Feds crack down on Medicare ambulance fraud

Officials require ambulance agencies to receive prior authorization for non-emergency trips in order to be paid by Medicare

By Harold Brubaker
The Philadelphia Inquirer

PHILADELPHIA — When the feds closed Brotherly Love Ambulance Inc. in October 2011 amid allegations of Medicare fraud, the owner's son quickly opened his own ambulance company and picked up where his mother had left off.

For a while, anyway. Bassem Kuran, who also was a driver for Brotherly Love, is to be arraigned this month for making false statements in a healthcare matter, related to his operation of VIP Ambulance Inc.

For years, teams of federal officials have been trying to stamp out this "whack-a-mole" pattern of one fraudulent ambulance operator shutting down only to have another - sometimes headed by a friend or family member - replace it.

But since 2014, authorities have hit on an effective strategy. They don't allow new ambulance firms in the Philadelphia region to be paid by Medicare. And they require all repetitive non-emergency trips - dialysis, for example - to receive prior authorization.

The impact of the crackdown has been huge in Southeastern Pennsylvania, where Medicare's annual spending on basic ambulance services plummeted to $12.7 million last year from $55.4 million in 2010, federal data show.

"We're never going to claim victory, but we think we did a good job of rooting out a lot of these fraudulent companies," said Nick DiGiulio, special agent in charge of the Philadelphia regional office of the U.S. Department of Human Services' Office of Inspector General.

Since early 2014, 83 ambulance firms - more than a quarter of the total in Southeastern Pennsylvania - have closed, according to Pennsylvania Department of Health data.

After 30 criminal convictions in the last five years leading to an aggregate of 82 years in prison and restitution orders totaling $22 million, DiGiulio said, "we're not hearing as much about this fraud."

The fraud, he said, centered on Medicare beneficiaries who needed kidney dialysis three times a week.

Transporting a single dialysis patient by ambulance for a year means $67,000 in revenue, said Ron Kerr, assistant special agent in charge of HHS's Office of Inspector General here.

"Those patients are viewed as assets by the criminals," he said.

But there are relatively few patients who qualify for scheduled non-emergency ambulance rides to dialysis. It has to be medically necessary, meaning there is no other way - paratransit, public transportation, private car - to move the patients safely.

Before Medicare's preauthorization rules took effect Dec. 15, 2014, it was easy for fraudulent ambulance companies to get paid. All they had to do was bill Medicare and pretend they had physician certification that the rides were medically necessary.

Only later would Medicare contractors check to see whether proper documents were in the patient files.

That made it easy to recruit patients for ambulance rides to dialysis, and to enlist them in the process of scamming Medicare.

When the fraud was rampant, companies bid against each other for patients, with some paying patients as much as $500 a month for the right to bill Medicare, which pays $360 to $380 per round trip, including mileage, for each of those three weekly trips. Some patients were driven in cars. Others drove themselves.

It was a short step to billing for dialysis trips that did not happen. That is what Bassem Kuran, now 23, allegedly did in 2012, federal prosecutors said when they charged Kuran in March with making false statements in a health-care matter.

Kuran's company, VIP Ambulance Inc., based in Northeast Philadelphia, collected $537,715 from Medicare in 2012 and 2013.

Ambulance firms like VIP typically ceased operations when they failed to pass an audit by government contractors, who demanded documentation proving that services were medically necessary.

Vitaly Samsonov, owner of Global Emergency Vehicles Inc., an ambulance dealer in Levittown, witnessed the impact of the shutdowns firsthand.

"Usually we would get customers wanting to buy trucks, and all of a sudden the whole industry was in a selling mode," he said.

He said he didn't buy many, "because a lot of them were pretty abused."

While law enforcement officials and regulators have made huge inroads against ambulance companies that relied heavily on dialysis patients for business, some with heavy reliance on repeat Medicare business in 2014 are still operating.

Platinum Ambulance Inc., of Huntingdon Valley, for example, served 17 Medicare beneficiaries, providing an average of 160 basic, nonemergency trips each, records show. That was the highest average in the region.

The company received no Medicare ambulance payments in 2012 or 2013, but collected $546,316 for basic nonemergency trips in 2014, the latest Medicare data available.

Reached by phone in May, Platinum's owner, Sergey Naboka, said he was still in business. Asked whether he was still serving Medicare patients, he said: "I actually would rather not comment on any of that, if you don't mind."

The larger picture provided by Medicare data points to progress. In the three states where prior authorization has been required since December 2014, Pennsylvania, New Jersey, and South Carolina, monthly Medicare costs for scheduled, repetitive ambulance trips plunged to an average of $5.4 million last year, in aggregate, from $18.9 million the year before.

The Centers for Medicare and Medicaid Services, or CMS, which administers Medicare, said in April that in 2015 it had approved 6,430 of 18,367 prior-authorization requests in the three states.

CMS is continuing to hone its tools to combat fraud, Shantanu Agrawal, director of CMS's Center for Program Integrity, told a skeptical congressional panel May 24.

Agrawal told the lawmakers there was no way to say how much of the estimated $89 billion in improper Medicare and Medicaid payments last year was due to fraud.

In the ambulance sector, CMS has been providing investigators quicker access to billing information, he said.

In one case, investigators were able to take action based on $1,500 worth of claims, he said. In the past, "that provider might have billed the program for far more money before they were ultimately caught," Agrawal said.

Dean Bollendorf, president of the Ambulance Association of Pennsylvania, described the Medicare effort to reduce ambulance fraud as a mixed bag.

The cycle of providers reinventing themselves under new names has stopped. "That was a real benefit," said Bollendorf, who is vice president of HealthFleet Ambulance Inc., of Philadelphia.

However, the prior authorization program needs improvement, he said: "There are definitely patients that meet the criteria but are being denied."

Copyright 2016 The Philadelphia Inquirer

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