Florida Whistleblower Healthcare Fraud Lawsuit Settles for $7.5 Million

Jacksonville, FLThe Feds may have dropped their healthcare fraud lawsuit, but the decision does not minimize allegations of fraudulent billing and other practices against nine hospitals in the state of Florida together with an ambulance service provider. The defendants in the False Claims Act case will pay a combined $7.5 million to settle allegations brought following an investigation by the US Department of Justice (DOJ), the Federal Bureau of Investigation (FBI) and other agencies.

The healthcare fraud whistleblower lawsuit was originally brought by plaintiff Shawn Pelletier, a former employee of Century Ambulance Service Inc. He will collect in excess of $1.2 million for his role in bringing the whistleblower lawsuit.

Pelletier’s lawsuit under the False Claims Act alleges that nine hospitals routinely ordered ambulance transfers via Century that were medically suspect, costing Medicare, Medicaid, Tricare and the Federal Employees Health Benefits Program millions in unnecessary billings.

According to court documents, the nine hospitals in and around the Jacksonville area routinely ordered life support ambulance transfers that have since been deemed medically unnecessary. In association with this alleged healthcare fraud, Century was accused of knowingly up-coding claims from basic to advanced life support. Century was also accused of transporting patients unnecessarily and needlessly driving patients to their own homes as if it were an emergency.

“Hospital staff that certify the medical need for services when they are, in fact, not medically necessary fail in their role as gatekeepers of valuable taxpayer-funded health care programs,” Gregory E. Demske, chief counsel to the US Department of Health and Human Services inspector general, said of the allegations believed to have been committed between January 2009 and April 2014. “Ambulance companies must ensure that services billed to federal health care programs are medically necessary and reasonable,” he said, in a statement. “Billing Medicare and Medicaid for transports that amount to taxpayer-funded taxi services will not be tolerated.”

The multi-year investigation involved a host of agencies: among them the FBI, the Office of Personnel Management, the Defense Criminal Investigative Service, DHHS Office of Inspector General, the Office of Audit Services, the Florida Medicaid Fraud Control Unit, the Defense Health Agency Program Integrity Office and Assistant US Attorney Jason Mehta.

According to the US Department of Justice, Baptist Health, which owns four Jacksonville hospitals, will pay $2.89 million; Memorial Hospital, Specialty Hospital, Lake City Medical Center and Orange Park Medical Center will pay a combined $2.37 million; University of Florida Health Jacksonville will pay $1 million; and Century will pay $1.25 million.

Yet another potential defendant, Liberty Ambulance, will likely be a target of the DOJ in a civil complaint. The Feds were not successful in reaching a settlement with Liberty over allegations Liberty knowingly submitted claims for reimbursement that were not medically necessary.

The healthcare fraud case is United States of America et al v. Century Ambulance Service Inc. et al., Case No. 3:11-cv-00911, in the US District Court for the Middle District of Florida.