$3.4 million in ambulance service fines - Morgan Hill Times: County

$3.4 million in ambulance service fines

Contracted service provider Rural/Metro says the number is somewhat higher than expected

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Posted: Thursday, April 4, 2013 4:00 pm | Updated: 9:30 am, Tue Apr 9, 2013.

Santa Clara County’s Emergency Medical Services ambulance provider, Rural/Metro, has been fined more than $3.4 million by the County dating back to January 2012 for failing to meet the guidelines laid out in its contract since gaining exclusive county ambulance service rights in 2011.

Rural/Metro claims to have paid all of its fines, which included a pair of infractions in 2012 for falling short of the 90 percent response time standards in the contract. The response time is the time elapsed from the moment the ambulance is dispatched to the time it arrives at the targeted destination.

For urban areas with a population density of 101 or more people per square mile, the response time must be under 11 minutes, 59 seconds. The city limits of Morgan Hill and Gilroy fall into that category. As for San Martin, considered suburban with a poulation density between 51 to 100 people per square mile, the response time must be under 16 minutes, 59 seconds, according to John Blain, EMS specialist for the county’s Emergency Medical Services Agency. As for rural areas heading out towards Pacheco Pass, the response time climbs to under 21 minutes, 59 seconds.

Rural/Metro, which also was reprimanded for violating the contract terms for not having three ambulances in service at all times, gets a detailed invoice of its fines at the end of every month and then cuts the check to the County for the full amount. As per the contract, Rural/Metro has 30 days to pay the fines.

However, County EMS Director Michael Petrie said the County’s current five-year emergency response contract with Rural/Metro is among the strictest and most stringent of any in the state.

“This fine structure was developed in the contract and this level of fines is not an indicator of poor performance,” said Petrie of the millions of dollars in fines assessed to Rural/Metro since January 2012.

In the county report detailing Rural/Metro’s list of infractions, sent Thursday morning by Petrie to the Dispatch, the ambulance company has been fined a total of $3,407,250, averaging $243,375 in infractions per month over that time. In January of 2013, Rural/Metro paid a $305,500 bill, its highest monthly amount to date, compared to a low of $170,250 exactly one year earlier.

County Supervisor Mike Wasserman, however, strengthened Petrie’s conviction. Wasserman said Rural/Metro’s performance is “as good if not better than the prior contract,” with the previous ambulance company, American Medical Response, and “there is no telling if this contract was in place years ago, how much (AMR) would have been fined.”

In February 2013, Rural/Metro was fined $279,500 for late response times on 472 of 5,516 calls for all five zones within Santa Clara County. For Zone 5, which includes Gilroy and Morgan Hill, Rural Metro was late on 26 of 341 calls. They were late a total of 68 minutes, 29 seconds for those calls and, although at 92.38 percent, Rural Metro still paid $20,750 in fines.

“It is phenomenally strict,” said Blain of the standards set forth in the contract that gives a $250 fine for being under 2 minutes, 59 seconds late (which was only a $39 fine under the contract the county had with its previous provider, American Medical Response) and a $500 fine for being between three to five minutes late. The highest fine of being more than 35 minutes late is $15,000.

“A vast majority (of the fines for late response times) are in the first two categories,” Blain added. “Zone 5 has some of the best service. ... so I would tell you it’s working.”

However, the Dispatch reported on several complaints from local residents who used Rural/Metro ambulances and were forced to foot the entire bill because the company is not considered in-network by any major insurance provider. One resident, 54-year-old Gilroyan Elena Miles, who suffers from Chronic Obstructive Pulmonary Disease, was so distraught by the charges for her ambulance ride that she “told my husband I’ll take the chance to die. It’s cheaper to die than it is to ride their ambulance.”

Wasserman believes Rural/Metro is upholding its part of the contract and added that it was one of only a few ambulance companies that wasn’t scared away by the hefty fine structure from bidding for Santa Clara County’s emergency services contract.  

“We put that in place as a financial incentive to give our residents, the people of Santa Clara County, the best service possible,” said Wasserman, who fully supports Rural/Metro. “And those fines (handed down to Rural/Metro) did not adversely effect the patient in any way.”

Rural/Metro ambulances are equipped with GPS trackers that show the exact time of when the ambulance arrived at its destination.

