County’s Private Ambulance Firms Have History of Past Penalties

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Orange County officials, in their recent push to introduce private paramedics, have turned to ambulance firms with records of years of labor violations and financial difficulties, records show.

Lynch Ambulance Service of Anaheim, the first private paramedic operator designated by the county Health Care Agency or HCA in April to transport critical patients among facilities, last year paid $2 million to settle a Santa Ana Superior Court lawsuit, which alleged that the company cheated more than 300 employees out of breaks and wages. Lynch denies wrongdoing.

A second firm in negotiations with the HCA to conduct interfacility transports, Mission Viejo-based Medix Ambulance Service, for years violated contracts with the Orange County Fire Authority, eventually losing 10 contracts in as many cities to provide ambulance services for 911 paramedics.

In recent months, records show Medix Ambulance has violated its requirement for paying the authority for supplies.

In an interview, Dr. Samuel J. Stratton, the medical director of the HCA’s emergency-disaster division, expressed no concern about the issues Lynch Ambulance and Medix Ambulance have faced.

Lynch Ambulance is working with the HCA as part of a controversial pilot program in which private paramedics are being used to transfer patients between institutions.

Last month, the county’s Emergency Medical Care Committee delayed full approval of the program after the firefighters union raised issues, including questions about a death. The interfacility transfer program continues, and the committee plans to take up the issue again during a meeting in August.

Stratton and other officials say the deployment of private paramedics is being examined as a way to ease the burden on other emergency services. The issue will gain significance as the demand for transferring patients among facilities increases when the federal Patient Protection and Affordable Care Act, also known as Obamacare, is fully implemented in 2014.

Others, however, see the pilot program as part of a larger, ideologically based effort to privatize emergency medical response in the county. Advocates for public paramedics fear that questionable ambulance operators will expand in the new era, threatening patient services.

Regarding Lynch Ambulance, Stratton said the company is being monitored for its interfacility paramedic transports, with no violations seen in the program so far. He was unaware of details of Medix Ambulance financial and performance record, he said.

“Lynch is in compliance now,” Stratton said, adding that he “hadn’t received any reports” from the authority on the other issues.

Some fire department leaders said they were unaware of the financial issues and contract violations and stunned when they learned about them.

“This information needs to get out,” said a concerned Wolfgang Knabe, fire chief of Fullerton and Brea.

In court records, Lynch Ambulance officials denied violating labor laws, with a spokesman saying virtually every ambulance company has been sued for such violations.

“We knew we did nothing wrong, but in California’s climate of lawsuit abuse, good businesses like ours are often forced to settle,” said Jeff Flint of Sacramento-based FSB Core Strategies, who serves as a Lynch Ambulance spokesman.

Medix Ambulance’s owner-operator, Michael J. Dimas, acknowledged issues with the authority but said his firm plans to seek an interfacility paramedic contract “to continue to provide top-quality ambulance services.”

The HCA last month proposed a new policy whereby the acceptable time for all 911 rescue transports would be lengthened by about two or three minutes to a standard common for large, for-profit ambulance chains but less stringent than what public paramedics now meet.

The proposal comes as word spread that Denver-based American Medical Response (AMR), one of the nation’s largest for-profit ambulance firms, might apply to be an HCA contractor for interfacility transports.

AMR, which last year transported some 3 million patients in municipal systems in 40 states, has been criticized by consultants and pubic firefighters for instances of paying fines rather than meeting contractually required time requirements for patient transports.

This practice, known in the industry as “buying minutes,” leads to longer patient transport times.

The HCA sought comments on the new policy during a 50-day period ending July 23. The posting drew some 200 comments, Stratton said, indicating advocates are carrying on organized campaigns for various positions.

After their monthly meeting last week, the Orange County Fire Chiefs Association was to file a letter with the HCA urging maintaining at least the current standard for quicker patient deliveries.

Fire chiefs want the current time — seven or eight minutes — that they say complies with national standards, officials say. The HCA proposal is for 90 percent of the transports to be done in 10 minutes.

