APPEAL from a judgment of the Superior Court of Butte County. Thomas W. Kelly, Judge. Affirmed. (Super. Ct. No. 137303).
The opinion of the court was delivered by: Scotland, P. J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
The Emergency Medical Services System and the Prehospital Emergency Medical Care Personnel Act (EMS Act) was enacted in 1980 to "provide the state with a statewide system for emergency medical services" and to "ensure the provision of effective and efficient emergency medical care" to the people of California. (Stats. 1980, ch. 1260, § 7, pp. 4261-4277; Health & Saf. Code, §§ 1797.1, 1797.6, subd. (a) (further section references are to the Health and Safety Code unless otherwise specified).)
Through the EMS Act, the Legislature created essentially a two-tiered regulatory system "governing virtually every aspect of prehospital emergency medical services." (County of San Bernardino v. City of San Bernardino (1997) 15 Cal.4th 909, 915 (hereafter County of Santa Bernardino).) The first tier is occupied by the Emergency Medical Services Authority (the Authority), a division of the Health and Welfare Agency, "which is responsible for the coordination and integration of all state activities concerning emergency medical services." (§§ 1797.1, 1797.100.) The second tier of governance is "a local EMS agency" (§ 1797.200), which is responsible for, among other things, "(1) planning, implementing, and evaluating an emergency medical services system 'consisting of an organized pattern of readiness and response services based on public and private agreements and operational procedures' (§ 1797.204); (2) developing a formal plan for the system in accordance with the Authority's guidelines and submitting the plan to the Authority on an annual basis (§§ 1797.250, 1797.254); [and] (3) 'consistent with such plan, coordinat[ing] and otherwise facilitat[ing] arrangements necessary to develop the emergency medical services system' (§ 1797.252)." (County of San Bernardino, supra, 15 Cal.4th at p. 916.)
In this case, we are called upon to determine whether a county may contractually designate a local EMS agency to administer some of the requirements of the EMS Act, while reserving for another local EMS agency all of the remaining statutory powers and duties not covered by the agreement.
The short answer is "no." As we will explain, the EMS Act authorizes a county to designate "a local EMS agency" (§ 1797.200), not two such agencies sharing the statutory powers and duties of Chapter 4 of the EMS Act.
We are also asked to decide whether the Authority has the statutory power to disapprove a local EMS agency's designation of an exclusive operating area through the grandfathering provision of section 1797.224 of the EMS Act, which states in part: "A local EMS agency may create one or more exclusive operating areas in the development of a local plan, if a competitive process is utilized to select the provider or providers of the services pursuant to the plan. No competitive process is required if the local EMS agency develops or implements a local plan that continues the use of existing providers operating within a local EMS area in the manner and scope in which the services have been provided without interruption since January 1, 1981. A local EMS agency which elects to create one or more exclusive operating areas in the development of a local plan shall develop and submit for approval to the [A]uthority, as part of the local EMS plan, its competitive process for selecting providers and determining the scope of their operations."
The short answer is "yes." As we will explain, an exclusive operating area (EOA) is "an EMS area or subarea defined by the emergency medical services plan for which a local EMS agency, upon the recommendation of a county, restricts operations to one or more emergency ambulance services or providers of limited advanced life support or advanced life support." (§ 1797.85.) The creation of an EOA is an "'important administrative tool for designing an EMS system'" because "an EOA permits local EMS agencies to offer private emergency service providers protection from competition in profitable, populous areas in exchange for the obligation to serve unprofitable, more sparsely populated areas." (Valley Medical Transport, Inc. v. Apple Valley Fire Protection Dist. (1998) 17 Cal.4th 747, 759 (hereafter Apple Valley), quoting County of Santa Bernardino, supra, 15 Cal.4th at pp. 931-932.) Because the local EMS agency is required by the EMS Act to "annually submit an emergency medical services plan for the EMS area to the [A]uthority" (§ 1797.254), which plan must include the subject of transportation of emergency medical patients (§§ 1797.76, 1797.103, subd. (c), 1797.70, 1797.72), and because the Authority possesses the statutory authority to reject a local EMS plan if "the plan is not concordant and consistent with applicable guidelines or regulations, or both the guidelines and regulations, established by the [A]uthority" (§ 1797.105, subds. (a) & (b)), it follows that the Authority has the statutory power to reject a local EMS agency's creation of an EOA as part of the transportation portion of the local EMS plan, regardless of whether that EOA was created through a competitive process or grandfathering.
We also reject the claim that the judgment must be reversed because, in interpreting the "manner and scope" language of section 1797.224, the Authority relied on an invalid underground regulation not promulgated in compliance with the Administrative Procedure Act (Gov. Code, § 11340 et seq.).
In August 1991, Butte County entered into an agreement with Northern California Emergency Medical Services, Inc. (Nor-Cal EMS), designating Nor-Cal EMS to "administer certain local emergency medical services as specified" in the agreement and to "administer certain 'local EMS agency' requirements called for under [the EMS Act]." (Italics added.) Paragraph 3 of the agreement provides that Butte County "delegates only those functions enumerated in this agreement to [Nor-Cal EMS] and which may be delegated pursuant to [s]sections 1797.94 and 1797.200; and for those purposes only, [Nor-Cal EMS] shall act as the local EMS agency." (Italics added.)
