annotation liability of operator of ambulance service for personal injuries to person being...

8/14/2019 ANNOTATION LIABILITY OF OPERATOR OF AMBULANCE SERVICE FOR PERSONAL INJURIES TO PERSON BEING TRANS

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Source: All Sources : States Legal - U.S. : Combined Restatement Rules, ALR,Jurisprudences and Law ReviewsTerms: paramedic or emergency medical systems and negligence (Edit Search)

17 Whittier L. Rev. 47, *

Copyright (c) 1995 Whittier Law ReviewWhittier Law Review

Fall, 1995

17 Whittier L. Rev. 47

LENGTH: 20046 words

ARTICLE: LEGAL IMPEDIMENTS TO COST EFFECTIVE PROVISION OF EMERGENCY MEDICALSERVICES IN CALIFORNIA: WHY AMBULANCE FRANCHISING AND OTHER INNOVATIONS TO CONTROLEMS COSTS MAY FAIL

Byron K. Toma*

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* Deputy County Counsel, County of Sonoma; Association Representative of SmoleyTask Force, California County Counsel. J.D., University of Santa Clara School ofLaw; A.B., Stanford University.

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SUMMARY:... When an ambulance is called, everyone is aware that there is a crisis. ...

For instance, what if an EMS provider has been sold to another ambulance companysince January 1, 1981? Will such an entity still be regarded as an existingprovider engaged in the provision of services in the same manner and scope? Whendoes the "existing provider" first need to exist? In 1981 or at the time of theproposed franchise? What if intervening providers have arisen in the historicalarea served? What if a number of providers merge and become one business thatserves the original historical service area subject to a possible grandfathered-infranchise? The only guidance given by the Court of Appeal in Petaluma regarding

these matters is that California Health & Safety Code Section 1797.6 "encourages aliberal construction favoring antitrust immunity for activities undertaken bylocal EMS agencies under section 1797.224." ... For instance, if a para hospitalsystem decides to use BLS ambulances to respond to 911 calls that are ultimatelyrouted to a clinic rather than to an acute care hospital, can this type oftransport be the proper subject for a franchise of emergency ambulance services?An exclusive operating area is defined as: ...

TEXT:[*47]


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I. Introduction

When an ambulance is called, everyone is aware that there is a crisis. Red lightsand sirens obviously indicate that someone needs help. What is less obvious isthat the provision of ambulance service in California is generally in crisis andin need of help. It is less a crisis of quality than a crisis of cost. In manymarkets, over-competition has driven ambulance costs up dramatically. n1 The meansof dealing with [*48] spiraling costs are unfortunately very limited.

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n1 This phenomenon has been explained in earlier articles by the author in thefollowing manner:

This occurs because ambulances have fixed costs for being on call 24 hours a day.An area may only generate a few emergency calls a day. With more competitors, thepatients must be charged a higher price for each ambulance run since the fixedoverhead of the ambulance company must be spread among ever fewer patients. Likehospital beds, an excess supply of ambulances may have an adverse affect upon

service cost.

Byron K. Toma, The Decline of Emergency Medical Services Coordination inCalifornia: Why Cities are at War with Counties over Illusory AmbulanceMonopolies, 23 Sw. U. L. Rev. 285, 289 n.25 (1994).

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Historically, one of the principal strategies to control emergency medical servicecosts has been to treat such services like utilities, thereby limiting competitionto permit consumers to enjoy monopoly economies of scale. An alternative approach

has been to treat emergency medical services like other medical services subjectto utilization review. n2 This strategy aims to provide the patient with the exactamount of service they require. Although both strategies hold the promise of costcontainment, they also face serious legal problems in implementation due to theambiguity of the statutory scheme.

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n2 "Utilization review" is a component of quality assurance in hospitals. Inhospitals it entails discharge planning. It is commonly the part of qualityassurance that health care insurers are most concerned about. It "assures" theinsurance companies that the patient is not getting more quality than he or shemay actually need in terms of health care.

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In this article, the author will attempt to summarize the legal obstacles toambulance franchising today, the legal obstacles to other cost containmentstrategies, and the desirability of securing appropriate legislative reforms inthese areas to permit the increasingly antiquated EMS Act to keep pace with thewinds of change.

II. Ambulance Franchising Is in Transition


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Once upon a time, "ambulance franchising" n3 in California was simple. In 1984,enabling legislation n4 placed the EMS Authority n5 in charge of supervising thecreation of ambulance monopolies. n6 This was done to facilitate state-actionantitrust immunity. n7 Any county desiring to create an ambulance monopoly withinan "exclusive operating area" merely read the EMS Act n8 and obtained theAuthority's blessing n9 up- [*49] on the proposed plan n10 for the provision ofregional emergency medical response. Selection of an exclusive ambulance providerwas relatively straight forward and safe.

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n3 The term refers to the creation of regional ambulance monopolies by local EMSagencies who have elected to supplant competition with regulation as authorized bylaw.

n4 Cal. Health & Safety Code sections 1797.224, 1797.85, 1797.6 (West 1990).

n5 Cal. Health & Safety Code section 1797.54 (West 1990).

n6 Such monopolies are referred to as "exclusive operating areas" within thelanguage of the statutory scheme of the EMS Act. Cal. Health & Safety Code section

1797.85 (West 1990).

n7 Community Communications Co., Inc. v. City of Boulder, 455 U.S. 40 (1982), madeit clear that local governments can only claim state-action antitrust immunitywhere there is direct state supervision of the scheme supplanting competition withregulation.

n8 Cal. Health & Safety Code section 1797 (West 1990).

n9 Cal. Health & Safety Code section 1797.1 (West 1990). The Authority is chargedwith responsibility for "the coordination and integration of all state activitiesconcerning emergency medical services."

n10 Cal. Health & Safety Code sections 1797.76 & 1797.85 (West 1990).

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However, times have changed. During the past several years, the scope of the EMSAct and the legislation authorizing ambulance monopolies in California (i.e., Cal.Health & Safety Code section1797.224) has come under serious challenge.Traditional views held by the EMS Authority have been placed under rigorous courtscrutiny. They have not always proven to be compelling. Some questions regardingexclusive operating areas have already been answered by the courts. Many questionsare waiting to be answered. Still many other questions have not even been asked.

This portion of the article will discuss the legal issues addressed by recent case

law, what issues are currently in litigation or pending appellate review, and whatnew legal issues must be considered before counties franchise ambulance servicesfor the first time or once again.

A. Grandfathering Existing Providers into Exclusive Operating Areas Is EasierToday Than in 1984, but It May Be Subject to an "All or Nothing" Election for theEntire EMS Area Under the Equal Protection Doctrine

When Sonoma County first considered the franchising of emergency/ALS ambulanceservices in its core metropolitan area in 1990, the franchising of existingproviders pursuant to the "Grandfathering" provisions of California Health and


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"Manner and scope" are now merely factual findings regarding the type and level ofservices provided by the 201 entities on June 1, 1980. Still, certain facts may bedifficult to assess. For instance, what if an EMS provider has been sold toanother ambulance company since January 1, 1981? Will such an entity still beregarded as an existing provider engaged in the provision of services in the samemanner and scope? When does the "existing provider" first need to exist? In 1981or at the time of the proposed franchise? What if intervening providers have

arisen in the historical area served? What if a number of providers merge andbecome one business that serves the original historical service area subject to apossible grandfathered-in franchise? The only guidance given by the Court ofAppeal in Petaluma regarding these matters is that California Health & Safety CodeSection 1797.6 "encourages a liberal construction favoring antitrust immunity foractivities undertaken by local EMS agencies under section 1797.224." n15

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n15 Id.

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[*51]

"Grandfathering" existing providers into exclusive operating areas in all but theclearest cases may still expose a county to litigation. If a county undertakes tograndfather a provider, it should recognize that it may be on its own. The EMSAuthority has been increasingly cautious about issuing opinions regarding "mannerand scope." With a limited budget, the cost of litigating "manner and scope"issues across the state is not appealing to the Authority. Indeed, MichaelHammang, Deputy Attorney General, has counseled the Authority to defer to locallegal counsel regarding interpretations of "manner and scope" to the extent suchconclusions depend upon the findings of the local agency.

