City approves $4.06 million ambulance billing write-off; leaders say new GEMT reimbursement could offset losses

The Idaho Falls City Council on Wednesday approved the write-off of $4,060,999.85 in unpaid ambulance service accounts covering calendar years 2021 through 2024, after an extended staff and public safety committee presentation that explained why much of the amount is uncollectible under current billing and insurance practices.

“Medicaid and Medicare discount that down to what they call allowable,” said Pam Alexander, the city’s director involved with utility and billing matters. She told the council the city is required to bill at published rates but insurers often pay a discounted allowable amount, producing a large gap between billed charges and actual reimbursements.

The council heard that about 72–75% of billed ambulance charges typically reduce to allowable reimbursement for Medicare and Medicaid claims. The $4.06 million total includes those government payment reductions plus contractual collection-agency shortfalls, bankruptcies and accounts with no estate to pursue.

“GEMT really is going to make up that gap,” said Division Chief John Perry, who chairs the city’s ambulance committee. He was referring to the state’s implementation of the federal Ground Emergency Medical Transportation (GEMT) program intended to reimburse providers for the difference between billed and allowable amounts for Medicaid and Medicare patients. Perry said the city expects GEMT reimbursement checks to be distributed retroactively to Jan. 1, 2024, and that initial payments could materially raise future collections.

Council deliberations and accounting implications

Council members asked how the potential GEMT reimbursements would interact with the write-offs, and staff said they will note the write-off for audit purposes and can annotate the auditor if GEMT payments later arrive. “When that [GEMT] comes in, the accountants are gonna say, ‘reverse this amount from the write-off because they were able to collect,’” one councilor observed.

Pam Alexander outlined the city’s collection process before write-off: internal notifications and outreach, referral to a national collection contractor that can pursue accounts across state lines, and quarterly reviews with the city’s collection contractor. She said the city’s write-off policy and state statutes guide the timing for internal write-off recommendations.

Why it matters: The write-off reflects accounting realities for emergency medical services and will be recorded ahead of the city’s year-end audit. The council was told the write-off represents under 1% of total utility collections in comparable contexts, but the ambulance fund’s larger write-off is materially significant in absolute dollars and tied to insurance and Medicare/Medicaid reimbursement practices.

What the council approved

The motion approved by the council authorized staff to write off the $4,060,999.85 in unpaid ambulance service accounts determined as uncollectible for the calendar years 2021–2024. Councilors emphasized that write-off does not preclude future recovery efforts if GEMT or other reimbursements arrive.

Ending

Staff said it will note the potential for future reimbursement from GEMT in communications with auditors and will keep the council informed about any substantial retroactive payments that could change the net fiscal impact on the ambulance fund.