Ambulance Companies to Pay $11.5M in “Swapping Kickback” Scheme

Five ambulance companies in San Diego and Orange County will pay more than $11.5 million to the U.S. government to settle a lawsuit that accuses them of a “swapping kickback” scheme.

San Diego-based companies Balboa Ambulance Service and E.R. Ambulance -- as well as Orange County-based Pacific Ambulance, Bowers Companies and Care Ambulance Service – are all named in the suit filed by the Justice Department. Pacific and Bowers were later acquired by the Rural/Metro Corporation after the alleged scheme occurred.

The lawsuit accuses the companies of providing deeply discounted or below cost ambulance services for hospital or facilities that gave them exclusive rights to the hospital’s Medicare patient referrals.

According to U.S. Attorney Laura Duffy, this kind of scheme encourages patients to overuse medical services and inflate Medicare charges.

A federal investigation revealed this kickback plan led to false claims for Medicare Part B transports, which essentially paid for the discounted trips. The companies are accused of violating the Anti-Kickback Statute, a rule that prohibits any payment arrangement intended to influence health care referrals.

“It is a priority of this office to combat abuses that drive up the cost of health care and waste taxpayer dollars,” said Duffy. “We will continue to work closely with our investigative partners to pursue those who refuse to play by the rules and offer kickbacks to induce health care referrals.”

The settlements also resolve a lawsuit filed by Kelvin Carlisle, a competitor and whistleblower in the case, under the False Claims Act. Carlisle will get about $1.7 million from the settlement money.

Duffy’s office says the False Claims Act has helped the Justice Department recover more than $24 billion for the government since 2009. More than $15.3 billion of that was recovered in cases involving federal health care fraud.

NBC 7 has reached out to the companies involved in the lawsuit for comment, but representatives have not responded.

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