June 7, 2006 in City
Mayor to decide AMR fine by next week
As many as 30,000 residents of the city of Spokane who have used the emergency ambulance services of American Medical Response since October 1998 now could be part of a just-expanded class-certified lawsuit.
The suit, filed last December by three Spokane residents, alleges AMR has overcharged patients and violated the state’s Consumer Protection Act over the past eight years.
Three months later, while under scrutiny by a City Council subcommittee, AMR admitted overcharging patients $320,689 the past two years and said it would make refunds.
Spokane Mayor Dennis Hession said Tuesday he expects to decide by next week the amount of a fine to be levied against AMR for violating its current contract with the city.
The fine by the city would be separate from the class action suit, now set for trial in September 2007.
The mayor also said he will respond soon to a call from Firefighters Local 29 for an “external investigation” into the relationship between AMR and Spokane Fire Department administrators who oversee the contract.
The contract allows for a $1,000 fine for the first offense, $3,000 for the second and $5,000 for each violation thereafter. According to AMR officials, at least 881 individuals and an undisclosed number of insurance providers, including Medicare, were overcharged for ambulance services.
Hession said he is scheduled to meet Friday with Fire Chief Bobby Williams to discuss the amount of the fine. Williams said Tuesday he likely will recommend to the mayor that the fine “be in a five-figures range,” but the fire chief wouldn’t be more specific.
“It’s important to make a statement about the seriousness of what happened,” Hession said. “But it’s not designed to make money for the city. The real impact of this was on the individuals who were (overcharged).”
AMR, the nation’s largest ambulance company with 18,000 employees, operates in the city of Spokane under an exclusive contract granted by the City Council and monitored by the Spokane Fire Department.
The city contract makes AMR the predominant ambulance provider for the entire region, including outlying suburban areas where service and mileage rates generally aren’t regulated.
After a lengthy hearing on Friday, Superior Court Judge Jerome Leveque agreed with a request by attorney D. Roger Reed to certify the suit as a class action, meaning thousands of city residents could now be potentially affected.
AMR patients will be divided into two groups: “Subclass A” for individuals transported between Oct. 5, 1998, and Oct. 31, 2003, and billed for services actually provided by fire department paramedics; “Subclass B” will be for patients who used ambulance service since Aug. 19, 2003 and were accompanied by a fire department paramedic.
Paul J. Dayton, a Seattle attorney representing AMR, opposed expanding the suit to include other potential patients.
He argued that the ambulance company already had identified patients it inadvertently overcharged and mailed refunds to them or third-party insurance companies or Medicare.
“The mere fact that the plaintiffs have alleged facts which, if proven, establish their claim against AMR does not ensure that (they) may properly represent a class of others with respect to such claims,” Dayton said in legal filings.
“I am really pleased with the court’s decision, certifying this as a class action suit,” Reed said Tuesday.
“Now the truth of how many people have been over-billed by AMR, how long this practice has gone on and whether AMR has committed unfair and deceptive practices in violation of our state’s Consumer Protection Act, will be decided in a court of law,” Reed said.
“AMR is no longer the judge and jury on these issues,” Reed said.
Reed said in opposing the class action suit, AMR was offering a “trust us” approach with its own accounting review that “was far short” of an independent audit and only covered the last two years.
In his legal motion, Reed said there are common issues of law, and a class action would be indisputably superior to flooding the courts with possibly 30,000 claims for less than $300 each.
The case against AMR is the “quintessential class action,” involving many small claims of individuals who couldn’t afford to pursue separate legal suits, said Reed.