EagleTribune.com, North Andover, MA

December 17, 2012

Mistakes cost city up to $100K in new fees

Methuen Council hears about rate-hike delay

By Brian Messenger
bmessenger@eagletribune.com

---- — METHUEN — The city lost between $60,000 and $100,000 thanks to a five-month rate-hike delay with the fire department’s ambulance service, Mayor Stephen Zanni said last night.

The City Council voted unanimously in May to increase the base rate the city charges for transporting a patient in an ambulance from $583 to $913. They also voted to nearly double the rates for numerous additional medical services.

But councilors learned last night that the higher rates weren’t implemented until Dec. 7. In a memo to the council, Zanni wrote that “several factors combined to cause this delay.” Among them:

The original copy of the signed ordinance calling for the rate hike contained a transcription error. The error was quickly corrected, but fire Chief Steven Buote believed it was outstanding and did not immediately pursue raising the rates.

Buote forwarded the new rate schedule to a billing company scheduled to begin contracting with the city in January, but did not submit the new rates to the outgoing billing firm.

The switch to a new billing company required the approval of the IRS and Medicare and was delayed as a result.

The reasons for the rate hike delay did not sit well with Councilor Sean Fountain last night.

“Someone should have been overseeing this,” said Fountain. “A lot of revenue was lost ... There should have been follow through.

“Now when the chief comes to us at budget time next year, that money’s going to have to come from somewhere else,” he said.

The ambulance service in Methuen generates just over $1 million annually. Ambulance revenue goes to the city’s general fund.

City councilors hoped to generate $160,000 in new revenue annually when they voted to raise the rates. But that number was based on the higher rate scheduled taking effect July 1.

Zanni told the City Council last night he expects to have a more complete report on the lost revenue later this week. He also said the city is looking into charging patients retroactively in order to collect the revenue that was lost as a result of the delay.

In his memo, Zanni wrote that Buote deserves credit for pursuing the rate increase. The chief was initially asked by Zanni to compare Methuen’s rate schedule with those in other area communities. Buote found city ambulance rates were among the lowest in the region.

“His work in getting us to this point will have a positive benefit for years to come,” wrote Zanni. “As manager of the city’s employees, I have fully discussed this matter with the chief, and he recognizes his responsibility in not ensuring that the rates were adjusted in a timely manner.”