4 HCA hospitals to pay $8.6M to settle ambulance-swapping allegations

The DOJ announced that the settlement with the four hospitals resolves allegations that patients at received free or heavily discounted ambulance transports from various ambulance companies in exchange for the hospitals’ referral of other lucrative Medicare and Medicaid business to those same companies.

Four Houston-area hospitals will pay $8.6 million to settle allegations they received kickbacks from ambulance companies in exchange for the rights to the hospitals’ more lucrative Medicare and Medicaid transport referrals.

The hospitals are all affiliated with the Hospital Corporation of America (HCA) and include Bayshore Medical Center, Clear Lake Regional Medical Center, West Houston Medical Center and East Houston Regional Medical Center.

The settlement resolves allegations that patients at the four hospitals received free or heavily discounted ambulance transports from various ambulance companies in exchange for the hospitals’ referral of other lucrative Medicare and Medicaid business to those same companies, according to a Department of Justice announcement.  If they didn’t agree to the kickback arrangement, the agency said the four hospitals would have been financially responsible for the patient transports at significantly higher rates.


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Under the Anti-Kickback Statute, organizations cannot offer, pay, solicit or receive remuneration to induce referrals of items or services covered by federal healthcare programs, including Medicare and Medicaid.

"This settlement emphasizes that both sides of any arrangement where remuneration is paid in exchange for healthcare referrals are responsible for their improper actions – even entities that do not actually bill Medicare or Medicaid for the services,” said Gregory Demske, chief counsel of the Department of Health and Human Services' Office of Inspector General. “Any company or individual receiving anything of value in exchange for referrals should understand that their actions may have serious legal and financial consequences.”

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As part of the settlement, the state of Texas will receive $300,000 because it paid for some of the Medicaid claims. Three whistleblowers, who filed two lawsuits under the qui tam provision of the False Claims Act, will also receive an unknown portion of the amount.

The settlement resolved claims of allegations; there was no determination of liability.

But Assistant U.S. Attorney Kenneth Shaitelman, who prosecuted the case, told the Houston Chronicle that swapping occurs throughout the United States, but Houston has a much larger market of ambulance companies because of the size of the medical center. Ambulance companies agreed to rides as low as $25 in order for hospitals to select them when they needed $500 rides, according to the article.

"Everybody knew if you were an ambulance company in the Houston market and you wanted to survive, you had to play the game and provide free and discounted services to the hospitals in order to get the lucrative government business," Glenn Grossenbacher, the attorney for one of the whistleblowers, told the Houston Chronicle. 

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