False Claims Act Allegations Result in Settlement Involving Ambulance Provider

According to statistics, the False Claims Act is integral in punishing healthcare fraud involving Medicare and Medicaid. While these cases often involve fraud by physicians’ offices or pharmaceutical companies, the FCA covers any situation involving reimbursement of a claim through a federal healthcare agency. If any person or entity submits a claim for reimbursement based on false, exaggerated, or non-existent services, it can expect possible triple damages, suspension from the Medicare/Medicaid programs, and criminal sanctions.

Details of Case Against Rural/Metro

Rural/Metro is headquartered in Scottsdale, Arizona and provides ambulance services to patients in need of emergency medical care. Under applicable Medicaid and Medicare guidelines, ambulance services may be reimbursed provided the patient was in need of bona fide emergency transportation to a nearby hospital. By submitting a claim to Medicare or Medicaid of ambulance services, Rural/Metro was effectively guaranteeing that its services were necessary and complied with the federal rules for reimbursement. However, according to a whistleblower lawsuit filed under the FCA, Rural/Metro was engaging in fraudulent business practices designed to bilk to government out of funds. As a result, it has agreed to settle claims by paying $2.8 million in a settlement, despite admitting no guilt in the matter.

According to the complaint filed by a whistleblower familiar with the situation, Rural/Metro routinely submitted claims for reimbursement based on ambulance services that did not meet the regulatory definition of “emergency” and thereby received millions of dollars in reimbursements it did not deserve.  According to Medicaid guidelines, ambulance transportation is covered when a patient has “a sudden medical emergency, [his] health is in serious danger, and when every second counts to prevent [the patient’s] health from getting worse.” The complaint alleges this scheme occurred between 2007 and 2011 and involved several subsidiaries of Rural/Metro located not only in Arizona, but also New York, Oregon, and Delaware.

Government’s Reaction to Fraud

The U.S. government has worked diligently over the past several years to reduce the influx of healthcare fraud. U.S. Attorney John Leonardo out of Arizona recently stated:

“The need to protect federal funds, including the Medicare trust fund, from fraud, waste, and abuse has never been greater. This settlement agreement is a substantial recovery for taxpayers and sends a clear message that the federal government will not stand idly by when its programs lose money due to false claims for payment.”

The DOJ’s settlement with Rural/Metro does not absolve it of all government inquiry, however. Pursuant to the terms of the settlement agreement, Rural/Metro remains subject to federal probes by both the Internal Revenue Service and federal law enforcement authorities and may face additional fines and penalties depending upon the results of the investigations.