Still, "Grandfathering" an ambulance provider into an exclusive operating area

appears to be a relatively easy way to limit over-competition in an ambulance-saturated area. n16 The alternative competitive method of establishing ambulancemonopolies is much more complex and, more likely than not, substantially morecostly in terms of consulting services and possible litigation. Unfortunately,recent case law proves that "Grandfathering" is still a very tricky proposition.One only needs to look at the preliminary injunction ruling in Lifecare MedicalTransportation v. County of Riverside n17 to see the untapped reserve of confusionand unpredictability Section 1797.224 still holds in store.

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n16 As in the case of competing utilities, aggressive competition may increaseambulance costs rather than drive them down.

n17 No. CV 95-0056 (E.D. Cal. Sept. 1, 1995) (order granting preliminaryinjunction).

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In Lifecare, the U.S. District Court, Central District of California, ruled withregard to the issuance of a preliminary injunction, that either a local EMS agencygrandfathers all qualified existing providers in the EMS area, or it does not. n18The Court adopted the view that it was a violation of due process and equalprotection to permit several cities to secure grandfathered into exclusive


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operating areas without extending the same right to a private ambulance companythat would have qualified for such grandfathering. n19 Since the language ofSection 1797.224, in the opinion of the district court, speaks in terms of theentire EMS area regarding grandfathering, grandfathering was an all or nothingproposition throughout the entire jurisdiction of the local EMS agency. n20 In acompetitive process, the court reasoned that the language of 1797.224 supportedmultiple exclusive operating areas within the EMS area. n21

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n18 Id.

n19 Id.

n20 Id.

n21 Id.

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This raises an interesting series of inferences regarding 201 cities. Arguably,under the district court's reasoning, one cannot grandfather just a single cityinto an exclusive operating area in an EMS area at a time. If you grandfather anyqualified existing provider, you must grandfather all of them. Under the federalcourt's view, a city has no right to be grandfathered into an exclusive operatingarea unless all qualified existing providers receive equal treatment. Hence, ifone qualified city seeks to be grandfathered, it would be a violation of equalprotection for a county to award an exclusive operating area to such a citywithout doing so for all other qualified entities. Arguably, if portions of theEMS area are competitively awarded to exclusive providers, thus superseding someareas served by existing providers, then no existing providers could be givenexclusive operating areas by grandfathering without a violation of due process and

equal protection. Under these circumstances, "grandfathering", once said to be tooharshly restricted as in the Petaluma case, n22 is again rendered largelyunavailable by the unusually harsh ruling in Lifecare.

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n22 15 Cal. Rptr. 2d 617 (1993).

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In the author's opinion, until this issue is resolved, counties would be foolishto grandfather unless they are prepared to do so for the entire EMS area as awhole. It is also inadvisable to grandfather any entity into an exclusive

operating area if a portion of the EMS area has already been franchised via acompetitive process.

B. The Rights Accompanying an Exclusive Operating Area Are Less Certain Today Thanin 1984

Certain issues regarding ambulance franchising are settled. Under CommunityCommunications Co., Inc. v. City of Boulder, n23 state-action antitrust immunityunder the Parker Doctrine requires local governments to act under a clearlyarticulated state intention to supplant competition with regulation. Under GoldCross Ambulance v. Kansas City, n24 local governments have a right to regulate


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ambulance rates provided the local government makes its decision to regulate in amanner that satisfies the rational relationship test. Under Mercy-PeninsulaAmbulance, Inc. v. County of San Mateo, n25 it was stated that "virtually anyanti-competitive effect, including exclusive contracts with primary [*53]providers and elimination of backup ambulance services altogether, would appear tobe well within the statute's [Cal. Health and Safety Code section 1797.6]contemplation." The specific parameters of the right to franchise ambulanceservices, however, are still very much in dispute in California.

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n23 455 U.S. 40 (1982).

n24 538 F. Supp. 956 (W.D. Mo. 1982), aff'd, 705 F.2d 1005 (8th Cir. 1983).

n25 791 F.2d 755, 758 (9th Cir. 1986).

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In 1984, few cities challenged the authority of the local EMS agency to regulateambulances within their incorporated boundaries. n26 It was even less common for

anyone to challenge the authority of local EMS agencies to franchise interfacility(hospital-to-hospital) transports. n27 Today, both issues are in litigation.

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n26 The City of Cotati challenged the County of Sonoma's entitlement to dispatchan ambulance provider that had failed to secure a Cotati business license into itsboundaries in 1989. That case was dismissed by the City prior to trial.

n27 A number of jurisdictions such as Fresno and Monterey Counties felt that suchfranchising was financially necessary. Their plans received the backing of theAuthority.

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1. Interfacility Transports

Whether hospital-to-hospital transportation of patients is within the scope of theEMS Act is a paramount issue in ambulance franchising. The issue is currently inlitigation in RELS v. County of Sonoma n28 and on appeal in A-1 Ambulance v.County of Monterey. n29 A number of ambulance companies have argued that the EMSAuthority only has jurisdiction in pre-hospital emergency medical situations. Oncea patient has arrived at a hospital or a physician has become involved in theprocess of determining appropriate medical care, it has been argued that the EMSAuthority no longer has jurisdiction over patient transportation. As aconsequence, interfacility transports are arguably not the appropriate subject

matter of a franchise. The counties argue that interfacility transports are withinthe jurisdiction of the EMS system. The counties cite to the express reference inSection 1797.52 that advanced life support services may be provided "duringinterfacility transfers," n30 and ALS services can only be provided within a localEMS system. It is also noteworthy that Section 1797.103, describing the planningand implementation guidelines for emergency medical services systems, speaksbroadly about transportation, not merely "prehospital" transportation. n31

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n28 No. C 91-1665 (N.D. Cal.).


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n29 No. C 89-20157 (N.D. Cal. Oct. 14, 1993). The appellate briefs have been filedbut no date for oral argument before the Ninth Circuit has been scheduled at thistime.


n31 Cal. Health & Safety Code section 1797.103(c) (West 1990).

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Whether interfacility transports are a part of the EMS system is also beinglitigated in the state courts. In Schaefer's Ambulance Serv. v. County of SanBernardino, n32 the County has been sued over its EMS agency's refusal to permitSchaefer's Ambulance to provide interfacility transport outside of its authorizedarea. Discovery is proceeding and no determinative motions have been filed at thistime. Again, the issue is whether the EMS agency has jurisdiction overinterfacility transportation.

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n32 No. SCV 16421 (San Bernardino Co., Cal. Sup. Ct.).

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In an unrelated matter, the County of San Bernardino may be brought into yetanother dispute between a private ambulance company and a hospital regarding theregulatory power of the EMS agency to govern ALS interfacility transports. ValleyMedical Transport, the exclusive provider of ambulance services for the AppleValley area under the San Bernardino EMS Plan, will be seeking to enjoin the useof fire district-owned ambulances leased to a local hospital for interfacilitytransportation.

Whether interfacility transports are part of the EMS system turns on the issue ofwhether paramedics can take direction from a doctor other than a base hospitalphysician for their authorized scope of service. n33 If hospital physicians areauthorized to provide supervision over EMT-Ps, then the supervision of basehospital physicians will be unnecessary and such interfacility transports may notneed to be within the EMS system. However, recent legislation indicates thatinterfacility transports in urban areas must be maintained under the EMS system,not under hospital physicians. Senate Bill 422, approved by the Governor on July31, 1995, enacts Section 1797.195 of the Health and Safety Code. n34 That sectionpermits, under crisis situations on a temporary basis, the use of EMT-Is, EMT-IIs,and EMT-Ps who are on duty with [*55] an emergency medical care provide (i.e.ambulance company or fire service) in rural n35 hospital emergency rooms. These

EMTs would be under the medical direction of the hospital pursuant to hospitalprotocols developed in consultation with the medical director of the local EMSagency and the emergency medical care committee, if a committee has been formed.n36 Section 1797.195(c) n37 and Section 3 of SB 422 n38 make it clear that thisrule is narrowly tailored to address a very pressing need only in small and ruralhospitals. In enacting this section, the lawmakers have clearly implemented the"Expressio Unius" n39 doctrine. In effect, to the extent that this section createsan affirmatively expressed exception to the general rule, it should be regarded asa complete articulation of the legislature's intentions and no other exceptions tothe rule may be presumed as a matter of statutory construction. n40 Until thisissue is settled, it would be prudent to avoid offering interfacility transports


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as a part of the proposed exclusive operating area in an ambulance franchise.

