Balboa Ambulance Services settled with the Justice Department for kickback allegations. Photo courtesy of Balboa Ambulance

In a lawsuit unsealed in federal court in San Diego on Monday, five ambulance companies have entered into civil settlements with the U.S. Department of Justice requiring them to collectively pay more than $11.5 million in payments to the federal government to resolve kickback allegations.

The settling defendants include two San Diego-based companies, Balboa Ambulance Service and E.R. Ambulance, and three Orange County companies, Care Ambulance Service, Pacific Ambulance and Bowers Companies.

The latter two companies were acquired by Rural/Metro Corp. after the alleged misconduct occurred.

The settlements resolve allegations that the defendants engaged in kickback schemes by providing deeply discounted — and often below-cost — ambulance services to hospitals or skilled-nursing facilities in exchange for exclusive rights to the facilities’ more lucrative Medicare patient referrals.

Such “swapping” arrangements can lead to overuse of medical services and inflated charges to the Medicare program. In this case, the deals allegedly resulted in false claims that essentially subsidized the discounted trips.

Anti-kickback legislation prohibits payment arrangements that are intended to influence health-care referrals. The law generally prohibits anyone from offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health programs, including Medicare.

The settlements resolve a False Claims Act lawsuit filed in the Southern District of California by Kelvin Carlisle, a competitor in the San Diego, Orange and Los Angeles County ambulance marketplaces.

Whistleblower provisions of the act permit the reporting party to recover a portion of the proceeds obtained by the federal government. As part of the resolution of the suit, Carlisle will receive more than $1.7 million.

Since January 2009, the Justice Department has recovered more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

— City News Service

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