Scottsdale, Ariz.-based ambulance giant Rural/Metro Corp. has agreed to pay $2.5 million to settle allegations it illegally offered Texas hospitals deep discounts on transports in exchange for exclusive contracts providing service billable to state and federal programs, the Justice Department announced today.
The settlement comes out of two whistle-blower lawsuits filed in 2000 and 2001 under the False Claims Act by two former employees of Rural/Metro competitor American Medical Response, Daniel Block and Adam Wightman, who will receive $450,000 of the payment.
Their allegations, which pertain to their employer and several other ambulance companies doing business in the area in addition to Rural/Metro, triggered investigations by the Justice Department, the U.S. attorneys office in Houston, HHS Office of the Inspector General and the FBI. According to an Oct. 5, 2006, Justice Department news release, American Medical paid $9 million to resolve those allegations.
Illegal inducements corrupt the integrity of the Medicare program by freezing out competitors, masking the true costs of services and misdirecting program funds, said Peter Keisler, an assistant attorney in the Justice Departments Civil Division.
According to its Web site, Rural/Metro has more than 8,000 employees serving 365 communities. The publicly traded company reported income of $3.5 million on $450.9 million in revenue for the fiscal year ended June 30, 2006.
The matter has been ongoing for sometime now and dates back to operations that Rural/Metro discontinued prior to 2001, spokeswoman Liz Merritt said. Although we disagree with the allegations, we believed it was prudent at the present time to expedite and settle the matter and return our focus to running our business. -- by Gregg Blesch