How to Avoid A $3,000,000 Healthcare Fraud Settlement

Could your practice pay $3,000,000.00 to settle a fraud suit?  Irrespective of its financial condition, paying $3,000,000.00 was a reality for an Orange County Ambulance Company.

“The suit was filed on behalf of the United States by two former employees of Lynch Ambulance, which is based in Anaheim, under whistle-blower provisions of the federal False Claims Act, according to a written statement by the U.S. attorney’s Central District of California office.  The suit alleged that between 2001 and 2007  the company regularly billed Medicare, TRICARE, which provides healthcare for uniformed service members, and the Federal Employees Health Benefits Program to transport patients who were not “bed-confined” or whose transportation was otherwise not medically necessary.  Federal prosecutors took over part of the case and negotiated the settlement. The company and two of its principals settled the case without admitting wrongdoing and the settlement was paid earlier this month.”  Article.

The ambulance operation ultimately settled the lawsuit for $3.05 million dollars.

This settlement demonstrates the importance of a compliance plan that regularly audits its medical documentation.  The audit should correct any problems before someone calls the mistakes “fraud.”  A compliance plan requires a yearly audit to discover any issues in advance.  If issues are found, audits need to be performed more often.

If your company has a “working” compliance plan, a fine for fraud of this amount simply could not happen.  Also, the government will consider whether the company has a working compliance program in determining how much to fine the healthcare provider.

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