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Monday, September 06, 2010

Environment - Still more on: Superfund used to justify $28,000 bill to fight fire at couple's home

Remember this ILB entry from March 23, 2010? The ILB may have missed some more recent news on the issues raised in the entry, but was reminded of the problems when reading this lengthy Sept. 3, 2010 NY Times story by Christopher Jensen. Some quotes:

In 2008, the city’s [Salina, Kan.] 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. * * *

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.

ILB: (1) Can anyone direct me to the Indiana law referenced above? (2) There is nothing in the NYT story equivalent to the $28,000 billed by the fire department to a New Castle family that lost their home to fire (reported by 6News in February) . I've not seen an update on this story.

Posted by Marcia Oddi on September 6, 2010 02:52 PM
Posted to Environment