National Ambulance Provider Rural/Metro Corporation to Pay U.S. $2.5 Million for Violating False Claims Act

WASHINGTON – Rural/Metro Corporation, one of the nation’s largest ambulance providers, has agreed to pay the United States over $2.5 million to resolve allegations that the company violated the False Claims Act, the Justice Department announced today. The government alleged that the ambulance company provided illegal inducements to hospitals in Texas in exchange for referrals.

The settlement relates to allegations that the Scottsdale, Ariz.-based company provided or offered inducements to Texas hospitals in the form of contracts known as “swapping arrangements.” Such contracts gave the medical facilities discounts on transports in exchange for the referral of all or some of the ambulance transports of patients being discharged from the hospitals, which were billed to Medicare.

“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 D. Keisler, Assistant Attorney of the Justice Department’s Civil Division. “This matter should serve as a reminder that referrals of Medicare patients should never be treated as a commodity that health care providers are free to trade to enhance their bottom line.”

The settlement arose out of qui tam or whistleblower lawsuits filed in 2000 and 2001 by Daniel Block and Adam Wightman, both of whom had previously been employed by one of Rural/Metro’s competitors. Under the False Claims Act, private individuals or firms, known as relators, can file suit on behalf of the government and may share in the recovery. As a result of the settlement, the two men will receive approximately $450,000.

The investigation was conducted by the Civil Division of the Justice Department, the U.S. Attorney’s Office for the Southern District of Texas, the Office of Inspector General for the Department of Health and Human Services, and the Federal Bureau of Investigation.

The cases are United States ex rel. Block v. Laidlaw Medical Transport (S.D. Tex.) and United States ex rel. Wightman v. Laidlaw, Inc. (S.D. Tex.).