Federal Ambulance Services Fraud Charges
Welcome to the Spodek Law Group. Our intention is to provide you with the truth regarding fraud charges for federal ambulance services—not the pleasant truth that other lawyers give you when they tell you this will all work out, but the truth regarding what happens when federal prosecutors set their sights on your ambulance service business as the next target for prosecution. We defend business owners and executives for federal health care fraud investigations for the ambulance service industry.
Most owners in the ambulance service industry who are being probed are under the same false and dangerous assumption. They think fraud is charging for trips which never occurred. This is absolutely correct. But it doesn't acknowledge the danger which has brought down most ambulance service providers who are being prosecuted by the federal government. The cases which flood the courts are not for imaginary trips. They are for actual trips for which the ambulance service provider was billed as ambulance transport.
The actual exposure comes through medical necessity. You actually carried real patients. Your EMTs actually provided care. The patient actually arrived at their destination safely. But if that patient was able to travel safely through any other mode of transport other than the ambulance, every single one of the transports you billed is a federal felony. The more patients you carried, the more felonies you committed, as far as the federal prosecutors were concerned.
What Federal Prosecutors Actually Look For
This is the catch nobody talks about beforehand. Medicare only pays for ambulance transport if the patient has Medicare Part B and is "bed confined," meaning they are unable to ride in a wheelchair, car, or any type of transportation – public or private – prior to, during, and after transport. They have to be unable to walk throughout the transport process in both directions. Walking to the stretcher invalidates the transport. Patients who can sit upright during transport are unclear on transportation. Those who can exit on their own power are problems in generating paperwork.
Think about that for a moment. If your patient had to walk to the stretcher at the nursing home, your claim is potentially fraudulent. If your patient sat up in the ambulance, your claim is questionable. If your patient could have been transported in a wheelchair van but you billed them in an ambulance because it is what the facility asked, every single one of these transports is a False Claims Act violation, incurring a minimum of $11,000 per violation per claim. That money adds up quickly, especially in terms of looking back at billing history over the course of two or three years.
Federal authorities don't begin a case based on presumption you're innocent. It's estimated that one in five ambulance services in the United States presents "questionable billing" on a regular basis, amounting to a total of $350 million a year, according to CMS. When federal authorities review your company, they feel fraud exists within your billing records. It's their duty to detect, document, and pursue prosecution.
The Department of Justice also has specialized units in the big cities of the country, known as Strike Forces, which specifically prosecute Medicare and Medicaid fraud. These prosecutors are not general prosecutors litigating ambulance disputes in between prosecuting drug prosecutions. These prosecutors specialize in nothing but Medicare and Medicaid fraud and know more about billing practices than most of the billing specialists in the hospital and have heard all defenses that your own lawyer could possibly muster.
The Whistleblower Sitting in Your Office Right Now
OK, so now is where most ambulance service owners entirely fail to appreciate the danger. You would think that federal investigations always begin as a result of government surveillance or Medicare audits. Occasionally they do. But not in most cases of healthcare fraud. Usually, it begins with a single phone call made to a whistleblower tip line—and that tip line call may be made by someone physically sitting in your dispatch office, your billing office, or in your administrative office. It may be someone you pay every two weeks.
The False Claims Act has a provision known as qui tam. This allows any individual with knowledge of fraud to sue on behalf of the federal government. If the federal government then recovers funds because of the litigation, the whistleblower gets between 15 percent and 30 percent of the funds that were recovered. This is not small change for doing the right thing. This is life-changing funds.
Let that register. If your company has billed the Medicare program $3 million over a period of five years, and an employee has grounds to suspect a certain percentage of these statements has been bogus, the reward here isn't a payout the employee would consider trivial. They're talking about an award of $450,000 to $900,000 just for making a phone call. Truthful whistleblowers have recovered more than $75 billion in False Claims Act cases since 1986, while personally pocketing billions.
Your billing clerk, observing patients heading towards ambulances. Your dispatcher, understanding that the patients in those nursing homes always need transport via ambulance, regardless of condition. Your EMT, marking patients as "bed confined" as required on the form. Any one of your employees may very well be punching your retirement card as you read. And you will never know until the FBI arrives.
The search and the inquiry are under seal. The filing of the qui tam suit is under seal in the court system as well. It can take the FBI months or years to examine your files before you realize that you are under scrutiny.
- They have talked to former employees.
- They have subpoenaed your bank statements.
- They have scrutinized billing patterns over the span of your operation.
