San Bernardino County officials and their attorneys are trading notes with their counterparts in Sonoma County in the aftermath of American Medical Response filing a suit in federal court alleging San Bernardino County, its board of supervisors and two of its interrelated or associated joint public safety agencies engaged in a violation of the Sherman Antitrust Act when it the board in December award the franchise for emergency medical response throughout most of the county’s desert region to an amalgam of one of those public safety agencies and an Arizona-based ambulance company.
Colorado-based American Medical Response, known as AMR, operates as an ambulance service provider in 40 states as well as the District of Colombia. Some of its corporate predecessors were providing ambulance service in San Bernardino County in the early 1970s. On January 1, 1981 AMR was given an exclusive operating contract in a wide swathe of the desert by the Inland Counties Emergency Management Agency, which oversees emergency medical response in San Bernardino, Inyo and Mono counties and licenses emergency medical service providers – including hospitals and ambulance companies – in those regions. AMR maintained that exclusive contract for providing services ambulance service in San Bernardino County’s desert for more than four decades. Though the Inland Counties Emergency Management Agency, known by its acronym ICEMA is a three-county joint powers authority, county officials in Inyo and Mono counties have empowered the San Bernardino County Board of Supervisors to act as the ICEMA board.
Whereas in previous years, the AMR contract was merely “rolled over” in what the county referred to as “a grandfathered process,” in late 2022 county officials began to look toward what action it would take with regard to the expiration or continuation of the contract. On December 20, 2022, the county released a request for proposals – a solicitation of bids – inviting prospective providers to provide ground ambulance service in 11 of the county’s 26 exclusive operating areas.
Responding to the request were AMR and Consolidated Fire Agencies, known by its acronym CONFIRE, a joint powers authority which provides communications, dispatch, computer information systems support and geographic location information to its nine member agencies – the Apple Valley Fire Protection District, Chino Valley Independent Fire District, the Colton Fire Department, the Loma Linda Fire Department, the Rancho Cucamonga Fire Department, the Redlands Fire Department, the Rialto Fire Department, the San Bernardino County Fire District and the Victorville Fire Department – and four contract agencies – the Big Bear Fire Department, the Montclair Fire Department, the Running Springs Fire District and the San Manuel Fire Department.
In its response, AMR stated it could commit 12,889 weekly unit hours to respond to calls, had 111 ambulances available during peak system demand and stationed throughout the service area backed with 39 additional available ambulances available to meet surges. It emphasized that it was the current provider of the services with vehicle infrastructure in place and 10 managers and 18 field supervisors and a medical director familiar with the comprehensive needs of the service area. The company offered rates of $3,958 for both basic life support and advanced life support, $2,834 to carry out an interfacility transport, and $4,392 for critical care transport.
In its response, CONFIRE said it would subcontract with Priority Ambulance, which also serves Maricopa County in Arizona and therefore could devote 10,371 weekly unit hours to respond to calls, had 93 ambulances available at peak demand, with 45 additional ambulances available to meet surges throughout the service area, that it will establish ambulance staging locations, put on-board personnel in place and acquire vehicles upon receiving the contract. It offered an assurance that it has leadership and management to meet the demands of providing the service, including nine managers and 18 operations supervisors as well as a medical director and that it controls the regional emergency services communication system. Its proposed rates for its advance life support service were $3,547 for non-emergency and interfacility transfer, $4,053 for emergency transport, $2,533 for non-emergency basic life transport and $3,167 for emergency basic life transport and CCT $5,067 for critical care transport.
What the county referred to as an “independent review panel” made up of four evaluators individually scored each proposal on 14 key areas – system requirements, response time standards, clinical performance, deployment plans, vehicles, medical supplies and equipment, personnel, hospital and community requirements, disaster preparedness/response, quality management, electronic patient care reports, centralized emergency medical dispatch center, financial and administrative requirements qualifications, and future system enhancements – for the purpose of making a recommendation to the county for final negotiation of contract terms. The total cumulative scores, against a standard with 1,720 points maximum, favored AMR, which registered 1,519 total points against 1,515 points for CONFIRE.
