MedStar settles Medicare fraud suit for $12.7M

A former employee claimed the company falsified bills for ambulance services to qualify for higher Medicare reimbursements

Jeffrey Newman Law

BOSTON — MedStar Ambulance agreed to pay $12.7 million to settle a False Claims Act lawsuit alleging the company fraudulently billed Medicare for unqualified ambulance services. 

A whistleblower firm alleged MedStar knowingly and fraudulently billed Medicare for ambulance services by billing for ambulance transports that were not medically necessary and by up-coding the runs to exact higher payments from the government. 

“This was a case in which the evidence obtained in the three-year litigation was clear in that it showed that the MedStar companies fraudulently over-billed Medicare and added false information to the ambulance run documents to make them Medicare eligible when they otherwise would not have qualified for reimbursement,” attorney Jeffrey Newman said. 

MedStar’s former billing manager Dale Meehan brought the case forward in 2013, after claiming she was fired for her continued questions and attempts to correct the fraudulent billing. She will receive $3,556,000 of the settlement under the federal False Claims Act, which allows whistleblowers to sue companies that are defrauding the government and receive a reward if the government recovers any funds as a result.
“This is not a case arising from the speculation of a disgruntled employee as has been publicly suggested in the past,” Newman said. “Dale Meehan courageously came forward and told the truth about this multi-million dollar fraud scheme to make more profits. The Medicare system is already severely over-taxed at a time when every penny should be used for those who need it. Our nation should have no tolerance for this kind of fraud or deceit and it is our hope that the new administration will support and encourage individuals who come forward to report specific these kinds of fraud as Dale Meehan did.” 

As part of the settlement, MedStar  must also enter into a Corporate Integrity Agreement (CIA) with the Office of the Investigator General (OIG). OIG negotiates CIAs with health care providers and other entities as part of the settlement of Federal health care program investigations arising under a variety of civil false claims statutes. A comprehensive CIA typically lasts 5 years and includes requirements such as implementing employee training, hiring a compliance officer and providing annual status reports to the OIG. 

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