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How to buy fire department billing and administration products

By Greg Friese

In any economic climate, collection of revenue is important for firefighting departments. Currently, as other sources of government funding are decreasing, fire departments need to ensure they are maximizing revenue collection and to increase revenue collection, you need to know where you are starting.

Fire departments have many options for consultants who can assist with administration and billing. Ed Marasco of Quick Med Claims recommends that the first step is determining current benchmarks related to billing and cost recovery. Instead of trying to benchmark your department against other departments, benchmark your own performance over time. Comparing your department to others is difficult because of the high number of variables you cannot control like service volume and charges.

Mr. Marasco advises fire departments to at a minimum review their performance with these three benchmarks:

1. Collection per transport. For every bill sent out, how much money do you collect? Over time, this number should naturally increase due to cost of living/inflation increases. If the number is not increasing, there is a reason that needs to be found, understood, and potentially corrected.

2. Percentage of charges collected. What is your department’s collection rate? This number should not significantly vary over time. If it does change, try to determine the reason. Did a large local payor change its reimbursement schedule? Has there been staff turnover in the billing department? Are you using a new billing service provider?

3. Days Sales Outstanding (DSO) is a calculation of the outstanding accounts receivable divided by charges in the same period multiplied by the number of days in that time period. How long does it take for your department to receive money? Ground service providers have a fairly predictable DSO. Again, if there is a change, determine the cause.

Benchmarking your department’s performance establishes the baseline needed to analyze and improve operations. Review each of the benchmarks monthly, quarterly, and annually. Compare the benchmarks against previous time periods and projections. Use the data to determine if an administration and billing consultant can help improve your operations. When selecting an administration and billing vendor, keep these top considerations in mind:

1. Experience. Find a consultant that has verifiable experience in fire service billing that is real and current.

2. Knowledge of rule changes. Mr. Marasco told me, “The rules can change as frequently as once a month.” An administration and billing vendor needs to have current information about regulatory and third-party payor changes.

3. Awareness of your region or state. A vendor should have knowledge about the large third party vendors in your service area as well as any specific state regulatory requirements.

Finally, remember to purchase the services you need. There is a distinct possibility that you will be oversold an analysis and scope of work well beyond your current needs. Start with a project needs assessment. Mr. Marasco made the analogy of the difference between a table top exercise and a full scale exercise. A table top exercise is a fairly quick and low cost analysis of current capabilities that can be used to establish benchmarks. “A tabletop gives you a feel of where your agency is at now and then those findings can be used to identify and prioritize subsequent actions,” Mr. Marasco explained.

Any other suggestions for purchasing Administration and Billing services? Anything we missed in the list above? Leave a comment below or email with your feedback.