U.S. Department of Justice Uses the False Claims Act to Recover $2.85 Million from New York City Ambulance Companies for Medicare Fraud.
On June 4, 2010 the U.S. Department of Justice announced the recovery of $2.85 million dollars from three New York City ambulance companies – SEZ Metro Corp., SEZ North Corp. and Big Apple Ambulance Service Inc. – to resolve false claims made to Medicare under the False Claims Act (“FCA”). The FCA gives the federal government (as well as private citizens) a cause of action against those who submit false claims to the government by and through its various agencies and/or departments. In this case, the Justice Department alleges that the ambulance companies used, or caused the use of, false records to appeal a large scale Medicare program refund demand.
Under Medicare rules, ambulance companies can lawfully bill the Medicare program for non-emergency transports only if a patient cannot be transported by any other means. Here, Medicare audited the ambulance companies past billings – audits that can go as far back as seven years under some circumstances – and concluded that the ambulance companies had charged Medicare tens of millions of dollars for ambulance trips that did not meet the standards required by the Medicare rules. When Medicare demanded a refund the ambulance companies proceeded by disputing Medicare’s decision through the Medicare appeals process and, in support of their appeals, submitted false claims by causing hundreds of forged letters purported to come from health care providers that attested to the need and medical necessity of the non-emergency ambulance transports.
This action was originally filed by a whistleblower – a private citizen who was the former financial officer for one of the ambulance companies – under the qui tam provision of the false claims act. The qui tam provisions permit private citizens to file suit on behalf of the United States and share in any recovery. Here, the former financial officer’s share of the settlement will be $618,450.00.
It is unclear whether the original Medicare audit that prompted this case was a product of Medicare’s recently instituted Recovery Audit Contractor (RAC) program.
