U.S. Intervenes In False Claims Act Case Alleging Kickbacks For Ambulance Services

Ambulance CaseThe United States filed a complaint on January 23, 2017, officially intervening in an alleged kickback scheme 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, alleging, among other things, violations of the False Claims Act and the Anti-Kickback Statute.

ETMC, one of East Texas’ largest healthcare 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 Mr. Williamson and EMSA, a public trust entity established under Oklahoma law. To facilitate the scheme, Defendants allegedly created a slush fund controlled by ETMC and Paramedics Plus that was used to pay over $20 million in kickbacks. The kickbacks and bribes allegedly ranged from cash payments, political contributions, marketing expenses, and direct payments to EMSA’s contractors.

The lawsuit, captioned United States ex rel. Dean v. Paramedics Plus, LLC, et al., was originally filed in 2014. The relator, Stephen Dean, was employed by Paramedics Plus as Chief Operating Officer overseeing the EMSA contract. 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 healthcare programs, and wrongly prioritize profits over patient care.”

The case was investigated by the U.S. Attorney’s Office for the Eastern District of Texas, the U.S. Department of Justice Civil Division’s Commercial Litigation Branch, the U.S. Department of Health and Human Services, and the states of California, Florida, Indiana, and Oklahoma.

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