Oklahoma EMSA: Cost Savings in the Books, Kickbacks in the Complaint

In the EMSA Paramedics Plus settlement, Oklahoma’s Emergency Medical Services Authority agreed to pay $300,000 to resolve ambulance contract kickback allegations. Paramedics Plus and the two East Texas Medical Center entities agreed to pay $20,649,000. The government’s case reached into the authority’s accounting entries, vendor bills and contract file.

The Justice Department announced the settlements on August 27, 2018. EMSA is an Oklahoma public trust. According to the government’s complaint, it billed Medicare and Oklahoma Medicaid for services furnished by Paramedics Plus, then used those public funds to pay the operator under the ambulance services contract. The government alleged that payments flowing back to EMSA helped Paramedics Plus keep that contract.

What Are Some Examples of Kickbacks in Healthcare?

Payments to an authority that controls ambulance business can be healthcare kickbacks. The EMSA case alleged a bargain involving returned profits, contractor-paid expenses, gifts and political contributions. The benefit went to the authority or its president, while the contract generated services billed to Medicare and Medicaid.

The Department of Health and Human Services’ Office of Inspector General described this risk in its 2003 ambulance compliance guidance. It told ambulance suppliers not to offer anything of value to cities or other EMS sponsors to secure a contract. It also told sponsors not to demand inflated payments for access to patients, including access through government 911 dispatch systems. Control over dispatch or a contract can carry the power to direct health care business.

The recipient helps explain the scheme. In the separate Brotherly Love Ambulance case, the indictment charged Medicare beneficiaries with accepting cash, checks or other valuable items to ride with the company or recruit other patients. Those patient kickbacks targeted individual rides and referrals. The EMSA allegations targeted the authority controlling the operator’s contract.

The Profit Cap and the Contract Extension

The government’s complaint described a secret profit-cap arrangement offered with the original 1998 bid. East Texas Medical Center and its officers allegedly agreed that Paramedics Plus would return profits above a 12% cap to EMSA.

The complaint alleged that more than $20 million went back to the authority from 2006 through 2013 under an arrangement designed to keep the contract. EMSA later settled for $300,000, based on its ability to pay. We see a striking gap between the payments alleged and what the authority agreed to pay.

The next bidding opportunity exposed what the arrangement allegedly bought. In 2007, EMSA had prepared a request for proposals. The government alleged that Paramedics Plus employees met privately with EMSA’s president to prevent it from being issued. They offered lower contract rates and a reduced cap of 10.5%, leaving more money for EMSA.

According to the complaint, the company’s confidential presentation offered improved cash flow in exchange for an extension negotiated with Paramedics Plus alone. Its menu included different cap percentages and cash-payment options. The complaint said the presentation omitted quality-of-care measures, including response times and performance statistics. It alleged that the request for proposals never went out for public bid, denying competitors their opportunity to compete.

We see the problem in that proposed exchange: the authority choosing the operator was being offered more money to keep the choice to itself. The alleged payment arrangement reached directly into the decision about whether anyone else could bid.

The complaint alleged that the payments stopped in 2013, when the operator learned EMSA would award the contract to American Medical Response. Employees also stopped tracking the cap payments. The government tied the end of the money to the end of the business.

What the Payment Promises Meant for Operations

The complaint also alleged that executives protected the payments at the expense of spending inside the ambulance operation. It described withheld retention bonuses despite concerns that losing paramedics would hurt performance. It also described a halt to spending, including scheduler training, while an executive tried to meet a promised payment to EMSA’s president.

That puts the allegation inside the workplace. A scheduler or operations manager may see the spending freeze, while the authority’s finance staff see the payment it helped fund. The government’s account connected those decisions. Money promised to the contract source was allegedly money withheld from training and retaining the people delivering the service.

Where the Payments Went in EMSA’s Books

The government alleged that EMSA recorded a reduced cost of service while leaving the payments it received out of its accounts. According to the complaint, EMSA subtracted those payments from what it paid Paramedics Plus and booked the reduced amount as “cost savings.” A tidy label. The government alleged that this accounting concealed the separate flow of money back to the authority.