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n33 Cal. Health & Safety Code section 1797.84 (West 1990) broadly describes anemergency medical technician-paramedic's scope of practice.

"Emergency Medical Technician-Paramedic," "EMT-P," "paramedic," or "mobile

intensive care paramedic" means an individual whose scope of practice to provideadvanced life support is according to standards prescribed by this division andwho has a valid certificate issued pursuant to this division. Cal. Health & SafetyCode section 1797.84 (West 1990).

Section 1797.52 describes what is entailed within the term "Advanced LifeSupport". The section makes it very clear all these ALS services must be"administered by authorized personnel under the direct supervision of a basehospital as part of a local EMS system at the scene of an emergency, duringtransport to an acute care hospital, during interfacility transfer, and while inthe emergency department of an acute care hospital until responsibility is assumedby the emergency or other medical staff of that hospital." Cal. Health & SafetyCode section 1797.52 (West 1990).

n34 1995 Cal. Legis. Serv. 4, 697 (West).

n35 Where the hospital is located in a community of 20,000 or less since 1980.Cal. Health & Safety Code section 1797.195(a) (West 1990).

n36 Cal. Health & Safety Code section 1797.195(b) (West 1990).

n37 "(c) Although this section authorizes the provision of services in anemergency department of certain small and rural hospitals, nothing in this sectionis intended to expand or restrict the types of services or care to be provided byEMT-I, EMT-II, or EMT-P pursuant to this article." Cal. Health & Safety Codesection 1797.195(c) (West 1990).

n38 This section provides:

SEC. 3. Due to the unique circumstances concerning the very limited resources ofsmall and rural hospitals and the need for temporary personnel in emergencydepartments of those hospitals and the need for temporary personnel in emergencydepartments of those hospitals, it is necessary to permit the use of EMS personnelto meet this need, and the Legislature finds and declares that a general statutecannot be made applicable within the meaning of Section 16 of Article IV of theCalifornia Constitution."

1995 Cal. Legis. Serv. 4, 697 (West).

The California Constitution provides in relevant part: "(a) All laws of a generalnature have uniform operation. (b) A local or special statute is invalid in anycase if a general statute can be made applicable.

Cal. Const., art. IV, section 16 (amended 1974).

n39 A shortened form for the Latin phrase "Expressio unius est exclusio alterius."


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n40 Sutherland on Statutory Construction notes: "As the maxim is applied tostatutory interpretation, where a form of conduct, the manner of its performanceand operation, and the persons and things to which it refers are designated, thereis an inference that all omissions should be understood as exclusions." See 2ASutherland Stat. Const. section 47.23. See also, County of Madera v. SuperiorCourt of Madera County, 114 Cal. Rptr. 283 (1974).

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2. Areas Within Cities and Fire Districts.

It has long been presumed that cities and fire districts are within thejurisdiction of local EMS agencies. Are cities and fire districts entitled tostand outside the scope of EMS regulation if they have not formally opted into theEMS area or plan? The EMS Authority says "no", n41 but this view is underchallenge in a case argued before the California Court of Appeal earlier thismonth. Most trial courts have accepted the concept that cities are within the

jurisdiction of the local EMS area automatically under the statutory scheme of theEMS Act unless they opt out through an exercise of their "201" rights. In Countyof San Bernardino v. City of San Bernardino, n42 however, the trial court opinedthat a city had to "opt into" the EMS area for the EMS agency to secure itsregulatory jurisdiction over emergency ambulances within incorporated areas. n43The trial court in that case set the common reading of Section 1797.201 (that itmust be affirmatively invoked) on its head. The Court of Appeal has apparentlyconcurred in the view that EMS areas require a JPA in order to includeincorporated areas within the jurisdictional reach of the local EMS agency. n44 Atthe same time, the court acknowledged that such cities are still within the EMSsystem. n45 This is not as inconsistent as it may first appear. The court believesthe EMS system is intended to include cities and counties. However, 201 cities,though within the system, are outside local EMS agency regulatory control without

an agreement evidencing their choice to be governed by this foreign governmentalentity. The only other reported appellate case, City of Petaluma v. County ofSonoma, n46 is silent on this point since the City of Petaluma had acknowledgedthat it had been in the county's regulatory control, in the local EMS system, andwas opting out.

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n41 Letter from Daniel R. Smiley, Interim Director, EMS Authority, to Gail Cooper,Chief, EMS Division of San Diego County (Dec. 6, 1990): "The argument that theprovisions of a city's charter may give the city sufficient authority overambulance services within its jurisdiction which may be outside the provisions ofthe Health and Safety Code, is without merit."

n42 46 Cal. Rptr. 2d 209 (1995).

n43 Id. at 213.

n44 Id. at 224.

n45 Id.

n46 15 Cal. Rptr. 2d 617 (1993).


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Similar arguments have been made in the RELS n47 case by a los- [*57] ing bidderupon the Sonoma County RFP. RELS argued that local EMS agencies did not have thepower to franchise exclusive operating areas encompassing incorporated areaswithout joint powers agreements with cities memorializing the city's intent to"opt into" the EMS area. n48 It is unclear whether the federal court will abstainfrom ruling on this point until the California Court of Appeal rules on the same

issue in County of San Bernardino. An identical claim has been made in A-1Ambulance n49 currently on appeal before the Ninth Circuit.

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n47 No. C 91-1665 (N.D. Cal.).

n48 Id.

n49 No. C 89-20157 (N.D. Cal. Oct. 14, 1993).

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In awaiting the resolution of this issue, counties should do all within theirpower to memorialize municipal assent to the authority of the local EMS agency.While entering into JPAs may give weight to the argument that such agreements arenecessary, acts short of such JPAs evidencing consent to the proposed franchisemay aid in possible future litigation regarding this issue.

3. "201" Cities and Fire Districts.

As opposed to the unusual argument raised in City of San Bernardino, RELS, and A-1that all cities are outside EMS regulation until they "opt in" as participants inan EMS plan, cities commonly argue they are entitled to "opt out" of establishedEMS areas. To qualify for the exemption, certain conditions must be shown. At thepresent time, a series of "201" cases are pending trial or are on appeal. However,

the County of San Bernardino is engaged in the only pending appeal in the statecourts of a "201" case, County of San Bernardino v. City of San Bernardino. n50 Inthe Court of Appeal's tentative decision issued in late August, 1995, the Judgeruled that the City of San Bernardino enjoyed broad administrative powers over itsemergency medical service system as a "201" entity, therefore it was free toelevate its level of service at any time without local EMS agency consent and thatit could raise this right at any time. n51 The court also gave a very narrowinterpretation to the term "medical control," the power remaining with countiesrelative to 201 cities continuing the administration of their emergency medicalservice system. n52 All of these rulings are plausible and unsurprising.

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n50 County of San Bernardino v. City of San Bernardino, No. E012673 (Cal. Ct. App.Aug. 1995)(tentative decision). At the time of publication, the California Courtof Appeal, Fourth Appellate District, had published its opinion at 46 Cal. Rptr.2d 209 (Oct. 17, 1995).

n51 No. E012673 (Cal. Ct. App. Aug. 1995) (tentative decision).

n52 Id.

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[*58]

Objectively, the decision is quite cogent and thorough in addressing virtuallyevery issue left on the table regarding "201" powers. Unfortunately for theAuthority, each and every position taken by it regarding "201" cities has beenoverturned. The silver lining in the decision for counties may be relief fromadministrative responsibility for all but a narrow series of duties left to thelocal EMS agency regarding "medical control" within 201 cities.

