Deeper Than the Headlines: Ambulance Swapping and a 8.6 Million Dollar Settlement

“Any company or individual receiving anything of value in exchange for referrals should understand that their actions may have serious legal and financial consequences.” Said Chief Counsel Gregory Demske of the Department of Health and Human Services – Office of Inspector General (DHHS-OIG). The statement was made in response to a recent $8.6 Million settlement by four Texas hospitals associated with the Hospital Corporation of America (HCA).

Demske continued, “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.”

The settlement resolves allegations that the four hospitals, Bayshore Medical Center, Clear Lake Regional Medical Center, West Houston Medical Center and East Houston Regional Medical Center, received kickbacks from various ambulance companies in exchange for the hospital's highly coveted Medicare and Medicaid transport referrals.

All Parties Held Accountable For Their Role in Kickbacks

What is interesting about this settlement is that the DOJ made sure to hold the medical institutions accountable for their role in receiving the alleged kickbacks and didn’t just focus on the ambulance companies themselves. This is the second such settlement with the first being announced in November of 2015. That settlement was also in Texas and was for almost $3.2 Million with a skilled nursing facility that allegedly was involved in similar ambulance swapping arrangements. Demske shared a similar message in that first settlement when he stated, “This settlement sends a message to the healthcare industry that both sides of a swapping arrangement can be held responsible for their improper actions, not just the entity that actually bills Medicare or Medicaid for the services.” According to the DOJ press release, prior to these two settlements, virtually all cases focused on the actions of the ambulance companies, rather than the medical institutions they served.It was alleged that patients at the four hospitals in this recent settlement received free or heavily discounted ambulance transports from various ambulance companies in exchange for the hospital's’ referral of other lucrative Medicare and Medicaid business to those same companies. According to the DOJ, if not for this kickback arrangement, the four hospitals would have been financially responsible for the patient transports at significantly higher rates.

How To Prevent Kickback Abuse At Your Organization

Your organization’s compliance program should have plans in place to audit, monitor or evaluate all relationships and remunerations with entities that either directly or indirectly influence the billing of Federal healthcare programs.

The guidance the OIG has previously given in its Hospital Compliance Program Guidance is still pertinent. They offered the following introspective questions a hospital’s compliance program should consider in this regard:

• Does the hospital have any remunerative relationship between itself (or its affiliates or representatives) and persons or entities in a position to generate Federal health care program business for the hospital (or its affiliates) directly or indirectly? Persons or entities in a position to generate Federal health care program business for a hospital include, for example, physicians and other healthcare professionals, ambulance companies, clinics, hospices, home health agencies, nursing facilities, and other hospitals.
• With respect to any remunerative relationship so identified, could one purpose of the remuneration be to induce or reward the referral or recommendation of business payable in whole or in part by a Federal health care program? Importantly, under the anti-kickback statute, neither a legitimate business purpose for the arrangement, nor a fair market value payment, will legitimize a payment if there is also an illegal purpose (i.e., inducing Federal health care program business).

These settlements are not new, yet, we continue to read about them. Don’t let your organization be the next headline. Invest in your compliance program and include action to monitor potential anti-kickback abuses.