Ambulance fraud is a serious problem that costs Medicare millions every year. In 2012, Medicare paid out over $5 billion to ambulance companies, which is more than was spent on cancer doctors. Both the Justice Department and the Centers for Medicare and Medicaid have singled out the ambulance industry as an area where Medicare fraud is rampant.
In 2011, Brotherly Love Ambulance Inc. was one of many companies shut down by the feds over allegations of ambulance fraud. When the company was forced to close its doors for good, the owner’s son, Bassem Kuran, opened another ambulance company called VIP Ambulance Inc.
The move from Brotherly Love to VIP Ambulance is not uncommon in the ambulance transportation industry. But moves like this have become a thorn in the side of regulators trying to weed out corrupt ambulance companies. Officials liken this to playing a game of ‘whack-a-mole,’ where the feds successfully shut down a fraudulent ambulance company only to have another company—commonly started by a relative or friend of the owner/operator of the fraudulent company—open under a new name.
In the case of VIP Ambulance, Kuran picked up right where his mother left off with Brotherly Love. But this month, he will be arraigned for making false statements in connection with a health care matter.
How has the government cracked down on perpetrators like Kuran? Officials decided to take a new approach, limiting the number of new ambulance companies in cities where ambulance fraud was running rampant, and forcing them to receive prior approval for repetitive non-emergency transport.
The New Approach to Combating Ambulance Fraud
Starting in 2013, federal officials decided that things had to change if they were going to stop, or even slow down ambulance fraud. With new ambulance companies like VIP Ambulance constantly popping up after investigations shut down their predecessors, the government decided to stop approving new ambulance companies in areas plagued by ambulance fraud. After the tactic was first tried in two metropolitan cities, it slowly spread to other parts of the country.
The impact of this new approach has been significant in areas like Southeastern Pennsylvania, where last year Medicare only spent $12.7 million on basic ambulance services, down from $55.4 million in 2010. In addition to restricting new ambulance companies from being paid by Medicare, officials also require all ambulance companies in Southeastern Pennsylvania to receive prior authorization on all repetitive non-emergency trips, like for dialysis treatment, for example.
According to the Pennsylvania Department of Health, 83 ambulance companies have been shut down since the beginning of 2014 – more than 25 percent of all ambulance companies operating in Southeastern Pennsylvania. The area has also seen 30 criminal convictions within the last five years, leading to restitution orders totaling $22 million and an aggregate of 82 years of jail time handed out to perpetrators.
The type of ambulance fraud that led to these criminal convictions centered on Medicare beneficiaries who needed transport for dialysis treatment three times per week. Ron Kerr, assistant special agent in charge of the HHS Office of Inspector General in Southeastern Pennsylvania, says a single patient requiring this type of transport could fetch an ambulance company $67,000 per year. These patients, according to Kerr, are viewed as assets by criminals.
Under Medicare rules, very few patients actually qualify for ambulance transport to and from dialysis treatment, as it has to be considered medically necessary (i.e. there is no other way to safely move the patient). Prior to the new tactics to combat ambulance fraud, ambulance companies would simply bill Medicare, pretending to have physicians certifying the medical necessity. Medicare contractors didn’t check to make sure these trips had proper certification until later. Some ambulance companies would go so far as to pay patients as much as $500 per month just so they could bill Medicare for transportation to dialysis treatment centers (Medicare pays up to $380 each round trip, including mileage). In reality, many of the patients weren’t even transported in an ambulance – they were driven in a car or they drove themselves for treatment.
Are We Making Serious Progress Rooting Out Ambulance Fraud?
According to the Philadelphia Inquirer, Medicare data suggests that we are making progress in slowing ambulance fraud. At present, there are three states that now require prior approval for repetitive non-emergency transport – Pennsylvania, New Jersey, and South Carolina. All have seen dramatic reductions in their monthly costs for repetitive non-emergency ambulance transportation.
However, there are still a large number of ambulance companies that rely heavily on repeat Medicare business for non-emergency trips. Which begs the question: have these companies just changed their schemes enough to avoid detection? We will have to wait and see in the coming years whether the downward trend in ambulance fraud continues.
In the meantime, if you have knowledge of any ambulance companies fraudulently overbilling Medicare for transportation, it is in your best interest to speak with an experienced whistleblower attorney as soon as possible. By coming forward, you may not only be protecting the integrity of a vitally important government health care program, but you may also be entitled to a reward if your case is successful.