The most implausible and surprising element of the decision was the portion of theruling that permits a "201" city to assert a right to an exclusive operating area.This is in direct conflict with the ruling in Petaluma where the Court of Appealfor the First District ruled that nothing in the language of Section 1797.201suggested a right to an exclusive operating area. n53 The California Court ofAppeal, Fourth District, in its justification for finding a right to excludeprivate competitors from 201 cities, seemed quite concerned about the waste ofmunicipal funds. n54 This echoes the Ninth Circuit's concern in Springs AmbulanceServ. v. City of Rancho Mirage. n55 What is paradoxical is the concern theappellate court in San Bernardino had for the public investment of cities in their201 systems. The Fourth District appears to have disregarded the public costs thatwould be incurred by counties in order to dismantle ambulance franchises and the

sophisticated countywide EMS systems organized to serve them. It is notable thatno such balance had to be struck in the Springs Ambulance case. It is interestingto consider whether the Ninth Circuit would tilt in favor of counties with heavyEMS investments or in favor of the cities with lesser investments if a new SpringsAmbulance-type case were litigated today. Also interesting to consider is whethertoday's pro private sector Ninth Circuit would tolerate cities usurping the realmof private enterprise with such a tenuous basis as is advanced by the cities. Inthe opinion of the author, this is the issue where counties must hold the line. If"201" entities can safely supplant private ambulance companies within theirjurisdiction, then all cities will be happy to claim their "201" rights and toexercise them.

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n53 15 Cal. Rptr. 2d 617 (1993).

n54 46 Cal. Rptr. 2d 209, 225 (1995).

n55 745 F.2d 1270 (9th Cir. 1984). In this case involving pre-EMS Act operations,the Ninth Circuit Court of Appeals reasoned that it would be implausible for thetaxpayers to support free public ambulances if the lawmakers did not intend toauthorize such ambulances to rid cities of unwanted private competitors. The NinthCircuit, hence, ruled in favor of the city.

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Another troubling issue in the Fourth District's ruling lies in the [*59]appellate court's expansive reading of two cases involving the City of Lomita,California. n56 Nowhere did those cases suggest that counties are responsible formore than medical transport costs related to indigent health care. The FourthDistrict Court of Appeal's broad statement that counties have a historical "dutyto pay for emergency ambulance costs for all county residents, including indigentpersons in a city" n57 is incorrect. In accordance with Lomita I, counties areresponsible for indigent health care under California Health & Safety Code section1444 n58 and California Government Code section 29606, n59 but here the court errsin suggesting that counties are duty-bound to pay for ambulance costs for all non-indigent county residents. Counties, with failing general fund budgets, and county


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hospitals in dire financial straits, cannot permit this misconception to takeroot. Lomita II is also somewhat perplexing, but appears to stand for theproposition that fiscal inquiries into the ability of patients to pay aresecondary to appropriate medical care, and the counties, as the local governmentalentities responsible for ambulance cost payment for indigents, should be involvedin provision of ambulance services to cities. n60

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n56 City of Lomita v. Superior Court, 230 Cal. Rptr. 790 (1986); City of Lomita v.County of Los Angeles, 196 Cal. Rptr. 221 (1983).

n57 46 Cal. Rptr. 2d 209, 223 (1995).

n58 Cal. Health & Safety Code section 1444 (West 1990).

n59 Cal. Gov't Code section 29606 (West 1983).

n60 230 Cal. Rptr. 790 (1986).

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Ironically, the court in Lomita II notes that the County may "contract with thecities or local agencies located within the county to provide necessary emergencyambulance services to the residents of the county found within such city or cities. . . ." n61 It could be argued that a city which refuses to contract with thecounty for provision of such services cannot expect payment for indigent care. Thecounty has a legitimate interest in seeking an agreement before becoming liablefor costs incurred by cities. Indeed, Lomita II may suggest that cities whichrefuse to contract with the County may be unable to collect for indigent ambulanceservices. If a County decides that it would be more cost effective to use privateambulances n62 for indigent health care in 201 cities, could 201 citieslegitimately block such an option when the right to secure such alternativeservices are plainly given by the Court of Appeal in Lomita II?

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n61 City of Lomita v. Superior Court, 230 Cal. Rptr. 790, 791 (1986) (see option3).

n62 Id. at 791 (see option 4).

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Another troubling portion of the Fourth District's opinion lies with [*60] itsview of "who is in charge of patient care at the scene of a medical emergency."n63 It concluded pursuant to section 1798.6(c) that "authority for the management

of the scene of an emergency shall be vested in the appropriate public safetyagency having primary investigative authority." n64 The court confuses scenemanagement, a law enforcement role, with medical management of the scene. Thecourt ignores the dictate of section 1798.6(a) that patient health care managementlies in the most medically qualified person. n65 A firefighter is not qualified tosupersede the directives of a base hospital physician through whom paramedics mustsecure their licensure. This portion of the court's decision will certainly reekhavoc at medical emergency scenes. Surrendering medical control-relatedadministration to cities with regard to equipment, personnel, staffing, fireequipment used by paramedics, scene management, and dispatch n66 virtually "guts"the concept of "medical control". It is not at all clear how city and fire


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district paramedics will be able to continue certification under a medicaldirector's licensure from whom the court gives them full independence. A basehospital physician or EMS medical director cannot be expected to assume liabilityfor actions of paramedics over whom them have little or no control. That would betantamount to paralegals practicing their craft without any accountability to thelawyer under whose license they are able to engage in their profession. Cities andfire districts may need to secure their own medical directors. If they do so, suchmedical personnel will not necessarily enjoy EMS immunities. n67

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n63 46 Cal. Rptr. 2d 209, 221 (1995).

n64 Id. See also Cal. Health & Safety Code section 1798.6(c) (West 1990).

n65 Cal. Health & Safety Code section 1798.6(a) (West 1990).

n66 46 Cal. Rptr. 2d 209, 221 (1995), wherein the court prunes the term "medicalcontrol" down to little more than what the 201 cities do not want to do forthemselves.

n67 See Cal. Health & Safety Code section 1799.108 (West 1990). Arguably,immunities are only conferred when the certified medical personnel secure theirpermits within the EMS Act. See note 76, infra.

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At least on the exclusive operating area issue, the stage may be set for an appealto the California Supreme Court to resolve the conflict between the two appellatedistricts regarding whether "201" rights confer a right to an exclusive operatingarea. If the San Bernardino case is allowed to stand, the whole nature of theprovision of EMS services in California will change. Cities will have the right togovern their own insular EMS systems. Counties will only be left with theadministration of what remains in the unincorporated portions of the County

together with county-wide medical control. It is questionable, [*61] however,what degree of medical control will be left to the counties. The Fourth Districtonly appears to leave local EMS agencies with certification of personnel,standards for training, and EMS standards in the unincorporated areas.

If medical control over "201" areas is minimized by the San Bernardino decision,counties would do well to accept the offered freedom from responsibility formedical control systems not entirely within their control. Counties may evenconsider abandonment of ALS certification for the cities (or the county as awhole) without an agreement from the cities that they will abide by local EMSagency regulation regarding medical control. This is arguably permissible becausethe Court of Appeal noted the EMS Act does not preempt the field since countiesare not compelled to create local EMS agencies. n68 The question remains whether

the Authority will permit counties to create local EMS agencies only for theunincorporated areas of the County and those portions of the County where citieshave agreed to participate within the EMS system. Arguably, what the Authoritywants may not matter. The Authority may have to accept a marginal, perhaps evenvestigial, role in emergency medical services if the decision of the Court ofAppeal is not overturned. n69 After all, while counties must submit a local EMSplan to continue in the provision of ALS services, the plan can only encompass the"EMS area", n70 the area subject to the local EMS agency's jurisdiction. Ifcounties cannot administratively manage incorporated areas, then counties cannotinclude such areas in their plan without a JPA. n71 If medical control iscompromised regard- [*62] ing 201 entities, should counties even attempt to


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regulate medical control in city-administered EMS systems?

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n68 46 Cal. Rptr. 2d 209, 215-16 (1995).

n69 In large part, the EMS Authority has played the role of the U.N. in the"balkanization" of EMS services in California. While the battles between the

cities and counties rage, the Authority takes the moral high ground but doeslittle to genuinely resolve the conflicts except to issue edicts and commands.Like the U.N., it has few resources to call its own and it is too politicallycompromised by its ties to the warring factions (the California AmbulanceAssociation and the Fire Fighter's Association) to do anything that does not meetwith the approval of both.

n70 Cal. Health & Safety Code section 1797.74 (West 1990), defines "EMS area" as"the geographical area within the jurisdiction of the designated local EMSagency."

n71 The Counties' legal footing with regard to fire protection districts lyingwithin their general jurisdiction may be somewhat better. While Cal. Health &

Safety Code section 1797.201 (West 1990) gives such districts a right to "opt out"of EMS regulation, districts are generally within the police power of countygovernments. Arguably, setting medical control standards in unincorporated areasof the County are within the domain of the Board of Supervisors under Cal. Gov'tCode section 26227 (West 1990). Cal. Health & Safety Code sections 13861, 13862(West 1990) (setting out the powers of fire protection districts do not speak interms of "medical control", but only in terms of "Emergency medical services" and"Ambulance Services," pursuant to Division 2.5 (commencing with Section 1797)).

