A Crash. A Call for Help. Then, a Bill.
By CHRISTOPHER JENSEN
NYTimes.com
Published: September 3, 2010
Steve Kagan for The New York Times
VICTIM Cary Feldman paid for the dispatch of a fire truck he didn't request.
“I had no idea what the fire truck was there for,” said Mr. Feldman, of nearby Matteson. “It came, it looked and it left. I was not hurt badly. I had scratches and bruises. I did not go to the hospital.”
Mr. Feldman had become enmeshed in what appears to be a nascent budget-balancing trend in municipal government: police and fire departments have begun to charge accident victims as a way to offset budget cuts.
Ambulance charges have long been common and are usually paid by health insurance, but fees for other responders are relatively new. The charge is variously called a “crash tax” or “resource recovery,” depending on one’s point of view. In either case, motorists are billed for services they may have thought were covered by taxpayers.
Sometimes the victim’s insurer pays. But if it declines, motorists may face threats from a collection agency if they don’t pay.
The AAA opposes such fees, said Jill Ingrassia, managing director for government relations and traffic safety advocacy. “Generally, we see that public safety services are a core government function that should be properly budgeted for with general taxes and not addressed by fees after the fact,” she said.
Ms. Ingrassia says such charges can place an “undue burden on motorists who can’t choose the size or duration of an emergency response,” which means they cannot control the size of the bill they may get. “We also really don’t want to discourage any motorist involved in a crash from calling for police or rescue services if they fear they are going to be billed for it,” she said.
Mr. Feldman received a bill for $200. The Chicago Heights Fire Department told him the fire truck had responded in case there was a fire at the scene.
But Mr. Feldman, 71, had another question: “Why are you charging me? I didn’t do anything wrong. Charge the other guy.”
Neither Mr. Feldman’s insurance company, nor that of the man who struck him, would pay. Mr. Feldman finally paid the bill with some of the money he received from the insurance company of the person who hit him.
“This is my personal opinion: it is a rip-off and a scam,” he said.
The Chicago Heights fire chief, Thomas Martello, referred inquiries to the mayor’s office, which did not respond to three phone messages in early August or to another on Thursday. (Mayor Alex Lopez died of a heart attack on Aug. 27. )
There appears to be no group that tracks the jurisdictions charging such fees or the number of bills sent. But police or fire departments are charging in at least 26 states, said Robert Passmore, senior director for personal lines at the Property Casualty Insurers Association of America. The group has lobbied against the fees, saying they amount to double taxation. It also says on its Web site, “The role of police and fire departments should be to serve and protect, not serve and collect.”
But Regina Moore, the president of Cost Recovery, a billing company in Dayton, Ohio, that tries to collect the fees for municipal departments, said property taxes paid for fire crews to be “on ready standby” and for police to “protect property and citizens from crime.” She argued that “traffic crash response is outside the scope of the primary function of both law enforcement and fire services.”
The people who cause the problems should pay for such services, she said, not other taxpayers or accident victims who are not at fault.
Jeffrey Johnson, president of the International Association of Fire Chiefs, said that some fire departments had charged for service calls for years, but that it was happening more often as departments tried to avoid reducing services.
“It is more prominent recently as economic times drive responders to look for ways to pay for their services,” said Mr. Johnson, who just retired as chief of Tualatin Valley Fire and Rescue in Aloha, Ore. People are accustomed to bills for ambulances, which are routinely paid by health insurance, he said. “So what we are really talking about is the leap from paying an ambulance fee, which people expect, to paying a first-responder fee.”
Mr. Johnson said the fire chiefs’ association had taken no position on such charges. “We believe that is a local decision,” he said.
But the association does have what it calls a partnership with Fire Recovery USA of Roseville, Calif., another billing company.
In an e-mail, Ann Davison, a spokeswoman for the fire chiefs’ association, said that relationship was focused on helping to explain the pros and cons of the practice to fire departments. Fire Recovery does donate “a portion” of its revenue to the association, she said.
Often departments charging fees are in communities with busy Interstate highways, where crews often respond to crashes involving travelers who do not pay local taxes, Mr. Johnson said.
That is the case with Salina, Kan., which responds to accidents on Interstates 70 and 135. In 2008, the city’s fire department received permission to start billing people involved in accidents to help cover costs, said Mayor Aaron Peck.
In about two years the department has sent out bills for 63 accidents, averaging about $390 each. He said the city sent about $10,000 a year in bills and received payments amounting to about half that much. The rest of the money is lost to the city because some people refuse to pay and some of the money goes to a billing agency.
The billing services make money by taking a portion of the funds they collect. “The average is 10 percent, and if they don’t get paid, we don’t get paid,” said Ms. Moore of Cost Recovery.
Rick Benner, chief financial officer for Fire Recovery, said that for his company about 20 percent would be “a fair representation.”
Billing agencies like these have made it easier for fire departments to charge for services, and that has the effect of encouraging more departments to send bills to motorists involved in crashes, said Mr. Johnson of the fire chiefs’ association.
The insurance industry argues that billing companies trying to drum up new business are a main reason the practice has been spreading.
But Mr. Benner says Fire Recovery is simply trying to help departments avoid service cuts.
Typically, departments send billing firms copies of accident reports and information on how many people and how much equipment responded. On average, the bill is about $200 for police and $600 to $800 for fire departments, Ms. Moore said.
Whether taxpayers are billed for crashes in their own jurisdictions varies by location.
There are also variations in whether the bill goes only to the motorist at fault or to all the parties involved, in which case the billing companies say the insurers determine fault.
If the insurance company refuses to pay, whether the motorist is billed depends on the jurisdiction, Ms. Moore and Mr. Benner said. If the motorist declines to pay, some departments drop the claim. Others take legal action.
Whether an insurance company will pay depends on the language in the policy, Mr. Passmore said, adding, “There are a lot of shades of gray.”
After adopting such programs, some jurisdictions — including Radnor Township, Pa. — later backed off in response to complaints from residents and visitors, news reports and lobbying by the insurance industry. In recent years 10 states have prohibited such collections, according to the property casualty association: Alabama, Arkansas, Florida, Georgia, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee. But some of those prevent only the police, as opposed to fire departments, from charging fees.
Ms. Moore of Cost Recovery says these are examples of “big insurance” working against “innocent taxpayers” and public safety.
The insurance industry says it is protecting consumers and trying to hold down premiums.
The finger-pointing has left cities like Denver trying to figure out what to do. This year, the city considered fees for nonresident, at-fault drivers, said Eric Brown, a spokesman for Mayor John W. Hickenlooper. Mr. Brown said the city stood to recover about $500,000 a year for fire services.
But the proposal was criticized by taxpayers and the media. In an editorial, The Denver Post described the idea as unfair and unwise, saying it would put taxpayers “financially on the hook for supporting emergency services twice.”
The city decided not to decide.
“We shelved it for this year,” Mr. Brown said.
A Crash. A Call for Help. Then, a Bill.
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