National Care EMS: The Brothers’ Ambulance Swapping Settlements

The National Care EMS fraud settlement called for more than $245,000 from two owners to resolve allegations of ambulance swapping: free or heavily discounted facility trips exchanged for lucrative Medicare and Medicaid referrals. The government’s case concerned a Houston-area ambulance business and a successor using the same name. For someone who knew the facility pricing, the point is the exchange: what the hospital or nursing facility saved on its own transport bill, and what business the ambulance operator expected in return. The Justice Department’s January 27, 2016 announcement described settlements with brothers who owned the former and successor operations.

Two National Care EMS Operations, Separate Payments

The former National Care EMS business had closed by the announcement. Its successor also operated as National Care EMS, under the former owner’s brother. The government identified each owner’s payment separately.

The Former Owner’s Settlement

The former owner agreed to pay $125,000 to resolve swapping allegations against him and the company. The government alleged that he and National Care EMS provided discounted or free ambulance transports to nursing facilities and hospitals in return for their referrals of other Medicare and Medicaid business.

The discount was the alleged benefit to the facility. The referrals were what the ambulance company allegedly bought with it. That relationship between the price and the promised business is the center of the case.

The Successor Owner’s Payment

The brother who owned and operated the successor National Care EMS agreed to pay $120,000 toward the settlement. Texas was allocated approximately $21,000 of the settlement because the state had funded some of the Medicaid claims at issue.

What Are Some Examples of Kickbacks in Healthcare?

Free or heavily discounted ambulance trips for a hospital or nursing facility, offered in exchange for Medicare and Medicaid referrals, are the alleged health care kickbacks in the National Care EMS case. The Justice Department described the exchange under the Anti-Kickback Statute. The benefit takes the form of a smaller bill for the facility.

The industry’s payment split explains the attraction. A nursing facility pays for some transports from its own bundled payment. Other trips can be billed separately to Medicare or Medicaid by the ambulance supplier. The facility can direct that business. One relationship therefore gives the facility control over work it pays for and work somebody else pays for.

The Department of Health and Human Services’ Office of Inspector General explained the incentive in its 1999 ambulance advisory opinion. The nursing facility wants to reduce its costs, while the ambulance company wants access to separately paid federal-program business. The Inspector General’s office said Medicare and Medicaid may effectively subsidize the facility’s discounted rates. We see the absurdity in calling that a saving: the facility gets the bargain, while the public programs supply the business that makes it worthwhile.

The Inspector General’s office examined whether the discount made commercial sense without the other business. It identified below-cost prices and prices unavailable to a comparable buyer without federal referrals as particularly suspect. That comparison reaches beyond the percentage printed on a rate sheet. It asks what the seller expects to receive in return.

The same field also has ambulance patient kickbacks, where benefits go to patients to induce them to ride. In the National Care allegation, the bargain ran through the institutions controlling referrals.

The Houston Hospitals’ Separate Swapping Settlement

Four Houston-area hospitals affiliated with Hospital Corporation of America agreed to pay $8.6 million in a separate ambulance swapping settlement announced on October 4, 2017. The Justice Department’s hospital announcement described allegations that free or heavily discounted ambulance transports bought referrals of other lucrative Medicare and Medicaid business. The government said the hospitals would otherwise have paid significantly higher rates for those transports.

The hospital case shows the receiving side of the same kind of bargain. The institution saves money on transports it would otherwise have to fund, while its referrals generate business for the ambulance supplier. Three whistleblowers brought two False Claims Act lawsuits behind the hospital settlement.

For a facility employee, the purchasing decision matters as much as the ambulance company’s bill. The Inspector General’s office made the point in the National Care announcement that both sides of a swapping arrangement can be held responsible, including the institution that directs patients but does not bill Medicare or Medicaid for their ambulance rides. In a separate Southern California complaint against Pacific Ambulance, a competitor alleged that higher Medicare referral volume allowed lower prices for facility-paid transports.

What Is Considered Medically Necessary for an Ambulance?

Medical necessity for Medicare ambulance coverage turns on whether the patient’s condition makes other transportation unsafe. The condition must support both the ambulance ride and the level of service billed. The Medicare Benefit Policy Manual also explains that a physician’s order alone cannot settle whether the ride was medically necessary.

The Inspector General’s advisory opinion identified an incentive to increase utilization inappropriately or use abusive billing to recoup losses on discounted facility work. That incentive connects the pricing arrangement to the clinical paperwork behind the claims.

The crew’s account of the patient’s condition belongs in the transport record. Changes to that account for billing concern what happened on the trip. The physician certification statement concerns the medical need certified for the transport. We examine those documents alongside the pricing and referral decisions, so the business explanation and the patient account can be considered together.

What Evidence Is Needed to Report Fraud?

For an ambulance swapping concern, we work with you to connect the facility’s price to the federal-program business the supplier expected in return. Which part you know is the starting point for our conversation.

The Inspector General’s 2003 ambulance compliance guidance described facilities that purchase private-pay or Part A services while referring Part B or Medicaid patients. It identified an explicit or implicit link between the facility-paid price and federal referrals as the kickback concern. An unwritten understanding can therefore be central to the commercial story an employee or competitor brings us.

Someone who negotiated the facility rate and someone who handled the claims may see different parts of the same arrangement. Our job is to build a case that explains how those parts fit.

Do You Get Money for Reporting Medicaid Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For someone who knows an ambulance pricing or referral arrangement, we assess how that knowledge could support a whistleblower case. Start with our whistleblower experts if you know how a facility discount was tied to patient referrals.

You Know What the Facility Was Offered

If you knew the National Care EMS pricing or see the same exchange at another operator, talk with our whistleblower experts about the bargain behind the referrals. We build your strongest ambulance whistleblower case with you, bring in ambulance fraud whistleblower lawyers who know facility contracting and Medicare billing, and stay beside you through the pursuit of a recovery.