What the Leader did not tell you last week By D Moore
After the Sep 26, 2012 article in the Bellevue Leader about the City’s Rescue Squad Slush Fund. It is time to set the record straight and dispel the Leaders attempts to defend Chief Guido. Let us start at the beginning, BVFD had for years gotten away with sending out ambulance bills. Let us assume that no one knew that each bill sent out was a criminal act and a violation of Federal law. Federal law defines the Medicare Ambulance benefit as a “Transportation Benefit” and reimburses for the ambulance, not the medic. Since the City owned the ambulances, only the City had the right to bill. But BVFD, a private organization, did bill and keep the money to boot. It is a violation of federal law to bill Medicare for something that you do not own; in this case that was the ambulances. A Whistle Blower complaint was filed by disgraced former City Councilman Carter McCann against BVFD volunteers for illegally conducting billing brought attention to this situation. The complaint alleged that BVFD had collected over $10 million dollars by illegally billing. The state auditor’s office ordered BVFD to turn the money over to the City of Bellevue because the reimbursement was for use of City ambulances and not for the services of the volunteers. BVFD refused and kept the money, eventually using some of it to purchase and remodel the old VFW Hall in Olde Towne. Finally, in 2007 the Nebraska Unicameral stepped in and passed LB1096 which forced Bellevue to hire a full‐time Fire Chief and for the City to take control of the billing and the funds. As a result the City hired a professional billing company and took over the billing June 1st 2008. The contract called for the billing company to work with the City Finance department and not the fire department. So Chief Guido had a fire department employee placed on the city books as a finance department employee to keep his hands on the money. This is the employee that Guido keeps claiming the billing service cost him. The person spent maybe 10 minutes a day sending billing over to the billing service, but they had control the Rescue Squad Slush Fund and had the checkbook in their purse. So in reality, the expense was Guido’s choice so that he could maintain control of the checkbook and not for the benefit of the contractor. But the City failed to appreciate or respect the resource that they had in their contractor. Pat Shannon, President of Cashflow Billing is a Certified Billing Expert who works in the Federal Court system as an expert witness. He has advised judges and prosecutors in over 500 cases and on a wide variety of charges. It was Mr. Shannon who quietly worked behind the scenes spending untold hours advocating against the prosecution of BVFD volunteers. This was apparently forgotten when Mr. Shannon told the City that he could no longer be involved with the Rescue Squad Billing if the City refused to properly account and reflect the money on the Page 2 City’s books. The City’s general fund is a bank account and its balance must be reported on the books of the City and on the monthly Financial Statements produced by the City. So too must any other separate bank accounts where City Funds are deposited be reported and reflected on the financial statement of the City. Since the Rescue Squad Funds are deposited into a separate bank account, and are City funds, they must be listed on the page titled “Cash and Equivalents” in the City’s Financial Report, along with all other separate accounts maintained by the City. When Mr. Shannon approached the City and told them that they must account for and properly reflect the money that his company was bringing in for the City, they balked. Stating that the funds that his company was bringing in for the City were reflected in the Revenues page and that there was no need to show the public the checking account balance or to list that account in the financial report. Further the City did not have a problem with a Fire Department employee running around with a checkbook in her purse with over $1 million dollars of City money in the account. Mr. Shannon told the City that he was not willing to risk his reputation or that of his company if the City was not willing to follow proper accounting, reporting and control of the money. So that is how the City lost a contractor doing a stellar job for the City. As confirmed by the Leader story, this contractor was collecting 99.1% of the money for the City. To this day, the Rescue squad funds remain under the control of the Fire Department and the checkbook balance is not reflected as a line item on the Cash and Equivalents page of the City’s books. So why, two and a half years later is this still a story swirling around the Bellevue Community and why did the Leader feel the need to provide cover for Guido in its article. Comically, the first of two reasons is that Chief Guido himself has kept