OC Ambulance Contracting Draws Scrutiny From State Authorities

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A selection process for long-term ambulance services for 911 emergency calls for most of Orange County is in upheaval as state officials are questioning its legality.

On Jan. 23, the Orange County Fire Authority was to launch the selection process for 19 municipal ambulance contracts to transport patients to hospitals for the agency’s paramedics.

But the state Emergency Medical Services Authority, a Rancho Cordova agency that oversees such services, is questioning whether the Orange County Health Care Agency has delegated too much responsibility to the Fire Authority, thereby running afoul of court decisions and requirements to select the top-ranked ambulance firms.

As a result, the Fire Authority board, which includes representatives from the cities it serves and two county supervisors, decided to delay a decision on initiating the selection process until its next regular meeting Feb. 27.

This has left city, county and Fire Authority officials scrambling to resolve the dispute. And time is running out, given that in a best-case scenario Fire Authority officials say six months are needed to conduct a formal request for selection process, which must be completed before current ambulance contracts expire on Sept. 1.

With the September deadline in mind, Fire Authority administrators said they will continue planning for ambulance selections.

“We have no choice,” said Jim Ruane, the Fire Authority’s finance manager, noting public emergency needs.

County health officials from the emergency services division flew to Sacramento Thursday to meet with state officials to seek a resolution.

They will have to convince the state Emergency Authority that the local Fire Authority’s process follows state law and ensures that top-ranked ambulance firms are selected so the best service is provided.

If the state decides the Fire Authority can’t conduct the ambulance selection process, the county Health Care Agency would have to do it, said Dr. Samuel Stratton, medical director of the agency’s emergency-disaster service. He added that the agency would need to hire consultants and likely staff for the process and questioned whether there would be funding available.

Questions on Plans and Process

Part of the reason state officials are concerned is that the Health Care Agency has not filed the annually required emergency-disaster plan with the state for six years. Such plans include updates from legal and regulatory decisions, which local agencies are to follow.

The Health Care Agency hasn’t filed the plans because officials couldn’t achieve an agreement with cities about how emergency services are provided, Stratton said. The agency received warning letters annually from the state, he added.

During past ambulance selections, some Fire Authority partner cities have not chosen the top-ranked firms.

Orange County municipalities, along with others statewide, now must award the contract to the highest-ranked bidder, said Dan Smiley, chief deputy director of the state Emergency Authority. If they don’t, they must conduct an entire new selection round, he added.

“We want a fair and competitive process to ensure the best operations by ambulance firms,” said Smiley.

Cautionary Tale

If a city does not follow the state’s direction, Smiley said, a municipality loses state liability protection from ambulance firms that lost out during the bidding process and allege violations of anti-competitive laws.

What is occurring in Mission Viejo — where the private ambulance firm for nearly 5,000 annual 911 calls is financially failing — shows what can happen.

In the last major selection process a decade ago, Mission Viejo officials picked hometown firm Medix Ambulance Service, which wasn’t ranked first.

On Jan. 3, Medix was unable to make payroll and required an emergency loan, acknowledged owner Michael J. Dimas. Dimas has tried, without success so far, to find a buyer for his ailing company.

Nonetheless, Medix is currently meeting its rescue responsibilities, county officials say.

To ensure continuous coverage for Mission Viejo, county health officials recently issued a medical directive to have Doctor’s Ambulance Service of Laguna Hills — the designated, contractual backup — step in if Medix suddenly doesn’t respond to Fire Authority 911 calls.

County health officials acknowledged this is not an optimal way to operate but said they are keeping a close watch.

Meanwhile, Fire Authority officials have noted its ambulance selection plan is to include financial checks in the first phase to ensure bidders can meet long-term requirements.

The Selection Process

Another major problem is how the county, which is the state-designated local emergency service agency, conducts ambulance contract selections for exclusive areas of operations.

How that process is conducted was clarified in a 2010 court case involving Butte County in Northern California.

