Catch of the Week — Ambulance Company and Clients Busted for Illegal Kickbacks and Cozy Financial Relationships
Here’s a question you shouldn’t have to ask when you’re in an ambulance: Did a bribe put me here? Our Catch of the Week goes to a $21 million settlement of a case against several ambulance-industry companies for allegedly paying kickbacks to secure lucrative exclusive contracts. Paramedics Plus, the East Texas Medical Center, the Emergency Medical Services Authority (EMSA), and EMSA’s president and CEO Herbert Stephen Williamson were accused in a scheme involving millions of dollars over the years to illegally induce referrals for ambulance services.
The cozy relationship between Paramedics Plus (an affiliate of the medical center) and EMSA (an Oklahoma state public organization) had troubling features. At times, Paramedics Plus bypassed bidding or RFP processes designed to find the best ambulance services by offering to kick back to EMSA revenues exceeding an unwritten “profit cap.” After securing or renewing the contracts, Paramedics Plus made such payments, falsely calling them “rebates.” The receiving public entity’s (EMSA’s) CEO allegedly personally received gifts from Paramedics Plus. He also directed Paramedics Plus to donate to local politicians (which EMSA could not directly do as a public utility), explicitly crediting such payments out of the “profit cap” kickbacks.
The ambulance services contracts were exclusive and therefore very lucrative. As DOJ observes in its press release: “Sophisticated health care companies do not simply give away millions of dollars to referral sources without expected something in exchange.” The services tainted by the kickbacks were, in part, covered by government healthcare programs, including Medicare. CMS will not pay for such kickback-tainted claims, and thus the ambulance companies’ claims for related Medicare payments were wrongful under the False Claims Act.
A whistleblower, former Paramedics Plus employee Dr. Stephen Dean, originally exposed this conduct in a qui tam action he filed as a relator under the False Claims Act. Two public entities (Alameda County and Pinellas EMSA) receiving the alleged kickbacks settled for some $121,000 before the government intervened in Dr. Dean’s case. The current settlement follows DOJ intervention. To resolve this portion of the case, the East Texas Medical Center entities and Paramedics Plus will pay over $20 million, EMSA will pay $300,000, and the former CEO Mr. Williamson will pay $80,000.
Whistleblower Dr. Dean will receive a share of the proceeds – $4.9M – for coming forward with his information.
DOJ’s intervention in this case and the ensuing settlement further the goal of ensuring that health care choices, including the selection of ambulance companies, are made based on patient interests and not a provider’s financial motives.