The Huntington Community First Aid Squad has signed a one-year, $1.585 million contract with Huntington officials to provide emergency medical and ambulance service.

The agreement includes a provision for the squad to, for the first time, bill insurance companies for emergency services.

“The contract is good, professional, it’s what should be,” Town Supervisor Frank Petrone said.

The squad and town were at odds in the fall when Huntington’s 2016 budget was proposed with an 8 percent cut to the squad’s budget.

Petrone said the decision to trim the squad’s budget was based on the town’s analysis of its finances, which indicated the squad has been carrying a cash balance in its operating budget for the past four years. The squad does not dispute that there is $475,000 in the account, but officials said the money is to be used to purchase new ambulances. Ambulance officials also acknowledge $1.9 million in another account but said that money was raised over the years from donations and wise investing.

The budget was approved with the cut and town officials insisting the squad begin billing insurance companies for emergency services. Town officials said medical billing helps fund ambulance squad operations amid the limitations of the state tax cap.

advertisement | advertise on newsday

Town officials also argue the squad, which is made up of volunteers, provides services to areas such as the Walt Whitman Shops where ambulance service may be needed for non-ambulance district residents, with local taxpayers paying the bills.

Billing insurers for ambulance services has become more common in the state in the past decade to help municipalities offset the cost of emergency medical service.

“With the fact that the town had decreased our budget for 2016 the only way to bring our finances back to where they were previously would be to begin billing,” Squad president John Palmieri said. “The town gave us the option that we would be allowed to bill and we are following in the footsteps of Commack Ambulance and we’re learning about it.”

Commack Volunteer Ambulance Corps began billing patients’ insurance companies for emergency service last year. Palmieri said he hopes to have the billing system in place by fall.

The Huntington Community Ambulance District covers an area from Lloyd Harbor and Lloyd Neck in the north to Melville in the south and from the Nassau/Suffolk border and Cold Spring Harbor in the west to Greenlawn and Dix Hills in the east.

“Commack was in the forefront of insurance billing and was extremely eager and helpful in tailoring its program,” Petrone said. “It’s been beneficial to them, and we know it will be that way for Huntington.”