Family-Owned Ambulance Company to Pay $12.7 Million to Resolve False Claims Allegations

U.S. Attorney’s Office
District of Massachusetts
13 January 2017

FOR IMMEDIATE RELEASE

BOSTON – The U.S. Attorney’s Office announced that Medstar Ambulance, Inc., four of its subsidiaries, and its two owners, Nicholas and Gregory Melehov, have agreed to pay $12.7 million to resolve allegations concerning inflated Medicare claims for ambulance transports.

“Our office is committed to finding and eradicating Medicare fraud wherever it occurs,” said United States Attorney Carmen Ortiz. “While we recognize that Medicare does and should pay for medically necessary ambulance services, it is our job to ensure that ambulance providers do not take advantage of the system or the patients. This settlement is part of the office’s ongoing effort to stamp out health care fraud and return money to taxpayers.”

“We expect those who participate in the Medicare program to provide services, including ambulance services, based on the medical needs of patients rather than their desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that those who abuse the Medicare program will be held accountable for their actions.”

“Improperly billing the government for services affects every American taxpayer,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The settlement with MedStar Ambulance, Inc. is a result of the FBI’s continued effort to combat inappropriate and questionable billing practices in the area of ambulance transport fraud.”

“Ambulance service companies should be focused on the needs of the patients,” said Department of Health and Human Services, Office of Inspector General Special Agent in Charge Phillip Coyne. “Billing Medicare for ambulance rides that were unnecessary or at a higher rate than could be medically justified is unacceptable. Together with our law enforcement partners we will seek out and stop this fraudulent behavior.”

The agreement resolves allegations that Medstar wrongfully billed Medicare for ambulance services that were not medically necessary or for higher levels of ambulance services than were required or provided. Medstar and its subsidiaries – Medstar EMS, Inc., MetroWest Emergency Medical Services, Inc., Fitchburg Emergency Medical and Pioneer Valley EMS, Inc. – provide ambulance services to municipalities, hospitals and skilled nursing facilities in central and western Massachusetts. The allegations came to the government’s attention when Dale Meehan, a former employee in Medstar’s billing office, filed a complaint in federal court [captioned below] alleging wrongful billing by Medstar. The government contends that after Medstar took its ambulance billing services in house around 2011, it engaged in a pattern and practice of submitting false claims to Medicare for ambulance transport services in which (1) the services did not qualify for reimbursement because the transports were not medically reasonable and necessary, and (2) Medstar billed for higher levels of ambulance transport services than were required by patients’ conditions or billed for higher levels of ambulance transport services than were actually provided.

Once Medstar became aware of the investigation in late 2014, it quickly endeavored to put in place meaningful change, including revamping its ambulance billing software and training its billing employees. Medstar has worked cooperatively with the government throughout its investigation, and has taken swift action to address past misconduct. In addition, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services.

U.S. Attorney Ortiz; Principal Deputy AAG Mizer; FBI SAC Shaw; and HHS SAC Coyne, made the announcement. The case was handled by Assistant U.S. Attorneys Jessica Driscoll and Lisa Asiaf-Schlatz of Ortiz’s Office, and Trial Attorney Kelley Hauser of the Department of Justice’s Civil Division.

HHS Hotline: The government encourages anyone with information about the practices described above, or similar practices involving ambulance billing, to contact the Department of Health and Human Services Office of Inspector General Hotline via telephone, 1-800-HHS-TIPS (1-800-447-8477), or in writing via https://forms.oig.hhs.gov/hotlineoperations/.

United States ex rel. Meehan v. Medstar Ambulance. Inc., et al., No. 13-CV-12495-IT (D. Mass).