this story alive. Through an endless series of lies told to the City Council, to the Leader, and to anyone else that will listen, Guido has made this the story that will not die. I have been told that you can now tell when Chief Guido is lying; it is anytime his mouth is moving! So let us examine some of the outrageous lies that Guido has been telling and shine the light of truth upon them. The first lie we will examine is when the mutual termination agreement ending the contractors responsibility was before the City Council, Guido stated this his people could do just as good a job as the contractor and collect just as much as they did. The leader article clearly demonstrates that the contractor collected more than Guido’s people and Guido himself is quoted as stating that, “he does not dispute that Cashflow had a higher collection rate than the BFD.” That same night, Guido lied to the Council again stating that he had trained personnel that could do the job. In the RFP put out by the City when it went out for bids to hire a contractor, it required that bidders have nationally certified Billers and Coders on staff with appropriate national certifications. Even to this day, the fire department does not have anyone that has the Page 3 CHBME (Certified Biller) or CPC (Certified Professional Coder) credentials required of the contractor in the RFP put out by the City. Instead, after the council meeting Guido put out a job listing for a billing supervisor, no experience necessary, no credentials required to get the job, they just had to agree to apply for an internet credential and complete the on‐line course within their first six months on the job; Hardly what he represented to the Council. He further embarrassed the City of Bellevue by stating in the job listing that he wanted someone with knowledge of CPT codes for ambulance billing, when anyone that knows ambulance billing could have told him that ambulance billing is done with HCPCS and ICD‐9 codes not CPT codes. The job listing was e‐mailed amongst CPC’s in town as a joke to be laughed at; nobody took it serious and as most thought the hiring decision had been made long before the listing went out. A fireman’s wife was hired at $67,000 in salary, plus $20,000 in benefits, plus $6,700 in retirement, plus $5,000 in payroll taxes for a total cost of $98,700 or $8,225 per month just for a billing supervisor. Remember this number we will come back to it. Had the Leader checked, they previously reported on this hire. The last lie we will look at, from that same night, is the only lie that the City’s Liar in Chief has been called out for. Kudos to former Mayor Gary Mixan for having the guts to call our Liar in Chief on this one, in front of the City Council. Guido actually stood in front of the City Council and bold face lied to them stating that the software to do the ambulance billing would only cost $16,000. A quote from the software vendor revealed that the cost was actually $53,000 for just two user licenses and with the City now up to 5 people working on the billing and the additional licenses being $7,000 a piece, puts the total cost of the software at $74,000 plus on‐going support charges of $14,800 annually or $1,233 monthly starting month 1. Again, we will come back to those numbers as they prove further lies. In examining the data for this story one thing became immediately apparent. When asked for data the contractor was immediately forthcoming with a complete set of data and sat down with me to make sure I understood the numbers and invited me to analyze and compare however I felt was fair. Guido insists on selecting specific timeframes and provides his analysis while hiding the raw numbers. By reviewing the City Financial reports I was able to assemble the actual collections figures, which reveal quite a different picture than Guido would have one believe. When the contractor started, the City had never billed under its own tax ID number before and it had no provider numbers with which to bill. So the contractor was required to create the billing program for the City from scratch. Applications had to be filed with Medicare, Medicaid, Blue Cross, Tricare, etc. to obtain billing provider numbers, which once obtained then had to be set up for electronic billing. The City had to establish a bank account for the money, so that the contractor could then setup electronic funds transfers from the insurance companies to the City. All of this work was done by the contractor before they could start billing. When the City took over Feb 1, 2010 they got a fully setup program. All they had to do Page 4 was send out bills. So I was amazed when I compared billing results for the initial 60 days and the initial 6 months of billing. The contractor, whom had to create a program from scratch, in their first 60 days of billing, brought in $174,079.81. Guido, whom benefitted from a fully setup program in his first 