CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Authorize the City Manager to increase the 2026 personnel headcount and hire two full-time Medical Billing Representatives in the Fire Department
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DEPARTMENT: Fire Department
SUBMITTED BY: Mark Puknaitis, Chief
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
The Fire Department (“FD”) is responsible for the billing of emergency medical service (EMS) calls. Traditionally, this function has been administered through a third-party vendor compensated through a commission-based fee structure tied to collected revenues. At this time, the FD employs one Medical Revenue Specialist to perform a variety of administrative duties related to ambulance billing including the organization, preparation, submission and posting of Medicaid, Medicare, private pay and private insurance billings and serves as the point of contact for both the third-party vendor and customers utilizing ambulance transport services.
Despite growing call volume and number of calls for service eligible for billing, the table below shows that the FD has experienced a year-over-year decline in dollars collected per trip, and as a result, lower annual revenue.
|
Year |
# Total Calls |
# of Billable EMS Calls |
Avg. Collected Per Trip |
Total Annual Revenue |
|
2023 |
17,330 |
10,913 |
$549 |
$7,583,795 |
|
2024 |
18,198 |
11,639 |
$531 |
$8,060,713 |
|
2025 |
18,531 |
9,392 |
$503 |
$6,365,279 |
Staff has worked diligently to address these issues with the vendor; however, those efforts have resulted in only limited success. For example, in 2025 due to vendor and new hospital software issues, over 60 days of billable calls could not be billed or collected until 2026 and only after staff identified the errors.
After monitoring vendor performance, service delivery, and reviewing the experiences and operational practices of other municipalities, the FD recommends transitioning this function in-house. Bringing the billing operation under Fire Department administration will improve operational oversight, increase efficiency, enhance customer service, and reduce costs associated with third-party commissions. See the table below.
|
Year |
Third-party Commission Payments |
|
2023 |
$329,917 |
|
2024 |
$333,402 |
|
2025 |
$211,920 |
DISCUSSION:
Pilot
In preparation for this recommendation, and to evaluate the department’s ability to effectively manage the billing process in-house, the FD initiated a pilot program in February 2026. While still under contract with the current third-party vendor, approximately 20% of all billable EMS calls for service were managed by the Medical Revenue Specialist. The third-party vendor was responsible for the remaining 80%.
Since implementation of the pilot program, the FD has experienced measurable improvements in claim denials, shorter payment turnaround times, and improved follow-up management of rejected claims. Further successes include cost recovery for vehicle accidents and vehicle fires of nearly $25,000.
Most notably, the FD has achieved a 100% success rate in identifying, correcting, and resubmitting rejected claims within applicable timely filing requirements for reimbursement.
The table below shows additional details of the pilot program.
|
In-house Pilot Program |
|
Total # of Billed EMS Calls |
316 |
|
EMS Billing Revenue Collected |
$463,165 |
|
Total # of Billed Fire Recovery |
187 |
|
Fire Recovery Revenue Collected |
$24,750 |
|
Total Revenue Collected |
$487,915 |
|
Total Accounts Receivable |
$374,493 |
|
Total Billed across all payors |
$862,408 |
|
AR >90 Days |
$19,784 |
|
Avg Date to payment reduction (in-house v 3rd party) |
76 days |
|
Total Claims administered |
316 |
|
Claims with initial denial |
47 |
|
Claims denied after intervention |
0 |
Staffing
The FD created medical billing policies/procedures and has purchased the software required to perform in-house billing. Since February, the Medical Revenue Specialist and one Firefighter/Paramedic have performed ambulance billing. While this setup has worked in the short term and with a limited workload, the recommended solution is to add Fire Department staff to manage a full workload of an estimated 12,000 annual emergency medical service calls.
As such, the department is requesting the addition of two full-time Medical Billing Representatives. If approved, the current Medical Revenue Specialist will be promoted to supervisor and perform billing and customer service duties, manage claim denials and customer concerns, and serve as the liaison between the FD and the Finance Department. The Firefighter/Paramedic will return to shift.
While most of the work associated with an in-house billing program will be in the FD, there will be some additional workload for the Finance Department’s accounting and collections teams. Once the program is fully implemented, staff will be able to better assess those impacts and determine whether additional staff are required.
FISCAL IMPACT:
The addition of two Medical Billing Representatives would result in an estimated 2026 cost of $79,300. This amount assumes that the two positions would not be filled until August 1, incurring only five months of salary and benefits in 2026.
The estimated annual cost for an entire year in 2027 rises to $200,000 and increases annually as salary, benefit, and pension costs increase.
The annual costs associated with the increased staffing are offset by the elimination of the third-party billing service and the associated commission payments.