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The other "201" case San Bernardino County recently tried was resolved favorablyto the County and has not been appealed. n72 In that case, the trial court drew a

distinction between transport and non-transport prehospital EMS response. Whilethe trial judge acknowledged that Section 1797.201 may allow the level of pre-hospital emergency medical services to be increased, the level of service couldonly be increased for the type of service provided by a "201" entity on June 1,1980. Hence, a fire district with a BLS ambulance could increase its level ofambulance care to ALS, but a fire district not engaged in ambulance services onJune 1, 1980 cannot subsequently implement an ambulance program.

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n72 County of San Bernardino v. City of Colton, No. 224288 (Riv. Sup. Ct. filedJuly 21, 1994) (originally filed in the San Bernardino County Superior Court asCase No. SCV 268490).

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Not all courts have ruled in such a reasoned manner. Similar issues were addressedby the Mendocino Superior Court in City of Ukiah v. County of Mendocino. n73 Therethe court ruled that the City of Ukiah had not been engaged in ambulance servicesin 1980 or subsequently thereafter, and the County EMS agency had appropriatejurisdiction. n74 Strangely, the court ordered the city and county back to thebargaining table, broadly alluding to a city entitlement under Section 1797.224and Section 1797.201 to some exclusivity within its boundaries. n75 The court'sreasoning is unclear. While grandfathering a city into an exclusive operating area


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is possible according to the ruling in Petaluma, it is impossible given the trialcourt's finding that the City of Ukiah was not engaged in ambulance services on orsince January 1, 1981. Confusion over the meaning of Section 1797.201 iswidespread.

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n73 City of Ukiah v. County of Mendocino, Nos. 65575 and 65248 (Men. Sup. Ct.)

(consolidated).

n74 Id.

n75 Id.

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Unfortunately, the confusion appears to be spreading even farther. Santa ClaraCounty is in a "201" dispute with the City of Santa Clara and recently settled adispute with the City of San Jose. Marin County is fighting a dispute with a firedistrict in Corte Madera. The ambulance franchisee for Sacramento, AMR, isfighting a "201" dispute with the City of Sacramento and a number of fire

districts. n76 The Ninth [*63] Circuit review of the District Court's denial ofthe preliminary injunction is interesting insofar as it reflects that the Court ofAppeal does not appear aware that cities, under the state statutory scheme, arenot entitled to claim antitrust immunity simply because they are "201" entities.n77 Perhaps the dicta from City of Petaluma indicating that "201" rights do notconfer rights under Section 1797.224 was not mentioned in the argument by AMR. n78

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n76 911 Emergency Servs., Inc. v. Sacramento Regional Fire/EMS CommunicationsCtr., 56 F.3d 72 (9th Cir. 1995).

n77 Id. "Given the likelihood that Parker state action immunity will be a completedefense, Parker v. Brown, 317 U.S. 341 (1943), Traweek v. City and County of SanFrancisco, 920 F.2d 589, 591-92 (9th Cir. 1990) (state statute confers antitrustimmunity on city if it is foreseeable that city may engage in anti-competitiveactivity), Cal. Health & Safety Code section 1797.201 (West 1990) (allowing citiesthat provided prehospital emergency services as of June 1, 1980 to retainadministration of those services, pending entry into a contract with the county);Mercy-Peninsula Ambulance, Inc. v. County of San Mateo, 791 F.2d 755, 757-58 (9thCir. 1986) (California legislature intended to displace competition withregulation in emergency ambulance service market, the nature of AMR's injury, andthe public interest involved, the district court did not err in concluding thatthe balance of hardships did not tip sharply enough in AMR's favor to warrant therelief requested. AFFIRMED.).

n78 What is frequently overlooked in City of Petaluma is that the trial court'sruling that "201" areas are not exclusive operating areas as described withinSection 1797.224 was upheld by the Court of Appeal. As the Court of Appeal noted:"Be that as it may, no version [of Section 1797.201] mentions explicitly, orimpliedly concerns, exclusivity of EMS services provided in historical serviceareas." City of Petaluma, 12 Cal. App. 4th at 1246.

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Some of these "201" claimants clearly fail to meet the requirements of the Section


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1797.201. They have arguably been encouraged to stretch the reasoning in the Cityof Petaluma's ruling that "manner and scope" should be liberally construed. n79However, the court's remarks regarding the granting of "grandfathered-in"exclusive operating areas should be noted. This has no correlation with "201"rights. The Court believed liberal construction of "manner and scope" wasnecessary to accomplish the purpose of the legislation, namely to give fullantitrust immunity to those entities granted ambulance monopolies. n80 There is noreason to apply liberal construction to a provision like Section 1797.201 that

threatens to undermine the state's system of uniform regulation and is notintended to provide antitrust immunities.

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n79 15 Cal. Rptr. 2d 617, 622 (1993).

n80 Id.

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Nevertheless, cities that have only recently begun transport ambulance servicesare belatedly claiming a right to raise their prior level of EMS service (often

first responder fire services) to paramedic ambulance services. In some "201"trials, the courts have been unwilling to state that first-responder services by acity are insufficient to secure a right to transportation services as a matter ofpublic policy. n81 The [*64] rights of "201" claimants will have to be resolvedon a case-by-case basis until the appellate case law regarding "201" rightsbecomes more defined.

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n81 See City of Sonoma v. County of Sonoma, No. 111910 (Solano Sup. Ct. Feb. 19,1993).

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Until the 201 controversy has been settled, proposed exclusive operating areasshould exclude those cities claiming 201 rights. Even those cities that may claimsuch rights in the future should be excluded from proposed exclusive operatingareas. Caution dictates that any EMS plan that purports to include cities,especially within a franchise, have full city support. An agreement, or at least aconsent to the EMS agency's jurisdiction, would be a prudent measure againstpossible future succession. With respect to medical control within cityboundaries, it may be best for counties to take a minimalist approach and merelyset county-wide medical control standards. Beyond promulgating medical controlstandards, the more counties attempt to do, the less likely they are to succeedgiven the cities' administrative free hand.

4. Potential for Immediate Medical Attention Transports (Code "1" Calls)

The Sonoma County ambulance franchise awards the right to respond to Code "1"calls. Such calls are those where there is a potential need for immediate medicalattention. They are typically less urgent than Code "2" calls, but involve aperception by a public service agency (such as a PSAP dispatcher) that immediatemedical attention may be necessary. Whether such Code "1" calls, as opposed toCode "2" or Code "3" calls, can be franchised must await the outcome of the RELScase. n82 Whether so-called "non-emergency but potential for emergency" calls canbe franchised must await the outcome of the A-1 Ambulance Case. n83 There is aslight distinction between the cases. In the Code "1" call, there is a perception


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The court was addressing the apparent failure of Monterey County to factor intoconsideration in the rate-setting process a balancing of investor and consumerinterests. n90 It noted that: "It is clear from the record that the interest ofinvestors in receiving a return on their investment within a zone ofreasonableness was never considered or even suggested to the rate makers whoenacted the ordinance." n91

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n90 No. C 89-20157 (N.D. Cal. Oct. 14, 1993)(Memorandum of Decision at page 19,lines 14-20, inclusive, in which the court stated: "In order to beconstitutionally acceptable, such a rate must reflect a just and reasonablebalance between the consumer interest in non-exploitative rates and the investorinterest in maintaining a fair return on investment and financial integrity forthe regulated entity. The governmental rate fixer must balance these interests andmake factual findings supported by substantive evidence which must be memorializedin a medium sufficient for judicial review.").

n91 No. C 89-20157 (N.D. Cal. Oct. 14, 1993) (Memorandum of Decision at page 20,

lines 5-8, inclusive).