Based on what the county characterized as the negligible difference between the scores, it provided AMR and CONFIRE with notice to enter into contract negotiations with the county and that the final contract approval rested with the board of supervisors.
After those negotiations concluded, the county purchasing division on October 27, 2023, emailed AMR a notice of intent to recommend that it be awarded a contract extension from the time its current contract expires on March 31 from April 1, 2024 through September 30, 2024 to allow CONFIRE to get prepared to take on the contract for an initial term from October 1, 2024 through September 30, 2029.
AMR lodged a protest, alleging the county had failed to follow the selection procedures, did not adhere to requirements specified in the request for proposal, had awarded the contract to the entity which had lost in the competition and that it had otherwise violated state and/or federal law. The county’s purchasing agent, Ariel Gill, who reviewed and considered the protest and notified AMR of its decision to deny the protest.
At the December 5 board of supervisors meeting, a motion by Supervisor Jesse Armendarez seconded by Supervisor Curt Hagman to deny the protest from American Medical Response and schedule a vote to consider awarding the contract to Consolidated Fire Agencies and its private subcontractor Priority Ambulance passed by a unanimous vote. During the December 5 meeting, AMR was represented by a spokesman who neglected to identify himself and Mike Rice, the company’s vice president of operations, who made no comments. The unidentified spokesperson said AMR offered “stability, performance and clinical excellence. AMR is in the best position to take this into the future. We’re fully integrated with the fire departments, public health, behavioral health, the communities we serve.” He emphasized that AMR had a “depth of resources, history of performance, experience and expertise, disaster response capability and represented a lower risk of liability to the cities and county than have public agencies providing ambulance service. He said that “AMR meets or exceeds all response [time] standards” and featured as part of its vehicle fleet “all-wheel-drive units in key areas that need that… and a disaster command vehicle.” He said the company had helicopter ambulances and was “financially strong” with an established sustainable model.”
CONFIRE was represented by Rancho Cucamonga City Councilwoman Lynn Kennedy, the chairwoman of the CONFIRE Board of Directors, as well as Rancho Cucamonga Fire Chief Mike McCliman and CONFIRE Chief Nathan Cook. Lynne Kennedy said what CONFIRE was offering something that “will result in increased resources, decreased response times and a delivery model that includes private/public partnership, a private partnership with Priority Ambulance that has the capacity to serve our county and the public partnership that crosses the continuum of care, making sure that every single resident receives the right care at the right time on time every time without exception. It is going to be transformational in three areas. It is going to improve our service delivery, establish an efficient system and invest both financial and human resources back into the system.”
County officials reasoned that both CONFIRE and AMR performed, for all intents and purposes, equally well in the evaluation of their proposed offerings of service. The county also figured that a state law which encouraged local agencies to develop emergency medical transportation capability dovetailed with San Bernardino County Policy 1104, which calls for making a determination of “best value” when entering into such contracts, favored CNIRE over AMR. Assembly Bill 1705, passed in 2019, allows an ambulance service provider operated by the state, a county, a city, a county and city or cities, fire protection district, special district, community services district, health care district, or a federally recognized Indian tribe – in short a governmental entity – to receive a supplemental Medi-Cal reimbursement when the patient being transported is a Medi-Cal recipient, in addition to the rate of payment the provider would otherwise receive for those services. By applying the advantage inherent in Assembly Bill 1705, which was put in place to facilitate local agencies develop in-house ambulance/emergency medical transportation capability, the county would be able to capture those supplemental Medi-Cal payments, while AMR, as a private sector provider, would not be eligible for such reimbursements. Thus, the added “value” of the arrangement involving CONFIRE dictated the county contract with it, according to county officials.
“Of the two proposers that we heard today, CONFIRE JPA [ joint powers authority] may be eligible for this funding, but only CONFIRE JPA,” Chairwoman of the Board of Supervisors Dawn Rowe said on December 5 in articulating the rationale for contracting with CONFIRE.
