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Preauthorization programs have ill effects on patients and ambulance providers

N.J. dialysis patients feel impact of programs designed to curb ambulance fraud, while attorneys warn against criminal liability

A Centers for Medicare & Medicaid Services (CMS) preauthorization program designed to weed out fraud and abuse tied to non-emergency ambulance services in three states may be doing more harm than good, according to NJ.com.

The new rules, implemented in December, require ambulance companies in New Jersey, Pennsylvania and South Carolina to acquire preapproval in order to receive payment for non-emergency transportation, a service used by patients with mobility issues to get to and from dialysis, wound care and chemotherapy treatments. But frequent denials of these authorization requests have driven some ambulance companies out of business and left patients struggling to juggle transportation needs. According to Medicare regulations, patients who can be moved using a wheelchair do not qualify for ambulance services.

Three ambulance companies in New Jerseys have closed their doors this year, and many within the industry indicate it's the result of denied authorizations for non-emergency services that the companies had previously billed for, and that made up the bulk of ambulance services, according to the article. Since the new rules took effect, ambulance companies have been denied authorization even if physician documentation supports non-emergency transportation for the patient. Ambulance companies are left chasing additional information from physicians or providing the services hoping that payment will eventually arrive.

"It's really sad right now," William Michael Barbered, owner of the now-defunct United II Care, told NJ.com. "It's become a big mess in the industry."

CMS implemented the program because audits revealed high billing rates in New Jersey, Pennsylvania and South Carolina for non-emergency services. Estimates indicate that ambulance fraud contributes as much as $350 million each year, and scams frequently hone in on dialysis patients that are capable of transporting themselves.

Meanwhile, Health Care Law Today, published by Foley & Lardner LLP, recapped some of the lessons learned from a recent ambulance fraud case that culminated in a seven-year sentence for Wesley Harlan Kingsbury, the owner and manager of Alpha Ambulance in Los Angeles, for fraudulently billing Medicare $5.5 million. Rather than admitting documentation inadequacies to CMS auditors in 2012, Kingsbury and co-conspirators altered records to support their billing practices.

"In sum, the leaders of Alpha Ambulance erred in how they reacted to the audit and the follow up from the audit," authors of the Health Care Law Today article wrote. "If they had been transparent about their documentation problems, they likely would have had to pay monies to the government to address the problem, but might have avoided criminal prosecution."

However, fraud schemes tied to ambulance services continue to roll in. On Thursday, Rostislav Kmet, owner of Philadelphia-based Life Support Corporation, was sentenced to nearly seven years in prison for his role in a scheme in which Medicare paid out nearly $2 million in false claims, according to a statement from the U.S. Attorney's Office in the Eastern District of Pennsylvania. Kmet transported patients who were able to walk and therefore ineligible for ambulance transportation by falsifying reports and paying kickback to patients to convince them to continue using the ambulance services.

For more:
- read the NJ.com article
- here's the Health Care Law Today post
- read the statement from the U.S. Attorney's Office

Related Articles:
Ambulance fraud masterminds brought to justice
Ambulance services contribute to $350 million in fraud annually
CMS launches ambulance precertification program