Sounding the Siren on Ambulance Fraud

Fraud in providing ambulance services seems like the perfect crime: everyone is acting quickly in an emergency, the patient is often in a poor position to understand what is happening if they are conscious at all, and a sense of confusion often pervades. Even when all of the parties are well-intentioned it is easy to see how such chaotic circumstances might not breed the most accurate billing.

Of course, the parties are not always well-intentioned, and the exigencies of the moment make an excellent veil for those who seek an opportunity to defraud the American taxpayer. Whether it involves putting every patient on the stretcher, administering useless tests and procedures en route to the destination, or calling every transport an “emergency” even when it is little more than an inter-facility transfer, ambulance fraud is on the rise.

The Department of Justice is aware of the growing industry problem—the FBI raided a California-based ambulance company in October 2014—and is looking to those who can help fix it. Conscientious employees are in the best position to put a stop to ambulance fraud, save taxpayers a fortune, and maintain the integrity of a profession that should be focused on saving lives, not milking the Medicare system. This article seeks to help employees recognize some common categories of ambulance fraud, as well as briefly explain the rewards and protections available to those who take a stand against it.

Unnecessary or Not-Performed Services

Some forms of ambulance fraud are small items that add up. Fraudsters often believe they can get away with repeated smaller frauds because no individual act is large enough to draw scrutiny. It is the same principle that causes a store clerk’s inspection of a $5 bill to be less exacting than that of a $100 bill. But over time, small fraud adds up to big fraud, so employees should be on the lookout.

Employees should bear in mind that it is illegal to bill Medicare for both services that were never performed and for services that are medically unnecessary. For example, no one bats an eye at an ambulance service billing for something like using a stretcher, testing blood sugar, or administering oxygen, but each of these services may not be needed in every case. Yet, many ambulance companies will bill a set of services like this for every single patient that gets in the car. Managers may demand that every patient, even one that is perfectly ambulatory, be placed on a stretcher simply to make the billing fraud less obvious. This type of perfectly consistent billing for relatively minor ambulance services should at least raise an eyebrow.

Often owners of companies providing ambulance services exert subtle pressures on those working in the field or in billing to include smaller services in PCRs when those services are either not necessary, and in the worst cases, when they are not performed at all. In a surprising number of instances, owners and managers are overt in their demands that employees include certain items in all PCRs. Employees should keep an eye out for smaller services that are not always necessary but are always performed.

Mischaracterized Services

The classic perception of an ambulance service involves flashing lights, sirens, and a patient in dire need of serious medical attention. However appealing this image may be to film audiences, it does not represent 100% of real life ambulance services. Often an ambulance will calmly transport patients from one medical facility to another, presumably because the patient inside needs some amount of medical attention or sustained care along the way. The ambulance drops off the patient, who heads to the proper ward for treatment, not the emergency room.

An ambulance company owner or manager interested in perpetrating fraud, however, trades on the common perception of ambulance services, and may bill non-emergency transports as emergency transports. This mischaracterization nets the company a higher reimbursement for the same service. While the line between what is and is not an emergency may not always be clear, employees can also watch for other types of mischaracterizations of the services rendered that the employer pushes to increase the amount they can bill.

Regulatory or Licensing Violations

It is perhaps less sexy than the other, more recognizable types of fraud described above, but ambulances are subject to Medicare and Medicaid regulations, as well as state regulatory and licensing schemes. Failure to follow these rules could disqualify the ambulance from billing for services provided that are not in accordance with the rules.

One common form of flouting state and local regulations is ambulances providing services outside the areas where they are licensed, particularly in urban areas, where hospitals are nearer to each other and licensing restrictions are more geographically narrow. In many cases, actual EMS employees in the field may not even know that they are engaging in fraud unless they are familiar with the company’s licensing restrictions. To the extent an employee recognizes that the ambulance picking up patients in areas that are out of bounds and billing for these pickups to Medicare or Medicaid, that employee may be witness to fraud.

Protection from Retaliation and Rewards

Those who benefit from fraudulent billing of Medicare and Medicaid do not typically surrender at the first sign of adversity. They have a powerful interest in maintaining the scheme, and will often seek to retaliate against those who threaten to put a stop to it. Retaliation does not have to be a termination (although it obviously could be), but it could be the tactics discussed above: assignment on less desirable (or fewer) shifts, name-calling or other forms of harassment. Emergency personnel are not famous for their fabulous wealth, and most are afraid to rock the boat for fear or losing their job. Of course, this kind of retaliation is illegal, but it is important to stay ahead of it. 

If an employee suspects fraud and does wish to report it, he or she should make sure to clearly articulate their observations, in writing if possible, to those in the best position to address the concerns. It is also a good idea to keep track of any actions taken against them. This will ensure the employee is better protected if he or she wishes to pursue a retaliation case later.

Moreover, employees should know that under the federal False Claims Act (as well as similar laws enacted in most states), they may be entitled to a reward should their reports of fraud result in a recovery for the government. This kind of government "outsourcing" to attentive employees has been remarkably successful in stemming the tide of Medicare and Medicaid fraud, and emergency workers and billers are exactly the type of dedicated, vigilant people the government depends on for effective oversight.

David L. Scher is principal, The Employment Law Group, PC. 

R. Scott Oswald is managing principal, The Employment Law Group, PC.