OIG Audit Finds City Bills Accurately for Emergency Medical Services

The City of Chicago Office of Inspector General (OIG) has completed an audit of the Department of Finance’s (DOF) billing for emergency medical services (EMS) provided by the Chicago Fire Department. Based on the audit results, OIG concluded that DOF bills issued for emergency medical transports were accurate, but that the Department failed to bill for all transports eligible for billing and that opportunities exist to increase fee revenue and reduce costs.

Specifically, while DOF reviewed accounts to guard against overbilling, which can result in penalties and fees, the Department did not routinely review unbilled accounts to assure that they were accurately designated as not-billable. As a result, DOF’s billing for emergency ambulance transports was not complete, resulting in an estimated $160,799 of missed fee revenue in 2014.

In addition, although DOF is authorized to set reasonable fees for all ambulance services, currently DOF only bills for services that involve transporting the patient to the hospital. For example, when a patient is evaluated and treated on scene without transport, the City does not bill the patient for any services. However, if the patient is evaluated, treated, and transported to the hospital, the City bills the patient for all three services. OIG estimated that DOF could collect an additional $696,594 per year if it were to bill for incidents where ambulance crews provide treatment, but do not transport patients. Although Medicare and Medicaid will only pay for services that involve a transport, cities such as Dallas, San Antonio, and San Francisco charge private insurers and self-pay patients for such “treat-no-transport” services.

In response to these revenue findings, DOF stated that it would institute a monthly review of unbilled accounts. The Department will also undertake a cost/benefit analysis to determine whether it should charge for treat-no-transport services. If charges are implemented, the Department stated that it would, “work to develop a plan to minimize the impact on low-income patients and patients [who are] declining treatment.”

Finally, by comparing ambulance billing contracts held by other municipalities with DOF’s contract, OIG estimated DOF could save between $883,211 to $1.5 million annually by adopting certain compensation provisions. DOF stated that it will take this opportunity into account later this year when it negotiates a new contract.

“Our audit indicated that DOF has a robust billing system and that opportunities exist for adjustments that would improve both revenue and cost outcomes,” Inspector General Joe Ferguson stated. “DOF’s commitment to working through these issues and thereby further improving its management of the program should foster confidence in the Department as a proactive steward of public fiscal resources and services.”

The full report, and DOF’s response to the findings, can be found online.

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