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Hospitals, ambulance companies share fraud liability burden

As federal prosecutors focus on non-emergency transportation services, hospitals could be targeted for increased "throughput"

Throughout the first half of 2015, a number of fraud cases and investigations have focused on ambulance services, particularly for non-emergency transportation. In some instances, these cases have implications for both ambulance companies as well as hospitals.

In February, ambulance owners in Southern California, Texas and West Virginia came under fire for False Claims Act charges involving non-emergency transportation. Meanwhile, in Jacksonville, Florida, one ambulance company and nine hospitals collectively paid $7.5 million to settle false claims allegations that the providers conspired to provide unnecessary emergency transportation to healthy patients. Some estimates indicate ambulance fraud costs Medicare up to $350 million annually.

Although there has been a rash of activity over the last several months, ambulance fraud has been scrutinized at the federal level for several years, Sean McKenna, a partner at Haynes and Boone LLP in Dallas and co-chair of the firm's Healthcare Practice Group, said in an exclusive interview with FierceHealthPayer: AntiFraud. McKenna previously served as an Assistant U.S. Attorney for the Northern District of Texas and worked at the Office of Counsel to the Inspector General for the Department of Health and Human Services.

"We're seeing a lot of scrutiny because the perception still is that this area is ripe with abuse," said McKenna, pictured right. "Even large companies and chains have settled civilly for upcoding the severity from a BLS [basic life support] to an ALS [advanced life support], or transportation that didn't have the requisite medical necessity documentation."

Focus on non-emergency transportation

Although ambulance fraud cases "run the gamut," according to McKenna, most investigations revolve around unnecessary services and inappropriate billing for non-emergency transportation. 

"They can look at those types of transports and determine, first of all, is this company servicing the non-emergent population, which is a huge red flag," McKenna said.

Ambulance providers are often small and locally run, which can spark a number of potential issues. In some cases, honest providers get ensnared in fraud investigations simply because they are unaware of coding regulations. On the other end of the spectrum, ambulance services require very little infrastructure and expenditure, which can attract owners intent on defrauding Medicare.

"You get some individuals [who] are unsavory and want to turn a profit, so they start directing questionable transports, which is where you see in a lot of criminal cases," McKenna said.