Audit Shows Spokane, Wash., Ambulance Patients, Insurance Companies Overbilled

March 10, 2006

The Spokane, Wash., City Council will decide whether to terminate a contract with a private ambulance company that overbilled hundreds of patients and insurance companies more than $320,000 in the past three years.

The overbilling has soured relations between the council and Fire Chief Bobby Williams, whose department was supposed to oversee the ambulance contract. Williams already was in trouble for a firehouse sex scandal involving one of his firefighters and a 16-year-old girl.

An audit made public showed American Medical Response, the private ambulance company serving Spokane residents, overbilled hundreds of patients and insurance companies a total of $320,689 since January 2003.

AMR, the nation’s largest ambulance company, said it has begun sending refunds to patients who were billed too much for hospital trips in its vehicles.

Under the contract signed in 1993, the company is supposed to charge the “basic life support” rate of $358 when a city firefighter accompanies a patient to the hospital in one of its ambulances. Instead, many patients were charged the higher “advanced life support” rate of $494, the audit found.

The council could decide to terminate its contract with AMR, or seek hundreds of thousands of dollars in fines.

Under the contract, the city can seek progressive fines starting at $1,000 and increasing to $5,000 for successive violations, Williams told a City Council public safety committee.

“This is a serious matter for the citizens of Spokane,” Council President Joe Shogan said after the briefing.

The council also could urge Mayor Dennis Hession to take oversight of the contract away from the fire department.

Fire Lt. Bill Jackman told the committee the FBI opened a fraud investigation several months ago and served a search warrant for ambulance records at the Fire Department’s headquarters, but charges never materialized.

A class-action lawsuit was filed against AMR in December by three Spokane residents who said they were overcharged.

“We made this mistake,” AMR executive Randy Strozyk told the committee. “There’s no doubt we’re going to be made to look pretty stupid by this. I can say nothing more than, ‘I’m sorry.'”

The amount of overbilling represents only 1 percent of the revenue the ambulance company made between 2003 and 2005 from its monopoly contract in the city, Strozyk said.

The contract allows the ambulance company to be the dominant ambulance provider in suburban areas, where its rates are governed only by Medicare reimbursement.

Williams requested the audit last June, but council members said they weren’t told until late last year when they began questioning details of the AMR contract.

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