The complaint also alleged that Paramedics Plus paid EMSA contractors directly, bypassing the authority’s public-bidding obligations and required board approval for certain large expenditures. The complaint said those vendor payments were not itemized in EMSA’s audited financial records. A contractor’s invoice could therefore show spending that the authority’s own audited accounts did not identify.

The written contract allegedly told another story again. The government said four modifications between 2008 and 2013 omitted the payment arrangement and expressly denied unwritten oral agreements. For an authority insider, the point is concrete: the contract terms, board approvals, vendor bills and ledger entries can describe different versions of the same relationship.

A Letter Added Before the Auditor Arrived

The government alleged that an undated letter was placed in the contract file before an auditor’s arrival to make the payment terms appear documented. The letter purported to confirm an existing agreement, including how and when payments would be calculated and made. It also claimed there was an annual audit used to calculate the payments. According to the complaint, that claim was false.

The government’s description of the file itself is blunt:

The alleged deception depended on where the letter sat among older contract documents. We would want to understand when that letter appeared, who supplied it and how its account compared with the earlier correspondence. The history of a document can matter as much as the terms printed on it.

The Former EMSA Executive’s Gifts and Political Contributions

EMSA’s former president and CEO separately agreed to pay $80,000 to the United States and Oklahoma. The Justice Department said he allegedly received gifts and directed Paramedics Plus to make political contributions to local Oklahoma politicians, something EMSA could not do on its own.

The government’s complaint gives those allegations texture. It described gifts of steaks that were not disclosed to the board, the public or the Medicare and Oklahoma Medicaid programs. It also described spa expenses requested by the president and charged against the amount the operator would otherwise return to EMSA.

The political contributions allegedly used the same accounting route. The complaint described donation requests passing through the president to the operator, then quoted the operator’s own documents:

The alleged arrangement gave the public authority access to political spending through its private contractor. We see why the rebate accounting matters: the same pool of money could pay an authority expense, a personal benefit or a requested campaign contribution. The invoice label alone would tell very little of that story.

What the Separate Settlements Resolved

The Justice Department announced settlements totaling over $21 million. Two other public ambulance authorities also settled allegations in the same whistleblower case.

The authority and its former executive settled separately from the operator. Like EMSA’s payment, the executive’s settlement reflected his ability to pay.

The whistleblower was Paramedics Plus’s chief operating officer overseeing the EMSA contract. The United States joined part of the case.

The operator’s name also changed. Paramedics Plus was acquired by A&M Capital Partners in March 2018 and rebranded as PatientCare Logistics Solutions.

What Evidence Is Needed to Report Fraud?

In an ambulance contract kickback case, we look for what connects the contract decision, the benefit and the claims paid by government programs. Here, the government’s complaint connected a withheld solicitation, renewal proposals, direct vendor payments, accounting entries and an audit-file letter to the ambulance contract and EMSA’s Medicare and Medicaid billing.

An authority employee may know what reached the board. An operator employee may know what was promised privately or why a vendor bill was paid. A finance employee may recognize how the payment was recorded. We work with those different views to test the relationship between the money and the business it allegedly secured, and examine run-report evidence wherever the account of the transport is also in question.

What Is the Reward for Uncovering Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In this case, the Justice Department announced that the whistleblower would receive over $4.9 million as his share of the settlements.

EMSA’s Separate Credential Settlement

On April 14, 2021, EMSA agreed to pay $250,148 after disclosing conduct to HHS-OIG. The agency’s credential settlement notice says EMSA allegedly submitted claims for ambulance transports furnished by an unlicensed individual. This was a separate Civil Monetary Penalties Law resolution concerning who furnished the transports.

You Know What the Contract File Leaves Out

If you know who approved the payment, supplied the letter or directed the contractor’s spending, speak with our whistleblower experts about the payments you saw. We build the case with you and bring in healthcare fraud whistleblower lawyers who understand public ambulance contracts and referral payments. We stay alongside you from the first conversation through building your strongest ambulance fraud whistleblower case.