EagleTribune.com, North Andover, MA

January 13, 2013

Inside Methuen's $80K 'mistake'

Errors delayed ambulance rate hike 5 months; Zanni says 'buck stops with me'

By Brian Messenger
bmessenger@eagletribune.com

---- — METHUEN — A series of errors and miscommunication by the fire chief and others at City Hall ultimately cost the city $80,000 in ambulance revenue, a review of public documents shows.

And while fire Chief Steven Buote takes “full responsibility” for the five-month delay that prevented the city’s ambulance service from collecting additional money under a higher rate schedule, Mayor Stephen Zanni is also shouldering the blame.

“There’s finger-pointing,” said Zanni. “No matter how you cut it up, the buck stops with me.”

The City Council voted unanimously last May to increase the base rate the Fire Department charges for transporting a patient in an ambulance from $583 to $913. The vote also nearly doubled the rates for numerous additional medical services.

It was expected the rate hike would take effect July 1, 2012, and generate $160,000 in new revenue. But the new rates weren’t instituted until Dec. 7 — a costly delay Zanni said he didn’t learn about until November.

“My understanding was they were in place,” said Zanni.

Councilors first discussed the rate-hike delay Dec. 3. The next day, Buote sent Zanni a five-page report outlining numerous missteps. The report was included in a series of emails and documents obtained from the city by The Eagle-Tribune.

The emails and documents reveal the following problems:

After unanimously voting to raise ambulance rates May 7, city councilors signed an ordinance that included an incorrect rate schedule

During the process of switching ambulance billing companies effective Jan. 1, the city submitted incorrect information to its new vendor, New England Medical Billing (NEMB), which led to delays.

The city’s old billing company, Comstar Ambulance Billing, was not notified of the new rate schedule until Dec. 6

“Due to unfortunate delays I do not believe that we notified you,” Buote wrote to a Comstar employee Dec. 6. “Please make these new rates effective immediately, or sooner if possible.”

In his five-page report to Zanni, dated Dec. 4, Buote wrote “the reasons that these new rates have not yet taken effect are many.”

“In hindsight, had I been aware that the process was going to be so convoluted, I most certainly would have began the process of the rate increase sooner, even with the incorrect rates,” wrote Buote.

Buote assured the mayor “there was nothing done intentionally, by anyone” to delay the rate increase or change from Comstar to NEMB.

“I believe that the most prevalent cause was miscommunication and possibly a lack of communication by many, including me as well as the City Council themselves,” wrote Buote. “After all, they are the ones who voted in favor of the incorrect rates.”

‘A mistake was made’

The rate-hike delay meant the Fire Department was unable to collect additional revenue from July through November. Zanni first chalked up the delay to a “mistake” on Buote’s part.

“I’m going to leave it at that,” said Zanni. “It’s done. It’s over with. A mistake was made and it’s been corrected.”

On Dec. 17, Zanni estimated the city lost between $60,000 and $100,000 as a result of the delay. The mayor told the council that night a more complete report on the lost revenue would be made available in the coming days, but that report was never issued.

On Friday, City Auditor Thomas Kelly said Methuen likely lost around $80,000.

Kelly said he no longer expects to receive a precise calculation from Comstar, since the city no longer does business with the company. Determining the exact amount is a complex process involving Medicare and various insurance company policies, he said.

Kelly said Comstar representatives also informed him it is unlikely the city will be allowed to retroactively bill patients for the lost revenue, which Zanni previously suggested was a possibility.

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

Buote was initially encouraged by Zanni in early 2012 to compare the city’s rate schedule with those in other area communities. The chief found city ambulance rates were among the lowest in the region.

In his five-page report to Zanni, Buote wrote that he received a packet from NEMB regarding Medicare and insurance information on June 13 that needed to be completed and returned. After the packet was filled out by Buote and personnel in the city auditor’s office, remaining questions were forwarded to City Treasurer Ann Guastaferro.

“This was all going on during a very busy budget time and I forgot that I had not yet adjusted the rates due to their uncertainty,” wrote Buote.

After several weeks passed, Buote’s assistant contacted NEMB and learned the city had submitted incorrect information regarding Methuen’s IRS identification number. Buote’s assistant reached out to Guastaferro again and was told Guastaferro was working on it.

By this time, Buote had asked NEMB to document the company’s interaction with Guastaferro. Such a log, spanning Aug. 7 to Oct. 4, was included in the chief’s report to the mayor. The letter with the incorrect ID number was received by NEMB on Aug. 7.

“A couple more weeks transpired with no progress,” wrote Buote. “I contacted NEMB and asked what the delay was. They responded to me that they were still having difficulty getting the correct required information. They stated that incorrect information was still being submitted and phone calls were not being returned.”

Buote then spoke to Guastaferro personally. She told the chief she was having “great difficulty” getting correct information from the IRS.

“I asked her to please get this completed as quickly as possible,” wrote Buote. “She assured me that she was doing the best that she could.”

According to the NEMB log, the corrected information from the IRS was sent out in early October.

Buote also reported to Zanni that he received the signed council ordinance May 16, or nine days after the vote to raise rates. Upon realizing it included the incorrect rate schedule, Buote notified Nancy Colbert Puff, Zanni’s chief of staff.

In a second document sent to the mayor dated Dec. 17, Buote wrote Colbert Puff never replied to him and that he did not receive a corrected ordinance until Dec. 10. But according to a memo from Zanni to the council, also dated Dec. 17, the ordinance error was corrected quickly, though Buote failed to recognize it.

It is in Buote’s second memo to Zanni that the chief accepts “full responsibility” for the delay.

“Although we can state several different reasons for the delay and confusion, ultimately, it was my responsibility to see to it that the rates were adjusted as quickly as possible following City Council’s approval,” wrote Buote. “As fire chief and manager of the city of Methuen ambulance service, I accept full responsibility for the delay of adjusting the city of Methuen ambulance rates.”