MedStar Ambulance Inc., a large Massachusetts ambulance company, will pay $12,700,000 dollars to settle False Claims Act (“FCA”) allegations brought by a corporate “whistleblower.”
The False Claims Act allows individuals with information about fraud on the government to bring suits on behalf of the United States to recover ill-gotten funds from contractors. If an individual’s suit proves successful, the “whistleblower” is generally entitled to 15-30% of the recovered funds. Congress adopted the law in the 19th century to expose fraud among contractors.
The case leading to MedStar’s settlement, filed by Dale Meehan, a former MedStar “Patient Account Representative” working in Worcester, Massachusetts, alleged various fraudulent schemes the company employed to bilk funds from federal healthcare programs.
In announcing the settlement, a government spokesman said, “Ambulance service companies should be focused on the needs of the patients.” The Department of Health and Human Services Office of Inspector General Special (“HHS OIG”) office and “Agent in Charge” Phillip Coyne led the investigation. Adding, “Billing Medicare for ambulance rides that were unnecessary or at a higher rate than could be medically justified is unacceptable. Together with our law enforcement partners, we will seek out and stop this fraudulent behavior.”
In Meehan’s 2013 complaint, which was “sealed” until the resolution of her case in 2016, she alleged that MedStar fraudulently billed Medicare for ambulance services by mischaracterizing the nature of the services.
Meehan alleged that MedStar frequently billed patient transports as “requiring advanced life support” (“ALS”) to bill Medicare a higher amount. Meehan also alleged MedStar billed Medicare for ambulance transportation services when an ambulance is not medically necessary for patients.
Often, MedStar billed Medicare for ambulance services provided for transportation to patients for services that were not covered by Medicare. The company transported patients from nursing homes to doctors’ offices for “regular” doctor’s appointments, where a van transport could well have been used.
Meehan alleged that MedStar frequently illegally “double-dipped” reimbursements by “double-billing” Medigap and Medicare for the same services. Allegedly, MedStar also “up-coded” transports to be billed as emergency services when the transports were not in fact eligible for “emergency service” reimbursement.
After these problematic procedures and practices were uncovered by Meehan, she immediately brought them to the attention of her supervisor and asked why MedStar billed Medicare for unnecessary and “up-coded” services. Her supervisor told her that this is just “the way MedStar does it and the way [the CEO] has wanted it done.”
MedStar seemed disinterested in correcting the company’s alleged billing errors, and when Meehan attempted to correct the company’s fraudulent billings within the Medicare electronic billing system, her changes were altered by MedStar management.
These fraudulent billing practices resulted in significant over-billing to Medicare and were allegedly purposeful in their design to increase company profits. Meehan contended that the conduct giving rise to her complaint resulted in higher ambulance service costs to Medicare, and in-turn, taxpayers, which occurred from at least 2005 through 2013.
The settlement constitutes a resolution of Meehan’s FCA claims against the company as well as her claims for being “wrongfully terminated” and retaliated against by MedStar for complaining about billing deficiencies and filing an FCA suit.
While the alleged fraud a whistleblower sees may not be as explicit as what Meehan experienced at MedStar, consulting an experienced whistleblower attorney or an attorney who specializes in the False Claims Act will help evaluate and guide a potential whistleblower’s claim.
Whistleblowers who bring qui tam False Claims Act cases against companies that commit fraud against the government stand to not only disrupt immoral practices, but often recover significant financial rewards.