Council approves one-year contract to outsource prebooking inmate medical billing

Cleveland City Council approved an emergency ordinance authorizing the director of public safety and the director of finance to enter into one or more contracts with Heritage Health Solutions Inc. to provide medical-billing services for prebooking prisoners for a one-year term with two one-year renewal options.

The ordinance, introduced by Councilmembers Polencic and Griffin as Ordinance 10-82-2025, covers professional services to process medical claims and to reprice bills at Medicaid rates before the city pays hospitals and other providers. Director-level staff said the contract will cover the vendorprocessing of claims and the city will pay the approved medical costs plus the vendorprocessing fee.

Council began by asking staff to explain the work in lay terms. April Butshe, administrative manager for EMS billing and prisoner-care billing, said: "They will act as a TPA, a third party administrator on the city's behalf. They will reprice them at Medicaid rate, make sure that they're valid, make sure that they meet federal standards, state standards." The directorstaff clarified the city remains responsible for the full medical cost of care for people in custody; the vendor handles vetting and applying the Medicaid reimbursement rate.

Why it matters: council members flagged budget and oversight questions, including where the contract money will come from, whether city employees could lose jobs and whether the city is already receiving the Medicaid rate. Staff said the medical costs themselves are the city's obligation and that the billing-service cost in the Heritage proposal is $50 per claim, while the contract's overall not-to-exceed amount was not included in the legislative summary and must be provided to council before final passage.

Council questions and staff responses

Councilman Casey asked who performed the work previously; staff said Medical Mutual provided the service as part of the city's employee-benefits arrangement until it stopped late last year and that Medical Mutual continued to provide transitional support while the city ran an RFP. Finance and public safety staff said six firms responded to the RFP and Heritage was selected as the best fit.

On whether city employees would lose jobs, staff said "no one is losing their job." On rates, staff clarified the vendor will seek Medicaid rates: "it is actually the Medicaid rate and that is the state law that if someone's in custody, Medicaid rate has to be applied," a director said.

Council pressed for financial detail. Staff said the contract will be structured as a requirements contract with an "up to and not to exceed" amount but the exact ceiling was not available at the table; staff committed to provide the not-to-exceed figure to council.

Implementation and scope

Staff said the contract covers prebooking medical bills (medical care provided before a person is accepted into county custody). Once the county accepts an arrestee for booking, county per-diem payments cover subsequent medical care. Staff also said Heritage's services include processing all hospital and related medical billing (doctors, labs, x-rays) and confirming billing codes and rates are appropriate.

Council directed staff to provide follow-up information: the number of transports and the associated costs for the previous year, the contractnot-to-exceed amount, and additional RFP materials. Without objection the ordinance was approved as read.

Provenance: the ordinance and selection rationale were described when the item was introduced to the committee; council recorded final approval after questions and requests for additional contract detail.

Ending

Council members said they would not advance the measure without the contract ceiling; staff committed to supply that figure. Council approved the ordinance as read and asked finance staff to return the requested budget and transport data before finalization of contract details.