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The Ninth Circuit rule regarding rate-setting appears to be that "substantive" dueprocess requires investments by a regulated entity to enjoy a "fair return." n92This applies even to incremental increases in investment. n93 Hence, it isarguable that the purchase of a new ambulance during the course of a lengthyfranchise should alert the local EMS agency that a hearing for a rate adjustmentor other compensation to the provider may be appropriate. Failure to hold hearingsor engage in a process to determine whether there is a "fair return upon

investment" may expose the County to a regulatory taking claim pursuant to theholding in Sierra Lake Reserve v. City of Rocklin. n94

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n92 See Guaranty National Insurance Company v. Gates, 916 F.2d 508 (9th Cir.1990). Judge Ingram summarized this case as standing for the proposition that itis not enough to break even, that rate legislation only passes constitutionalmuster if it provides for a fair rate to investors.

n93 Sierra Lake Reserve v. City of Rocklin, 938 F.2d 951 (9th Cir. 1991) is amobile home rent control case best known for its holding regarding vacancycontrol. The Ninth Circuit's original decision was set aside, in part, by the U.S.

Supreme Court ruling in Yee v. City of Escondido, 112 S.Ct. 1522, (1992) whereinvacancy control was not found to constitute a "physical taking" of propertywithout just compensation. The part of the case that is relevant here, however,continues to maintain that incremental investments by an entity subject to rate-fixing are entitled to a fair return upon investment. It should be noted that somefederal court judges have broadly expanded upon the "fair return" doctrine inSierra Lake and ruled that profit must always be provided for all additionalexpenditures by an entity subject to fixed rates. In Hillsboro Properties v. Cityof Rohnert Park, U.S. District Court, Northern District of California, Case No. C-93-1723-FMS, the court ruled: "Sierra Lake demands that the profit always beprovided. Since Ordinance 494 fails to provide a mechanism which necessarily


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affords landlords the opportunity to receive a profit on their capital improvementinvestments, it violates substantive due process on its face, and plaintiff'smotion for summary judgment is GRANTED." Id.

The author believes Judge Smith's articulation of the ruling in Sierra Lake lacksa "real world" perspective on investment returns. Not all incremental investmentsgenerate a profit in dollars and cents. For example, the purchase of newambulances by a franchisee should not necessarily require a rate increase if it

could be shown that there were other "returns" to the investor such as savingsfrom reduced maintenance, repairs, injuries, and/or insurance upon the oldvehicles. Other returns might result from more favorable financing of the newvehicles at a lower borrowing rate than may have existed for the old vehicles.Finally, speedier vehicles may be better able to meet response times and avoidcostly penalties under a franchise agreement. All these types of "returns" maymeet the Ninth Circuit rule mandating a fair return upon investment.

n94 938 F.2d 951 (9th Cir. 1991), modified, 987 F.2d 662 (9th Cir. 1993) (vacatedPart I of the earlier opinion dealing with regard to the "physical taking" issue).

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Presently, it is uncertain whether the Ninth Circuit will reverse the lowercourt's finding that the Monterey County Board of Supervisors failed to balanceinvestor and consumer interests in arriving at a fair return upon investment inadopting the interim ambulance rate for the franchise. Counties consideringfranchising would be well advised to [*67] prepare extensive documentation toprove that the due process safeguards discussed in the court's memorandum ofdecision n95 are being observed and implemented. This part of the court's rulingappears to address procedural rather than substantive due process. The argumenthas been raised that such procedural deficiencies become moot and irrelevant oncea fixed-rate franchise agreement has been hammered out, because the rate-makingwill become a matter for negotiation. A-1 Ambulance is arguing that this argumentis new upon appeal rather than merely one that was not strongly asserted at trial.

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n95 In criticizing Monterey County, the court commented:

In the instant case there is no record at all. No hearings were held of whichformal records are in evidence; at such hearings as were held no due processsafeguards such as cross-examination were in effect. The County's decision toadopt a rate which was 34% less than the median of comparable counties is notsupported by any factual evidence at all and in fact it is not clear from the

record the respect to which those counties on the list were even comparable toMonterey County. Apparently the list of comparable counties was issued for avariety of purposes, including adoption of a salary schedule and the like, and hasno specific reference to rate fixing or ambulance services."

No. C 89-20157 (N.D. Cal. Oct. 14, 1993) (Memorandum of Decision at pages 19-20beginning at line 21 on page 19 and ending on line 5 of page 20).

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It is difficult to conceive how rates can be easily set in advance of a franchisewinner being selected and still satisfy the "fair return upon investment"requirement alluded to by Judge Ingram. The investment of each bidder in equipmentwill necessarily differ. Is it appropriate to presume that each bidder willprovide for a comfortable rate of return upon investment? What if the bidderguesses incorrectly?

It may be best to defer ambulance rate-setting until a franchisee has been chosenand a franchise agreement is under negotiation. Then the necessary "fair return"analysis can take place with appropriate documentation of both procedural andsubstantive due process. Regulatory taking law is very active in the NinthCircuit, and it would be prudent for counties to follow the developing law in theutility and rent control cases in the months prior to franchising.

IV. "Managed Care Reforms," Para Hospital Joint Powers Agreements, and "922" CallsWithin Exclusive Operating Areas as Additional Techniques for Cost-Containment

The possible future problems surrounding ambulance franchising are as varied asthe future routes health care reform may take in this nation. At the present time,there are no laws that prohibit a local EMS [*68] agency from setting rates that

must be paid by all ambulance customers. n96 New federal and state legislationsupporting and facilitating managed care reforms may weaken the existing power toset rates. Future franchises of emergency ambulance services should anticipatechanges in the law to the extent possible. Counties must be careful not to awardmore rights contractually to an ambulance provider than the county will be able tohonor due to subsequent legislative reforms to encourage managed health care.Express disclaimers and limitations should be carefully drafted and acknowledgedby the parties to an ambulance franchise agreement.

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n96 There are, of course, limits as to how much certain payers (such as Medicareand insurance companies) will be willing to pay as coverage benefits for ambulance

services.

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To the extent that requests for proposals may be non-committal as to the nature ofrights being awarded to exclusive providers, counties should not be surprised bylower than expected interest by ambulance providers. Investment in an exclusiveoperating area can be quite costly, and to the extent that return upon theinvestment may be uncertain, few providers may want to commit their resources forlong periods of time with no real expectation of generating a profit.

Counties considering franchising should also anticipate a change in theoperational manner in which health care, particularly prehospital emergency

medical care, will be provided in future years. One vision of that future is beingconsidered in Solano County and is entitled a Para Hospital Joint PowersAgreement. n97 It would bring all governmental entities providing first responderservices under one funding broker, and approach all the large "consumers" of firstresponder medical services (i.e. insurers and HMOs) to negotiate a capitatedmanaged care approach to payment for such services.

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n97 This entity is known by the acronym "SEMSC" which stands for "Solano EmergencyMedical Services Cooperative."


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The Para Hospital JPA is an intriguing and innovative county response to (1) thewasteful allocation of limited EMS resources and (2) the continuing battle betweenfire services and EMS agencies spawned by the 201 controversy. n98 It seeks toaddress the catalyst of [*69] the 201 rebellion, namely a perception that thefire services are being shortchanged of the funds to pay for emergency medical

care, by bringing fire services within the fold of providers who are paid forservices rendered. Such JPAs are arguably the type of agreements contemplated inSection 1797.201 to transition 201 cities into EMS Plans. n99 However, theypresent a number of new issues regarding the scope of emergency/ALS franchising.

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n98 SEMSC summarizes the ills of the present system it is attempting to address asfollows:

1) A maximal response to minimal stimuli; (2) A system oriented to exclusion of

providers rather than inclusion; (3) A development scheme which has largelyignored the question of cost vs. outcome; (4) A fee-for-service model inconsistentwith current trends to capitation; (5) A frequent duplication of services whilefailing to maximize public resources including dispatch service, first responders,etc. These problems are further exacerbated by the inherently complex arrangementof interdependent agencies and interests which collectively produce emergencymedical services.

The Solano Emergency Medical Services Cooperative (SEMSC): A Proposal for theImplementation and Delivery of Parahospital Medical Services, at p.18 (Draft June20, 1995).

n99 The exact nature of what qualifies as a "201" agreement for purposes ofcommitting a city to a local EMS agency's jurisdiction has not been established bycase law. In the City of Sonoma v. County of Sonoma suit, the agreement grantingthe City of Sonoma ALS authorization was not found to be a sufficient instrumentto bind the City to the jurisdiction of the County EMS plan. See No. 111910(Sonoma Sup. Ct. Feb. 19, 1993)(Transcript of Trial Proceeding at pp. 284-86).

