By Bill Estep
The Lexington Herald-Leader
BREATHITT COUNTY, Ky. — An ambulance service in Breathitt County defrauded the government by billing for transports that were not medically necessary, a competitor has charged in a federal lawsuit.
In one case, the lack of any real need for a medical transport was so obvious that an Arrow-Med Ambulance crew taking a person to dialysis treatments let the patient ride up front with the driver, the lawsuit alleged.
The company “pressured” paramedics and emergency medical technicians to exaggerate patient’s medical conditions in paperwork to justify the transports, according to the lawsuit, which was made pubic Monday.
The total on the alleged fraud is not known yet, but it dates to 2012 and could be more than $1 million, said Lexington attorney Mark Wohlander, who represents the whistleblower in the lawsuit.
The lawsuit was filed under the federal False Claims Act.
Under that law, whistleblowers can file lawsuits on behalf of the federal government aimed at recouping money the government paid out because of alleged illegitimate claims.
Darrell Stephen McIntosh, who owns McIntosh Ambulance Services, filed the lawsuit against Arrow-Med Ambulance and owner Hershel Jay Arrowood, a Jackson businessman.
Arrowood has a car lot and sells flooring, but got into the ambulance business in 2012.
Arrow-Med, which operates in Breathitt and Wolfe counties, competes with McIntosh Ambulance.
McIntosh filed the lawsuit more than a year ago, but it was sealed until Monday.
Lexington attorney T. Scott White, who represents Arrow-Med, said the company and Arrowood strongly dispute the claims of improper conduct.
White said Arrowood hired a compliance consultant after buying the ambulance service to educate him and employees on following the law.
“There’s just simply no credible evidence that he’s done anything wrong,” White said of Arrowood.
White said McIntosh is trying to use the government as an ally in its competition with Arrow-Med.
Wohlander responded that there have been other cases when competitors pointed out wrongdoing by a company. Competing companies can be in the best position to spot problems, he said.
“Who best to know when somebody’s engaged in fraud?” Wohlander said.
The government has said it will intervene in the lawsuit in part, indicating it believes there are viable claims, Wohlander said.
The lawsuit unsealed Monday said McIntosh was able to recognize improper ambulance runs by Arrow-Med because of his knowledge of the business and community, including patients being transported.
Arrow-Med regularly provided transportation to appointments such as dialysis treatments to people who could walk, meaning the company should not have billed Medicare and other government-funded programs for those transports, the lawsuit said.
McIntosh often saw one dialysis patient, identified as JB, doing things that showed she did not need to be transported by ambulance for treatment, the lawsuit said.
On Sept. 9, 2014, McIntosh saw JB driving and pumping gas, for instance.
The next month, McIntosh’s employees told him they saw a patient identified as DS riding to a dialysis treatment in the front of an Arrow-Med ambulance, according to the lawsuit.
McIntosh “has personally witnessed a number of Arrow-Med’s patients transported to kidney dialysis centers were able to walk outside for the purpose of smoking cigarettes, demonstrating the lack of medical necessity” for an ambulance transport, the complaint said.
In addition, staffers at a dialysis clinic also told McIntosh they’d seen Arrow-Med ambulances drop off people who walked into the building for treatment, according to the complaint.
The lawsuit also claimed that Arrow-Med billed for services it shouldn’t have because they were provided by an EMT while his license was suspended, and took part in a scheme to provide big discounts on ambulance runs to a Jackson nursing home, the Nim Henson Geriatric Center, in return for the center referring patients to the ambulance company.
That “swapping” scheme violated an anti-kickback law, the lawsuit argued.
The lawsuit said McIntosh Ambulance had lost business with the nursing home.
The lawsuit seeks a cash award to McIntosh for exposing the problems; attorney fees; and a fine against Arrow-Med of $11,000 for each false bill to the government.
It also seeks a payment to the government of triple the amount that the ambulance company received through false claims, if they are proven.
Copyright 2016 the Lexington Herald-Leader