Rice, who had remained silent during the company’s public presentation on December 5, allowing AMR’s anonymous spokesman to do all the talking, lost his reticence after the board of supervisors had made its decision.
“The decision made by the county Board of Supervisors does not align with the best interests of the community and the patients of this community,” Rice said. “The proposal selected by the board puts 29 fewer ambulances a day on the road than what AMR proposed. The community and our hard-working employees will be negatively impacted by the decision today. Given the circumstances, AMR is left with no choice but to explore all available options, including legal recourse, in response to the board’s actions.”
On February 2, AMR made good on that threat, with the attorneys Stephen Larson, Jonathan Phillips, Mehrunisa Ranjha and Benjamin Falstein filing on behalf of AMR a lawsuit in Riverside Federal Court that names the County of San Bernardino, the San Bernardino County Board of Supervisors, the Inland Counties Emergency Medical Agency and Consolidated Fire Agencies as defendants and Consolidated Fire Agencies as the real party in interest.
At the very core of the lawsuit and the entire contretemps involving CONFIRE and AMR is the concept of a monopoly and where and under what circumstances they are tolerated and upon whom or what entity they are to be conferred. The Sherman Antitrust Act was a law passed by the U.S. Congress in 1890 to prohibit, trusts, monopolies and cartels and thereby promote the economic fairness and competition and to regulate interstate commerce. According to the Act, its intent was to “preserve free and unfettered competition as the rule of trade for the benefit of consumers. There are, nonetheless, circumstances in which exceptions to the act’s provisions are considered to be legitimate and are allowed. As pertains to the matter in question, that exception would be what is termed “an exclusive operating zone.”
The Inland Counties Emergency Management Agency and its governing board, the San Bernardino County Board of Supervisors, oversee issues pertaining to emergency medical response not just within the expanse of 20,105-square mile San Bernardino County but in 10,227-square mile Inyo County and 3,132-square mile Mono County, a combined area that is larger than 12 different states, including Maine, South Carolina, West Virginia, Maryland, Vermont, New Hampshire, Massachusetts, New Jersey, Hawaii, Connecticut, Delaware and Rhode Island separately and larger than Vermont, New Hampshire, Massachusetts and New Jersey combined.
There are extensive expanses within all three of those counties which are only sparsely populated but which still need, from time to time, emergency medical response. Thus, there are swathes of territory in each where one ambulance company has not only primacy but a virtual monopoly in that it, and only it, is authorized and licensed to function there under normal circumstances. The ostensible rationale for granting these monopolies is that operating ambulances is an expensive proposition, not to mention one that is crucial to public health and safety. Competition between ambulance companies has the potential, so the reasoning goes, of driving down the prices those companies charge to the point that their operations will not be profitable enough for them to remain in business. Upon these ambulance companies going out of business, the public would be put into a position where there would be insufficient emergency medical transportation service available to ensure public safety. In this way, those arrangements – the exclusive operating zones – have been established, which have “immunity” from the Sherman Antitrust Act.
Some have long disputed that the exclusive operating zones are necessary, and they assert they are rather a ploy by which county politicians have further inculcated a pay-to-play ethos into the county’s governmental function, with the exclusive operating permits being granted to the companies or company proving to be the most generous in handing out political donations to incumbent politicians. Among those critics of exclusive operating zones are some who maintain the monopolistic system has long endangered public safety. One of those was the county’s firefighters’ union, known as Local 935, which a decade ago suggested the exclusive operating approach has on occasion created critical shortages in the High Desert’s ambulance transport system.
For years, the county’s decision-makers ignored those warnings. The December 2022 decision to put the franchise contract out to bid by seek a so-called request for proposals was what led to the submission of competing bids between CONFIRE and AMR.
According to Larson, Phillips, Ranjha and Falstein, AMR was the “exclusive ‘grandfathered’ ambulance provider to the county” and the “county departed from this practice and for the first time published a state-approved request for proposals” to solicit entities interested in competing for the franchise.