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In the para hospital model, patients who do not need hospitalization are reroutedto an authorized health care facility that will provide the most appropriate levelof medical care with an eye toward cost control. This may mean 911 callers will be

routed to urgent care clinics instead of hospital emergency rooms, or to doctors'offices rather than to an acute care hospital. This is the reason why HMOs andinsurers may be willing to fund first-responder (i.e., fire department) calls on a"capitated" basis. HMOs and insurers will save money in expensive acute carehospital costs through the adoption of a para hospital system of dispatch. Aresuch responses within the scope of the EMS Act? n100 The EMS Authority has advisedthe County of Solano that it is within [*70] the scope of the EMS Act. n101 TheRELS and A-1 cases referenced above may ultimately decide whether the optimism ofthe Authority is warranted. Until then, it may be prudent not to mix the parahospital model within ambulance franchises. To do so may require counties to dealwith a number of perplexing legal issues.


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n100 The only provision of the EMS Act that addresses cooperation with grouppractice prepayment health care service plans is Health & Safety Code Section1797.106. Cal. Health & Safety Code section 1797.106 (West 1990). It permits thetransport and transfer of a plan member to "a hospital that contracts with theplan when the base hospital determines that the condition of the member permits

the transport or when the condition of the member permits the transport, exceptthat when the dispatching agency determines that the transport by a transport unitwould unreasonably remove the transport unit from the area, the member may betransported to the nearest hospital capable of treating the member." Hospital, asused within Section 1797.106(b) refers to an acute care hospital. Cal. Health &Safety Code section 1797.88 (West 1990). There is a broader grant of authority,however, under Section 1797.106(a) which states: "Regulations, standards, andguidelines adopted by the authority and by local EMS agencies pursuant to theprovisions of this division shall not prohibit hospitals which contract with grouppractice prepayment health care service plans from providing necessary medicalservices for the members of those plans." Cal. Health & Safety Code section1797.106(a) (West 1990). Arguably section (a) permits working with acute carehospitals to develop regulations and policies that will facilitate use of urgent

care centers and other type of triage medical services.

n101 Letter from Joseph E. Morales, MD, MPA, the Director of the Emergency MedicalServices Authority, to Michael Frenn, Administrator, Solano County EMS Agency(March 27, 1995). Dr. Morales states: "In our opinion, a local EMS medicaldirector does have the authority to permit transport of patients to destinationsother than acute care hospitals and may formulate policies to implement thatalternate destination decision." Dr. Morales bases his opinion on the authoritylocal EMS agencies and medical directors have to develop policies and proceduresrelating to patient care, including those that relate to treatment and triageunder Cal. Health & Safety Code Section 1797.220 and CCR 100146.

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For instance, if a para hospital system decides to use BLS ambulances to respondto 911 calls that are ultimately routed to a clinic rather than to an acute carehospital, can this type of transport be the proper subject for a franchise ofemergency ambulance services? An exclusive operating area is defined as:

an EMS area or subarea defined by the emergency medical services plan for which alocal EMS agency, upon the recommendation of a county, restricts operations to oneor more emergency ambulance services or providers of limited advanced life supportor advanced life support. n102

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If the type of ambulance service used is not LALS or ALS, counties must be carefulthat all responses are, in fact, "emergency" ambulance responses. When anambulance does not have to take a person to an "emergency" room, does such atransport still fall within the scope of pre-hospital emergency medical services?n103 Would a transport initiated through the 911 system and routed to a doctor's


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office still be an "emergency" n104 for purposes of Health & Safety Code Section[*71] 1797.224 if it was originally perceived in that way? Would theadministration of first aid by a para hospital resource such as a mobile intensivecare nurse be within the regulatory power of the EMS Act and subject to EMSfranchising? This could turn on the court's interpretation of the term "emergency"in the EMS Act.

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n103 Letter from Joseph Morales to EMS Medical Directors, EMS Administrators, andOther Interested Parties (Apr. 5, 1995). Dr. Morales states:

We believe that the references to "transport to a general acute care hospital"found in 1797.52 and 1797.218 are permissive and non-specific. Because of theoverriding need to allow flexibility for EMS medical directors, HSC 1797.220prevails. HSC 1798.101 addresses problems of rural areas where, for geographic orother extenuating circumstances, as determined by the authority, arrangements maybe made for patients to be taken to other appropriate non-hospital facilities.Yet, we find that there is nothing in statute which restricts the destination ofpatients in other than rural areas to hospitals. Presumably, as in the ruralareas, the local agency medical director would determine which patients are

appropriate for those alternate facilities.

It is arguable the "expressio unius" doctrine works against the view that analternative site other than hospitals may be permissible under the statutoryscheme in other than rural areas. It is something to consider before taking theAuthority's position upon faith.

n104 Under Cal. Health & Safety Code section 1797.70 (West 1990), "emergency meansa condition or situation in which an individual has a need for immediate medicalattention, or where the potential for such need is perceived by emergency medicalpersonnel or a public safety agency."

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Arguably, the "emergency" jurisdiction of the EMS Act is merely perceptual ratherthan one that must exist in reality and fact. Hopefully the courts will recognizethat this has always been the case. It is also conceivable that it has always beenpart of the role of the EMS Authority to address the issues of less-than-emergencycare raised by para hospitals. Section 1797.102 states:

The authority, utilizing regional and local information, shall assess each EMSarea or the system's service area for the purpose of determining the need foradditional emergency medical services, coordination of emergency medical services,and the effectiveness of emergency medical services. n105

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Para hospitals raise the issue of what to do with the arguably less- than-emergency situation that was initially perceived as an emergency that may stillrequire some level of urgent care or prompt scheduling for medical follow-up. Itraises the same issue as the County of Sonoma's Code "1" calls that invoke


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response to the "potential need" for immediate medical attention. n106 Hopefully,answers regarding whether such services are within the EMS Authority'sjurisdiction will be provided by the courts in the very near future.

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n106 Since its initial adoption, the County of Sonoma has abandoned Code "1" callsas an element of its Emergency Medical Services Ordinance and its core EOA by

ordinance amendment.

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Another innovation spawned by managed care that the Authority must address are"922" systems that permit a pre-screening of the dispatch of "911" resources toreal medical emergencies. Not only do such systems preserve limited emergencymedical services, but they cut health care costs. n107 They accomplish this bytransporting appropriate [*72] patients n108 to alternative non-hospital sitesfor care. n109 In some cases, a patient care decision may be made that transportmay not be necessary. n110

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n107 Today, if a patient calls into "911" and complains of breathing problems, anALS ambulance is dispatched. The patient is picked up and a paramedic administersoxygen under the supervision and direction of the base hospital physician ormobile intensive care nurse. The patient is transported to an emergency room. Atrauma surgeon looks at the patient and prescribes an asthma shot. The ambulanceservice costs $ 900, paramedic services and oxygen costs $ 300, the hospitalcharge is $ 1,200, and the surgeon's services are another $ 200. In a "922"referral, a screening nurse may ask a few questions, and send a nurse practitionerto your home or schedule a doctor's visit for $ 100. In effect, you get a bag ofpeanuts when you mention you're hungry rather than a ten course meal. "922"dispatch will arguably not always be "prehospital" or "emergency". "922" dispatchwill not necessarily involve transportation, EMTs or paramedics. The question is

whether such services are prehospital emergency medical services and whetherHealth & Safety Code Section 1797.224 authorizes franchising of such non-transportmedical services.

n108 In effect, sub-acute care patients.

n109 In the April 5, 1995 letter, supra note 103, Dr. Morales notes:

For several years, selected 9-1-1 patients in the inner-city of Los Angeles Countyhave been transported to urgent care centers attached to Comprehensive HealthCenters, The EMS personnel function under protocols and are capable of deciding

which patients are appropriate for transport to the urgent care centers. Theurgent care centers are under contract with the local agency to receiveappropriate 9-1-1 patients.

Id. (on page 2 of 3).

n110 In the April 5, 1995 letter, supra note 103, Dr. Morales notes:


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There is no requirement in Division 2.5 or regulations that all persons who enterthe 9-1-1 system must be transported. Each system has the authority to developprotocols and policies to address the situation where a patient either does notneed transport or refuses transport.