Emergency consultants have said that some ambulance chains find it more economical to pay fines to municipalities rather than field more ambulances.

AMR spokesman Ron Cunningham didn’t respond to an inquiry about the firm’s interfacility application plans.

At the fire chiefs’ meeting, Stratton said he asked the leaders what standard they wished, adding he would abide by their recommendation. “If there is a great deal of opposition to the proposal, we will leave the policy as it is,” said Stratton.

For more than 30 years, Orange County emergency patients contacting 911 have been served by paramedics from various fire departments, who use private ambulance services for hospital trips.

Records from the lawsuit against Lynch Ambulance and authority documents on Medix Ambulance’s performance provide a sobering view of some current private operators seeking to create private paramedic services.

The litigation against Lynch Ambulance began in 2008 with multiple lawsuits consolidated into class action litigation for emergency medical technicians or EMTs and medical van drivers.

Initially, three paramedics also filed complaints with the state Department of Industrial Relations over break and wage offenses. One case was resolved with payment to an EMT, according to state records, and the other two were withdrawn.

The EMTs’ lawsuit alleged they worked 10- to 12-hour shifts, weren’t given time for food or rest breaks and weren’t paid all wages if or when they left the firm. State law requires breaks to ensure employees are rested for the potentially stressful and difficult work.

In 2012, attorneys for employees and Lynch Ambulance reached a settlement agreement for a $1.5-million fund for labor law violations.

A judge determined that the employees prevailed in the action, court records show, so Lynch Ambulance also had to pay $500,000 for employee attorney fees and about $67,000 for costs.

Last year, about 330 employees received payments from the settlement. The average employee claim was for more than $1,100, but claims ranged as high as $6,445 per employee, said officials of CPT Group Inc., the settlement administrator in Irvine.

Medix Ambulance, a longtime operator in the county, has repeatedly not met contractual obligations to assist authority paramedics on rescue runs throughout the county, records show.

Beginning almost a decade ago, records show the authority repeatedly found Medix Ambulance to be in violation of its contract involving fielding ambulances. The authority board demanded improvement. Termination notices followed.

In a July 2008 letter, authority officials wrote to Medix about contractual breaches regarding service to Cypress, San Juan Capistrano, Seal Beach, Rancho Santa Margarita, Laguna Nigel, Lake Forest and Mission Viejo.

Various ambulance companies that assist authority paramedics countywide are required as part of their contract to pay fees for restocking their equipment with rescue supplies. Medix Ambulance historically has been late paying those amounts, which can be as large as $180,000 a month, according to records.

“I have little confidence that you are willing or able to correct these breaches,” wrote Jim Bailey, then the authority’s battalion chief for emergency services.

Medix Ambulance officials disputed the charges, calling them “hyperbole.” They noted any potential offenses hadn’t affected patient service.

But after subsequent authority breach and termination notices, Medix Ambulance lost the 10 municipal contracts, after a dispute over how to deploy ambulances regionally.

In 2009, the firm sued the authority in Superior Court but lost. Dimas said he is considering another lawsuit.

Meanwhile, authority records show that financial issues that constitute contract breaches have continued with Medix Ambulance’s Mission Viejo service.

Because of this, the authority requires Medix Ambulance to pay their monthly charge with a cashier check, because the firm’s checks have bounced in the past. But twice this spring, Medix Ambulance has failed to do so, using instead the firm’s checking account.

Acknowledging the payment issues as “my fault,” Dimas said he has taken administrative action to try to prevent a repeat. A meeting is planned between authority officials and Dimas to resolve this conflict. Medix Ambulance’s Mission Viejo contract runs out in September 2014.

To be included in the interfacility paramedic transport program, Stratton said, Medix Ambulance or any firm must add a costly computerized system for tracking patients.

“They can’t join the program until they have it,” said Stratton.

Dimas said his firm is in the process of securing financing for the computerized system. “There are significant challenges,” Dimas added, “but we are meeting those challenges.”

Rex Dalton is a San Diego-based journalist who has worked for the San Diego Union-Tribune and the journal Nature. You can reach him directly at rexdalton@aol.com.

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