By the time the FBI rings your doorbell at six in the morning, the government has already gathered the evidence against you. They have already finished the inquiry phase of the suit. They have moved on to the prosecution phase of the suit.
How Real Transports Become Federal Felonies
But here is the part that is not discussed in the legal manuals or on the websites of law firms. There is no need in becoming a defendant for the government by committing actions that look like crimes. Your service involved transporting patients in need of care. Your business hired licensed emergency medical technicians to perform their duties. You maintained compliance with local law and processed payments through proper avenues and collected payments that you were entitled to collect. As far as you were concerned, you were operating a healthcare business.
However, federal prosecutors have a different interpretation in this regard. With regard to offenses under the False Claims Act, guilty intent is determined by whether you "knew or should have known" that there was a falsehood in a claim submitted to government authorities. That's not necessarily guilty intent – it's negligent at best. A billing manager might have had his doubts over whether a patient qualified for ambulance service, and if you put in a claim in such a situation, you might have committed a fraud act in this regard, based on what you should have known rather than what you actually knew.
The Guam Medical Transport Case: Clifford Shoemake and Kimberly Conner managed the transportation services for an ambulance firm serving patients needing dialysis. Those patients authentically needed dialysis. They authentically needed transportation to have access to it. Their transportation services authentically provided the transportation. Their services were real. Their medical need was real. Their transportation need was real. However, they could walk.
They were not "bed-confined" within the legal meaning under Medicare. The prosecution showed that Shoemake and Conner ordered their staff to remove any mentions in internal documents about patients' walking abilities. This was their undoing. Shoemake received a 71-month jail term in federal prison. Conner received a 63-month jail term. The two were also asked to repay $10.8 million in restitution. This is every dollar that Medicare had ever paid them.
It all hinged upon whether or not patients could have been transported in vans rather than ambulances. The transports did occur. Patients did reach dialysis. Medical treatment was administered. However, the level of billing was in error.
The Nursing Home Trap That Creates Crime
However, wait—there is another point of exposure that most ambulance service business owners do not even know exists. The Anti-Kickback Statute prohibits the giving, offering, soliciting, or receiving of anything of value to induce referrals for patients entitled to benefits under these programs. This is a federal criminal offense that is separate from the violation of the False Claims Act and is not affected by it.
"Anything of value" does not simply mean money in an envelope. It can mean any arrangement where something is given in return for referrals. Fastest response times for nursing homes referring exclusively to you. Discounted rates that are not commercially reasonable. Free services that other facilities are not afforded. Even an unofficial agreement to "take care of" facilities referring patients to you. The law is meant to be broad.
Each Medicare claim made because of an improper referral arrangement constitutes a violation of the False Claims Act with a penalty value of $11,000 or more. If you refer patients from fifty nursing homes, and an investigation shows improper inducements in any of these arrangements, then every transport you make from these facilities constitutes a separate violation. This has an exponentially escalating level of consequences.
Todd Spodek recognizes this cycle over and over in cases involving healthcare fraud in numerous federal districts. "The ambulance company owner would think they were merely establishing business relationships, like every business would," Spodek says. "The nursing home administrator would think they were merely arranging transport for their patients," Spodek continues. But "the prosecutors think it's a kickback scheme, and they can show a link between the referrals and Medicare claims from the billing records." Your documents used to operate a business are now the documents used to convict you.
Sentences in Ambulance Fraud Convictions
The sentences that occur in cases of ambulance fraud convictions are more than just a number on a chart. Seventy-one months is close to six years in federal prison. Federal, not state. And there's no parole. In the federal system, you have to serve a minimum of 85 percent of your sentence. It means you'll miss your child's graduation, your parent's funeral, your family's life. There's no physical contact allowed within the federal system as there might be allowed within a state prison.
Consider the spectrum of sentences imposed by prosecutions around the country:
Penn Choice Ambulance case: The physician who owned the firm received an 8-year sentence (96 months) for the $3.6 million Medicare false claim because the individuals he recruited were those who could walk, not those who actually required the services of the ambulances. They were genuine patients they transported in an actual transfer; however, they did not fit the Medicare requirements.
Muhammed Nasiru Usman: The owner of an ambulance business in Texas was sentenced to fifteen years (180 months) in prison for healthcare fraud committed against Medicare/Medicaid through his ambulance business, Royal Ambulance Service, as well as First Choice EMS.
Yaroslav Proshak: The owner of the medical transport company ProMed Medical Transportation received 108 months (9 years) in prison for the conviction of conspiracy to commit healthcare fraud. He went to the trial thinking that he would win. But the jury had other plans.