The “requirements set forth in the request for proposals RFP were strict,” according to Larson, Phillips, Ranjha and Falstein and under the rules of the competition the county was “required to award the exclusive contract to the bidder with the highest scoring proposal. Moreover, any provider whose proposal failed to meet the minimum qualifications specified in the request for proposals could not be considered at all.”
Despite what was supposed be a highly regulated and precisely controlled competition, according to Larson, Phillips, Ranjha and Falstein, the “county was willing to disregard this mandatory process in order to award the contract to its pre-ordained preferred provider – CONFIRE – regardless of whether it had submitted the best bid. In other words, the process actually employed by the county was not truly competitive at all.”
Larson, Phillips, Ranjha and Falstein maintain “The independent, non-biased review committee administering the request for proposals process gave AMR’s proposal a higher score than CONFIRE’s proposal based on scoring criteria set forth in the RFP.” Furthermore, according to Larson, Phillips, Ranjha and Falstein, [T]he board of supervisors voted to award the contract to the losing bidder, CONFIRE. By negotiating with and ultimately awarding the contract to an ambulance services provider with an inferior bid, the county and its board of supervisors acted contrary to the RFP and state law—and, consequently, outside the narrow confines of their antitrust immunity.”
According to Larson, Phillips, Ranjha and Falstein, “CONFIRE’s proposal should not have been considered to begin with, as it failed to fulfill basic minimum requirements mandated by the request for proposals. Nevertheless, the county and
board of supervisors deliberately disregarded the glaring deficiencies in CONFIRE’s proposal when they allowed it to move forward in the process and ultimately decided to award CONFIRE the next exclusive ambulance services contract.”
Under the State of California’s Emergency Medical Services Act, the state’s
Emergency Medical Services Authority oversees and regulates a local emergency medical services authority’s administration of local emergency medical service programs. In San Bernardino County, the Inland Counties Emergency Management Agency was that local emergency medical services authority responsible for planning, evaluating, and implementing the emergency medical system and its personnel, facilities and equipment. Under the State of California’s Emergency Medical Services Act, the local emergency services agency – not the county – is “the agency, department, or office having primary responsibility for administration of emergency medical services in a county.” According to Larson, Phillips, Ranjha and Falstein “Counties and local emergency services agencies accordingly may not share statutory powers and duties.” But Larson, Phillips, Ranjha and Falstein maintain the county did so and thereby engaged in a conflict of interest which violated California law and abridged their client’s rights. “A local emergency services agency must develop—and submit to the California Emergency Medical Services Authority an annual emergency medical services plan consistent with California law,” according to Larson, Phillips, Ranjha and Falstein. “[A] narrow exception to antitrust liability exists where anticompetitive conduct at the local level is authorized by a state law establishing a clearly articulated and affirmatively expressed state policy to displace competition. The request for proposals specifies that the review committee would only recommend the highest-scoring bidder for final negotiation of contract terms with the county. Negotiations may only commence with the next highest-rated bidder if the county terminates negotiations with the highest-scoring bidder for failure to negotiate.”
AMR did not refuse to negotiate and it did everything it was supposed to do and competed fair and square, according to Larson, Phillips, Ranjha and Falstein
“AMR’s proposal received the highest score based on the scoring metrics specified
in the RFP,” the lawsuit states.
AMR protested and its protest was denied, according to the suit, while the county and the county board of supervisors maintained the supervisors had discretion in the selection process that allowed its members to collectively “disregard the evaluation prepared by the non-biased review committee and further empowered the county and board of supervisors to disregard the request for proposal’s mandatory requirement that only the highest scoring proposal would receive consideration for award of the contract.”
The board of supervisors, as articulated by Chairwoman Rowe at the December 5 meeting, according to Larson, Phillips, Ranjha and Falstein, “did not consider the fact that the ‘highest scoring proposal’ is necessarily the proposal that ‘demonstrates the best value and meets the needs of the County.’ In other words, there was already a procedure for selecting the proposal that demonstrates the best value and that meets the needs of the county – and that procedure is
established by the criteria set forth in the state-approved request for proposals [process]. The board of supervisors, however, took the position that it was permitted to conduct its own evaluation of these criteria – notwithstanding the non-biased review committee [had] already done precisely that.”
