The Office of Inspector General (OIG) conducted an audit of the Department of Finance’s (DOF) billing for emergency medical services provided by the Chicago Fire Department (CFD).
The City began billing users for ambulance transports in 1985 “in order to take advantage of available reimbursements from Medicare, Medicaid and private insurance companies.” According to CFD, the City’s total cost of providing emergency medical services—including both ambulance and fire company services—was $529.2 million in 2012, the most recent year for which CFD has performed this analysis. DOF does not bill for emergency medical services other than ambulance transports. Municipal Code of Chicago (MCC) § 4-68-130 gives DOF the authority to set “reasonable fees, as determined by the comptroller, for ambulance services rendered by public ambulances.” DOF bills for ambulance transports through a contract with a vendor.
The objective of the audit was to determine if DOF billed for emergency medical services accurately and completely. OIG found that,
- DOF billed accurately for emergency ambulance transports, but opportunities exist to strengthen its compliance practices;
- DOF’s billing for emergency ambulance transports was not complete, resulting in an estimated $160,799 of missed fee revenue in 2014;
- DOF could increase fee revenue by an estimated $696,594 annually if it expanded the range of City-provided emergency medical services subject to fees; and
- DOF could reduce costs by eliminating incentive fees from future contracts or, if the fees are maintained, clarifying how they are awarded.
OIG concluded that DOF billed accurately for emergency medical transports, but opportunities exist to increase fee revenue and reduce costs. We recommend that DOF consider reviewing unbilled accounts to ensure the completeness of billing, and expanding the range of services subject to a fee. We also recommend that DOF consider eliminating incentive fees from its contract with the billing vendor as a means of reducing costs. If it does not eliminate incentive fees, we recommend DOF more carefully review documentation used to justify monthly incentive payments.
In response to our audit findings and recommendations, DOF stated that it would evaluate the costs and benefits of implementing additional compliance activities to further align its compliance program with federal guidelines. DOF also committed to reviewing unbilled accounts to determine if any could have been billed. The Department stated that it will consider eliminating incentive fees from future vendor contracts, and work with CFD, the Office of Emergency Management and Communications (OEMC), and the Office of Budget and Management (OBM) to evaluate the costs and benefits of expanding the range of emergency medical services subject to fees.
 The City’s website states that “prior to 1985, this service was provided free of charge.” City of Chicago, Department of Finance, “Ambulance Bills,” accessed March 16, 2016, http://www.cityofchicago.org/city/en/depts/fin/supp_info/revenue/ambulance_bills.html.