New York City has agreed to pay $9.5 million to settle federal charges that it routinely bilked Medicare over an eight-year period for medically unnecessary ambulance trips.
The case stems from a whistleblower suit brought by Daniel Burstein, a former city medical technician and paramedic. Burstein filed his complaint under the federal False Claims Act.
While admitting no wrongdoing, the city, the fire department's Bureau of Emergency Medical Services-known as EMS-and the New York City Health and Hospitals Corp. will reimburse Medicare for roughly the amount the city was overpaid, said Daniel Connolly, special council to the city law department.
HHC, the agency that operates city hospitals, ran EMS before that service was turned over to the fire department in March 1996. The city will pay most of the settlement from general funds, and HHC will contribute a small amount, probably less than $1.5 million, Connolly said.
Mary Jo White, the U.S. attorney for the Southern District of New York in Manhattan, filed the initial complaint in August. The suit alleged that from 1990 through at least April 1995, EMS billed the government for ambulance services provided to all Medicare-eligible patients transported to private hospitals, whether or not the transportation was deemed medically necessary. It further charged that EMS illegally used DRG codes that would qualify for Medicare reimbursement and that HHC hospitals violated corporate policy by failing to instruct physicians to certify the medical necessity of ambulance trips.
Connolly conceded that the city probably received reimbursement to which it was not entitled but said there was no intent to defraud the government. "This was not a plot hatched by folks in the (city) government to rob money from the (federal) government. Rather, the Medicare regulatory scheme is extremely complex and also very dynamic," he said.
Connolly said the city's view was that when a patient called EMS for an ambulance, the trip was medically necessary.
The settlement, filed Oct. 15, calls for forming a compliance committee and conducting annual reviews and audits of billing policies. Connolly said the city has hired KPMG Peat Marwick to help develop a compliance plan.*q