[Updated October 2017] Medicare fraud prosecutions ebb and flow, just like many things in life. There seems to be no shortage of EMS fraud related cases, however. The Department of Justice and the Centers for Medicare and Medicaid Services have been focusing on ambulance providers over the last several years, so much so that there have been moratoriums on approving new ambulance companies in Philadelphia and Houston.
Usually when that much attention is focused on one industry group, the fraudsters tend to hibernate and hide. Not so with EMS fraud. New operators seem to pop up as fast as the Justice department can shut down the bad ones. It’s like playing a high stakes version of the carnival game, Whack-a-Mole.
The Justice Department is prosecuting EMS Medicare fraud cases across the United States and has even decided to seek prison sentences against some ambulance operators. We have seen cases where regulators will shut down one shoddy operator only to have the owners file bankruptcy, buy back their own equipment and simply re-letter the trucks.
There are many different types of Medicare fraud involving ambulances, they include:
- Billing for Advanced Life Support (ALS) services when only providing BLS services (basic).
- Administering an unnecessary IV or medication simply to make the trip appear to require ALS.
- Using unqualified or underqualified personnel and billing for paramedics.
- Using ambulances as glorified taxis (frequently at the request of hospitals or nursing homes).
- Transporting otherwise healthy people to dialysis appointments by ambulance.
An recent OIG news release shows a new variation of Medicare fraud — taking people to sites where the patients didn’t actually receive any Medicare services. According to the Health and Human Services’ Inspector General’s Office, that “service” cost Medicare $30 million in the first half of 2012. (Unfortunately, that is the most recent data.)
Medicare is now extending moratoriums on new EMS services to New Jersey, Illinois, Florida, California and Michigan. Unfortunately, the moratorium hurts legitimate operators as much as the fraudsters.
By extending the moratoria, auditing more ambulance companies and criminally prosecuting a few bad apples, Medicare will ultimately win the battles. For the next few years we expect to continue to see new EMS whistleblower opportunities .
The 2012 OIG study took so long to produce because it analyzed 7.3 million ambulance transports performed between January and June of 2012! This means current statistics are hard to determine. The spate of new criminal indictments and whistleblower complaints show that for now, there are still plenty of fraud within the industry and opportunities to collect meaningful awards.
EMS Fraud and Kickbacks
Another growing area of EMS fraud prosecutions includes kickbacks. Under the federal Anti-Kickback Statute, it is illegal for anyone to pay money or give something of value in the hopes of getting healthcare business or referrals.
In recent years we have seen hospitals charged with anti kickback violations for paying EMS companies to bring patients to their facility. One hospital was prosecuted after being caught paying certain ambulance companies to drive critical care patients half way across the city instead of the nearest critical care hospital.
Of course, kickbacks go both ways and both parties can be prosecuted. An ambulance company that gives “freebies” to a hospital in return for lucrative transport business, dialysis centers that pay kickbacks, nursing homes… the possibilities are endless.
Why do we discuss kickbacks in this post? Because under the False Claims Act, whistleblowers who report these schemes may be entitled to large cash awards. More on that below.
Four Houston HCA Hospitals Settle EMS Kickback Charges
{October 2017] Four Houston area hospitals affiliated with HCA settled federal charges that they took kickbacks from local ambulance companies. Prosecutors say the ambulance companies made the kickbacks in return for Medicare and Medicaid referrals.
In a rather complex scheme, the hospitals set up a “swapping” arrangement in which they accepted free ambulance transports in exchange for referring Medicare patients back to the EMS providers. Some might say it is a win-win, it certainly was for both HCA and the ambulance companies. Unfortunately, Medicare (meaning taxpayers) was footing the bill.
HCA settled the case with the Justice Department for $8 million. They were not required to admit wrongdoing. Two years ago a national nursing home chain settled in this same case for $3 million.
This EMS fraud case is unusual in that the Justice Department targeted the recipients of the kickbacks (the hospitals and nursing home chain) and not the EMS companies paying the kickbacks.
Another lesson in this case is that the kickbacks were not cash. Instead, the “thing of value” was free or discounted rides given by the ambulance companies to the hospitals.
The case was originally brought by three people working for the ambulance companies. The government has not yet released their award information. For the $8 million portion of the settlement, we anticipate the three EMS workers will split approximately $1,290,000.
EMS Fraud and Whistleblower Awards
Of great interest to would be EMS fraud whistleblowers may be the rewards payable by the Justice Department. Under the federal False Claims Act, the government can pay a whistleblower up to 30% of whatever the government collects from the wrongdoer. Approximately 30 states have their own state false claims law that apply to state funded Medicaid. These programs also pay awards.
The average award when the government prosecutes the case is 15%. If the whistleblower’s own lawyer prosecutes, the awards are closer to 30%.
There are a few catches, however.
First, to receive an award you must have inside, original source information.
Second, you must file a lawsuit in federal court. (The suits are secret while the government is investigating them.) Calling the Medicare fraud hotline does not get you a big cash award, however.
Third, you must be first to file. Wait too long and chances are good that someone else may be the first to report your information.
Although Medicare is catching up with the current crop of fraudsters, there is generally a 6 year statute of limitations. (The law is a bit more complex but for discussion purposes, we will say 6 years.) Even if your employer cleaned up its act today, it remains on the hook for all the bad things done over the last several years.
EMS and Retaliation
Congress knows that whistleblowers who stick their necks out are taking a risk. The public knows that first responders are heroes. Unfortunately, when someone blows the whistle, their employer may not treat them like a hero.
The False Claims Act outlaws whistleblower retaliation and provides double lost pay, lost future pay and benefits, costs and even pays for your lawyer. Most states have similar whistleblower protection rules.
Medicare fraud is a huge problem that costs taxpayers tens of billions of dollars annually. It is not a victimless crime and it prevents vital healthcare dollars from being spent where they are most needed.
We have helped our whistleblower clients collect over $100 million in award monies. If you have information about Medicare fraud of any type, now is the time to call. Don’t wait another day.
For more information, contact attorney Brian Mahany at *protected email* or by telephone at (414) 704-6731 (direct). On October 7th, we also published important legal updates for ambulance fraud whistleblowers… new cases that make it easier to collect whistleblower awards in these cases. You can also visit our Medicare fraud or anti-kickback information pages.
MahanyLaw – America’s Medicare Fraud Lawyers
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