Chicago Considers Hike in City Ambulance Fees

Chicagoans and their insurance companies could soon be paying more for ambulance service.

Hired by the Daley administration last month to collect tens of millions of dollars' worth of unpaid ambulance fees, the DeZonia Group is also recommending Chicago significantly increase the fee for ambulance transports.

Patients transported by the city's 15 "basic life support" ambulances now pay $325 and $8 a mile. Patients with life-threatening illnesses or injuries who are rushed to a hospital in 60 "advanced life support" ambulances pay $400 and $8 a mile.

Those fees won't last for long if DeZonia has its way, according to a plan tied to the company's five-year, $20 million contract. The contract has a three-year renewal option.

"Based on industry comparables, the average charge should be closer to fees for services for other major municipalities ranging between $800 and $1,200 per transport," DeZonia officials wrote.

Revenue Department spokesman Ed Walsh noted that ambulance fees are "set by ordinance" approved by the City Council.

"Obviously, it's always something that we're looking at. But we don't have any plans immediately to raise any fees," said Walsh.

Walsh said DeZonia was chosen for its promise to "dramatically improve" ambulance fee collections; reduce from over 50 percent to 35 percent the number of transports where insurance coverage is not identified; and for its offer to accept a "flat rate" of 7 percent of actual collections.

The old vendor, Health Receivables Management, had a sliding scale that started at 7 percent and rose to 15 percent.

"We like the fact that DeZonia specializes in EMS and has over 20 years of experience," Walsh said.

Chicago began charging for ambulance service in the 1980s and has struggled to collect those fees since.

In 1996, the Sun-Times reported that nearly half the $18.5 million billed for city ambulance calls during the previous year went unpaid. City Hall blamed the problems on Medicare, Medicaid and third-party insurance companies that pay varying percentages.

Last year, the city raised $22.1 million in ambulance fees, but billed $80 million. That's a dismal collection rate of 27.6 percent. In 2005, the city billed $62.2 million and collected $21.6 million or 34.7 percent.

Only 10 percent of Chicago ambulance fees are self-paid. The rest comes from commercial insurance companies (34 percent), Medicare (34 percent) and Medicaid (22 percent).

Copyright 2006, Chicago Sun-Times Inc.

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