According to Larson, Phillips, Ranjha and Falstein, an illustration of how the board of supervisors engaged in a “complete abdication of its duty to adhere to the request for proposals requirements” consisted of the board’s “cursory vote to deny AMR’s protest.” In doing so, according to Larson, Phillips, Ranjha and Falstein, the board of supervisors engaged in a violation of the Ralph M. Brown Act, California’s open public meeting law, which requires action the governing board of a public agency takes to be previewed on an agenda published at least 72 hours in advance of any such board meeting at which a vote is to take place.
“AMR’s protest was never included in the December 5, 2023 agenda,” according to Larson, Phillips, Ranjha and Falstein.
What is perhaps the suit’s most significant feature is Larson’s, Phillips’, Ranjha’s and Falstein’s contention that CONFIRE and its private sector partner are not qualified under the county’s own specified standards to fulfill or hold the franchise contract, those being that the service providers have provided emergency ambulance service to a population of at least one million residents over a period of at least five of the previous seven years.
According to Larson, Phillips, Ranjha and Falstein, “[I]t is undisputable that CONFIRE, as well as its private subcontractor, Priority, had failed to meet the basic requirements set forth in the request for proposal. Because of this failure, disqualification was mandatory under the request for proposals, and CONFIRE’s proposal should never have received consideration by the county, let alone the county’s recommendation for further negotiation and ultimate award. CONFIRE’s proposal represented that Priority had sufficient organizational experience based on the ambulance services Priority provides in its largest service area, Maricopa County, Arizona. Priority does not have a contract as the primary ambulance provider with Maricopa County itself; instead, Priority contracts with five municipalities that together comprise only a portion of Maricopa County.
Priority’s contract with the City of Chandler, Arizona only commenced in or about January 2022 and thus fails to satisfy the durational requirement in the RFP, which requires the bidder to have continuously provided ambulance services for five of the last seven years. Additionally, under that contract, Priority only provides the physical ambulance and an EMT [emergency medical technician] driver – whereas the city provides the licensed paramedic on board the ambulance – and thus Priority itself is not capable of providing advanced life support services as required by the request for proposals. Priority’s contract with the City of Scottsdale, Arizona only includes the provision of basic life support services and does not include the provision of advanced life support services required by the request for proposals, which are instead provided by the local fire department.
CONFIRE also represented that Priority has an active contract with the City of Surprise, Arizona, but in actuality, that contract is no longer active and thus should never have been included in CONFIRE’s proposal to begin with. Yet, even if the contract was still active, it only allowed Priority to provide backup 9-1-1 ambulance response—as opposed to the primary 9-1-1 ambulance response services required by the RFP. At best, then, Priority has only provided
primary 9-1-1 ambulance response services for the requisite durational period for two municipalities in Maricopa County: the City of Glendale, Arizona, and the City of Goodyear, Arizona.”
Thus according to Larson, Phillips, Ranjha and Falstein, the team of CONFIRE and Priority fell down on the requirement that they have “organizational
experience,” which requires the bidder to have continuously engaged in the provision of 9-1-1 ambulance services under a contract for a large urban area with a population greater than 1 million. “In addition, the bidder’s contract with the large urban area must include the provision of multiple levels of ambulance services, including advanced life support, interfacility transport, and critical care transport services. Further, the bidder must have provided the services continuously for five of the last seven years. Neither CONFIRE, nor the fire agencies comprising its membership, possessed the organizational experience necessary to meet these requirements. CONFIRE instead attempted to rely on its private subcontractor, Priority,” to meet that criteria, according to Larson, Phillips, Ranjha and Falstein, who maintain, “Priority has only provided primary 9-1-1 ambulance response services for the requisite durational period for two municipalities in Maricopa County: the City of Glendale, Arizona, and the City of Goodyear, Arizona. However, based on the population metrics submitted by CONFIRE, the combined population of these two municipalities only amounts to 338,000 residents – a far cry from the service area population of 1,000,000 required under the request for proposals.”
