In The News

Ambulance Company Agrees to Pay $12.7 Million to Resolve False Claims Act Allegations Involving Inflated Medicare Claims and Unnecessary Transport Services

The government’s crackdown on fraud and abuse sometimes leads investigators to defendants who are allegedly more interested in profits than they are with patient health. This was the case when the Department of Justice announced earlier this month that Medstar Ambulance Inc and its four subsidiary companies including its two owners – Nicholas and Gregory Melehov – agreed to pay $12.7 million to resolve allegations that they knowingly violated the False Claims Act. “We expect those who participate in the Medicare program to provide services, including ambulance services, based on the medical needs of patients rather than their desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that those who abuse the Medicare program will be held accountable for their actions.”


The government alleges that from January 1, 2011 through Oct. 31. 2014, Medstar violated the False Claims Act by routinely billing for services that did not qualify for reimbursement because the transports were medically unnecessary. This meant that Medstar could bill for higher levels of services than were required by patient conditions and for higher levels of services than were actually provided. “While we recognize that Medicare does and should pay for medically necessary ambulance services, it is our job to ensure that ambulance providers do not take advantage of the system or the patients. This settlement is part of the office’s ongoing effort to eradicate health care fraud, and return money to the taxpayers,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts. As part of the settlement, Medstar agreed to enter into a corporate integrity agreement (CIA) with the U.S. Department of Health and Human Services (HHS).


The settlement came about as the result of a lawsuit that was filed by Dale Meehan, a former employee in Medstar’s billing office, under the whistleblower provisions of the False Claims Act. These provisions allow private individuals to sue on behalf of the government in cases of fraud and to then share in the proceeds of any such settlement or judgment. Meehan is scheduled to receive approximately $3.5 million.


The settlement demonstrates the government’s ongoing efforts at combating health care fraud via its Health Care Fraud Prevention and Enforcement Team (HEAT) which was announced back in May of 2009 by the Attorney General and the Secretary of Health and Human Services. The result is that since January 2009 the Justice Department has recovered more than $31.4 billion through False Claims Act cases. If your firm is accused of False Claims Act violations it is advised that you contact a False Claims Act lawyer. If you have knowledge of potential fraud, waste, abuse and mismanagement you are encouraged to contact the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).