Some questions arise from the news that the city of Spokane proposes fining American Medical Response $80,172 for overbilling patients. Is that total high enough and what measures have been taken to improve the oversight of the ambulance service contract?

Mayor Dennis Hession on Monday spoke to the first issue, saying the fine needed to be large enough to get the company’s attention while at the same time reflecting the city’s appreciation for the way AMR responded. AMR admitted to a City Council subcommittee in March that it had overbilled 881 people and an undisclosed number of insurance providers by charging them the “advanced life support” rate of $480 rather than the basic rate of $348. It has been cutting refund checks ever since.

The mayor did not mention how the city would improve oversight of the contract. The Fire Department receives $25,000 a month from AMR and administers the contract. It does spot checks to make sure billing is done appropriately.

Obviously that system failed to catch widespread mistakes, even though the firefighters union said it had alerted officials, including Fire Chief Bobby Williams, up to five years ago. The union says it caught on when some of its members were overcharged.

Last summer, Williams asked AMR to check its billing, unbeknownst to a City Council subcommittee that began its own review in December. It wasn’t until March that AMR publicly stated that it had overbilled patients.

At that point, some council members called for oversight of the contract to be removed from the Fire Department. The union called for an external inquiry into the relationship between the Fire Department and AMR.

The failure of the Fire Department to act sooner on overbilling allegations is troubling. The fire chief needs to be held accountable for that. It’s odd that he was even consulted on the fine when the relationship between department officials and AMR has been called into question. Williams recommended “five figures,” and that’s what it is.

As for the fine, AMR noted that the amount of overbilling – $320,689 since January 2003 – amounted to only 1 percent of the revenue the company gained from the contract from 2003 to 2005. By the same token, the $80,172 fine represents a much tinier sliver of total revenues.

Under the contract, the city could fine AMR $5,000 for each overbilling beyond the second instance. That’s potentially more than $4.4 million for the 881 instances that we know of. Instead, Hession’s fine amounts to about $90 each. And that doesn’t include the cases involving insurance companies or those that are alleged to have occurred before 2003. The union and a class-action lawsuit allege that AMR has been overbilling since 1999.

An $80,172 fine isn’t much punishment for a $1 billion-a-year company. Considering what the fine could be, it appears to be quite lenient.

But the larger concerns are the conduct of the Fire Department, whether the city should continue using AMR’s services and how the city plans to conduct oversight.

The class-action lawsuit is sure to shed more light on AMR’s practices. The city should follow that closely before making any long-term commitments.