Oregon is considering soft billing residents’ health insurance companies for rescue services.
Councilman James Seaman said the money is needed because there are fewer dollars collected from the fire department’s .5 mill levy as a result of lower property taxes over the years.
“At its height, we collected about $180,000 per year from the levy,” said Seaman, who is chairman of the city’s finance committee. “Now, it’s under $100,000.”
In addition, Senate Bill 66, which phased out tangible personal property taxes over five years, also had a negative impact on the fire department.
“Now that those taxes have been eliminated, it has hurt us,” said Seaman.
He’d like to see soft billing funds earmarked for more expensive projects, such as the renovation or construction of a fire station, or the purchase of a new pumper truck.
“My feeling is that the money we get from soft billing should go for infrastructure or large expenses. It could be used for small equipment and wage increases. Nothing has been decided yet but I would like to see it go for big ticket items,” said Seaman.
“Right now, we’re doing an assessment of the fire stations,” he added. “If we would need a new pumper, it costs over a half million dollars.”
Councilman Mike Sheehy, who is chairman of the safety committee, also said he would like to see funds put aside for costlier equipment and infrastructure projects.
“It makes sense that it would be money used for big ticket items, like fire trucks. So many times, we buy big equipment for the fire department, then we bond it out because there’s not enough money to pay for it. By soft billing, we wouldn’t have to go to the taxpayers and ask for more money,” said Sheehy.
The city currently has three fire stations: Fire Station One, at Seaman and Wynn; Fire Station Two at Wheeling and I-280, and Fire Station Three at Bay Shore.
“Some trucks almost don’t even fit in the fire stations anymore. We really have some issues about that, especially at the Bay Shore station, which is the oldest station,” said Sheehy.
Most of the fire department’s $2 million budget is appropriated from the general fund, said Seaman, while a smaller percentage comes from the fire levy.
Seaman said Oregon is one of the last cities to implement soft billing.
“It’s occurring in all the other cities,” he said. “It’s time for us to start thinking ahead and saving the money for these major infrastructure improvements.”
The fire department would collect about $150,000 the first year of soft billing, said Seaman, then about $200,000 annually.
“In the first year, we would get the paperwork setup and the billing system established, so it won’t be as efficient as the second year,” he said.
Members of the volunteer part-time fire department had been opposed to soft billing when it was proposed by former Mayor Marge Brown in 2008..
“Marge brought the idea of a full-time fire department to a head, and it was turned down,” said Seaman. “The fire department feels comfortable that the decision has come and gone. Now more and more fire departments are doing this, and we can’t be left behind. It’s time to move forward.”
“There wasn’t that level of trust with the previous administration. The rank and file thought it might have to do with ultimately bringing about a full-time fire department. That clearly is not the case,” said Sheehy.
Fire Chief Ed Ellis confirmed he is now on board with soft billing.
“In 2008, there were some other circumstances going on. It was the way it was presented to us. It isn’t our inclination to replace part-time with full-time firefighters at this time. The main driving force for a full-time department would be the number of runs we see, and our response times. Some day it will come to that, but not anywhere in the near future. As long as the administration is happy with what we’re doing, we’ll continue to have the same part-time fire department we have today.”
In addition, there were nagging concerns in 2008 that residents would have out of pocket expenses with soft billing, according to Sheehy.
“We were concerned residents would ultimately get a bill. With the levy, we had promised people they would never get a bill,” said Sheehy.
Now that other communities have had soft billing for several years, there are assurances that insurance companies will cover the costs.
“Years ago, the state government stepped in and required anyone selling insurance to include soft billing coverage on their policies. So people are paying for it already in their policy,”
said Sheehy. “Nobody is getting billed for it. They might get a statement of transaction, but they will never be billed.”
Ellis emphasized that the city will only bill the insurance company and not residents.
“If our rate is $500 for transport, and your insurance will only pay $250, than that’s what the city will accept,” said Ellis.
Those without insurance will not be charged, he added.
Ellis, other fire department administrators, and representatives from the fire department’s rank and file, joined city officials, including Sheehy and Seaman, on a committee to look at possible vendors to administer the program.
“We interviewed five companies from the area,” said Ellis. “We came up with a company that we think is a good fit.”
“We listened to all the presentations,” said Sheehy. “MedCorp seems to have the best proposal. They will do all the paperwork, and there would be no additional requirements from members of the fire department, who will be busy on their runs. The company would take care of all the billing of insurance companies.”
Seaman said it appears there is a consensus on council in favor of the proposal.
“We haven’t made a final decision on which vendor, but it’s imminent. It’s a positive thing across council and the mayor’s office. Everyone’s positive about it and it’s going to happen,” said Seaman.