Texas-based Paramedics Plus won a controversial
contract for Alameda County EMS services in
2010, but has financially struggled ever since.

The three-year extension of a controversial Alameda County contract for emergency ambulance services was moved forward by the Board of Supervisors Tuesday, but not without both sides recognizing the relationship’s future is doubtful.

The Alameda County Board of Supervisors gave direction to staff to continue negotiations with the EMS provider Paramedics Plus to extend the contract through June 2020, along with a number of cost-cutting features for the health care vendor. Supervisor Keith Carson voted no and Supervisor Nate Miley recused himself.

But the board, led by Supervisor Wilma Chan, also directed staff to immediately issue a Request for Proposal (RFP) to begin the search for a new EMS provider. Although the Texas-based Paramedics Plus suggested it hopes to win the next contract, it was nonetheless skeptical about its future in Alameda County.

Last year, not including an emergency infusion of $4 million approved by the Board of Supervisors in October 2015, Paramedics Plus lost $9 million. The county’s contribution came from a pot of penalties the company had incurred over the years for late ambulance arrival times, a fund that had reached more than $8 million, said Rebecca Gebhart, Alameda County Health Care Services Agency interim director.

Dale Feldhauser, chief operating officer for Paramedics Plus told the board the company would be amendable to negotiating an out-clause if the county ultimately decides to choose a new EMS vendor in the future. Gebhart said the RFP could be completed in less than two years. “It’s been difficult managing a workforce with this much insecurity in the system,” said Feldhauser.

Chan later pressed Feldhauser, on whether the company is eyeing an exit from a previously planned expansion into California, a strategy that has not gone well since it signed a contract with the county in late 2010. Alameda County is Paramedics Plus’ only client in California. Feldhauser said the company is still committed to doing business in the state, but added revenue from a “fee-for-service” model was lower than expected.

Earlier, Feldhauser acknowledged Paramedics Plus overstated the proposed revenues contained in its initial proposal with the county in 2010. The comment is notable since the previously holders of the EMS contract in Alameda County, American Medical Response (AMR), sued the county and Paramedics Plus in part alleging they overly-inflated revenue estimates.

Alameda County recently settled a federal lawsuit related to the 2010 contract with Paramedic Plus that alleged it received kickbacks from a profit-sharing scheme. The lawsuit included Paramedics Plus contracts in several other states.

Carson grilled Feldhauser over the initial contract, although both acknowledged the executive was not part of those negotiations. “The board trusted them at the time,” Carson said of the 2010 deal, “but I didn’t.”

Part of the proposed agreement stipulates a significant lower of penalties for on-time ambulance services, up to 90 percent. Carson expressed doubt that lowering the amount of penalties will incentivize prompt service. “This is a contract that is costing this county so much,” Carson fumed.

Another proposed cost-cutting element for Paramedics Plus within the contract extension is the county absorbing half of the cost of EMS service calls for psychiatric patients in four cities not covered by the contract. They include Alameda, Albany, Berkeley, and Piedmont.

“That makes zero sense to me,” said Supervisor Scott Haggerty, who earlier lauded Paramedics Plus for its service, as did Supervisor Richard Valle. He later questioned why the county is essentially subsidizing 51/50 calls that are money-losing operations for other EMS companies in the four East Bay cities. Speaking to Feldhauser, Haggerty urged him to accept the county’s deal. “I think from the county’s standpoint, this is more than generous,” said Haggerty.