The vast majority of local EMS agency functions are enumerated in the agreement. For instance, paragraphs 5 and 6 of the agreement states that Nor-Cal EMS "shall plan, implement and evaluate an emergency medical services system in accordance with the provisions of the [EMS] Act, consisting of an organized pattern of readiness and response services based upon public and private agreements and operational procedures" ([see §] 1797.204)." Those paragraphs also require Nor-Cal EMS to have a "licensed physician and surgeon as Medical Director to provide medical control and to assure medical accountability throughout the planning, implementation and evaluation of the EMS system" (see § 1797.202). And the agreement makes Nor-Cal EMS responsible for, among other things, "submit[ting] an [annual] emergency medical services plan for [Butte County] to the [Authority]" (see §§ 1797.250 & 1797.254) and, "consistent with such plan, coordinat[ing] and otherwise facilitat[ing] arrangements necessary to develop the emergency medical services system" (see § 1797.252).
Conspicuously absent from the agreement is enumeration of the authority to "create one or more exclusive operating areas in the development of a local plan" pursuant to section 1797.224. The apparent intent of the contracting parties was to create a bifurcated system in Butte County consisting of two local EMS agencies. Nor-Cal EMS would be responsible for all local EMS agency functions delineated in the agreement, while the Butte County Public Health Department would retain the statutory authority to create EOAs pursuant to section 1797.224. Such an intent was expressed by Chester L. Ward, M.D., the Butte County Health Officer: "Butte County has . . . designated [Nor-Cal EMS] as the [local EMS agency] for limited purposes. However, [Nor-Cal EMS] is not the local EMS [a]gency relative to exclusive operating areas of and within Butte County. For that purpose, the Butte County Public Health Department is the [local EMS agency]."*fn2
In June 1992, on behalf of the Butte County Public Health Department, Dr. Ward issued an order (the EOA order) directing that the County's local EMS plan be amended to establish EOAs pursuant to section 1797.224. Among other things, Dr. Ward found that "[b]efore January 1, 1981 and continuing through the present, the County of Butte has been divided into five (5) operating areas for the provision of emergency medical services to the citizens of Butte County"; "[t]hese [EOAs] have not changed significantly in scope or geographic area since prior to January 1, 1981"; "[w]ithin each area, one or more operators have been providing emergency medical services, on an exclusive basis, prior to January 1, 1981, and continuously to the present, as those relevant terms have been defined by the [Authority]"; "[e]ach of the service operators providing service within each of the designated [EOAs] have [sic] provided emergency medical services to the citizens of Butte County within each EOA in the same manner and scope since at least January 1, 1981"; and, "pursuant to [section] 1797.224, no competitive process for selection of exclusive operators is required in that this plan will continue the use of existing providers operating within the [c]county in the manner and scope in which the services have been provided without interruption since January 1, 1981." In accordance with these findings, Dr. Ward ordered that "the current and present operators providing service within [their respective EOAs] be deemed the exclusive operators within each area."
Three of the five EOAs established by the Butte County Public Health Department are at issue in this appeal--the area surrounding Chico (Zone 1), the area surrounding Paradise (Zone 2), and the area surrounding Oroville (Zone 3).
Zone 1 had been serviced by Enloe Medical Center (Enloe) and First Responder Emergency Medical Services, Inc. (First Responder) since 1978.*fn3 This area of operation remained "essentially unchanged," except for "minor changes in 1987 due to overlapping of service to certain areas of the map where thick lines had been drawn which left some room for dispatch interpretation." Zone 2 had been serviced by First Responder since 1997 when First Responder purchased Paradise Ambulance Service, which had serviced the area from 1980 to 1997. This area of operation expanded in 1987 to include Butte College, which until then had been serviced by the Chico area providers. Zone 3 had been serviced by First Responder since 2002, when First Responder purchased the service from Oroville Hospital Ambulance which had serviced the area from 1982 to 2002, having acquired it from Oroville Ambulance, which had serviced the area from 1972 to 1982.
In July 1992, Dr. Ward submitted to the Authority an amendment to Butte County's EMS plan establishing the EOAs, along with "copies of correspondence [Dr. Ward] had received from each current provider, attesting to their service times and levels." He "requested that [the Authority] approve [the] plan and confirm [the Butte County Public Health Department's] ability to grandfather the current providers into the [EOAs]."
Acknowledging that "authority for the administration of the emergency ambulance services program has been retained by the Butte County Health Department," the Authority directed Dr. Ward to provide more information about "the continuity of providers within the zones for which grandfathering is proposed" and "a complete description of [Butte County's] transportation system[,] justification for the use of zones, both clinically and economically[, and] identification of the level of exclusivity [the Butte County Public Health Department] would be granting[.]" The record does not reveal whether the Butte County Public Health Department responded to the Authority's request for more information.
