Ambulance Company Agrees to Pay $5.4 Million to Settle Claims of Fraudulent Medicare Billing

BIRMINGHAM—A medical transport corporation operating in several states, including Alabama and Kentucky, will pay $5.4 million to settle claims that the company improperly billed Medicare, announced U.S. Attorney Joyce White Vance for the Northern District of Alabama; U.S. Attorney David J. Hale for the Western District of Kentucky; and Derrick L. Jackson, special agent in charge of the U.S. Department of Health and Human Services Office of Inspector General for the Atlanta Region.

The payment of $5,426,000 by Rural/Metro Corporation, Rural/Metro of Central Alabama Inc., and Mercury Ambulance Service, doing business as Rural/Metro Ambulance, settles a lawsuit that claimed the ambulance company violated the False Claims Act by submitting false claims for payment on ambulance services that were never provided or were medically unnecessary.

“The resolution of this lawsuit means millions of taxpayer dollars that were used to reimburse false claims by Rural Metro’s ambulance service have been recovered,” Vance said. “A whistleblower who worked for the ambulance company in Alabama brought these claims to light. We encourage anyone with information about potential wrongdoing to come forward and help us stop fraud and abuse in our health care services,” she said.

“Our office led an extensive investigation of conduct occurring in Kentucky, and we are pleased with the outcome announced today,” Hale said. “Coordinating our efforts with federal and state law enforcement partners, in Kentucky and Alabama, we avoided duplication of efforts and contributed significantly to today’s recovery of taxpayer dollars.”

“This is a substantial recovery for the taxpayer,” Jackson said. “Today’s action sends a message to greedy ambulance companies that improperly bill the Medicare and Medicaid systems. The Office of Inspector General will continue to ensure that federal health care programs pay for services that are proper and necessary.”

According to the settlement agreement, the government claimed that Rural/Metro ambulance services in Alabama and Tennessee sought Medicare reimbursement from January 2008 through December 2010 for non-emergency transportation for Medicare beneficiaries to receive dialysis services. The government also claimed that from January 2008 through August 2011, a Rural/Metro company in Kentucky, Mercury Ambulance, also sought reimbursement for non-emergency transportation for Medicare beneficiaries to receive dialysis services.

The lawsuit that originally asserted the False Claims Act violations against Rural/Metro was filed against the company in 2009 in U.S. District Court for the Northern District of Alabama. It was filed as a whistleblower action by a former employee of Rural/Metro of Central Alabama. The United States intervened in the lawsuit in March 2011.

Rural/Metro Corporation, through its subsidiaries and affiliates, is engaged in the business of providing medical transportation services to individuals, including ambulance transportation services to Medicare and Medicaid beneficiaries, in approximately 20 states.

In conjunction with several federal and state law enforcement agencies, the U.S. Attorney’s Office for the Western District of Kentucky investigated conduct occurring in that state and worked with the U.S. Attorney’s Office in Alabama to include the Kentucky-based claims in the Alabama lawsuit. Under the whistleblowing statute, the offices will share the reimbursed funds with the whistleblower and his attorneys, who will receive $1,030,940 plus fees and costs.

Medicare’s regulations cover the reimbursement of certain ambulance services only if those services are furnished to a beneficiary whose medical condition dictates that other means of transportation are not advised. This generally means that ambulance transportation is appropriate if the beneficiary is bed-confined or if the beneficiary’s medical condition, regardless of bed confinement, is such that transportation by ambulance is medically required.

The United States’ complaint alleged that the defendants created and submitted fraudulent records and claims for payment by governmental health care providers. According to the complaint, Rural/Metro falsely represented that transported patients were either bed-confined or that transportation by ambulance was otherwise medically required. Many of those patients, however, were neither bed-confined nor needed to be moved on stretchers and did not require ambulance transportation or qualify for ambulance transport under the applicable Medicare requirements.

The allegations in the complaint do not relate to the quality of the care provided by the defendants during the transportation.

The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that defendants submitted false claims for government funds. The law provides that the whistleblowers are entitled to receive a share of any funds recovered through the lawsuit. The False Claims Act permits the government to recover three times its damages plus civil penalties.

This settlement is neither an admission of liability by the defendants, nor is it a concession by the United States that its claims are not well founded.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Department of Health and Human Services Secretary Kathleen Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.

The U.S. Attorney’s Office for the Northern District of Alabama prosecuted the case. The U.S. Attorney’s Office for the Western District of Kentucky joined the Northern District of Alabama Office, along with the Health and Human Services’ Office of Inspector General, the FBI, the Medicaid Fraud and Abuse Control Division of the Kentucky Attorney General’s Office, and the Office of the Inspector General of the U.S. Railroad Retirement Board in investigating the case.