U.S. Intervenes in False Claims Act Case Alleging Kickbacks For Texas Ambulance Contracts

According to a press release issued by the U.S. Attorney’s Office for the Eastern District of Texas on January 23, 2017, the United States has filed a complaint intervening in a False Claims Act case which alleges a large-scale ambulance kickback scheme in the Eastern District of Texas.

The complaint was filed in partial intervention against East Texas Medical Center Regional Healthcare System, Inc., East Texas Medical Center Regional Health Services, Inc. (together, “ETMC”), Paramedics Plus, LLC, Emergency Medical Services Authority (“EMSA”), and EMSA’s President, Herbert Stephen Williamson (“Williamson”) alleging, among other things, violations of the False Claims Act and the Anti-Kickback Statute.

ETMC, one of East Texas’ largest health care systems, provides ambulance services outside of Texas through its for-profit subsidiary, Paramedics Plus. The United States’ complaint alleges that ETMC and Paramedics Plus entered into an illegal kickback scheme to obtain and retain a lucrative public ambulance services contract awarded by Williamson and EMSA, a public trust entity established under Oklahoma law. The United States alleges the defendants created a slush fund controlled by ETMC and Paramedics Plus that was used to pay over $20 million in kickbacks. The United States alleges the kickbacks and bribes ranged from cash payments (including at least $50,000 for Williamson’s personal benefit), political contributions, marketing expenses, and direct payments to EMSA’s contractors.

The lawsuit, United States ex rel. Dean v. Paramedics Plus, LLC, et al., 4:14-CV-203, was originally filed in 2014 in the U.S. District Court for the Eastern District of Texas by relator Stephen Dean. Dean was employed by Paramedics Plus as Chief Operating Officer overseeing the EMSA contract. Dean filed the action under the qui tam provisions of the False Claims Act, which permit private parties known as “relators” to sue on behalf of the United States and to receive a share of any recovery. Dean’s lawsuit includes allegations against additional defendants, including other municipal entities doing business with Paramedics Plus in California, Florida, and Indiana. The False Claims Act permits the Government to intervene in such a lawsuit, as it has done in a portion of Dean’s case.

“The law prohibits paying kickbacks, such as those alleged in this lawsuit, in order to gain access to Medicare and Medicaid funds,” said Acting U.S. Attorney Brit Featherston. “Kickback schemes are anti-competitive, undermine the integrity of our nation’s health care programs, and wrongly prioritize profits over patient care.”

Read the full press release here.