60 days of billing brought in a measly $4,081.64. In their first 6 months of billing the contractor brought in $380,893.44 and Guido only brought in $162,615.33. I found this analysis particularly significant when you go back and realize that Guido was responsible for the billing from Feb 1, 2010 but he deliberately chose to give the Leader an analysis that did not start until July of 2010 because looking at the beginning accentuates his poor performance. The contractor averaged $63,482.24 per month over these 6 months, while Guido only achieved $27,102.55 per month or 42% of what the contractor did. Stated another way, the City lost 58% of its revenue when Guido took over according to the actual numbers. Adding to the City’s lost revenue is the fact that the number of ambulance runs as reported by the City is up 22% from the time that the contractor was billing. This would be attributed to the City annexing more people into the City and adding ambulances. In addition, when you consider that the contractor was billing for ambulances staffed by volunteer EMT’s that reimburse at the Basic Life Support or BLS rate. While Guido again gets the advantage of billing for paid paramedics that bill at the Advanced Life Support or ALS rate which is 18% higher than the insurance companies pay for BLS. So with 22% more runs and 18% higher reimbursement from the insurance companies, Guido managed to drop revenues by 58% from the previous level. In an attempt to calculate how much the City has actually lost, let me advance the following: We know that the contractor was billing for an average of 170 claims per month and getting an average reimbursement of $352.48 per claim for average revenues per month of $59,744.84. Guido is now billing for an average of 207 claims per month and with the 18% increase in reimbursement should be collecting $415.93 per claim for average revenues of $86,097.51. So looking at Guido’s $27,102.55 per month in actual collections, he only collected 31% of the money during the first 6 months, or exactly what was stated in the Leader article. Further confirming Guido’s pathetic performance, is the fact that several weeks ago Guido asked the City Council to approve use of a collection agency because he stated that he had $550,000.00 in uncollected bills from the rescue squad. Again, this story was reported in the Leader had they bothered to check. So we had a contractor that could collect 99.1% of the City’s money without help, and Guido has now gotten permission to use a collection agency to attack Bellevue residents because he cannot do the job properly. Yet, he wants us to believe that he is collecting 84.5% in his own mind. Mr. Guido, How exactly is the City “Better Off” now that Bellevue residents have to be afraid of dialing 911 for fear of being sent to collections, all because you cannot do the billing properly? One might draw the conclusion that Mr. Guido’s incompetence is damaging public safety. Page 5 But let us now turn to Guido’s biggest pack of lies, the expenses. The Leader used a nicer word; they called his lying, “whittling”. We all agree that the contractor collected $1,194,896.77 over their 20 months. An average of $59,745.00 per month and the City was paying them approx. $4,800 per month (the Leader only reported $4,500). Guido put a fire department employee into the finance department for the express purpose of gaining control of the rescue squad checkbook. In my opinion, it hardly seems fair to consider this a valid expense of having a contractor. The new Bellevue Hospital has reduced reimbursement for mileage by approximately $6.00 per claim or $1,020 per month and not the $38,252.00 claimed by Guido. At the same time Guido makes no adjustment for all the increases in revenue that benefit him, but we will give him the $1,020 per month. So for the contractor the City received $720,000.00 annually minus the mileage adjustment of $12.240 and contractor fees of $57,600 for a net deposit to the City of $647,100 annually. Guido has had the billing for 30 months and has collected $907,808 as reported by the Leader and $162,615.33 not reported for a total of $1,070,423.20. (Guido has still not caught up to the amount brought in by the contractor in 20 months of collections even with 10 extra months) So that gives Guido average revenues of $35,681 per month before expenses. He wants to amortize the software cost over 36 months so that is $74,000 / 36 months or $2,055 per month. Support charges on the software are $14,800 or $1,233 per month. Fees for electronic claims submission and mailing costs for statement about $250 per month. Cost of the billing supervisor as discussed earlier, $8,225 per month. There are three secretary’s involved in the data entry, answering the phones and in sending out the mailings. Total salaries of $135,000, plus $60,000 in benefits, plus $13,500 in retirement, plus $10,125 in payroll taxes for a total