Under state law and the court decision, the Health Care Agency may conduct the selection process itself and hire a consult for assistance, but it may not delegate its responsibilities to another agency, state officials said.

If a county delegates its responsibilities to another agency, under the Butte County court decision an ambulance selection process can be considered faulty and possibly open to legal challenge, according to state officials.

Local Brouhaha Gets State Attention

Records and accounts of behind-the-scenes maneuvering by local officials have brought the Fire Authority’s ability to handle the bidding process into question.

On Oct 3, the agenda for the following week’s meeting of the Orange County Board of Supervisors included a proposal pushed by Supervisor Todd Spitzer to rescind the county’s 2004 ordinance delegating to the Fire Authority the ability to select ambulances for county unincorporated areas.

Because they had little to no notice of the proposal, Fire Authority board members, staff and attorneys rushed to respond.

In a memo penned the following day, Jill R. Ingram, Seal Beach’s city manager who is chairwoman of the Fire Authority’s technical advisory committee of partner cities, alerted the municipalities that the proposed county action “would remove the [Fire Authority’s] ability to perform this [ambulance selection] service on behalf of our cities.”

This is because the unincorporated areas were combined with 13 adjoining cities to economically attract bidders, officials said. If the supervisors were to approve Spitzer’s proposal, she said, the entire Fire Authority ambulance selection process could be effectively undermined.

Also on Oct. 4, Fire Authority attorneys wrote that the county proposal arguably would rescind the ability of all 23 Fire Authority municipal partners to charge base ambulance rates.

By Oct. 7, the Fire Authority’s board was convening an emergency meeting to plot its course.

Among the first Fire Authority board members to comprehend the implications of Spitzer’s proposal was Mission Viejo Mayor Trish Kelley, who has served on the board for 11 years.

In an interview, Kelley said that upon her arrival at the emergency meeting, “it was apparent that many of the [Fire Authority] directors didn’t know” what they were facing.” Quickly, she added: “We were all very concerned.”

On Oct. 7, The Fire Authority wrote to Supervisor Pat Bates, the other county official on the Fire Authority board, requesting a delay.

At the Oct. 8 supervisors meeting, the board opted not to rescind the 2004 ordinance after considerable politically-charged discussions. Spitzer did not return calls seeking comment.

During those discussions, Fire Authority Chief Keith Richter came in for sharp questioning by Spitzer and other supervisors over the ambulance selection process.

In particular, supervisors were critical of a September memo written by a mid-level Fire Authority staff about attendance at a meeting for potential ambulance bidders.

The document became known as “the poorly-worded memo.” It had little to no impact but was seen by some Fire Authority officials as a vehicle to criticize Richter, who is undergoing a performance review in closed sessions.

Nonetheless, the Fire Authority agreed to keep the supervisors more informed on the ambulance selection process.

But though the controversy dissipated publicly in the county, state officials seized upon documents regarding the county delegating authority to the Fire Authority to question the entire ambulance selection process.

In an Oct. 25 letter to Stratton, Dr. Howard Backer, director of the state Emergency Medical Services Agency, described “fair bidding practices” where the Health Care Agency “delegated its authority” to the Fire Authority.

The state letter also sought documentation of “statutory or regulatory authority that allows the county to delegate its responsibilities to conduct competitive bids to the [Fire Authority].” And the state requested “a detailed list of processes and procedures” the county uses to conduct competitive bidding for ambulance zones.

In a five-page letter on Nov. 22, Stratton asserted to the state that there was no “delegation” of Health Care Agency responsibilities to the Fire Authority, that fair competitive bidding was undertaken for ambulance contracts and that any suggestion Orange County’s actions were illegal is “groundless.”

But on Dec. 26, Backer wrote to the Health Care Agency that “it appears from all available evidence” that the county had “delegated its statutory responsibility” to the Fire Authority to select ambulances.

It is to disabuse state officials of this notion that local officials are traveling today to a meeting near Sacramento. The outcome of that meeting is expected to determine how ambulance services will be selected.

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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