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Ambulance company whistleblower awarded $1.7 million

A whistleblower from Southern California who complained about five ambulance companies paying kickbacks for referrals will collect more than $1.7 million in a False Claims Act settlement.

Kelvin Carlisle, a competitor in the ambulance services business in San Diego, Orange, and Los Angeles County, filed a qui tam lawsuit with allegations of illegal kickbacks. The DOJ took over the suit.

The settling defendants together will pay more than $11.5 million to resolve the allegations.

They include two San Diego-based companies, Balboa Ambulance Service and E.R. Ambulance, and three Orange County companies, Care Ambulance Service, Pacific Ambulance, and Bowers Companies. The latter two companies were acquired by Rural/Metro Corp. after the alleged misconduct occurred.

The defendants allegedly were part of so-called “swapping” kickback schemes. Swapping involves providing deeply discounted and often below-cost services to hospitals or skilled nursing facilities in exchange for exclusive rights to more expensive Medicare patient referrals.

The federal Anti-Kickback Statute prohibits payment arrangements intended to influence health care referrals covered by federal programs, including Medicare.

Prosecutors said the alleged Southern California swapping scheme resulted in false claims for Medicare transports.

Private parties can sue on behalf of the government through the qui tam provisions of the False Claims Act and collect a portion of government’s recoveries.

“Today’s settlements resolve a thorough investigation of the practices by ambulance companies that offered significant discount services to facilities in exchange for patient referrals,” said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (OIG) Los Angeles Region.

Since January 2009, the DOJ has recovered more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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