Billing 'not a total answer' to fire companies' woes
By Daina Klimanis
The York Dispatch (Pennsylvania)
Copyright 2006 York Newspapers, Inc.
All Rights Reserved
David Sulik has what he calls a "hot topic" on his hands.
He is vice president of a company that specializes in sending out bills for fire and EMS service, a service he said is getting increasing interest from fire companies across the country as they look to billing to meet their financial needs.
It's also a tactic that has been proposed in York City, where promoters say it would provide needed funding without requiring a property tax hike.
But Sulik, vice president of Wisconsin-based National EMS Billing Inc., said the idea that the city can easily get money by sending bills to insurance companies doesn't always hold true.
He and others involved in fire services billing say the demographics of those billed, as well as the persistence with which payments are pursued, would ultimately determine how much money the city gets.
York City Council President Cameron Texter drafted a bill to give the fire department power to send out bills after it responds to vehicle accidents and fires. Though Texter said he does not yet plan to introduce the matter for a vote, he wanted to initiate discussion on the topic.
Texter also drafted a separate bill that established the new fees. A "basic" response to an accident scene would cost $125; a complicated extraction or a fire call could cost up to $500. The money would go to a fund to be
used for the city's fire and rescue services.
Support, caution: David Bowman, president of the York Professional Firefighters Association, is among those who endorse the plan. As head of the city's fire union, he has been pushing for billing as a way to fund the department.
"If you have a vehicle accident, you're going to have a bill from the towing company, you're going to have a bill for an ambulance if you're transported, you're going to have a bill from a utility if you do any damage," Bowman said. "We're the only one that doesn't bill."
But not everyone is as eager to back the measure. City Mayor John Brenner said he has "serious concerns" about the proposed legislation.
"He's not comfortable supporting the subject at this time," said Rosalinda DeJesus, speaking for Brenner when he was out of town last week. "And he said the subject does need additional research."
Insurance payments: Texter said he expects insurance companies to pay almost all of the bills, which would be covered under many auto insurance policies in the case of auto accidents, or homeowners' insurance policies in the case of fires.
But how likely people are to have that insurance coverage varies with the amount of poverty in a community, Sulik said.
The better the work force and the lower the unemployment in a community, the more likely that bills will go off to insurance companies and be paid relatively quickly, Sulik said. Even then, not all policies will cover the fees.
To increase the rate of return, a municipality or billing company has to be aggressive in pursuing the bills, Sulik said.
"You have a blend there," Sulik said. "It's how hard is the billing service going after the individuals, how good is their staff. But the biggest thing is ... how much they want to push their residents."
Different approaches: Some municipalities will turn those who don't pay the bills over to collection companies after only 90 days, some wait two years and others won't send any kind of reminder encouraging people to pay up, said Bill Womelsdorf, sales and IT director for Georgia-based Emergency Billing LLC.
Though less aggressive methods will decrease the income that billing will bring in, a municipality can largely limit its income source to insurance company payments as long as it does not send bills out to the individuals when insurance companies won't pay, Womelsdorf said. With the fees already covered under many insurance policies, fire departments have the opportunity to try and collect.
But others say insurance companies that pay the fees will just pass the costs along.
"Whatever you charge insurers, you're ultimately charging insurance policy holders," said Sam Marshall, president of the Insurance Federation of Pennsylvania. "It comes back at you."
Plus, the process has its own costs. Sulik said many fire companies are becoming frustrated with the paperwork and phone calls that come along with billing and are increasingly contracting with independent companies to do the work. Those companies must pay for their own operations.
Though the system is bringing some income into fire companies, other funding is still needed, said Tom Savage, executive director of the Pennsylvania Fire & Emergency Services Institute.
"I think people realize it's not a total answer to problems," Savage said.