cost of $218,625 or $18,219 per month. Plus Guido has asked to add a fifth person that we will not even add in. Cost of a 20 x 20 space with utilities for 5 people to office set at $400 per month. Cost of phone lines, internet, office supplies and misc. at $400 per month. This brings expenses to a grand total of $30,422 per month or what Guido characterized as “minor”. So for Guido the City is receiving $428,172 annually with expenses of $365,064 for a net deposit of $63,108 annually. A Net Loss to the City of $583,992 Annually since Guido took over. Seems to me that the Leader owes Chuck Fredrick an apology since he has been stating all along that the City has been losing more than half a million dollars a year on the rescue squad billing since Guido touched it. The grand total comes in at $48,666 per month in lost revenue to the city for the 30 months that Guido has been screwing thing up or $1,459,980 in lost revenue. Guido is quick to point out that he is trying to recover $550,000 of that by hiring a collection agency. He also scoffs at using the full cost of city employees claiming that I should only use their salaries. I reminded him that the city does pay the costs of employee benefits and payroll taxes, as well as make the contributions to their retirement funds, so it is appropriate. Page 6 So Eugene, I have independently and on my own been able to come to the same numbers and percentages that you were being told by Guido’s detractors. So why does this story that just lays out the facts look so different from yours? One more thing Eugene, you can quit trying to make this out to be a fight between Mr. Shannon and Chief Guido. Pat Shannon is one of the most well respected businessmen in our community and is a nationally recognized expert in his field. He took a stand on principle and walked away from the City when the money was not being handled and accounted for properly. He made it abundantly clear to me and I am sure he did the same for you, Eugene. Stating that he would not have anything further to do with the City’s rescue squad billing while Guido was still there and the money not on the books. Mr. Shannon is not the story. You might also want to share that with Council person Kathy Saniuk who has been running around Bellevue slandering the city’s billing contractor with 10 year old allegations that were disproven back when they were made. I had heard that she was using her position on the Council to slander this vendor so I approached her and mentioned the rescue squad. She immediately went into her spiel, until I stopped her and said you know that is not true. To which she replied, oh, you know about that. I asked her why she was doing that and she said that she was protecting the Fire Chief. The idea that we actually elected someone so ignorant that they thought using their position to slander a city vendor, that did a stellar job for the city, with information that she knew to be false, is just beyond the pale. Who does she think would ever want to do work for the City of Bellevue in the future if they knew they would be treated this way. All I can say is what a loser. This brings us to the final reason that this story will not die. Sadly it is not all the lies coming from Guido and repeated in front of the council and in the Leader, Bellevue resident are used to that. It is the money itself. Whatever the City does not bring in through revenues it has to tax its citizens. These loses represent increased taxes to all of us. Can anyone explain why the rescue squad money is being kept in a separate account? Why are these funds not being swept back into the general fund? Every time they want an ambulance or fire truck that comes out of the general fund, so what is this money being held apart from other funds ? It is the lack of answers to these basic questions that is keeping this story alive. How much of the two million dollars has been spent? What was it spent on? The public has a right to know. In addition, there is Bellevue’s history of funds getting lost. Can anyone tell us where 50 years of revenues on the Bellevue Bridge has gone? Nobody wants to return to the days when Jerry Ryan was Mayor and $1 million came up missing from the bond fund and $3 million missing from the waste water fund. The Leader attempted to explain away the missing waste water funds, but nobody ever explained the missing bond fund money. The City Council raised the mil levy supposedly for one year to replace the bond money and then conveniently forgot to ever Page 7 lower the mil levy on the bond fund back down. So how long does anyone actually think it is going to take for the two million dollars collected by both the contractor and the city to come up missing if the money is not being tracked on the books of the City? That is why people are keeping this story alive, but our Council members and the Leader either do not get it or are simply choosing to ignore it.