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An ambulance company is suing a competitor as well as the city of Tyler, Smith County, and others, alleging the parties created an illegal monopoly to provide emergency medical services in the region. 

The ambulance company, Champion EMS, which is affiliated with the Christus Trinity Mother Frances health system, filed suit against the competing ambulance company and government entities on April 16.

The suit alleges the government entities worked with an ambulance company affiliated with the former East Texas Medical Center to create a monopoly in providing health services in the region. The suit alleges that the control of the ambulance market dates back to a 1992 contract.

Champion filed the suit in the 241st District Court in Smith County on April 16. The suit is a counterclaim against a lawsuit ETMC EMS, which was part of the former East Texas Medical Center health system until a year ago, brought against Champion in May 2017.

ETMC EMS had sued Champion in 2017 claiming the company was providing ambulance services in the region, and was therefore infringing on a contract ETMC EMS had with local authorities to be the region’s exclusive ambulance service provider.

The original suit sought at least $1 million in damages, a court decision saying ETMC EMS “has the exclusive right to provide paramedic ambulance services” in the region, a court order preventing Champion from performing ambulance services in the region, as well as legal fees.

Champion now contends it has been unlawfully excluded from providing ambulance services in the region. Therefore, the suit says ETMC EMS, the ETMC health system, the city of Tyler, Smith County, and the Smith County EMS Administrative Agency, are violating the Texas Free Enterprise and Antitrust Act.

The Texas Free Enterprise and Antitrust Act is a state-level law that seeks to maintain and promote competition in Texas commerce so Texas consumers can benefit from the market effects of competition.

“In Texas, every contract, combination, or conspiracy in restraint of trade or commerce is unlawful,” the suit reads. “It is further unlawful to monopolize, attempt to monopolize, or conspire to monopolize any part of trade or commerce.”

A spokeswoman for ETMC issued a statement saying Champion has been violating “several different local statutes,” and that the company would “vigorously pursue our rights and remedies under our contracts with both the city and the county.”

Christus said in a statement that Smith County residents “are entitled to and benefit from fair competition and a competitive bidding process for ambulance services” and that the current contract is “contrary to the best interests of Smith County residents and, candidly, to good business practice by the city and county.”

Spokeswomen for the city of Tyler and Smith County declined to comment for this story, saying they don’t comment on pending litigation.  

Details of the case

In October 1992, ETMC EMS entered into a five-year contract with the Smith County EMS Administrative Agency, a partnership between the city of Tyler and Smith County, according to court documents.

The contract would expire in 1997 but could be extended in one-year increments if ETMC EMS met certain standards, according to court documents. However, Champion EMS alleges the agency did not provide enough oversight in extending the contract.

“In effect, the agency has provided (ETMC EMS) with a monopoly on ambulance services and has failed to conduct, or even allow, a competitive bid process for such services in over two and a half decades,” Champion EMS alleges in its lawsuit.

“With the indisputable rise of health care costs in the past couple of decades, no reasonable person could deny the benefits of competition for such services,” Champion EMS says.

In addition to alleging an illegal monopoly, Champion EMS also is alleging that ETMC EMS’s original lawsuit is seeking to prevent Christus and its affiliated facilities from transporting patients within and between its own facilities.

“ETMC EMS’s actions in seeking to prevent the transport of patients … is outside its rights under the unlawful ambulance contract,” the lawsuit says. “And its actions are indicative of a company desperate to maintain a monopoly, whether justified or not.”

The suit also goes on to allege that Smith County EMS Administrative Agency did not exercise enough oversight to enforce other terms of the contract. The suit points to a portion of the contract requiring the agency to take into account the “character” of the entities providing emergency medical services.

The suit then points to the lawsuit the U.S. Department of Justice brought in January 2017 against East Texas Medical Center health system and related entities for allegedly engaging in kickbacks to make Paramedics Plus an exclusive ambulance provider in a region in Oklahoma.

ETMC EMS has historically had ties to Paramedics Plus because ETMC EMS was part of the former East Texas Medical Center health system. In April 2017, the health system system announced it would spin off both ETMC EMS and Paramedics Plus into a separate entity. 

Paramedics Plus settled its involvement in the federal kickback lawsuit in February for an undisclosed sum, according to federal court documents. In April, an Oklahoma agency agreed to settle its liability in the case for $300,000. A federal judge still needs to approve both settlements.

On March 1, the East Texas Medical Center health system finished selling off the umbrella company’s assets to Ardent Health Systems and the University of Texas Health Sciences Center at Tyler. ETMC EMS is part of that new system, now called UT Health East Texas, according to a hospital spokeswoman. 

“The financial solvency and capability of ETMC has likewise been, at best, questionable,” the suit says. “Even with these facts, the agency continues to refuse to even allow a competitive bid process for ambulance services in Tyler.”

Smith County officials to discuss lawsuit on Tuesday

The Smith County Commissioners Court will discuss the lawsuit in an executive session at its regular meeting, which starts at 9:30 a.m. on Tuesday at the Smith County Courthouse Annex Building at 302 E. Ferguson Street in Tyler.

After the executive session, which is closed to the public, the court will return to a public session to decide whether to hire an attorney to represent the county in the case.

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