State Says OC Cities Must Put Ambulance Contracts Out to Bid

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A state agency has told three cities providing emergency medical services for a large swath of Orange County they must hold new competitions for their ambulance contracts in order to secure important legal protections.

Anaheim, Fullerton and Buena Park must put out to bid contracts that are now held exclusively by a single ambulance firm or end up vulnerable to a restraint of trade lawsuit by other ambulance companies in the Orange County market, according to the California Emergency Medical Services Authority.

Each of these cities are in this position because they have not held a competitive bid for their ambulance service in 10 years, which puts them out of compliance with a state law governing exclusive ambulance contracts, according to the state officials.

With a combined total annually of nearly 37,000 emergency medical calls producing 25,500 transports, the cities could face costly litigation or potentially disruptive court orders.

This issue comes as some Orange County officials are becoming increasingly aggressive in attempts to privatize emergency services, which likely will become more profitable as the new federal health care law known as Obamacare is fully implemented during the next two years.

Other officials fear that for-profit companies with questionable ownership and spotty performance records may end up with lucrative city contracts and undermine services.

Officials in each of the cities say they are consulting their attorneys and assessing their options.

Dr. Samuel J. Stratton, medical director of the Orange County Health Care Agency’s emergency medical-disaster service, said he recently asked state officials what should be done to rectify the situation.

“The response was: Do competitive requests for proposals for the ambulance contracts,” he said.

Buena Park may have an added legal burden. On May 28, it extended its contract with its ambulance firm without a competition. Orange County’s Health Care Agency had received the state notification on May 22, records and officials state but didn’t begin informing the cities until mid-June.

The review that flagged the local ambulance systems is part of a statewide effort to ensure an orderly transition to the new federal law, officially called the Patient Protection and Affordable Care Act. Orange County is so far one of six across the state that have received such letters.

“We are looking at all local emergency medical services agencies that have exclusive ambulance operating areas to ensure they are compliant with state law,” said Thomas McGinnis, chief of the authority’s emergency medical services division in Sacramento.

McGinnis said the oversight is intended to improve system efficiency, safety and performance. Officials in Orange County, however, believe the actions are being taken to keep out of the cross hairs of federal authorities.

Currently, the three Orange County cities utilize Care Ambulance Service of Orange as their exclusive provider of ambulances to transport patients for their 911 emergency systems.

Anaheim and Fullerton fire departments have their own paramedics, who administer care to hospital-bound patients needing advanced, life-support. Buena Park contracts with the Orange County Fire Authority for paramedic service.

Within the next year, officials say OCFA has 21 of its municipal contracts for paramedic service up for renewal. In all but two of those cities — Buena Park and San Clemente — OCFA conducts the requests for proposals for ambulance contracts, referring recommendations to city councils for final approval.

While Care Ambulance is now the dominant firm countywide, authorities say the marketplace is bound to become more competitive, because Obamacare will result in more revenue from previously uninsured individuals.

“It’s all about the money,” said Wolfgang Knabe, fire chief of  Fullerton and Brea.

Care Ambulance officials say that contracts with five other Orange County cities that use their firm — Los Alamitos, Seal Beach, Cypress, Stanton and La Palma — are up for renewal in September 2014.

In Orange County, there is also a strong push for private ambulance firms and paramedics to both challenge the political power of te OCFA firefighters union and promote a free-market ideology.

Some emergency authorities fear that patient care would be put in jeopardy by either disreputable companies winning contracts or chaotic competitions for patient transports.

A pilot program at the county might already be providing a glimpse of what could happen. The program allows private paramedics to transport critically ill patients between facilities.

Late last month, the Orange County Professional Firefighters Association — the union at the Fire Authority — asserted that the private paramedic service involved in the pilot program is acting as a 911 system parallel to the countywide network. In doing so, they are degrading the quality of care, the union declared.

Pilot program records show that of the first 121 calls for the new private service since April, 17 cases or 14 percent subsequently required responses from the public 911 network. One of these calls involved a death now under additional scrutiny.

Both Health Care Agency officials and those of Lynch Ambulance Service of Anaheim, the private company doing the transports, deny any violations or quality issues.

“This pilot program is all about giving policy makers good information so they can make the best decision for patient care in Orange County,” wrote Patrick Powers, an executive for Lynch Ambulance, in an email. He added that Lynch Ambulance staff are “working together seamlessly” with 911 paramedic teams to save lives.

Against this backdrop, the three municipalities are assessing their legal options to chart their respective ways forward.

Buena Park may have compounded its legal dilemma by its agreement to a five-year extension with Care Ambulance. Records show the HCA’s emergency medical services division received the state’s letter, dated May 15, on May 22.

But when the Buena Park City Council later voted for the extension it hadn’t heard from the HCA about of the state’s concerns, said Aaron France, assistant to the city manager.

Buena Park learned of the letter in mid-June, said France, but the city didn’t receive a copy until June 25 after an inquiry by Voice of OC.

Asked iwhether the city had legal exposure as described by the state, France responded: “It would appear that way.”

Buena Park’s last competition for an ambulance contract was in 1999. Last year the city received 5,365 calls for emergency services leading to 3,500 transports of patients, officials said.

In a year, Anaheim, Orange County’s most populous city, produces about 22,400 emergency calls leading to 15,700 ambulance transports. City officials are reticent, saying they are reviewing the issue.

Beginning in 1998, Anaheim contracted with Care Ambulance for nine years via a series of extensions. City spokeswoman Ruth Ruiz wrote in an email that in 2004 Anaheim “executed a new contract” with Care Ambulance that expires next year.

As of June 25 when contacted by the Voice of OC, Anaheim Mayor Tom Tait said he had yet to be informed of the issue.

In Fullerton, Knabe said he believed the city was solidly in conformance with state law because of the manner in which it has contracted for ambulance service.

The city last held a competitive contract selecting Care Ambulance in 2003, officials said. Last year there were 9,000 calls for emergency services in the city producing 6,425 ambulance transports.

Knabe said the city specifically has maintained “the obligation and responsibility” for such services, delineating this in any contracts. By so doing, Fullerton is meeting state law, said Knabe, who represents Southern California fire chiefs for the Sacramento-based California Fire Chiefs Association.

If Fullerton maintained the responsibility, “it may have a good case” to argue it is not in violation of state requirements, said Derek P. Cole, a Roseville attorney knowledgeable on the issue.

Asked about these arguments, the state’s McGinnis said his agency stands by its position.

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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