By LINDA SATTER
Arkansas Democrat-Gazette (Arkansas)
A former Jonesboro ambulance company that defrauded Medicare and Medicaid of hundreds of thousands of dollars in the late 1990s had its fine reduced Wednesday by more than a half-million dollars.
In the same hearing at which U.S. District Judge James M. Moody reduced Patient Transfer Service’s fine from $1,177,786 to $500,000, he increased the sentence of the service’s former general manager, paramedic Kevin Wise, from 30 months to 37 months.
The resentencing hearing was held at the direction of the 8th U.S. Circuit Court of Appeals in St. Louis.
In a July 5, 2005, opinion, an 8th Circuit panel recited the key evidence presented in a 2003 jury trial: From January 1997 through March 1999, the ambulance service filed 2,568 Medicare or Medicaid claims with identical billing codes, indicating that the 12 patients at the heart of the claims were each bed-confined and needed ambulance transportation between their homes and kidney dialysis treatment sites.
The service received $841,276 from state and federal funds on the basis of those claims, each of which said the patient in question had to be moved by stretcher and that the ambulance ride was “medically necessary.” An FBI investigation revealed that none of the patients — all of whom had end-stage renal disorder — was actually bedconfined, needed to be moved by stretcher or required an ambulance to get to and from dialysis treatments. The FBI played videotapes at the trial showing some of the patients walking to and from the ambulance without assistance.
An appellate court panel upheld the convictions but found merit in the company’s argument that before imposing a fine, the judge should have first determined the company’s ability to pay.
The panel remanded the case to Moody so he could make specific findings on the record to that effect.
Assistant U.S. Attorney Karen Whatley argued Wednesday that Moody should impose the same fine because the company’s assets — which were frozen while the case was on appeal — could be liquidated to easily pay the original fine. The assets include a building and equipment.
But Moody said that in reassessing the market value of the assets to take into account the building’s gradual depreciation and the possibility that the assets would sell for less than their worth at an auction, the corporation may be unable to pay the original fine. He ordered a $500,000 fine to be paid over five years.
The appellate court also said Moody should not have given Wise credit for accepting responsibility for his crimes during his testimony. Without that credit, sentencing guidelines recommended a sentence of 37-46 months, and Moody imposed the minimum. He ordered Wise, now 39, to begin serving his sentence on May 8. Wise remained free during his appeal and until his resentencing.
Wise is the brother of Donald Wise, a former Jonesboro alderman who owned the business but was acquitted of a conspiracy charge. The 8th Circuit upheld the conviction and probationary sentence of Shirley Wallace, the ambulance service’s office manager and a cousin of the Wises.