In April 1993, the Butte County Counsel sent a letter to the attorney for a prospective ambulance operator explaining the county's view that EOAs were established by Dr. Ward's EOA order and that the Authority's approval was not required. As Butte County interpreted section 1797.224, a local EMS agency may create EOAs either through a competitive bid process or through grandfathering; and only when a competitive bid process is used is the local EMS agency required to obtain the approval of the Authority. Thus, because Dr. Ward established EOAs through grandfathering, the county believed that approval of the Authority was not required. However, this letter also expressed the position that Dr. Ward's EOA order was meant to be an "interim" measure, and that there would eventually be "a formal addition to the local EMS plan calling for competitive bidding."
In December 1993, Nor-Cal EMS wrote to the Authority in order to "clarify the intentions of Butte County and [Nor-Cal EMS] regarding the establishment of [EOAs] by means of the grandfathering provisions of [s]section 1797.224." Nor-Cal EMS explained that "establishment of new services in Butte County have [sic] been temporarily put on hold. This will allow time for the development of a competitive bid process, as referenced in [section] 1797.224."
In January 1994, the board of supervisors passed resolution No. 94-12, which (1) formally adopted the findings and conclusions of Dr. Ward set forth in the EOA order, (2) purported to formally amend Butte County's local EMS plan by "creating the [EOAs] set forth in [the EOA order] and establishing the current operators in those areas as exclusive operators," subject to the qualification that "[t]he installation of the operators within the [EOAs] is intended as an interim measure," and (3) established a schedule providing for a competitive process for each of Butte County's five zones of operation. However, Butte County never actually implemented the competitive bid process called for by this resolution.
In March 1996, the interim health officer of the Butte County Public Health Department, after consulting with the emergency medical care committee and Nor-Cal EMS, issued an order (second EOA order), finding that "the maintenance of [EOAs] and the continued utilization of the current providers as exclusive providers within those areas is proper and appropriate for the same reasons as set forth in Dr. Ward's [EOA order]," and directing "that the currently established operating areas remain in place and that the current exclusive operators now installed as exclusive providers remain so installed as exclusive providers and that no competitive bid process is either required nor in the best interest of the citizens of [Butte County] at this time."
The following month, the board of supervisors passed resolution No. 96-40, which rescinded the schedule providing for a competitive bid process that was set forth in resolution No. 94-12. By this resolution, the board expressed Butte County's position that (1) section 1797.224 gives the Butte County Public Health Department, as the local EMS agency with respect to the establishment of EOAs, "the authority to create one or more [EOAs] in the development of a local plan"; (2) "no competitive bid process is required for the selection of exclusive operators within [EOAs] if the local EMS agency develops or implements a local plan that continues the use of existing providers within the county in the manner and scope in which services have been provided without interruption since January 1, 1981"; and (3) "the EMS Act unequivocally establishes that the local EMS agency, not the Board of Supervisors, may establish an [EOA] as such a decision is a professional, not a political determination[.]"
In March 2000, Nor-Cal EMS submitted Butte County's EMS plan to the Authority, including the EOAs ordered by the Butte County Public Health Department, and then submitted additional revisions in 2001.
In July 2001, the Authority approved the plan, except for the section grandfathering the existing emergency service providers into their respective EOAs. In the Authority's view, the December 1993 letter from Nor-Cal EMS to the Authority and resolution No. 94-12, both expressing the intention to establish a competitive process for choosing exclusive operators in Butte County, "changed the scope and manner of operation, [and] therefore, 'grandfathering' the Chico, Oroville, and Paradise zones is not possible." In response, an attorney representing Butte County sent a letter to the Authority explaining that, while resolution No. 94-12 called for a timed sequence of competitive bidding, this competitive process was vacated by resolution No. 96-40; therefore, "the 'scope and the manner' of [Butte County's] operation" was not altered by resolution No. 94-12. However, the Authority held firm to its position regarding grandfathering, explaining that the "scope and manner [of operation] had changed because [Butte County's] EMS transportation plan [had] changed."
In 2004, Byron Parsons, CEO of First Responder, convinced the Butte County Counsel to press the Authority a final time for its position regarding grandfathering. In April 2004, the County Counsel wrote to Parsons stating the county "accepts and intends to comply with the [Authority's] position regarding issues of exclusivity and grandfathering."
In March 2005, Parsons met with David Reade, Chief of Staff to Assemblymember Doug LaMalfa, concerning the grandfathering issue in Butte County. The Authority then sent Reade a letter explaining that "to establish exclusive zones and install the providers that were serving the county in 1992 would require a clear determination of eligibility for exclusivity. To date, however, the lack of pertinent and sufficient supporting evidence has hindered such a declaration. [Section 1797.224] states that services must have been provided, without interruption, since January 1, 1981. Since that date, three services in the Chico, Oroville, and Paradise areas have changed ownership, and, in the Paradise area, three different owners have operated the ambulance service. Sufficient documentation has never been submitted to the [Authority] to verify whether these purchases were reorganizations of the existing entity. [¶] In addition, in researching this issue further, it appears that a significant boundary change was made to the [Paradise area]. In 1987, the Butte College campus was incorporated into the zone, adding a daytime population of over 10,000 ...