., `collections increase profits". This type of contract provides an impetus for the company to utilize any and all methods available to secure payment on each account. The Department would likely face a difficult negotiation if it were to require AIS to change a long-standing practice that could potentially reduce the company"s revenue flow.

Consumer debt and public debt are not the same. The 90-day billing cycle recommended in the Audit is appropriate for commercial and consumer debt. The Audit recommendation does not properly address public debts related to medical and health care expenses. Any undue or excessive pressure applied to patients who have just experienced a major medical event may reflect poorly on San Francisco City Government, as well as on the SFFD. Without a sensitive approach to handling public debt, the Department"s public image could be tarnished, perhaps irreparably. Although it has the tools to track down a debtor, the BDR is not equipped to submit claims to third parties such as Medicare, Medi-Cal, and others.

The Bureau of Delinquent Revenue would be hampered by the same issues that prevent AIS from effectively collecting on accounts that lack specific patient identifiers (i.e., name, social security number or address). Additionally, fees charged to the Department by BDR are significantly higher than those charged by AIS because BDR deals with more problematic accounts.

The fee for BDR services is 25% of collected gross revenues. The fee for A.I.S. services is 7.5% of collected gross revenues. The Department"s new MOU with BDR., which memorializes the current practice, was negotiated with significant input from BDR personnel. Bureau representative Florence Mar was consulted and she concurred with the Fire Department on this issue.

The Department will continue to ensure that AIS transfers delinquent accounts to BDR promptly after 180 days.

·Department Action Plan and timeline

The Department will maintain the established 180-day AIS billing cycle, in order to maximize revenue collection on the majority of its third party accounts. There is no applicable action step to change the timeline to 90 days.

· Recommendation of Auditor"s report

4.4.4 Direct AIS to transfer billable accounts less than $300 to BDR within 90 days of the first billing, if AIS has been unable to collect such accounts. The exceptions described in 4.4.3 should also apply to these accounts.

·Assessment of Department

The Department agrees with some of the recommendation of the audit.

The Department agrees that billable accounts under $300 should be transferred to BDR for collection. This has not been a past practice because AIS and the Department felt they were in compliance with San Francisco City and County Administrative Code (Section 10.38). It is useful to utilize the more extensive collection methods available to BDR to attempt to collect on these accounts.

The Fire Department recommends that AIS continue current practices of holding and working on all accounts for a period of 180 calendar days for the reasons described in Section 4.4.3.

· Department Action Plan and timeline

The Department has directed AIS to transfer billable accounts under $300 to BDR if such accounts remain uncollected after 180 days. There is no applicable action step to change the timeline to 90 days.

· Recommendation of Auditor"s report

4.4.5 Enter into an ALS Provider Agreement with the Local EMS Agency, as required by the California Code of Regulations.

·Assessment of Department

The Department concurs in principal with the recommendation of the audit.

The Department will comply with this recommendation and state law related to ALS provider agreements. This recommendation refers to Title 22, Section 100173 (4) of the California Code of Regulations (Paramedic Service Provider). Section 100173 details contractual obligations of Advanced Life Support (ALS) provider agencies to comply with State and Local requirements, policies and programs.

Currently, the Department of Public Health Emergency Medical Services Section does not have written agreements with any of the ALS providers currently functioning within the City and County limits. Thus the Department finds no basis for the Audit claim that "this may increase the City"s liability for as the argument could be made that the Fire Department is not an approved ALS provider." The City has provided EMS services for over 100 years without such an agreement and has never had a problem with revenue collection related to the lack of such an agreement.

The development of such an agreement by Department of Public Health Emergency Medical Services Section is expected in the near future. The Department cautions that provisions contained in this type of agreement will mandate the service level required to be provided by the City. The Department cannot fully commit to entering into an ALS provider agreement with the local EMS Agency until it knows the terms of that agreement. Some provisions in the agreement may require the City to provide funding for additional EMS resources to comply with its mandates.

·Department Action Plan and timeline

The Department will work with the DPH EMS Section and the Board of Supervisors to enter into an agreement regarding the level of EMS services required to execute our mission. The Department expects this project can be completed by January 2003.