Nursing home agrees to pay $3M in ambulance-swapping case

The settlement is believed to be the nation's first to hold a medical institution, rather than a transportation company, accountable for ambulance-swapping arrangements


By Cindy George
Houston Chronicle

HOUSTON — Galveston-based nursing home operator Regent Management Services has agreed to pay more than $3 million to settle allegations that the company received illegal kickbacks from ambulance providers.

The resolution was announced Monday by U.S. Attorney Ken Magidson of the Southern District of Texas and top investigatory officials with the U.S. Department of Health and Human Services.

The settlement is believed to be the nation's first to hold a medical institution — a hospital or nursing home — rather than a transportation company accountable for what are called ambulance-swapping arrangements. In these arrangements, providers often give price breaks or do not charge residents for certain ambulance rides in exchange for referrals of other lucrative Medicare and Medicaid business.

"This resolution is part of the government's emphasis on combating health care fraud throughout the district," Magidson said in a news release. "Any type of improper behavior or arrangement in the industry is a serious allegation that we will not take lightly and we will pursue in order to protect the integrity of the health care system."

There are a dozen facilities named Regent Care Center — one in Nevada and 11 in Texas cities including Kingwood, League City, The Woodlands and San Antonio, according to the company's web site.

Federal law, namely the anti-kickback statute, prohibits offering, paying, soliciting or receiving compensation to induce referrals of federal health care program items or services.

"If not for this kickback arrangement, Regent would have been financially responsible for the patient transports at significantly higher rates," the release said.

The company will pay nearly $3.2 million to resolve the alleged scheme, though no liability had been determined as of Monday.

"This settlement sends a message to the health care industry that both sides of a swapping arrangement can be held responsible for their improper actions, not just the entity that actually bills Medicare or Medicaid for the services," Gregory Demske, chief counsel to the Health and Human Services Inspector General's office, said in the statement.

Medicaid is funded jointly by the states and the federal government. Texas paid some of the Medicaid claims at issue and will be reimbursed roughly $533,000 of the settlement amount.

Regent also has entered a corporate integrity agreement with the Health and Human Services Office of Inspector General, which obligates the company to make substantial internal compliance reforms over the next five years.

In 2013, federal health officials placed an unprecedented six-month moratorium on private ambulance company enrollments in government insurance programs based on Houston's designation as a Medicare fraud "hot spot." The Centers for Medicare and Medicaid Services stopped approving new or pending applications for ground ambulance suppliers in an eight-county area, including Galveston County and Harris County — the nation's leader in the number of private Emergency Medical Service providers. The agency placed the same limitations in Miami and Chicago, other high-fraud areas.

The Chronicle reported in 2011 that Houston's EMS players were No. 1 in the nation in Medicare claims by billing more than $300 million in a five-year period. One in four questionable Medicare ambulance claims filed in Texas at that time came from Houston-area EMS providers.

Since then, enforcement increased resulting in arrests and Medicare removing at least 100 Texas ambulance companies as providers.

(c)2015 the Houston Chronicle

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