Ambulance Company Agrees to Pay $5,426,000 to Settle Fraudulent Billing of Medicare
Improper Billing Covers a Seven-Year Period for Ambulance Services in Multiple States, Including Kentucky, Alabama, and Tennessee

LOUISVILLE—United States Attorney for the Western District of Kentucky, David J. Hale; along with U.S. Attorney Joyce White Vance for the Northern District of Alabama; and the Health and Human Services Inspector General today announced the settlement agreement and scheduled voluntary payment of $5,426,000 by Rural/Metro Corporation, Rural/Metro of Central Alabama Inc., and Mercury Ambulance Service Inc., doing business as Rural/Metro Ambulance, with the United States to resolve claims that the ambulance company improperly billed Medicare.

“Our office led an extensive investigation of conduct occurring in Kentucky, and we are pleased with the outcome announced today,” stated David J. Hale, U.S. Attorney for the Western District of Kentucky. “Coordinating our efforts with federal and state law enforcement partners in Kentucky and Alabama, we avoided duplication of efforts and contributed significantly to today’s recovery of taxpayer dollars.”

The United States Attorney’s Office for the Western District of Kentucky, in conjunction with several federal and state law enforcement agencies, investigated conduct occurring in Kentucky and worked with the United States Attorney’s Office in the Northern District of Alabama to include the Kentucky-based claims in the Alabama lawsuit.

The United States alleges that the defendants created and submitted false and fraudulent records and claims for payment by governmental healthcare providers. According to the settlement agreement, from the period of January 1, 2008 to December 31, 2010, Rural/Metro of Central Alabama (RMCA) and Rural Metro/Central Tennessee (RMCT) submitted reimbursement claims to Medicare for non-emergency ambulance transportation services for Medicare beneficiaries to receive dialysis services, which did not meet Medicare criteria.

The United States further contends, from the period of January 1, 2008 to August 31, 2011, Mercury submitted reimbursement claims to Medicare for non-emergency ambulance transportation services, provided by Mercury in Louisville, Kentucky, for Medicare beneficiaries to receive dialysis services, which did not meet Medicare criteria. Medicare’s regulations allow the reimbursement of certain ambulance services only if other means of transport are not advisable for medical reasons. This generally means that ambulance transportation is reimbursable only if the beneficiary is bed-confined or if the beneficiary’s transportation by ambulance is medically required.

The United States partially intervened in this lawsuit that began as a federal whistleblower action against the defendants, brought by Carl Crawly, a former employee of Rural/Metro of Central Alabama Inc. According to the terms of the settlement agreement, Crawley will receive $1,030,940 of the settlement. Crawly originally filed the qui tam lawsuit on September 10, 2009, in U.S. District Court for the Northern District of Alabama. The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that defendants submitted false claims for government funds. The private plaintiffs are called “relators” and, under the statute, are entitled to receive a share of any funds recovered through the lawsuit. The False Claims Act permits the government to recover three times its damages, plus civil penalties.

In the complaint, Crawley alleged that Rural/Metro Corporation and Rural/Metro of Central Alabama Inc. violated the False Claims Act by submitting false claims for ambulance services that were never provided and were medically unnecessary. The United States filed a motion to partially intervene in this action on March 11, 2011. The United States’ motion was granted on March 14, 2011. The United States then filed a Complaint-in-Intervention alleging that from September 11, 2003 to the present, the defendants submitted false claims for transportation services provided to dialysis patients in several states, including Alabama and Kentucky. The allegations in the complaint did not relate to the quality of the care provided by the defendants during transportation.

The settlement agreement is neither an admission of liability by the defendants nor intended to be interpreted as such in any subsequent proceedings, nor is it a concession by the United States that its claims are not well-founded. This agreement relates to Medicare claims only and does not limit the Commonwealth of Kentucky from pursuing its own investigation into claims made by the defendant to the Medicaid program.

Rural/Metro Corporation, through its subsidiaries and affiliates, provides ambulance transportation services to Medicare beneficiaries in approximately 20 states, including Kentucky.

According to the terms of the settlement agreement, payment of the $5,426,000 must be made by electronic transfer no later than five business days after the settlement agreement is fully signed.

This case was prosecuted by the United States Attorney’s Office for the Northern District of Alabama and was investigated by the United States Attorney’s Office for the Western District of Kentucky, United States Attorney’s Office for the Northern District of Alabama, the Office of Inspector General of the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, the Medicaid Fraud and Abuse Control Division of the Kentucky Attorney General’s Office, and the Office of Inspector General of the U.S. Railroad Retirement Board.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services, in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.