Division General Manager Mark Norman for Rural/Metro Santa Clara County 9-1-1 said the fines handed down by the county were paid immediately by Rural/Metro. The fines go directly into the County’s EMS Trust Fund, not the county general fund, and go directly back into improving the EMS system.

A committee decides exactly what the funds will be used for. Rural/Metro can’t use any of those dollars toward its own operating costs.

Rural/Metro accrued another $17,000 in penalties (17 fines at $1,000 each) in February 2013 for having less than three ambulances in service on four different ocassions; use of a non exclusive operating area ambulance nine times; and vehicle failure while in the commission of 9-1-1 services four times.

The $3.4 million total amount paid by Rural/Metro to date “is a little higher than we anticipated,” admitted Norman, whose company was well aware of the fine structure in its contract.

In 2012, Rural Metro twice fell short of the 90 percent response time standard mandated in its contract with the county.

In October, Rural/Metro met its response time standard 89.57 percent in Zone 1, which covers northwestern Santa Clara County. In December, Rural/Metro was at 89.66 percent for Zone 4, which covers southeast San Jose and the incorporated area north of Morgan Hill. Gilroy and Morgan Hill are in Zone 5, which consistently had the highest response times from Rural/Metro between July 2011 to December 2011.

If Rural/Metro is found to be in breach of the contract, the County can fine them $200,000 if the company does not make the necessary improvements. The agreement also has a “Lame Duck Provision” wherein if Rural/Metro continues to not meet the strict standards then the county can search for ambulance company to take over while Rural/Metro continues to operate.

Other stipulations of the contract are: $2,500 fine for failure to submit any monthly or quarterly reports and up to $5,000 for not having required equipment or supplies on an ambulance.

Rural Metro serves 14 of the county’s 15 incorporated cities (Palo Alto being the exception) and nearly 700 communities in 21 states. Santa Clara County Supervisors awarded Rural Metro the contract in 2011 to be the “exclusive provider of 911 and emergency ambulance service within Santa Clara County,” according to a press release from the County Emergency Medical Services.

Previously, American Medical Response, or AMR, which services more than 2,100 communities nationally, including 30 in California, had those exclusive rights for more than 30 years. But every 10 years, the county, even if they are satisfied with the ambulance provider, is required to make a Request for Proposals and begin the bidding process.

The Santa Clara County Board of Supervisors voted 3-2 in December 2010 in favor of Rural Metro because “the savings would be more than 12 percent for the five-year contract that is worth about $375 million.”

Wasserman was one of three who voted in favor of Rural/Metro.

The County’s decision to award Rural Metro with a five-year contract for exclusive operating rights in Santa Clara County was based on criteria of “clinical care, good operations effectiveness and patient satisfaction,” according to Petrie.

“The contract standards are much stricter than the contract we had with AMR and most counties throughout California,” Petrie said.

In the contract, the county supervisors “required Rural/Metro purchase 55 state-of-the-art ambulances to provide better service.”

At that time, County Executive Jeffrey Smith said the stiffer fines within the contract “will ensure high quality service to county residents.”

Despite the $3.4 million in fines, Petrie called Rural/Metro “a capable partner” in the county’s EMS system. He, along with Wasserman, said the ambulance company has fully complied with “the deliverables in the contract.”

Some of those mandates included having ambulances equipped with technology to record their response times as well as cameras in the front and rear of the ambulance to monitor responders’ performances.

Norman said the contract is the strictest of any the company has across the nation due to the 90 percent response time standard and the fine amount for each infraction.

Norman sees those expectations as “very exciting” because those stringent standards should positively benefit county patients and offer a “tremendous enhancement to the overall vitality and sustainability of the EMS system.”

Rural/Metro also received fines in 2012 for not having three ambulances in operation at all times.

Petrie again came to Rural/Metro’s defense, stating that emergency responder companies “routinely run out of ambulances” and patients are forced to wait longer for their arrival. Wasserman added that in the past, the county’s emergency provider, AMR, was not fined for that offense.

“That’s not acceptable in Santa Clara County,” Petrie said. “A fine is levied if that happens.”

Norman said Rural/Metro is “completely compliant with contract expectations” despite the infractions and the company knew what it was getting into when agreeing to the contract.

“It wasn’t something that creeped up on us over night,” Norman said. “We all knew ground rules and accepted those.”

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