Incident response cost recovery:
How to get started, Part 2

In Part 1 of this two-part series, I covered some of the basics, including what cost recovery is, its legality, and how you, as a not for profit organization, may be able to recover incident response costs associated with your department.

Here, in Part 2, I’ll outline how you can get started recovering your incident response expenses.

When there isn’t a federal or state law addressing an issue, local communities and municipalities may pass local laws that do. Cost recovery is commonly addressed as such. Because state and federal laws can be subject to change, your cost recovery service can help you stay current with relevant legislation.

You’ll want to start by locating an experienced cost recovery service with a successful track record. You can begin by searching the Internet under "fire department billing" or "fire rescue cost recovery" or by asking neighboring departments what company they are using and if they’re satisfied with their results. Be wary of a company that tries to guarantee any sort of collection percentage, as that’s virtually impossible due to the wide number of variables. Covenant Solutions also recommends choosing a service that specializes only in fire service incident response cost recovery instead of offering the service as an add-on to an already existing product such as ambulance transport billing.

Step One

Ensure that the service understands the methods and billing practices that your department wishes to enact. Your cost recovery program is yours and yours alone and should be under your direction and control. Your cost recovery service is simply working as your agent in representing your program and intentions. A service should be prepared to supply information and offer recommendations to help you determine how to govern your program, but ultimately this is your program to be implemented as you see fit.

Step two

Work with your cost recovery service to be sure important documentation is in order, such as a W9, and a resolution or ordinance, if desired, that includes the establishment of a rate schedule. Your service should be able to provide a standardized rate schedule based on documented formula’s that can be verified as acceptable national averages, along with available legal research and documentation pertaining to fire departments and their cost recovery programs.

Step three

Determine the best method for your department to submit all billable incident reports and all required information. It is very important to lay out an interface between the department and the cost recovery service that’s practical for your own needs. The service should offer you a variety of choices such as web form, fax, or email submittal options. Incident reporting export options may also be a viable option to consider.

Step four

Begin your research and submittal of qualifying incident reports to your chosen service, beginning from your chosen launch date. You may be able to bill retroactively as well, per whatever statutes of limitations are in place for your state. Covenant Solutions suggests keeping a log of all run reports that have been sent to your service so you can follow up on progress and keep track of all payments.

Your cost recovery service should be able to provide you with reports on a monthly, quarterly or annual basis to assist with these accounting needs. Some services, like Covenant Solutions, may also be capable of receiving cost recovery data from NFIRS incident reporting software either now or in the near future. Check with your software provider to see what they offer in terms of export capabilities.

Ultimately, it’s your decision how technologically advanced your cost recovery reporting system becomes. The real key to a successful cost recovery
program is to find a reliable service you can feel confident in, that will keep your departments needs their number one priority. Once you find that good fit your department can benefit enormously from the additional revenue stream.