Why $4 million in fines not fixing problem with ambulance response times in county

AMR community paramedic Dennis Flannery is seen in Modesto on Tuesday, Sept. 20, 2016.
AMR community paramedic Dennis Flannery is seen in Modesto on Tuesday, Sept. 20, 2016.

In the past five years, ambulance companies in Stanislaus County have been assessed more than $4 million in fines for slow response times and failing to meet other standards for emergency services.

County leaders suspect that ambulance providers are simply paying fines as a cost of business instead of providing better service to improve outcomes for patients.

Last week, supervisors approved a 12-month extension on five-year agreements with medical services responders and a new plan for improving emergency medical services. The current agreements were set to expire April 30.

After talks with the largest ambulance provider, American Medical Response, reached an impasse, local officials reluctantly agreed to an extension that includes no fines for failure to meet response-time requirements.

Proposals from ambulance companies will be sought under a new plan for a "high-performance" emergency response system that delivers good patient outcomes, reliable response times, economic efficiency and customer satisfaction. The new contracts will start in May 2019.

"It's a disappointing situation, but I believe we will come up with something better for all our citizens," Supervisor Vito Chiesa said.

A spokesman for AMR said Monday the penalties under the current agreement are not fair and the contract is financially unviable for the company. In negotiations over the extension, AMR wanted to change how penalties are assessed and the county opted for eliminating the fine structure, the spokesman said.

“What we had previously discussed with them was an actual renewal,” AMR spokesman Jason Sorrick said. “It was not until the last year of the five-year contract that they said they were going out for an RFP.”

To regulate EMS services, Mountain Valley Emergency Medical Services Agency has agreements with ambulance providers including AMR, Oak Valley Hospital District, Patterson District Ambulance and ProTransport-1. Also playing a role in the EMS system are fire departments, police and dispatch communication centers.

Representatives from about 35 agencies took part in interviews last year as a first step toward crafting a new plan for emergency responders.

Among the challenges are better use of dispatch resources, a paramedic shortage that makes it hard to staff ambulance crews, sustainable funding for ambulance services and the need for more training.

During the flu season this past winter, paramedics were delayed too long at hospitals in trying to deliver patients to packed emergency departments.

A report last week also noted there were 5,800 more emergency calls in 2016 than in 2014, with Code 3 responses (flashing lights and sirens) representing 70 percent of the total calls in Stanislaus County.

Five years ago, the agreements with ambulance providers included tougher financial penalties for not meeting response time standards. Ambulances are expected to arrive in less than 7.5 minutes in urban areas. 11.5 minutes in suburban areas and 19.5 minutes in rural areas.

By far, AMR has been hit with the most fines, though an actual breakdown was not available. A regional director for AMR told supervisors last week that, under the current agreement, penalties are assessed if the company is 90 percent complaint with the standards.

When the agreements were signed in 2013, officials expected the Affordable Care Act would increase revenues for ambulance providers as thousands of residents were enrolled in insurance and Medi-Cal eligibility was expanded.

Sorrick said the ACA has led to a payer mix that is not sustainable for the company. Significantly more patients are in high deductible insurance plans and many customers have Medi-Cal coverage that pays far below the cost of an ambulance ride.

“About 85 percent of patients pay below our costs,” Sorrick said.

The spokesman also questioned the fairness of penalizing the ambulance service when employees are delayed at crowded hospitals.

The new agreements should put less emphasis on fast response times because it’s necessary in only a small number of calls, Sorrick said. “With a broken leg, there is no need to be there in 7 minutes and 30 seconds,” he said. “AMR has no interest in bidding on a (new agreement) if the terms are not changed.”

The new plan for emergency medical services will strive for efficiency, financial sustainability for ambulance providers, enhanced communications and better coordination of responders.

Jim DeMartini, Board of Supervisors chairman, said he wants to hear from staff in five months or so if response times are "way out of line" during the extension period.

Up to $200,000 in penalty funds held by Mountain Valley will be used to hire a consultant to assist with a request for proposals designed to improve ambulance service.