New Ambulance Contract Approved In Alameda County

ALAMEDA COUNTY, CA — Unless a last-minute change in contract terms scuttles the deal, 911 emergency ambulance calls in most of Alameda County will be answered by a new service provider beginning next July.

County supervisors Tuesday approved a five-year contract giving Falck Northern California, a subsidiary of a Danish-owned multinational healthcare corporation, the exclusive right to provide emergency service in all areas of the county except for the Cities of Alameda, Albany, Berkeley and Piedmont which provide their own ambulances.

Falck will replace Paramedics Plus LLC, since 2011 the exclusive service provider in most of the county including the cities of Oakland, Emeryville, San Leandro, Hayward, Fremont, Newark, Union City, Dublin, Pleasanton, Livermore and unincorporated Castro Valley and the Lawrence-Livermore Laboratories.

Approval of the Falck contract culminated a prolonged, and at times acrimonious, selection process lasting more than a year and punctuated by a court decision requiring a second round of bidding.

Unlike the existing PMP contract that has resulted in county subsidies of several million dollars, Falck will generate revenues through “fees for services” generated from ambulance rates that are primarily paid for by third-party providers such as private insurance companies, Med-Cal and Medicare. Currently the two government programs cover more than half the charges for Alameda County ambulance service.

Slight Increase in New Rates

Colleen Chawla, director of the Alameda County Health Services Agency, told supervisors that rates under the new contract will be slightly higher than those currently charged by PMP. As of Sept. 1 the base rate for PMP service was $2,181 plus $50.71 per mile of transport from the scene of an incident to the hospital in addition to a fee of $161.91 if oxygen is used. Individuals who are treated at the scene but refuse transport to a hospital are charged $450.77.

Under the new contract Falck will charge a base rate of $2,227.36, $51.78 per mile and $171.45 for oxygen. Treatment without transport will cost $460.27.

However, in approving the contract, supervisors made a substantive change in the terms, eliminating a clause providing an option to renew the agreement for an additional five-years beginning in 2024. In addition, supervisors directed the county’s Emergency Medical Services Agency within the next two years to prepare for another round of bidding for ambulance service when the contract approved this week expires.

The resolution approving the contract also directed Falck to hire all Emergency Medical Technicians and Paramedics currently working for Paramedics Plus under existing union contract terms covering salaries and benefits.

It’s unknown whether Falck will go along with the unexpected change in contract terms. A company spokesman did not respond to Patch requests for comment.

Troy Hagan, head of Falck’s Petaluma-based Northern California ambulance operations, told supervisors the company had already spent $1 million preparing its bid and was committing $39 million for startup in Alameda County, including the purchase of 77 new ambulances.

Falck was one of three bidders for the in a second round of bidding, competing against American Medical Response West (AMR), which provides emergency ambulance service in Contra Costa County through an alliance with the county’s fire department, and Paramedics Plus (PMP).

Falck Northern California is a subsidiary of Orange County-based Falck USA which in turn is a wholly owned subsidiary of Falck A/S a giant Danish multinational ambulance and healthcare corporation owned by Denmark’s Lundbeck Foundation and the KIRKBI group, an investment company controlled by Denmark’s Kristiansen family, creators of the popular LEGO toys and through a separate company operators of LEGOLAND amusement parks.

Falck USA operates 22 ambulance companies in the United States, and last year generated $196 million in revenues, about 15 percent of the parent company’s worldwide ambulance income. During the first three quarters of 2018, according to the parent company’s financial reports, US operations have produced $208 million in revenues.

Legal Action Delays Contract

Much of the delay in awarding an ambulance contract involved a dispute over a section of the Request for Proposals (RFP) – a draft solicitation for ambulance bidders -- containing a clause that would permit “alliance” bidding by the Alameda County Fire Department. When the county submitted its draft RFP to the California Emergency Medical Services Authority, a state agency that certifies Emergency Medical Technicians and Paramedics and claims to have authority to approve ambulance contract bidding documents, the CEMSA rejected the RFP ordering removal of the alliance clause.

Alliance bidding is a concept used successfully in neighboring Contra Costa County through a public-private partnership where the county EMS agency contracts with the county fire department to provide emergency ambulance service and the fire department, in turn, subcontracts with a private company to actually provide ambulance vehicles and crews.

Removal of alliance bidding from the RFP stymied plans by the Alameda County Fire Department (ACFD) to bid on the contract. Last January the California Fire Chiefs Association, a nonprofit corporation representing more than 800 local, state and federal fire agencies, sued CEMSA and Alameda’s EMS Agency seeking a restraining order halting further action on the county’s bid solicitation, claiming excluding ACFD from bidding was improper.

An Alameda County Superior Court Judge ultimately ruled the clause prohibiting alliance bidding was illegal, ordering the county to issue a new bid solicitation. Following that ruling ACFD issued its own request for companies interested in partnering on ambulance service.

But the fire department’s plans to bid on the contract were abandoned after just two companies, AMR and PMP responded to the solicitation, with PMP being disqualified and AMR proposing rates much higher than what the company is charging in Contra Costa County.

Although Falck did not respond to the ACFD solicitation, it was one of three bidders for the EMS Agency contract and received the highest evaluation score from a review panel of outside experts.

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