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Ambulance Company Kickbacks Result In $8.6 Million Settlement For HCA-Affiliated Hospitals

On October 4, 2017, the U.S. Department of Justice announced that four hospitals in the Houston, TX area affiliated with HCA Holdings, Inc. ("HCA") will pay an $8.6 million settlement regarding a False Claims Act ("FCA") suit. The hospitals, Bayshore Medical Center, Clear Lake Regional Medical Center, West Houston Medical Center, and East Houston Regional Medical Center, have been accused of referring Medicare and Medicaid patients to ambulance companies in exchange for kickbacks. Specifically, the HCA hospitals were party to an agreement in which they traded free or severely discounted ambulance rides for lucrative referrals of Medicare and Medicaid patients to the ambulance companies supplying the kickbacks.

The settlement resolves two 2011 FCA complaints filed by three ambulance industry whistleblowers, which previously led to a $3 million settlement with a Texas nursing home chain in 2015.

The case is unusual in that it targets the recipients, as opposed to the payors, of the kickbacks. The settlement goes to show that both sides involved in receiving payment for health care referrals may be held accountable.

According to counsel for two of the whistleblowers involved, the HCA hospitals abused their significant influence over the ambulance providers and "misused their market power to benefit their own bottom line at the expense of Medicare and Medicaid."

The three whistleblowers will receive an undisclosed, negotiated amount for the parts they played in bringing the case.

Similar FCA suits have been settled in the past, though they have more commonly been directed at ambulance companies. Texas stands out as having dealt with many incidents of fraud concerning ambulance providers.

The legal team at SFMS has significant experience litigating securities matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier (nlussier@sfmslaw.com) or Chiharu Sekino (csekino@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Sources

Overley, Jeff. "HCA Hospitals to Pay $8.6M Over Ambulance Co. Kickbacks." Law 360. Last modified on October 4, 2017.

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