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Just a week ago I blogged about a False Claims Act case involving ambulance fraud, but already I have another entry for my whistleblower law blog.  Four Houston hospitals will be paying $8.6 million to resolve claims they took kickbacks from ambulance companies.  Three different whistleblowers filed suit under the False Claims Act to tell the U.S. about the ambulance kickback scheme.

According to DOJ, the hospitals saved lucrative Medicare business to give to ambulance companies that gave the hospitals deep discounts. The whistleblower’s lawyer, Glenn Grossenbacher, said: “Everybody knew if you were an ambulance company in the Houston market and you wanted to survive, you had to play the game and provide free and discounted services to the hospitals in order to get the lucrative government business.”  Hospitals paid as little as $25 for ambulance rides.  While the ambulance companies lost money on the rides they gave for nearly free to the hospitals, they raked in up to $500 for a single ambulance ride for a Medicare patient.

The Government Went After the Hospitals that Benefited from the Kickbacks, Not Just the Ambulance Companies

The Government proudly pointed out that it was not simply going after the companies that were giving the discounts.  In this case, the United States Attorney also was going after the hospitals that were accepting the benefits of the ambulance kickbacks. The Anti-Kickback Statute (AKS) makes it illegal to give or receive “anything of value,” which of course would include receiving discounted ambulance services.

First Whistleblower Was Competitor of Ambulance Companies

Whistleblower Daniel Brock started the case.  Brock ran an ambulance service that could not get contracts because it would not “pay for play.”  In January 2011, Brock went to federal investigators about the ambulance kickbacks that were killing his ability to get contracts with the hospitals.

All Four Hospitals Affiliated with Hospital Corporation of America

The four hospitals accused of ambulance kickbacks were Bayshore Medical Center, Clear Lake Regional Medical Center, East Houston Regional Medical Center and West Houston Medical Center.  All four hospitals are affiliated with Hospital Corporation of America.  No stranger to FCA litigation, Hospital Corporation of America settled a fraud case for a record (at the time) nearly $ 2 billion back in the 1990’s.

Whistleblowers Will Collect for Bringing Suit

Under the False Claims Act, the Government is required to pay a percentage of what it gets to the first whistleblower who filed suit and helped the Government discover the fraud.  The Government said the settlement resolved the claims of the whistleblowers who brought suit over the ambulance kickbacks, but it did not specify how much each of the three whistleblowers would get.

Under the FCA, the first whistleblower (called a “relator”) to file suit is entitled to get between 15% and 30% of what the Government collects as a result of the whistleblower’s information.  To be eligible for the award, the whistleblower has to file suit under the False Claims Act and comply with the statute.