Ambulance Companies Settle False Claims Act Case

The Department of Justice announced that five ambulance companies in California have agreed to collectively pay $11.5 million to settle allegations in a whistleblower’s qui tam complaint that they violated the False Claims Act and the Anti-Kickback Statute. The Anti-Kickback Statute prohibits the exchange of anything of value in an effort to induce the referral of federal health care program business.

According to the government, the California ambulance companies that were named in the whistleblower’s complaint are: Pacific Ambulance, Inc. and Bowers Companies, Inc. (collectively “Pacific-Bowers”); Care Ambulance Service, Inc.; Balboa Ambulance Services, Inc.; and E.R. Ambulance, Inc.

According to the Pacific-Bowers website, the companies, based in Orange County, are California’s largest independent regional provider of non-emergency ambulance services. The pair was acquired by Rural/Metro Corporation in December 2011 (after the alleged wrongdoing took place).

According to their respective websites, Care Ambulance Service, Inc. provides services to residents of Orange, Los Angeles and Riverside Counties; Balboa Ambulance Services has been operating in San Diego County since 1989, and E.R. Ambulance is also based in San Diego.

According to the Justice Department, in 2009, then-CEO of Care Medical Transportation, Inc., Kelvin Carlisle, filed a whistleblower complaint under the qui tam provisions of the False Claims Act. In the complaint, the whistleblower alleged that the defendant companies were engaged in a so-called “swapping” kickback scheme. According to the government, the scheme involved providing deeply discounted (50-100% off) the cost of non-emergency ambulance services provided under Medicare Part A to hospital and skilled nursing home patients. In return, the hospitals and skilled nursing homes agreed to use the defendant ambulance companies for rides covered under Medicare Part B. The government claims this arrangement violated the Anti-Kickback Statute and the False Claims Act.

The whistleblower, Kelvin Carlisle, will receive approximately $1.7 million of the settlement proceeds as his reward under the qui tam provisions of the False Claims Act.

If you know of fraud on the government and want more information on False Claims Act and whistleblower cases, click here to read our Frequently Asked Questions and view the video Whistleblower Awards Work for the Benefit of All by the Taxpayers Against Fraud.