FDNY Ambulance Billing Fraud Case Settled for $4.3 Million

The City of New York has agreed to settle a civil fraud suit brought by the United States Attorneys Office for $4.3 million. The suit claims FDNY improperly billed the U.S. Department of Health and Human Services for millions of dollars between October 2008 and October 2012 for services that were not “medically necessary”.

The city claims that an ambulance billing contractor was to blame for the improper billing. According to the complaint, FDNY discovered irregularities in 2010 and in 2012 actually informed the US Attorney’s office of the problem.

Reuters quoted the city’s attorneys as saying:  “As a result of this joint look into Medicare billing practices at the FDNY, the agency has completely revamped its policies and has stronger procedures in place to reduce the risk of recurrence and to immediately correct erroneous or improper payments.”

The complaint was filed today in US District Court for the Southern District of New York. Here are some of the more important quotes:

• In May 2010, FDNY personnel specifically inquired with the ambulance billing contractor about whether claims for reimbursement were being denied on the basis that the emergency ambulance services did not meet the Medicare medical necessity requirement.
• In 2010, the FDNY, through its ambulance billing contractor, submitted to Medicare more than 76,000 claims for reimbursement for emergency ambulance services. Of these, more than 12,000 claims—an average of more than 1,000 per month—were identified by the FDNY as not meeting the Medicare medical necessity requirement.
• Yet in June 2010, in response to the FDNY’s May 2010 inquiry, the ambulance billing contractor informed the FDNY that upon reviewing data for a period of several months, the contractor identified only one claim for which Medicare had denied reimbursement on the ground that the services did not meet the Medicare medical necessity requirement.
• The FDNY did not take steps to inform Medicare of its receipt of reimbursements for the tens of thousands of claims during the Covered Time Period for which it had indicated that the emergency ambulance services did not meet the Medicare medical necessity requirement until December 2012.
• On or about December 6, 2012, the FDNY sent a letter to NGS and the United States Attorney’s Office for the Southern District of New York, reporting, among other things, that the FDNY had been receiving reimbursements for claims for emergency ambulance services that FDNY had identified in the claims as not meeting the Medicare medical necessity requirement. The letter sought guidance regarding the submission of such claims going forward and obligations as to claims previously submitted, and noted that the FDNY was suspending submission of claims for services that may not meet the Medicare medical necessity requirement.
• In or around September 2013, the FDNY modified its claiming procedures to reduce the risk that the FDNY would be improperly reimbursed for claims for emergency ambulance services that did not satisfy the Medicare medical necessity requirement.
• Defendant knowingly concealed, avoided, or decreased an obligation to pay or transmit money to the United States.
• Such knowing concealment, avoidance or decrease of an obligation to pay or transmit money to the United States was made or done knowingly, as defined in 31 U.S.C. § 3729(a)(1).

Here is a copy of the complaint: US v City of New York

There was no settlement in the court file but Reuters is reporting that the case has been settled.