Calif. city FD looks to join other agencies in billing insurance for responding to calls
The move would add about $1.5M a year to the Modesto department's budget; Chief Alan Ernst said it would help the agency maintain its level of service
The Modesto Bee
MODESTO, Calif. — The Modesto Fire Department wants to bill insurance companies when its firefighters respond to car accidents, medical emergencies, fires and other calls for service.
This is expected to bring in about $1.5 million annually for the department's budget, according to two city reports, but Fire Chief Alan Ernst said in an interview the additional funding will help the department maintain its current level of service.
While the city is collecting more in sales, property and other taxes that support public safety and other city services, those taxes have not grown as fast as the city's expenses — primarily the cost of its employees — and city officials have looked for ways to bridge the gap.
"We are looking at ways of maintaining the level of service that the community expects," Ernst said.
Ernst stressed that insurance companies, not the people firefighters help, will be expected to pay these bills. He said the billing companies the city is considering using will not pursue payment from people if insurers do not pay.
And people without insurance will continue to receive assistance from the Fire Department.
The Fire Department is proposing Modesto enter into one-year agreements with Roseville-based Fire Recovery USA and Rancho Cordova-based Wittman Enterprises to bill and collect for these calls. The city would have the option to extend each contract by an additional year.
Fire Recovery would bill and collect on behalf of the Fire Department for fires, rescues, car wrecks, hazardous materials calls and similar calls for service while Wittman would bill and collect for emergency medical calls.
First responder fee
Ernst said Fire Recovery would bill private insurance companies for the money they collect from policy holders for these services. A city report calls it "the recovery of insurance mitigation rates associated with these types of high impact incidents." The amount charged would vary by the type of call. For instance, the charge for responding to a car accident could be $516.
Wittman would bill insurance companies a first responder fee of $360 for medical calls. "Private insurance companies typically pay such fees," according to a city report, "because field evaluation can help reduce emergency room visits and improve patient outcomes in an already overwhelmed medical care system."
Ernst said if the proposal goes forward, the Fire Department would seek payment from insurance companies to recover the costs associated with many of its calls for service. He said the department would not seek reimbursement for minor calls, such as firefighters helping someone who has fallen at home and needs helps getting up.
The City Council's Safety and Communities Committee last week recommended the full council approve this proposal and enter into agreements with the two billing companies. Ernst said this matter will appear before the council at its Tuesday meeting.
He said the billing could start in early 2022.
Common to bill insurance
A city report states it is becoming common for fire departments to try to recover some of their costs through billing insurance companies.
Fire Recovery USA states on its website that it has been in business since 2006 and is doing business with more than 1,300 fire departments in 42 states. Wittman Enterprises states in its proposal to the city that it has been in business since 1991 and is doing business with more than 110 public EMS and fire agencies in California.
Ernst said locally the Salida, Oakdale and Stanislaus Consolidated fire protection districts bill insurance for services.
Fire Recovery and Wittman will get a percentage of what it collects, and the expectation is that insurers will not pay most of the claims.
For instance, a city report states that based on the Fire Department's 2020 calls for service, Wittman could have billed insurance nearly $8.4 million but would expect to collect 14% of that, or nearly $1.2 million. Wittman's fees would be about a quarter of that, netting the city about $880,000.
Another city report states Modesto would net about $650,00 from Fire Recovery's efforts. That would bring in about $1.5 million annually to the city.
This story was originally published October 21, 2021 5:00 AM.
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