Kusserow’s Corner: Crackdown on Ambulance Fraud Continues

A month ago, I reported on the increased enforcement efforts involving ambulance fraud and cited the HHS Office of Inspector General (OIG) report on the subject. The OIG also issued a report (OEI-09-12-00350) on utilization of Medicare Ambulance Transport that took note of the fact that Medicare Part B payments for ambulance transports is growing at a much faster rate than all other types of payments and cited from previous reports on a number of vulnerabilities to fraud for ambulance transport under Medicare. I concluded that these OIG reports suggested continued enforcement interest in emergency transportation and would likely lead to some targeted audits and investigations. This is proving to be the case. The day after submitting this blog, the OIG announced an indictment was unsealed charging Superior EMS Ambulance Company, operating from Huntingdon Valley, PA, its owner and operator with conspiracy to commit Medicare fraud of more than $4.4 million.

Now on October 29, 2013, almost a month to the day after the foregoing case, the DOJ report that the owners and supervisor of Alpha Ambulance Inc. (Alpha) in the Los Angeles-area have pleaded guilty in connection with an ambulance fraud scheme involving more than $49 million in fraudulent claims. Their ambulance transportation company specialized in the provision of non-emergency ambulance transportation services to Medicare-eligible beneficiaries, primarily dialysis patients. The subjects of the case provided non-emergency ambulance transportation services to Medicare beneficiaries whose medical condition at that time did not require those services. The defendants instructed employees to conceal the Medicare beneficiaries’ medical conditions by altering requisite paperwork and creating fraudulent reasons that justified, on paper, the transportation services. Based on these medically unnecessary transportation services, the defendants caused Alpha to submit false and fraudulent claims to Medicare.

There are many other similar cases that have come to light over the last few months. For example, operators of Montgomery County Ambulance Company were charged in Philadelphia with improperly billing Medicare in a $4.4 million dollar fraud scheme unnecessary medical transport of dialysis patients and paying some patients bonuses for cooperating in the scheme. The defendants were paying some dialysis patients bonuses, which would be illegal kickbacks, in order to induce them to ride with Superior because they did not need ambulance transport. In another Philadelphia case, the President and founder of MedEx Ambulance, along with the Vice President and co-owner were sentenced 78 and 60 months respectively in prison for a healthcare fraud scheme. Both had defendant had pleaded guilty to all. As part of the scheme, they transported patients who were able to walk and could travel safely by means other than ambulance and who were not eligible for ambulance transportation under Medicare requirements. The falsified reports made it appear that the patients needed to be transported by ambulance when the defendants and their employees knew otherwise.

Julian Kimble, an owner and operator of four ambulance companies, was sentenced in Houston Texas to 72 months in prison, three years of supervised release and ordered to pay $3,676,587 in restitution. He had pleaded guilty to money laundering and tax evasion in connection with fraudulently billing Medicare for $8.7 million. His scheme involved routinely billing Medicare for basic life support ambulance transports that were not provided, not needed or not ordered by the treating physicians. None of the companies owned licensed ambulance vehicles necessary to provide such transports. Kimble used third-parties and straw owners to register the ambulance companies. He and others often transported multiple beneficiaries at the same time in vans or sedans and fraudulently billed Medicare for allegedly providing individual transports in ambulances under the attention of qualified emergency medical personnel. Medicare beneficiaries received payments in exchange for agreeing to be transported to different facilities around the Houston area. In addition, Kimble overstated the business expenses on his tax returns and failed to file corporate tax returns for Pearl during this time until his assets were about to be seized.

In Indianapolis about the same time an ambulance owner pleaded guilty to Medicare fraud in excess of $559,000. For two years as Kenneth Lock owned and operated Samaritan Ambulance, he transported patients unnecessarily in his vehicles and overcharged Medicare by the thousands, where he frequently bill in excess of $330 for what should have been a $40 billing to Medicare for transport. The higher amount is only allowed for mandatory ambulatory transport.

A Murfreesboro, Tennessee couple was convicted earlier this year for Medicare fraud, wire fraud and aggravated identity theft for activities related to their former business, Murfreesboro Ambulance Service. They submitted fraudulent claims totaling more than $1.6 million to Medicare and Medicaid, through Murfreesboro Ambulance Service, for reimbursement of ambulance transports of patients to and from dialysis treatments. They misrepresented patient transfers on stretchers, when in reality; patients were riding in the front seat or jump seat of the ambulance. The couple also filed claims for individual transports when two patients had been transported simultaneously in one ambulance.

Once again, these are reminders that the annual work plan of the OIG and the resulting reports are telegraph future enforcement actions by the OIG. These fraud cases often include some common elements, including:

  • Recruiting patients who were able to walk and could travel safely by means other than ambulance and as such are not eligible for Medicare ambulance transportation
  • Falsifying reports to make it appear that the patients needed to be transported by
  • Payment of illegal kickbacks to the patients
  • Charging Medicare at a higher rate by mischaracterizing the type of service provided

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2013 Strategic Management Services, LLC. Published with permission.