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AMR's Exclusive Contract in California Area May Have to Withstand Open Bidding

RIVERSIDE, Calif. -- If you're in the Inland area and need an ambulance to get to a hospital, chances are American Medical Response will take you there.

Since the mid-1990s, the private, for-profit company - one of the nation's largest ambulance providers - has held exclusive rights to emergency transport and advanced life support for western Riverside County and parts of San Bernardino County. On average, AMR responds to about 276,000 calls a year in the region, according to the company's website.

But AMR's Inland dominance could come to an end. Riverside and San Bernardino counties eventually plan to put their ambulance contracts out to bid. In at least two instances, competitive bidding caused AMR to lose business in California.

Inland officials say it's not that they're unhappy with AMR's performance. Instead, they want ambulance providers to compete for their counties' business in the hopes that competition will lead to the best possible service at the lowest cost for patients.

Riverside County could seek bids in summer 2014 after a consultant is finished examining the county's ambulance system. San Bernardino County officials hope to start taking bids on the contract within a couple years.

Jason Sorrick, AMR's director of communications and government relations, said his company provides top-notch service and bidding isn't needed to improve ambulance care. AMR on June 11 got a three-year extension from Riverside County, but a five-year extension, company leaders said, would have allowed AMR to make further improvements to ambulance care.

"If we're going to spend some money, let's spend the money on patient care and not on additional consultants and reviews of contracts and things of that nature," he said.

Some bidding advocates have questioned AMR's response times, and the county fined AMR almost $400,000 last year for arriving late to scenes.

Fire officials hope the new contract will include changes to how ambulances are sent to emergencies. Among other findings, a third-party study of the ambulance system determined urban response times are too slow.

Those who advocate bidding include the Riverside County/Cal Fire firefighters union and the Riverside County Fire Chiefs Association.

"We are simply asking for this to be put out to bid because our system is antiquated and out-of-date," said Murrieta Fire Chief Matt Shobert.

Calls for bidding out the contract have picked up in recent years. Three years ago, fire chiefs in Riverside County reluctantly supported extending AMR's contract with the expectation the contract would be put out to bid after the extension expired, Shobert said. More people will need ambulances as the county's population ages and more patients gain insurance through health care reform, he added.

SYSTEM WORKING?

In 2008, the fire chiefs association commissioned a study that listed shortcomings in the county's ambulance system and called for a competitively bid contract. Among the suggestions was an ambulance response time for urban areas of eight minutes or less - the current standard is nine minutes, 59 seconds - and a re-drawing of the county's 12 ambulance zones to reflect population growth.

Shobert said firefighters and ambulances need to be able to communicate via radio. In an incident such as a multi-victim car wreck on Interstate 215, "I would like to have the ability to give the ambulances directions to the scene, where to park and staging instructions," Shobert said.

"Our job is to control the chaos at the scene of the accident. When we don't have communications with (the ambulances), that adds to the dilemma."

Sorrick said AMR crews can talk via radio with Murrieta firefighters. But Shobert said not all AMR ambulances have that capability.

Murrieta officials have been the most vocal in calling for competitive bids. Sorrick contends that the real reason Murrieta wants bidding is to force city paramedics onto private ambulances. Such a move would not improve medical treatment and would increase the cost to taxpayers because more firefighters would have to be hired, he said.

Shobert said Sorrick is wrong and his assertions are "smoke and mirrors trying to deflect from the issue of a high-dollar contract that has never been out to bid with a system that's ripe for improvements."

"It's not a Murrieta issue. It's a county issue," the chief said.

THERE ON TIME

AMR is expected to meet its response time goals at least 90 percent of the time in Riverside and San Bernardino counties.

In 2011, AMR ambulances met those goals about 93 percent of the time for all its Riverside County zones, records show. But AMR is also fined for arriving late. Riverside County fines range from $5 for being less than a minute late to $2,000 for lateness exceeding an hour.

The county fined AMR more than $374,000 in 2011, according to records. AMR was late on about 11,000 calls last year - it handled more than 143,000 - - and most of the fines were for a few minutes lateness or less.

Riverside County's current ambulance system is "really good" and changes to AMR's contract can be negotiated at any time, Sorrick said. Earlier this month, AMR sought a five-year extension on the grounds the company needed that long to recoup the cost of planned improvements such as advanced cardiac monitors.

ROAMING THE COUNTY

AMR's Riverside County contract dates to 2004. A five-year renewal extended the pact to 2009, and the latest extension granted this month ends June 30, 2015.

The contract requires AMR to pay the county almost $1 million annually in fees to support emergency communications and pay for the contract's oversight. AMR maintains a dispatch center/ambulance depot in a commercial area of Riverside.

While some AMR ambulances are in fire stations, others roam the county like police cars on patrol. They can be shifted to deal with possible spikes in calls. For example, ambulances might cluster near freeways during rush hour when there's a greater chance for accidents.

Sorrick said his company uses global positioning technology to track ambulances and constantly examines response time data. Since 2004, AMR has spent about $30 million on emergency services infrastructure in Riverside County, he said.

AMR is not publicly subsidized and makes money by billing patients for its services. AMR can charge up to $1,174 per ambulance ride in Riverside County. Charges for mileage and oxygen can also apply.

The company doesn't get full reimbursement from every patient. Medicare and Medi-Cal only cover a fraction of AMR's fee, and the company is required to accept that payment and it can't go after the patient for the rest, according to county public health spokesman Jose Arballo.

Between 2007 and 2011, AMR averaged $98 million in total revenue and $89.6 million in operating expenses - including $34.4 million a year in uncompensated care - in Riverside County. Its average annual profit after taxes was $4.98 million, according to county records.

OTHER OPTIONS

At least one ambulance company, Orange County-based Care Ambulance, is interested in serving the Inland Empire.

"All of the major ambulance service providers would undoubtedly be interested in submitting proposals to Riverside and San Bernardino counties, including Care," Bob Barry, Care's director of business development, wrote in an email.

Santa Clara and Alameda counties recently dropped AMR in favor of other companies after putting their ambulance contracts out to bid.

Michael Petrie, director of Santa Clara's emergency medical services agency, said his county went with Rural Metro in 2011 because it offered a better overall package than AMR. "The contract set new standards, higher standards (such as stricter response times) and Rural Metro is meeting those standards," he said.

Tom Lynch, acting emergency medical services director for Alameda County, said price was only one factor in his county's decision last year to go with Paramedics Plus instead of AMR. Alameda also evaluated its emergency system and came up with faster response times and other improvements, he said.

Sorrick said AMR is confident it would win any Inland bidding war.

"This is a huge investment for us to be a part of this community," he said. "And we'd like to continue that relationship."



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