Title
Report regarding a resolution authorizing the City Manager or designee to execute a Consulting Services Agreement with Digitech Computer LLC for ambulance billing and revenue cycle management services for an initial term of five (5) years, with the option to extend the agreement for up to three (3) additional two-year terms, for compensation equal to 3.75 percent of collected revenue. (Richard Walls, EMS Battalion Chief)
Recommendation
RECOMMENDATION
It is recommended that the City Council adopt a resolution authorizing the City Manager or designee to execute a Consulting Services Agreement with Digitech Computer LLC for ambulance billing and revenue cycle management services for an initial term of five (5) years, with the option to extend the agreement for up to three (3) additional two-year terms, for compensation equal to 3.75 percent of collected revenue.
Body
BACKGROUND / DISCUSSION
The City of South San Francisco Fire Department provides Advanced Life Support (ALS) and Basic Life Support (BLS) ambulance transport services, processing approximately 4,300 ambulance transports annually. Ambulance billing and revenue cycle management are essential to ensuring timely reimbursement from Medicare, Medi-Cal, commercial insurers, and private payors while maintaining compliance with applicable federal and state laws and regulations.
The City’s current ambulance billing agreement was originally awarded to Wittman Enterprises. During the term of the agreement, EMS|MC acquired Wittman Enterprises and assumed responsibility for providing the City’s ambulance billing services. As the agreement approached expiration, staff determined that conducting a competitive Request for Proposals (RFP) was in the City’s best interest to evaluate current market capabilities, technological advancements, pricing, customer service, and opportunities to enhance revenue cycle management while maintaining regulatory compliance.
The City released an RFP for Ambulance Billing Services on May 20, 2026, and received seven written proposals. Following an initial review by EMS Chief Walls and Deputy Fire Chief Flannery, three finalists were selected for interview. Fire Chief Samson and EMS Chief Walls, serving as the Selection Review Panel, then conducted interviews and evaluated each proposer using the criteria identified in the RFP, including experience and qualifications, technical approach and methodology, compliance and reporting capabilities, customer service approach, cost competitiveness, and references. The three finalists were:
• Digitech Computer LLC
• EMS|MC
• Systems Design West
The evaluation process identified Digitech Computer LLC and EMS|MC as the two leading proposers, with both firms demonstrating the capability to successfully perform the required services. At the conclusion of the interviews, EMS|MC and Digitech Computer LLC each received an aggregate score of 89. Because the interview scores did not distinguish between the two firms, staff conducted an additional best-value assessment based on the published evaluation criteria, technical capabilities, pricing, references, and potential contractual terms.
Following consultation with the City Attorney's Office and consistent with the City's Purchasing Procedures and the RFP, staff entered negotiations with Digitech Computer LLC to improve pricing and contractual terms. Those negotiations resulted in several enhancements to the City's benefit, including:
• Reduction of the proposed contingency fee from 4.25 percent to 3.75 percent of collected revenue;
• Addition of a unilateral City option to terminate the agreement during months 15 through 18 if performance expectations are not met; and
• Retention of the comprehensive reporting, analytics, compliance support, and revenue cycle management platform presented during the proposal process, and training on its use and deployment within South San Francisco for both Revenue Cycle Management tracking, but also EMS crew education in proper billing practices.
• A clearly defined revenue cycle management strategy designed to improve insurance identification, reduce denials, and maximize compliant reimbursement.
These negotiated improvements substantially increased the overall value of the proposal, materially enhanced the contractual protections afforded to the City, significantly reduced implementation risk, and were a significant factor in staff's recommendation.
Digitech's proposal demonstrated particular strengths in automated claims processing, insurance identification, denial management, reporting and analytics, and overall revenue cycle management. Staff believes these capabilities provide the greatest opportunity to maximize compliant revenue recovery, improve operational visibility, and enhance long-term financial performance. The negotiated pricing, combined with the contractual protections obtained during negotiations, further strengthened the proposal. Staff also reviewed publicly available revenue cycle performance information from comparable California agencies utilizing Digitech, including San Francisco Fire Department and Palo Alto Fire Department, and compared those trends against South San Francisco's current reimbursement and collection performance.
Although EMS|MC submitted a competitive proposal and has provided satisfactory service to the City, staff concluded that Digitech Computer LLC represents the best overall value to the City based upon the published evaluation criteria, the negotiated contract terms, and its demonstrated technical capabilities. Staff therefore recommends award of the agreement to Digitech Computer LLC.
FISCAL IMPACT
The proposed agreement compensates Digitech Computer LLC at a rate of 3.75 percent of collected ambulance revenue. Despite inflationary pressures over the past two decades, the negotiated contingency rate is lower than any previously contracted rate for these services and reflects a reduction from the City's current 4.0 percent agreement; the agreement is for an initial term of five years (5) with three (3) separate two-year options (2), for a maximum of eleven (11) years.
Digitech is the same company formerly known as ADPI (later R1), which successfully provided ambulance billing services to the City from 1998 through 2016. Staff's prior experience with the firm provides additional confidence in their ability to successfully implement the proposed services.
While the City received proposals with lower stated contingency fees, staff concluded that Digitech's demonstrated ability to improve compliant revenue capture, combined with the negotiated contractual protections and enhanced revenue cycle management capabilities, provides greater long-term financial value to the City than contingency fee alone.
Funding for ambulance billing services is included within the Fire Department operating budget, and no additional appropriation is required. Digitech Computer LLC will be paid under the currently approved budget line item in the Fiscal Year 2026-27 Fire Department operating budget.
RELATIONSHIP TO CITY COUNCIL PRIORITIES ACTION PLAN
Approval of the proposed change in ambulance billing providers supports the City Council Priorities Action Plan Major Focus Area of Modern and Sustainable Organization by ensuring fiscal sustainability through the continued improvement and efficiency in ambulance transport cost recovery processes.
CONCLUSION
It is recommended that the City Council adopt a resolution authorizing the City Manager or designee to execute a Consulting Services Agreement with Digitech Computer LLC for ambulance billing and revenue cycle management services for an initial term of five (5) years, with the option to extend the agreement for up to three (3) additional two-year terms, for compensation equal to 3.75 percent of collected revenue.