As reported by the United States Sentencing Commission, 74.7% of healthcare fraud cases result in a prison sentence. Not probation. Not home confinement. Prison. The average sentence is 27 months, but in ambulance fraud cases that involve organized activity, you're talking five years plus. And you're going to pay back every penny that you received in Medicare reimbursements. Money that you've probably already spent on employees, equipment, fuel, and operations that kept your business alive.
Also, and importantly, if you're charged with healthcare fraud as a defendant in a case brought by federal prosecutors, you're not being charged a fine. You're being charged a prison term, assets forfeited, and barred from participating in federal healthcare programs in the future. The government takes your right to work in healthcare.
First 72 Hours Following the Arrival of Federal Authorities
Here's what actually occurs when federal agents search an ambulance company with a search warrant. This isn't hypothetical—this is what we've actually noticed in healthcare fraud cases at Spodek Law Group.
The agents come at 6am, usually on a weekday, which means it's likely your office is open and staffed. They have a warrant in hand, granting the seizure of computers, billing documents, patient records, phone logs, and pretty much anything else the government thinks has something to do with your practice. They can serve multiple warrants at once at multiple locations simultaneously – your residence, the home of your key personnel.
Meanwhile, the agents are grabbing the records, and the prosecution is filing motions to freeze your bank accounts. Freezing your assets occurs quickly when you are charged with fraud at a medical facility. You might already be a step ahead by contacting an attorney before the freezing process begins; however, when that happens, you might be unable to withdraw money for payroll or for purchasing products and services, including hiring an attorney.
You may be asked to appear in front of a federal magistrate within 72 hours to have an initial appearance on a criminal charge. This is not a trial; this is an event to determine whether or not bail can be granted pending a trial and under which terms. You might be held in custody pending a trial if prosecutors find that you might be a flight risk or a threat to witnesses. You might not go home after this.
See the problem? When you finally realize you're being investigated, the government already has their case constructed. You no longer have control of your records; the government does. Your funds have been frozen. Your company has been rendered useless. And, of course, you're already charged with a crime after an investigation which has gone on for several years while you continued to operate your company.
The Dangers of Battling Federal Healthcare Fraud Without Experience
The fact is, federal convictions for Medicare/Medicaid fraud have trial conviction rates in excess of 90 percent. Ninety percent. The evidence is all in documentation, your own billing, your own patient documentation, your own correspondence with nursing facilities and with physicians. Witnesses are not necessary to prove what occurred. They have documentation of every claim submitted, every dollar received. It is in your own documentation that you further their case.
This is important: the methods of defending fraud claims which prove fruitful in other types of fraud may prove disastrous in an ambulance fraud trial. It does not refute the "knowing or should have known" standard of the False Claims Act to assert that there was no intention to deceive Medicare. It does not refute the "bed-confined" standard to which Medicare subscribers must adhere to assert that patients really did need to be transported. It does not refute the standard practices of the industry to assert that practices are industry standard.
But what actually works is intervention prior to the filing of charges. After the feds have your records, it becomes a question of not how much fraud is in your billing history, because, statistically speaking, looking at federal audit data, it probably is. The question becomes how much of your criminal liability can your lawyer reduce while you still have negotiating leverage.
"The way that attorneys, like Todd Spodek, handle these kinds of cases involves recognizing that intervention earlier leads to a dramatically different outcome. Being in a qui tam case where you haven't been charged yet gives you different options than if you've already got indictments issued. Its value means more if obtained prior to your codefendants choosing to cooperate against you."
The Window That is Closing Right Now
They have had years to build this case against ambulance services such as yours. They have designated Strike Force prosecutors who have expertise in nothing but healthcare fraud cases. They have access to your data related to billing, patient information, contracts with nursing homes, and likely statements from individuals with whom you have enjoyed working relationships for several years who have decided the reward in the qui tam suit was worth more than working with you.
You have 48 hours to find the representation that understands federal healthcare fraud prosecution at the level that the prosecutors do. Not general criminal defense. Not even federal defense. But someone with the specific knowledge of Medicare billing fraud, False Claims Act cases, Anti-Kickback Statutes, and the convergence of the three that constitutes the prosecution of cases involving ambulances.
The whistleblower might be filing his lawsuit as we speak. The Medicare auditor might be referring you for criminal prosecution as we speak. Some nursing home might be working with the authorities to save their own licenses and themselves.
Contact Spodek Law Group before the knock at your door.
The opportunity closes once they arrive.
Call 212-300-5196
The clock is ticking now that you read this page. How you spend the next 48 hours determines the next 20 years of your life.