Id. (on page 1 of 3).

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Some HMOs have already invested substantial resources into what are known as"PCAPs", Private Center Answering Points, to accomplish the same purpose asproposed "922" systems in an effort to save funds. These PCAPs may be subject tothe Emergency Medical Treatment and Active Labor Act (EMTALA) n111 and COBRA/OBRAn112 health care financing regulations to the extent the PCAP sponsor is ahospital that has entered into Medicare provider agreements with HCFA. n113Hospitals participating in Medicare that also offer emergency services are obligedto provide screening and stabilizing treatment within the scope of theircapabilities. n114

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n111 See 42 U.S.C. section 1395dd (1992).

n112 Pub. L. 99-272. COBRA stands for Consolidated Omnibus Budget ReconciliationAct. Pub. L. 101-239 and Pub. L. 101-508 respectively. OBRA stands for OmnibusBudget Reconciliation Act. COBRA was enacted on April 7, 1986. OBRA was enacted asOBRA 89 and OBRA 90 on December 19, 1989 and November 5, 1990, respectively. Allthree laws are still in effect and address "patient dumping".

n113 Health Care Financing Administration.

n114 42 U.S.C. 1395dd(a) & (b) (1992).

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Hospitals and HMOs operating PCAPs must be very careful regarding the appropriatescreening of the patient to ensure that acute patients receive appropriatetreatment, and that patients sent other than [*73] to an acute care hospital'semergency department are sent in accord with all applicable federal regulations.n115 To do otherwise may constitute "patient dumping" in violation of 42 U.S.C.section 1395dd. n116 Arguably para hospitals, that maintain a fiction of being ahospital, may also be subject to HCFA regulations. n117 Para hospitals may also besubject to the prohibitions of Section 1798.172 against "patient dumping". n118Arguably, Section 1798.170 permits "appropriate designated facilities" other than

general acute care hospitals to be used in triage and transfer protocols within anEMS area. n119 However, the [*74] scope of this provision is not clear.Subsections (a), (b) and (c) of Section 1798.170 all relate to one type offacility, namely a general acute care hospital. n120 Legislative clarificationhere would be helpful. California Health & Safety Code Section 1317.2 may also beapplicable although it addresses transfers subsequent to initial admission into ahospital. n121 Arguably, if para hospitals are regarded to be extensions of theemergency room, it can be argued that this section applies as well. In most cases,the hospitals will not own the ambulances. In fact, even where a county hospitalis the destination, and the county owns the ambulance in a three-way lease held bya franchisee, the ambulances may not be deemed an extension of the emergency room


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to the extent they operate under different licenses. n122

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n115 See 42 CFR section 489.24 (1994).

n116 See 59 Fed. Reg. 32098 (1994):

We believe that section 1867 of the Act also applies to all individuals whoattempt to gain access to the hospital for emergency care. An individual may notbe denied services simply because the person failed to actually enter thefacility's designated emergency department. To read the statute in such a narrowfashion would in our view frustrate the objectives of the statute in many casesand lead to arbitrary results. For the same reason, a facility may not prevent anindividual from gaining access to the facility in order to circumvent theserequirements. If an individual is on a facility's property, which includesambulances owned and operated by the facility, even if the ambulance is not onhospital property and a request is made on the individual's behalf for examinationor treatment for a medical condition, we believe the statute reasonably requires

the facility to provide a screening examination and treatment or transfer inaccordance with section 1867 of the statute.

Id.

n117 This notion is not as far-fetched as it sounds. HCFA has taken an expansiveview of its jurisdiction against patient dumping. In the same page of the FederalRegister noted above, HCFA notes that "an individual in a non-hospital-ownedambulance on hospital property is considered to have come to the hospital'semergency department." Id.

The good news is that non-hospital owned ambulances not on hospital property arenot regarded as having come to the hospital's emergency department even if therewere communications with the hospital by ambulance staff indicating a desire forexamination and treatment at the hospital. At least one Seventh Circuit case hasdrawn a distinction between a hospital operated telemetry system and thehospital's emergency department for purposes of Section 1867 of the Act. SeeJohnson v. University of Chicago Hospitals, 982 F.2d 230 (7th Cir. 1992). But whathappens when a non-hospital owned ambulance takes a patient to a hospital ownedurgent care clinic? Will the parent hospital be required to deal with the patientin its emergency department? Who is liable for the error in initial assessment andscreening? Will HCFA fines and penalties attach for errors made by fieldpersonnel? Against whom?

n118 Cal. Health & Safety Code section 1798.172(b) (West 1990) notes:

Notwithstanding subdivision (a), and in addition to Section 1317, a general acutecare hospital licensed under Chapter 2 (commencing with Section 1250) of Division2 shall not transfer a person for nonmedical reasons to another health facilityunless that other facility receiving the person agrees in advance of the transferto accept the transfer.


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n119 Cal. Health & Safety Code section 1797.74 (West 1990) states "EMS area" meansthe geographical area within the jurisdiction of the designated local EMS agency.

n120 Cal. Health & Safety Code section 1798.170(a), (b) and (c) (West 1990).


n122 It is, however, unclear what would happen if the county hospital alsohappened to be the base hospital, and the base hospital physician was an employeeof the County hospital. At a certain point, HCFA may argue that a county ambulanceis a proxy for the hospital's emergency room under such circumstances.

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A "922" system dispenses with any fiction of functioning within a "virtualhospital" setting and may be free of HCFA regulations. n123 However, this presentsits own set of problems regarding whether such services are "pre-hospital." Manycalls may be requesting medical aid in clearly non-emergency situations. n124 Will"922" dispatches be part [*75] of the EMS system? Will ambulance franchisees beentitled to those "922" calls ultimately screened as emergency or ALS calls? Will

"922" calls to a governmental entity that contracts with a hospital to provideemergency call screening be regarded as falling under the jurisdiction of EMTALAand COBRA for purposes of patient dumping, Medicare and health care financing? Allthese considerations must be worked out or at least considered in the franchiseagreement with future exclusive emergency ambulance providers.

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n123 See Johnson v. University of Chicago Hospitals, 982 F.2d 230 (7th Cir. 1992).

n124 While the State EMS Authority will probably argue that such calls fall withinthe scope of Health and Safety Code Section 1797.220, Counties should consider

their actions regarding urgent/less-than-immediate need for medical attentioncalls very carefully. It may be questionable whether non-emergency BLS response tosuch calls are within the EMS system. ALS response to such calls has a betterchance of succeeding, however, the viability of such an argument may turn upon theFederal Court's ruling on this very issue in RELS v. County of Sonoma, No. C 91-1665 VRW (N.D. Cal.). In the end, how the courts view the term "emergency" willlikely define the scope of the EMS system. If the courts defer to medicalpractitioners to make judgments regarding the "potential for" immediate medicalattention being necessary as opposed to requiring a finding of immediate need,then such urgent calls will be a part of the EMS system. Then innovations like"922" systems and para hospitals will be deemed a part of the system of patientcare management authorized under Health and Safety Code Section 1798.6. Thatsection permits the establishment of a unified command structure for patient

management at the scene of an emergency under the umbrella of "medical control."See Health & Safety Code section1798.6(a) (West 1990). Additional support of theEMS system's authority to engage in other than emergency hospital room transportsis provided in Health and Safety Code Section 1797.274 which addresses theemergency medical care committee's power to review "emergency medical care offeredwithin the County." See Health & Safety Code section1797.274 (West 1990). Section1798.172 addresses "formal transfer agreements between hospitals with varyinglevels of care . . . ." If an ambulance can transfer a potential-for but less-than-emergency patient from an acute care hospital to a convalescent hospital,then it stands to reason (or is, at least, arguable) that the EMS Act hasjurisdiction in transports to convalescent hospitals directly. See Health & Safety


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Code section1798.172 (West 1990).

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The para hospital and other new managed care innovations will not always be easilyharmonized within an EMS franchise. The EMS franchise is market regulatory, whilethe para hospital is only operationally regulatory and a marketing/fundingvehicle. The JPA functions as a broker of emergency medical services. n125 A "922"

system is a screening device somewhat akin to an HMO's advice nurse. What aspectsof an EMS system accommodating para hospital dispatch or "922" scre

annotation liability of operator of ambulance service for personal injuries to person being...

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