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TX Fire Officials, Billing Service Accused of Fraud

TX Fire Officials, Billing Service Accused of Fraud

Dallas Fire-Rescue paramedics Oscar Deluna (left) and Jonathan Robinson swept up after a crash at Interstate 35E and Continental Avenue on Wednesday. A lawsuit focuses on the rate the city bills for ambulance services.

Dallas Morning News via YellowBrix

July 01, 2010

DALLAS – The cash-strapped city of Dallas could owe the federal government $40 million or more if a whistle-blower lawsuit’s allegations of fraud involving billing for ambulance services prove true.

While the city says the specific amount it may owe the government has not been determined, it acknowledges that it is “fully cooperating” with federal authorities and will “move forward aggressively” to make sure any overpayment amounts are repaid.

The previously sealed lawsuit was filed earlier this year by Douglas Moore, a former assistant city auditor. It alleges that Dallas-Fire Rescue officials and the city’s longtime ambulance service billing vendor knowingly collected fraudulent overpayments from Medicare and Medicaid.

According to the suit, the city and Southwest General Services of Dallas billed the government for “Advanced Life Support (ALS) level ambulance services for all 911 calls, regardless of whether the beneficiary’s condition required that level of service.”

The suit alleges that 100 percent of the city’s ambulance calls were billed at the advanced rate – which is more expensive than the Basic Life Support (BLS) level – even though the city’s own documents showed that at least 40 percent of its transport calls should have been billed at the lower cost.

Dallas Fire-Rescue Chief Eddie Burns acknowledged Wednesday that he is aware of the suit but said that there is little he can say about it.

07-01-2010

Dallas Fire-Rescue paramedics bring a patient to the ER at Baylor University Medical Center. The city says it's cooperating with authorities over ambulance billing questions.

“It’s a legal matter and they’re going to work through it as they would any legal matter,” Burns said. “Both legal teams, the Department of Justice and our legal folks, are trying to seek resolution.”

The city’s one-page statement, first released late Tuesday, says that Southwest General Services has been a vendor for the past 16 years and that until recently, the government had never indicated that the company, which handles ambulance billing services, had done anything improper.

The statement also said that the city has told federal authorities how much money it believes it owes, but said that in any event, the amount of any overpayments is “believed to be a small percentage of amounts paid under this program to Medicare and Medicaid to the City.”

According to the lawsuit and his attorney, Moore learned of the alleged overpayments last year while doing an audit of ambulance billing services. At an April 8, 2009, meeting, the suit says, he heard a Dallas Fire-Rescue captain say that every ambulance call is billed at the advanced level. A document later produced by another captain showed that 60 percent of the department’s ambulance calls are at the advanced level.

A patient requiring advanced services could, for example, need an ambulance equipped to treat a gunshot wound, while lower-level services might be for anything as simple as abdominal pain. The lawsuit says that when Moore met with Scott Fothergill, chief operating officer of Southwest General Services, Fothergill told him that the criteria for billing at the advanced rate was that the ambulance have the proper equipment and staff available for use. “The patient’s condition is immaterial,” the lawsuit states.

Late Wednesday, the city issued an expanded statement on the lawsuit in which it appeared to support Fothergill.

“Officials in the city’s fire-rescue department believed that the city could lawfully charge the federal government for advanced life support ambulance services in all cases because the city’s equipment and training meet the standards for providing advanced life support ambulance services,” the revised statement said. “Accordingly, neither the city nor any city official intended to defraud the Federal government.”

But according to the lawsuit, the position of the city and Southwest General directly contradicts Medicare and Medicaid regulations, which say that the patient’s condition – “not the type of ambulance or the training of the staff” – should determine the level of service that is provided and billed.

In addition, the city’s position that it did not intend to defraud the government is irrelevant, said David Haron, Moore’s Michigan-based attorney. The federal False Claim Act, the standard under which Moore’s suit is filed, doesn’t take intent into account.

“The statute doesn’t require intent; it requires knowing,” Haron said. “You have to know what the statutes are or intentionally disregard them. They knew.”

In the whistle-blower suit, Moore, who sued on behalf of the federal and state governments, contends that the excess payments from Medicare could have netted the city $116,994 a month.

According to Haron, the statute of limitation for federal false claims filing is six years and possibly as much as 10 years. The law allows the excess payments to be tripled when determining damages, which could run the total amount the city might owe to more than $42 million.

The city’s revised statement contends that city auditor Craig D. Kinton was already auditing Dallas’ emergency services billing procedures before it was notified of the government’s intervention in the matter, which followed the filing of the lawsuit. The city says Kinton’s report would have been made public.“However, before the city auditor could complete his audit and issue his report, one of the very auditors working on the city auditor’s audit filed this lawsuit in the name of the United States, alleging that the city and SGS were filing false claims with the Federal government,” the statement says.

“That former city employee now seeks a large reward for making that report to the federal government. The City feels strongly that federal law was not intended to allow government auditors to personally benefit by obtaining large rewards when they were being paid by the taxpayers to find and correct those exact errors for which they are seeking personal reward.”

But Haron says that the only reason Moore went to federal and state authorities is because his complaints to his supervisors about the alleged overpayments were ignored.

“One of the problems is when people knee-jerk fire a whistle-blower, or someone who brings fraud to an employee, they really damage themselves again,” Haron said. “You do your job and you care about the company and then … you’re told to shut up or get fired.”

Moore was fired Dec. 2, eight days after city officials learned that he had gone above their heads with his allegations, and less than a month after Kinton gave him a strong job evaluation. Haron said Moore, a former Hurst police officer hired by Dallas in February 2009, wants his job back with back pay.

In addition to asking for damages equal to triple the amount of overpayments, the lawsuit also asks for penalties of up to $11,000 for each false claim submitted. Any damages and penalties would be paid to the federal government, but Haron said that by law, Moore would be eligible to receive 25 percent to 30 percent of any recovered amount.


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