HomeMy WebLinkAbout2015-02-18 PACKET 04.G. REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
IVIEETING ITEM #
DATE 2/18/14 � I
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PREPARED BY Finance Robin Roland
ORIGINATING DEPARTMENT DEPARTMENT HEAD
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COUNCIL ACTION REQUEST
Consider write offs of Cottage Grove EMS accounts receivable in the amount of $2,227,142.
STAFF RECOMMENDATION
Adopt the resolution to write off Cottage Grove EMS accounts receivable in the amount of
$2,227,142.
BUDGET IMPLICATION
BUDGETED AMOUNT ACTUAL AMOUNT
ADVISORY COMMISSION ACTION
DATE REVIEWED APPROVED DENIED
❑ PLANNING ❑ ❑ ❑
❑ PUBLIC SAFETY ❑ ❑ ❑
❑ PUBLIC WORKS ❑ ❑ ❑
❑ PARKS AND RECREATION ❑ ❑ ❑
❑ HUMAN SERVICES/RIGHTS ❑ ❑ ❑
❑ ECONOMIC DEV. AUTHORITY ❑ ❑ ❑
❑ ❑ ❑ ❑
SUPPORTING DOCUMENTS
� MEMO/LETTER:
� RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
❑ OTHER:
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ADMINISTRATORS COMMENTS
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`�-- ity Administrator Date
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COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
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City of Cottage Grove ` �
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Finance Me111O
To: Honorable Mayor and City Council
Ryan Schroeder, City Administrator
From: Robin Roland, Finance Director
Brenda Malinowski, Assistant Finance Director ��`�
Date: February 11, 2015
Subject: Ambulance Write-offs
Introduction
Each year, certain uncollectible ambulance accounts must be written off. These charges
are a combination of Medicare and Medicaid paid accounts and other mandatory
adjustments in addition to actual "bad-debt" which has previously been turned over to
collection. Mandatory write-offs are considered during the budget/rate setting process
and should not be deemed an indication of adverse financial circumstances.
Discussion
Staff requests formal authorization to write-off $2,227,142 in ambulance charges for the
year ended December 31, 2014, as follows:
Percentage
Increase
2010 2011 2012 2013 2014 ('13 to'14)
Gross Revenues: 2,230,736 2,470,154 3,240,396 3,421,529 3,860,539 12.83%
W rite-off's:
Medicare $729,729.00 $857,857.00 $1,190,647.00 $1,329,334.00 $1,440,104.00 8.33%
Medicaid 270,738.00 283,567.00 374,392.00 421,167.00 495,854.00 17.73%
Worker's Comp. 2,306.49 5,184.00 7,231.00 4,590.00 4,684.00 2.05%
Other Manadato Ad' 8,835.00 13,383.00 18,438.00 11,631.00 21,061.00 81.08%
Bankruptc 322.00 33.00 3,479.00 3,732.00 5,317.00 42.47%
Closed by Collection 185,484.00 166,810.00 121,161.00 154,409.00 260,122.00 68.46%
Total Write-offs $1,197,414.49 $1,326,834.00 $1,715,348.00 $1,924,863.00 $2,227,142.00 15.70%
These write-offs relate to multiple years of service provided because the timing of the
write-offs each year varies by the type of call and whether there is mandatory assignment
required. For example, the write-offs related to Medicare and Medicaid are for runs over
the past 12 months because payments are collected shortly after they are billed.
However, the write-offs for those accounts "closed by collection" are for runs that
occurred over the past couple of years.
For Medicare, Medicaid, Worker's comp and "other mandatory adjustment", we are only
allowed reimbursement of a small government payment and a small co-payment from
the patient for the call. The amounts paid are a fraction of our billing rate and lower than
the actual cost to provide the service.
The "closed by collection" accounts are for ambulance call activity occurring anytime
from 2011 through 2013 in amounts that the collection agency feels are no longer
collectable. Accounts turned over for collection take over 12 months from the call date
to go through the full collection process. Currently if an account is not paid within 120
days, it is sent to collection and/or placed in the State Revenue Recapture program for
collection.
Cottage Grove EMS, like all other medical service providers, has been required to accept
assignment for Medicare payments since 2002. Medicare/Medicaid pays a
predetermined dollar amount no matter what billing rate is charged. The table below
reflects Medicare reimbursement amounts for the past six years. As our rates increase
(4%) faster than the increase (1.3%) in the reimbursement amount, the write-off amounts
also increase.
