SEMSA Vice President and Chief Operating Officer Klark Staffan talks about the status of the federal lawsuit initiated by the ambulance company more than four years ago. File photo

Jan. 15, 2013 — Sierra Emergency Medical Association (SEMSA) and 28 other ambulance providers throughout the country have come together to fight for a fair and equitable reimbursement system to alleviate necessary cost shifting.

Klark Staffan, SEMSA Vice President and Chief Operating Officer, initiated the lawsuit in late 2007 after numerous failed attempts to create legislative and administrative change.

“The logical approach (was) to pursue litigation,” said Staffan. “We have exhausted every other avenue and done everything we can.”

Staffan said the problem is Medi-Cal is the “lowest paying government health care program in the United States” but the “cost of doing business in California is the highest.”

Approximately 20 to 25 percent of SEMSA’s transports involve Medi-Cal and it pays less than 20 percent of the cost of the transport. The extremely low reimbursement is unsustainable and results in cost shifting, which means other residents pay extra, said Staffan.

State statutes require SEMSA to respond to each and every call it receives. Staffan said the mandate “implies an obligation of reimbursement to cover costs.”

Staffan said SEMSA wants to and does respond to all calls, and even though it is a nonprofit, it needs to cover the cost of responding, whether or not the ambulance transports a patient.

“It’s very unfair, and also a Fifth Amendment violation,” said Staffan. “They are putting emergency medical systems at extreme dire risk.”

According to Staffan, an average ambulance transport costs the company about $700 and Medi-Cal pays only about $150. He said SEMSA and other California ambulance companies cannot survive in that financial condition and may end up closing down.

“It’s a fragile situation,” said Staffan. “We are trying to take ambulance companies off the endangered list. We prefer the state gives in to reason and realize it’s legitimate and unfair.”

Originally the lawsuit was filed in California courts and the state’s response was to protect the state government, Staffan said. So, the group filed the lawsuit with the federal court and the lawsuit gained a lot of attention. That’s when 28 other ambulance companies decided to join the fight and share in the cost of pursuing the lawsuit.

Staffan said the lawsuit involves five causes of action, including violation of due process, interstate commerce violation charges and contract interference charges.

“The local community has been very supportive and I want to thank them,” said Staffan. “Lassen County Supervisors have been especially helpful when I have asked them to call their legislator. Former fire chief Stu Ratner even went to Sacramento with me to help make the point.”

            The lawsuit is currently in U.S. District Court for the Eastern District of California. If it is successful, Staffan anticipates an appeal case will go to the U.S. Court of Appeals for the Ninth Circuit. Then, depending on the outcome, and if appealed, the case could end up in the U.S. Supreme Court.