First Settlement of Its Kind Holds Medical Facility Accountable for AKS Violation

Healthcare Fraud

The emergency transportation industry is well-known for being a hotbed of fraud, especially in cases involving shady alliances made with medical facilities; when it comes to settlements involving these schemes, allegations are generally brought against the ambulance companies themselves rather than their counterparts in the agreement – until now. In what is believed to be the first of its kind, a chain of Texas-based skilled nursing facilities paid a settlement of over $3 million to resolve claims of its involvement in an illicit relationship with ambulance providers, which resulted in several direct violations of the Anti-Kickback Statute.

Regent Management Services, a Galveston-based healthcare company which operates twelve nursing homes, was found to have taken part in an “ambulance swapping” scheme which involved the SNF’s being permitted to receive free or heavily discounted emergency transportation, allowing the facilities to line their pockets with the savings that would have otherwise been paid out. In return for these bargain rides, they would shell out Medicare and Medicaid referrals to the participating ambulance companies; this mutually-beneficial agreement was made possible by Regent’s habitual falsification of documents that certified the medical necessity of these rides, allowing the ambulance providers to bill Medicare and Medicaid alike for higher rates.

The discovery of this co-conspiracy closely follows a 2013 initiative which placed a temporary moratorium that prohibited private ambulance companies from enrolling in government insurance programs, thus preventing them from receiving Medicare or Medicaid reimbursements. This call to action came to fruition after Houston was designated as a Medicare fraud “hotspot,” with Galveston County leading the nation in its number of emergency medical service providers. However, the same restrictions were not placed on the facilities that were engaging in these questionable agreements with the ambulance providers, which oftentimes allowed them to continue their fraudulent practices after Medicare cracked down on their partners in crime.

Leading up to this case, the Department of Justice generally held the party who directly billed Medicare or Medicaid responsible for the scheme in entirety; this shift in perspective, as related to the targeting of the facilities versus the ambulance companies, was intended to send a message that both entities in such swapping arrangements can be held accountable. Though both sides are undeniably at fault, it is vital to the endless battle against healthcare fraud that the tables turn against the medical providers who solicit such agreements in order to dissuade others from taking part in similar dishonest transactions.

Though this kickback scam did not involve the exchange of money, it is just as detrimental to the healthcare system as a whole, and equally just as punishable under the Anti-Kickback Statute. This law was conceived to ensure that medical care is consistently based upon the needs of the patient rather than being tainted by offers which benefit the providers, financially or otherwise. Settlements such as this clearly outline the necessity of such laws, as well as the importance of uncovering these schemes in an effort to safeguard the integrity and efficacy of all federal healthcare programs.

Whistleblower Justice Network Can Help You

Whistleblower Justice Network partners with whistleblowers who choose to expose conspiracies that defraud government healthcare programs; together, we seek to bring those to justice who deliberately rob from the already-limited pool of federal funding intended to help our most vulnerable and ailing citizens.

If you have meaningful information regarding nursing home fraud, ambulance fraud, or any other form of healthcare fraud that you believe violates 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 www.whistleblowerjustice.net, or call us at 844-WJN-4ALL.

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