Larson, Phillips, Ranjha and Falstein accused the county of hiding the failure of CONFIRE and Priority to meet the requisite standards from the public.
AMR’s legal team discovered that shortcoming only after it requested documents relating to the county’s awarding of the contract to CONFIRE by making public records requests for documents related to the decision.
According to the suit, the county sent a letter to CONFIRE on April 7, 2023 “wherein the county informed CONFIRE that ‘[a]fter a thorough review of your request for proposals submission, we are missing the demonstration of your subcontractor meeting the minimum qualification set forth in [the] request for proposals’ under the organizational experience requirement. The county further stated that in order for CONFIRE’s proposal to receive further consideration, it must ‘submit documentation demonstrating your subcontractor’s ability to meet the minimum qualifications set forth in the request for proposals, specifically experience providing primary 9-1-1 ambulance services for a large urban area with a population greater than 1,000,000.’ On or about April 11, 2023, CONFIRE responded to the county’s letter in an attempt to make the requisite showing of its organizational experience. But no additional responsive documentation was provided. CONFIRE instead merely repeated the same information submitted with its initial proposal, again relying on Priority’s limited history of providing ambulance services for the five municipalities in Maricopa County, which is inadequate.”
The petition for a writ of mandate does not ask for a monetary settlement for AMR other than attorney’s fees but does seek from the court that it declare that the selection process failed to adhere to the state requirements for a request for proposals process and therefore constituted an illegal restraint on competition, grant an injunction preventing ICEMA from granting CONFIRE the ambulance service franchise, grant an injunction against the board of supervisors from violating the state requirements relating to requests for proposals, require the county to grant AMR’s protest of the procedure and consider CONFIRE’s proposal alone and award the franchise contract to AMR.
County spokesman David Wert told the Sentinel, “The December 5 Board of Supervisors agenda materials, comments made by county staff and the board members at the meeting, and the county’s subsequent news release address this subject well. The county doesn’t have any additional comments at this time.”
The county’s previous statements maintain that the evaluation by the “unbiased evaluation” by the four-member panel could be interpreted as favoring CONFIRE. Though the total cumulative scores, against a standard with 1,720 points maximum, favored AMR, which registered 1,519 total points against 1,515 points for CONFIRE, a differential of one quarter of 1 percent, the county emphasized that three of the four judges on the panel favored CONFIRE over AMR. One of the evaluators rated AMR above CONFIRE by 35 points, 419 to 384, while the other three evaluators found in favor of CONFIRE by scores of 383 to 373, 363 to 346 and 385 to 381.
Additionally, according to the county, CONFIRE, as the dispatch agency for the county and fourteen other agencies within the county’s confines has demonstrate its organizational experience with regard to ambulance operations in that it has managed and coordinated the emergency medical response to the county’s unincorporated areas, the cities of Apple Valley, Big Bear, Chino, Chino Hills, Colton, Montclair, Needles, Rancho Cucamonga, Redlands, Rialto, San Bernardino, Twentynine Palms, Upland and Victorville, a population approaching or exceeding 1.2 million, such that the AMR lawsuit is without merit.
San Bernardino County is not alone in having jettisoned AMR as its ambulance service provider.
The County of Sonoma acted similarly in terminating a contract for ambulance service it had with AMR for over two decades, whereupon AMR sued the County of Sonoma in March 2023. The County of Sonoma countersued AMR in June 2023.
Of note is that for more than three-and-a-half decades, AMR has been one of the most constant and generous of contributors to the political campaigns of members of the board of supervisors, lagging behind a small handful of companies, corporations or individuals in the development industry, but accounting for more money being provided to the county’s top politicians than the lion’s share of businesses or wealthy individuals which and who provide officeholders with funds to run their campaigns, including well over seven eighths of those in the building industry. In recent years, however, public employee unions, among them most notably the San Bernardino County Professional Firefighters Union Local 935, have taken on a leading role in bankrolling the county’s politicians, primarily the board of supervisors. The county’s firefighters, in particular their labor representatives, have been prime movers in the effort to deprivatize ambulance service in the county.