Software gets blamed for a lot of problems. Lost report? Blame the software. Budget issues? Software again. The truth of the matter is that software can be the source of many problems, but most are avoidable if you take the time to research, purchase, implement and practice with the software. Recently I participated in the EMS billing software purchasing process and learned some valuable lessons.

Kittitas Valley Fire & Rescue provides advanced and basic life support and ambulance transport services across 1,200 square miles in Central Washington. The agency has billed for these services on a fee-for-transport basis since the service began more than 35 years ago. Approximately one-fourth of the department's operating funds are derived from EMS revenues.

EMS revenues represent a significant source of money that some agencies use to offset other emergency service costs. The process of collecting and accounting for these revenues is very structured, with little or no room for variation. Electronic billing for EMS is the standard. Simply stated, where Medicare goes, so goes the rest of the medical insurance industry.

There are essentially two options for EMS agencies to facilitate billing. The first is to contract for billing services. Typically, a billing service will charge between 5% and 8% of collected accounts, though the rates can vary significantly. The advantages to this approach include not having the overhead and personnel costs associated with data input, mailing, accounting and collections. For some agencies, the cost to provide this service internally exceeds the cost of contracting. In some ways, having an outside agency manage billing insulates the agency from potential issues related to the costs and to the billing process itself.

There are also a number of disadvantages to contracting billing. One is the lack of personalized service that patients receive at stressful times in their lives, service that the community associates with the local EMS provider. Patient-care reports must be completed in a form that the billing agency can process, and variations in that form delay the billing process. For some agencies, 5% to 8% of revenues represents more than internal billing. Finally, handling exceptions to the billing process, write-offs, and payment plans, may be less flexible with a contracted service.

The second option, providing EMS billing services internally, necessitates the use of a billing software package. The first step is to identify what the agency expects the software to do. There is significant variation in the billing software in both features and cost. A simple medical billing program may be inexpensive but might not provide the desired outcome. Many companies market software that was designed for physicians or another type of service. EMS often requires some effort in coding, and some medical billing software attempts to “hard” code based on input. Improper coding leads to claims that are denied. To form this list of desired features, contact other medical billing services, agencies that use EMS billing software and the finance department.

Does the agency need the program to provide accounting and financial reports? Different agencies manage EMS revenues differently. For most, the revenues are essential to operations and the ability to forecast and chart trends is critical to strategic planning. If the software is for a public provider, state auditing requirements should be addressed in the software purchase, as well. Many programs provide customizable forms and help to manage the record keeping associated with Consent to Bill and Health Insurance Portability and Accountability Act compliance.

For some agencies, the ability to move information from the patient-care report to the billing software electronically can be very important. My research didn't identify any product that is effectively used for both the EMS patient-care report and as the complete billing software. This would be ideal, as it would significantly reduce the time and effort in the billing process, but it may create issues with the providers themselves. Some providers struggle with the billing side of the industry, and assigning someone skilled in the billing process often is the best alternative. Kittitas employs one full-time ambulance billing clerk, who is supported for auditing purposes by other office staff.

For agencies with current patient accounts, the transfer of this information into the new system is typically important. Archive requirements range up to 10 years, and accessing old records is important. Kittitas found that transferring data from the old system into the new system didn't make sense so it ran the old system until the accounts were settled or closed. This is probably not the best option for all agencies, and data transfer is often problematic and expensive. Include this in a bid package as an option.

EMS billing personnel should be involved in this initial planning process as should a representative from the agency's administration and finance division. The agency should identify not only current needs but also the projected needs over the next five years. It would be ideal if the software was still meeting the agency's needs in 10 years, but that often is overly optimistic.

The next step is soliciting a vendor. Don't rush this process. Industry trade publications, agency surveys and the Internet are good places to look. Do not limit the agency survey to identical agencies. Expand the survey to include public and private providers. Some vendor contacts will provide on-site demonstrations, some will provide online demonstrations and others will provide a trial version of their product.

Inviting vendors on site often provides a more realistic product demonstration. Having the vendors demonstrate the actual software loaded onto an agency's computer system is optimum. Demonstration versions of the software loaded on specially configured computers don't often accurately show the software's weak points. Allowing the vendor to demonstrate the software without allowing agency employee's to manipulate the software also produces unrealistic results.

The cost for most software systems necessitates bidding the software purchase. Software systems that provided adequate billing, accounting and reporting options start at almost $20,000 for a relatively small number of patient accounts, about 3,000 per year, and a few licenses. Costs can easily exceed $100,000. Bid laws often vary for software, and the fine print can be problematic. The bid package should include a complete description of the software and require the bidders to provide a written description of the software to be installed, operating system requirements, hardware requirements, licensing, installation, training, technical support (including hours of availability), and maintenance fees. The bid document should provide enough flexibility to allow any of the following to be considered in the software decision:

• Cost of technical support,
• Maintenance costs,
• Training costs,
• Additional license costs and
• Costs to upgrade.

The selection process should look at the purchase from a total-cost perspective. Savings in purchase price tend to cost more over the life of the software. A vendor that has been in the business for a while may be a better bet than a start-up company. A company with an extensive history of buyouts should be researched to find out if it supports existing products after its mergers.

Once an agency selects a software package and vendor, it will need to dedicate adequate time for its personnel to train on the software. The software should be installed and used soon after the training. A gap between the training and implementation will create performance problems and can generate unanticipated support costs. As the new software is brought into service, expect, plan and budget staff time to overcome the inevitable learning curve. Users will make mistakes and, at first, the software will require additional time for even routine activities. Fixing problems immediately will keep mistakes from being learned. Many organizations use small fractions of their software's capabilities after paying for those features.

Quality control is essential in the implementation phase, as well. Failure to have finance personnel audit the output while the software is being brought into service may create problems that take a very long time to fix, affect customer service and involve the state auditor. When the software is no longer a primary concern, it is working. Remember to continue to evaluate updates and make those that make sense. Ongoing training also is worthwhile and can more than pay for itself. Six months or so into the use of the software, plan for some training time and possible modifications in how you use the system. The staff will, by that time, have a better idea of the issues and working with the vendor will pay dividends in the future. Finally, pay attention to upcoming changes in the insurance billing, keeping the vendor in the loop to ensure functionality changes are much easier to plan for than react to.

Kittitas purchased one of the few software programs designed specifically for EMS. We transitioned from a generic medical billing program, and the improvements are noticeable. The transition was not seamless, however, and the advice to invest extra time to training and the start-up phase are directly the result of our mistakes.

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Deputy Chief Rich Elliott is in charge of EMS, prevention and training for Kittitas Valley Fire & Rescue, Ellensburg, Wash.