Type of Call 2009 2010 2011 2012 2013 2014
Cottage Grove
BLS
Rate $ 1,160.00 $ 1,230.00 $ 1,330.00 $ 1,440.00 $ 1,530.00 $ 1,590.00 4%
Medicare Reimb 338.08 331.45 340.37 352.96 355.79 360.34 1.3%
% Reimbursed 29.14% 26.95% 25.59% 24.51% 23.25% 22.66%
ALS-1
Rate 1,430.00 1,520.00 1,640.00 1,770.00 1,880.00 1,960.00 4%
Medicare Reimb 401.47 393.59 404.19 419.13 422.50 427.90 1.3%
°/a Reimbursed 28.07% 25.89% 24.65% 23.68% 22.47% 21.83%
ALS-2
Rate 1,650.00 1,750.00 1,890.00 2,040.00 2,160.00 2,250.00 4%
Medicare Reimb 581.07 569.68 585.01 606.64 611.51 619.33 1.3%
% Reimbursed 35.22% 32.55% 30.95% 29.74% 28.31% 27.53%
The following chart reflects annual write-off's compared to the corresponding revenue �
by year for the past several years. ;
Prior Years 2011 2012 2013 2014 Totals
Revenue (billed charges) 2,470,154 3,240,396 3,421,529 3,860,539 12,992,618
Write-Offs
Medicare 873,419 1,241,815 1,256,502 1,343,342 4,715,078
Medicaid 298,011 370,208 427,431 450,418 1,546,068
Worker's Comp/Other Mandatory , 16,081 24,915 19,527 21,195 81,718
Bankruptcy 217 4,253 4,427 2,326 11,223
Uncontrollable Total 0 1,187,728 1,641,191 1,707,887 1,817,281 6,354,087
Closed by Coliection (Controllable) 128,643 196,263 296,613 0 621,519
Total Write-Offs 0 1,316,371 1,837,454 2,004,500 1,817,281 6,975,606
Written Off2014 -14,686 -7,376 -13,215 445,138 1,817,281 2,227,142
Written Offpreviously 0 1,323,747 1,850,669 1,559,362 0 4,733,778
Total Write-offs -14,686 1,316,371 1,837,454 2,004,500 1,817,281 6,975,606
Write-offs as % of Revenue
Revenue Increase 10.73% 31.18% 5.59% 12.83%
Uncontrollable 48.08% 50.65% 49.92% 47.07°/o
Controllable 5.21 % 6.06% 8.67% 0.00%
StillOwing 0.00% 0.00% 0.00% 20.97%
Controllable write-offs as % of Net Revenue
Revenue 2,470,154 3,240,396 3,421,529 3,860,539
Uncontrollable write-offs 1,187,728 1,641,191 1,707,887 1,817,281
Net Revenue 1,282,426 1,599,205 1,713,642 2,043,258
Controllable write-offs 128,643 196,263 296,613
Controll. write-offs as % of Net Rev. 10.03% 12.27% 17.31%
Staff also tracks the revenue (charges) versus write-offs by City of service. The following
charts cover the past three years. Grey Cloud Township reimburses the City for their
write-offs so these have not been included. 2014 data is not included as all mandatory
write-offs have yet to be accounted for in the system.
2011
Charges Write-offs W/O's as %
Cottage Grove $ 1,800,545 $ 906,458 50.34%
Newport 259,665 173,072 66.65%
St. Paul Park 398,100 230,523 57.91%
Grey Cloud 4,112 - 0.00%
Out of Area 7,732 4,604 59.54%
2,470,154 1,314,657 53.22%
2012
Charges Write-offs W/O's as %
Cottage Grove $ 2,388,192 $ 1,346,418 56.38%
Newport 324,370 181,780 56.04%
St. Paul Park 485,503 291,606 60.06%
Grey Cloud 10,278 - 0.00%
Out of Area 32,051 9,299 29.01 %
3,240,394 1,829,103 56.45%
2013
Charges Write-offs W/O's as %
Cottage Grove $ 2,521,152 $ 1,443,333 57.25%
Newport 380,265 247,977 65.21%
St. Paul Park 453,729 287,428 63.35%
Grey Cloud 7,214 - 0.00%
Out of Area 59,169 23,646 39.96%
3,421,529 2,002,384 58.52%
Since 2004 the City has placed delinquent patient ambulance accounts with the State
Revenue Recapture Program for collection. This program recovers payments from funds
receivable by the patient from the state, such as income tax or property tax refunds. A
cost effective way to collect delinquent accounts, the City receives approximately
$30,000 in payments annually through this program.
