Hospitals Settle for $8.6M in Kickback & Ambulance Fraud Case

In a case brought to light by three whistleblowers, four Texas-based hospitals were alleged to have been paid a substantial amount of kickbacks from an array of emergency transportation providers in exchange for Medicare and Medicaid referrals. This practice, a direct violation of the Anti-Kickback Statute, resulted in the four hospitals paying $8.6 million to resolve the allegations brought against them.

The four hospitals, which include Bayshore Medical Center, Clear Lake Regional Medical Center, West Houston Medical Center, and East Houston Regional Medical Center, are all directly affiliated with the healthcare giant HCA, who was found in 2002 to have committed the largest healthcare fraud in United States history. Together, they entered into fraudulent relationships with various ambulance companies in order to receive significantly discounted transportation services; in exchange, they offered referrals which sent Medicare and Medicaid beneficiaries directly to the companies that took part in the arrangement. In some cases, the ambulance rides were provided for a mere $25 – a heavily reduced rate from the standard $500 rides these companies generally offer.

Each of these low-cost rides allowed for the hospitals to save such an exorbitant amount of money that they would not outsource transportation to any other ambulance provider; such was the case with one of the whistleblowers, Daniel Block, who owned a local ambulance company and was consistently denied business with any of the medical facilities in question. This fraudulent practice was not only prevalent, but well-known; as explained by Block’s attorney, “Everybody knew if you were an ambulance company in the Houston market and you wanted to survive, you had to play the game and provide free and discounted services to the hospitals in order to get the lucrative government business.” Block’s unwillingness to enter into these dishonest agreements resulted in his business suffering greatly, which led to him filing suit against the group of hospitals alongside two other relators.

The Anti-Kickback Statute clearly states that the exchange of goods, services, or remuneration of any sort in return for referrals to federal healthcare programs is prohibited, as it prevents quality care from being provided to Medicare and Medicaid beneficiaries. By forbidding medical providers from forging relationships in which they benefit monetarily, the Department of Justice aims to protect the integrity of the healthcare system as a whole and ensure that treatment is not being conditionally afforded to patients based on financial premises.

When such “swapping” arrangements occur, allegations are usually brought against the ambulance companies rather than the healthcare institutions; this case is believed to be the second in the nation to be filed this way, following a 2015 settlement involving a skilled nursing facility. The uniqueness of holding the recipient of the kickbacks accountable rather than the financiers clearly demonstrates the DOJ’s diligence to bringing all parties to justice when they engage in illegal activity.

Whistleblower Justice Network Can Help You

Whistleblower Justice Network works alongside whistleblowers who bring forward information about scandals which defraud the federal healthcare programs that serve our nation’s ill and ailing. Together, we aim to bring to justice those who take advantage of these programs in the pursuit of personal and financial gain.

If you have meaningful information regarding hospital or ambulance fraud that you believe is in violation of the False Claims Act, Whistleblower Justice Network can help. Working alongside world-class legal counsel, we will ensure you are protected to the fullest extent of the law and that you receive credit for the information you bring to the U.S. government. Partnering with whistleblowers is all we do. Visit us at, or call us at 844-WJN-4ALL.