Riggs Ambulance Service gets a new partner

Nevada-based nonprofit has been helping Riggs for years

rgiwargis@mercedsunstar.comDecember 18, 2012 

— New ways of solving old problems.

That was the mantra that led Kraig Riggs, president of Riggs Ambulance Service, to contact Sierra Medical Services Alliance, or SEMSA -- a Nevada nonprofit emergency medical group -- nearly five years ago.

"He had this family-owned business and wanted to take it to the next level," said Klark Staffan, SEMSA's vice president and chief operating officer. "So he contacted us. We were able to bring a huge amount of experience."

Riggs asked SEMSA to do a full business assessment in 2006, looking at the agency's ground operations, safety-and-risk management, financial management and company culture.

The three-month assessment rendered some improvement opportunities, Staffan said.

"We were impressed with what he was able to achieve, but there were areas of opportunity -- fine-tuning opportunities to make his business better," Staffan said, including getting certified by the Commission on Accreditation of Ambulance Services -- a "Gold Standard" for EMS systems.

Another significant challenge Riggs faced was getting paid for the services his company provided in Merced County.

"Reimbursement in this industry is becoming very problematic," Staffan said. "Merced has one of the highest (percentages of) Medi-Cal recipients. It became imperative that we needed to propose something sustainable to the county."

Soon, what started as a business evaluation turned into a partnership, Staffan said. "Then we started talking about the opportunity to manage his company to help him reach the next level," Staffan noted. "We continued to implement improvements on what was already in place."

SEMSA already provided ambulance service to Lassen County, where officials reported being satisfied with its performance.

"My entire district is rural, and there were only two cases that SEMSA didn't make their response time," said Bob Pyle, a Lassen County supervisor. "They charge nothing to be at high schools, rodeos and other community events -- so we're extremely happy to have SEMSA."

By partnering with a non-profit like SEMSA, Riggs realized he could save money and his operation would become more sustainable by applying for grant opportunities and not having to pay some federal taxes.

Even though the partnership happened five years ago, it sparked many questions during the county's current bidding process.

Some wondered if Riggs is still a "local" company if they are partnering with a Nevada-based organization.

Riggs General Manager Don Vonarx said Riggs is still a local company because it employs local people and keeps revenue in Merced County. He said there's been no visible change resulting from the SEMSA partnership.

In May, SEMSA-Riggs submitted its bid for the current contract as a nonprofit. Vonarx said that since Riggs Ambulance Service Inc., the current contract holder in Merced County, couldn't sign its contract over to SEMSA, it made more sense for them to bid for the contract as a nonprofit.

An Ambulance Service Subcontractor Agreement between Riggs and SEMSA from January 2012 outlines specific terms if SEMSA-Riggs wins the current bid. It includes SEMSA "hiring and managing all employees of Riggs, managing all accounts receivables and rights to the Riggs name in providing ambulance service."

The contract reads as though SEMSA would completely take over.

That's because it will take over, Staffan said, but just the ambulance operation.

"We'd be taking the ambulance department and moving it under SEMSA," Staffan said. "Riggs, the corporation, would continue to exist with Kraig as president. He will be an employee under this contract."

As part of the subcontractor agreement, SEMSA would pay Kraig Riggs about $20,800 each month in salary. He will continue overseeing community service and donations, while having the "loudest voice" in his company.

Staffan said SEMSA has "helped out, not bought out" Riggs Ambulance Service.

"We're not a takeover company," Staffan said. "SEMSA will be invisible to the community."

Staffan said that SEMSA would keep the local billing department, and lease the building from Riggs. Additionally, it would lease and buy ambulances, office equipment and be the holder of the Merced County contract.

SEMSA officials intend to buy local, including a plan to replace all 24 ambulances over the next three years.

The uniforms and name on the ambulance would still read "RAS" and the employees wouldn't see changes in their pay or seniority.

"We're buying the parts of his company needed for ambulance operation," Staffan said. "We're buying the rights to the RAS name, so employees' paychecks will say, 'Riggs Ambulance Service -- a division of SEMSA.'"

Staffan said this partnership benefits the county because it provides grant opportunities, research and development, and the ability to "see a local company, but doing business as a financially stable nonprofit."

Merced County Supervisor Deidre Kelsey said she understands that SEMSA being in Nevada may cause concern to some, but the local jobs are more important.

"The issue of whether the company is local or not local is not as significant to me as the potential to keep local employees," Kelsey said. "The definition of a locally owned business varies; it's not a black-or-white situation anymore. The lines have blurred, and we need to be comfortable with that."

Reporter Ramona Giwargis can be reached at (209) 385-2477 or rgiwargis@mercedsunstar.com.


WHO: The Merced County Board of Supervisors and general public

WHAT: Public hearing regarding the county's exclusive operator for emergency ambulance service -- request for proposal

WHERE: Merced County Administration Building: 2222 M St. in Merced (Board Room, third floor)

WHEN: 1:30 p.m. today

WHY: To learn more about the county's bidding process and allow the public to give feedback and comments

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