Draft Financial Statements
Attached is a draft of the year end ambulance fund financial statements. These
statements are un-audited and may change, although not significantly. The statements
include four years of history for comparison purposes. The adopted 2014 budget
contained a net asset decrease of $114,940 compared to an actual projected net asset
increase of $169,756.
Action Requested
Adopt the resolution authorizing write-offs in the amount of $2,227,142.
CTTY OF COTTAGE GROVE, NIINNESOTA
co�.�za� sc�DUi.E oF xEVErluES, E��sES .�rm UNAjJDITED
CHANGES IN FLTND NET ASSETS _� �1"I'_
COTTAGE GROVE EMS F'UND
For The Yeazs Ended December 31, 2014, 2013, 2012, 2011, and 2010
Operating revenues:
Chazges for services
Less: Mandatory write-offs
Net chazges for services
Other revenues (outside employment)
Total operating revenues
Operating e�cpenses:
Operaring and maintenance:
Personal services
Personal services (outside employment)
Commodities
Contractual services
Bad debt expense
Bad debt allowance
Administrative and general:
Other charges- administrative chazge
Depreciation
Total operating expenses
Operaring income (loss)
Nonoperating revenues (expenses):
Inveshnent earnings
Loss on fixed asset
County reimb for training and equip.
Federal Grant
Miscellaneous
Total nonoperating revenues (expenses)
Income (loss) before
contributions and transfers
Capital contributions
Transfer to General Fund
Total transfers
Change in net assets
Net assets - January 1
Net assets - December 31
Year ended
Budget December 31,
2014 2014
$3,095,700 $3,838,582
(1,553,500) (1,965,577)
1,542,200 1,873,005
4,000 29,120
1,546,200 1,902,125
1,043,780 1,013,106
27,078
78,400 106,130
155,680 160,528
227,000 267,375
- 33,900
67,600 74,000
1,572,460 1,682,117
(26,260) 220,008
$6,000 $12,831
- 12,858
18,739
6,000 44,428
(20,260) 264,436
(94,680) (94,680)
(94,680) (94,680)
(114,940) 169,756
1,540,144
$1,709,900
Yeaz ended
Budget December 31,
2013 2013
$2,744,700 $3,399,157
(1,375,400) (1,766,722)
1,369,300 1,632,435
4,000 79,141
1,373,300 1,711,576
901,660 919,046
75,189
72,900 97,026
145,460 165,917
207,000 158,141
55,200 55,200
52,600 65,765
1,434,820 1,536,284
(61,520) 175,292
$2,300 ($6,79�)
- 13,265
- 422
1,896
2,300 8,790
(59,220) 184,082
(3,000) (3,000)
(3,000) (3,000)
(62,220) 181,082
1,359,062
$1,540,144
Year ended
December 31,
2012
$3,223,055
(1,590,706)
1,632,349
3,952
1,636,301
826,837
89,273
133,862
124,640
54,100
66,030
1,294,742
341,559
$3,346
17,096
20,442
362,001
(4,800)
(4,800)
357,201
1,001,861
$1,359,062
Year ended
December 31,
2011
$2,451,450
(1,160,024)
1,291,426
3,952
1,295,378
759,068
78,299
123,373
165,746
20,000
52,500
57,312
1,256,298
39,080
$5,905
(25,855)
4,594
(15,356)
23,724
(3,600)
(3,600)
20,124
981,737
$1,001,861
Yeaz ended
December 31,
2010
$2,228,646
(1,011,930)
' 1,216,716
1,216,716
724,406
81,288
121,742
185,163
7,000
52,500
52,389
1,224,488
(7,772)
$4,221
32,107
12,293
48,621
4Q849
2,345
(7,609)
(7,609)
35,585
946,152
$981,737
RESOLUTION NO. 15-
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RESOLUTION AUTHORIZING WRITE-OFFS OF THE COTTAGE
GROVE EMS ACCOUNTS RECEIVABLE IN THE AMOUNT OF
$2,227,142
WHEREAS, certain ambulance bills are determined uncollectable
NOW, THEREFORE BE IT RESOLVED, by the City Council of Cottage Grove, County
of Washington, State of Minnesota, that $2,227,142 be written off the Cottage Grove
EMS accounts.
Passed this 18th day of February 2015.
Myron Bailey, Mayor
Attest:
Caron M. Stransky, City Clerk