Memo Resolution EMS Bad Debt and Contractual Allowable Write-Off'sAgenda No. 2
CITY COUNCIL MEMORANDUM /RESOLUTION
City Council Meeting: September 21, 2010
Department:
Subject:
BACKGROUND:
EMS
EMS Bad Debt and Contractual Allowable
Write -Offs
Per City Policy, EMS is to bring uncollectible debt and non - collectable contractual allowables to City
Council throughout the year. For uncollectible debt, we are to write the debt off after 180 days of non-
payment.
FISCAL IMPACT
Our write off request is presented in three segments. First are the accounts that have been referred to our
collection agencies. These represent accounts sent to MVBA from April 1, 2010 through July 31, 2010.
For this period we are requesting to write -off $553,826.33 in collection accounts.
The second item to be written off comes from our internal billing procedures. Some of these are
negotiated charge reductions, write -offs of co -pays for citizens in the cities we serve, bills of homeless
patients who we cannot locate any longer, and bills of deceased patients who do not have insurance. The
amount of this category is $11,778.45.
Lastly, Contractual Allowables represent the funds we cannot collect by law due to accepting assignment
of Medicare, Medicaid and other government payments. This amount represents the difference between
what we have charged per our usual and customary charges and what we have been paid by
Medicare/Medicaid. The amount of these automatic write -offs is $578,279.73.
This last write -off of FY 2010 totals $1,143,884.51. Our anticipated budgeted write -offs for this Fiscal
Year is $2,856,819 of total Bad Debt Expenses and if approved, this request will bring our actual write -
offs to $3,705,884.14 due to larger than expected bad debt expenses. Contractual Allowables will be
$40,292.36 below budget while Collections will be $889,357.50 more than budget.
This is the first fiscal year that planned bad debt levels have been exceeded since we began handling bad
debts and uncollectables as expenses in the budget (FY 2005). These excess levels of write -offs appear to
be attributed to the current economic conditions affecting our area. In FY2009, we sent an average of 104
individuals to collections per month. In FY2010, this number more doubled with an average of 209
submissions to collections per month. We continue to explore new and innovative ways to collect these
dollars since the nature of our business prevents us from being able to chose who we provide service to.
RECOMMENDATION
Staff recommends Council approval of these Bad Debt Write -Offs.
Memo - Resolution.doc
City Council Memorandum
Page 2
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ:
That the above stated EMS recommends City Council approve the Write -Off amount of $1,143,884.51.
PASSED AND APPROVED at a regular meeting of the City Council of the City of Schertz, Texas this
21" day of September, 2010, at which meeting a quorum was present, held in accordance with the
provisions of the Texas Government Code, §551.001 et seq., as a 'ended.
R D
al Baldwin, ayor
ST:
nda Dennis, City Secretary
Memo - Resolution.doc