An ambulance company the city of Baltimore hired last year, despite objections that it was the subject of a federal investigation, has agreed to pay $1.25 million to resolve allegations it defrauded Medicare thousands of times, federal authorities said.
Hart to Heart was first accused in 2013 by a former employee of billing for unnecessary ambulance rides.
The settlement resolves a whistleblower lawsuit brought by the employee and joined by the federal government. It doesn’t require Hart to Heart to admit liability.
If Hart to Heart doesn’t pay the settlement, authorities could bar it from doing business with federal health programs.
Maureen Dixon, an agent at the federal health department’s inspector general’s office, which stepped in to investigate the case, said companies that engage in Medicare fraud “steal from the pockets of the taxpayer and jeopardize federal healthcare programs.”
Jonathan Biran, an attorney for Hart to Heart, said the company continues to deny the allegations, but decided to settle to let its executives “refocus their energy on managing day-to-day operations and to reinvest in the company and its future.”
“Hart to Heart remains committed to complying with all federal and state laws and regulations,” Biran said in a statement. “This settlement will in no way affect the quality of service to which Hart to Heart’s clients and patients have become accustomed.”
Federal authorities alleged in a complaint in November that Hart to Heart, which is headquartered in Harford County, submitted claims to Medicare for transporting patients when it wasn’t medically required. The government also alleged that former employees said they were pressured into falsifying documents to make it look as though the transportation was necessary.
Last June — while the investigation into Hart to Heart was underway — Baltimore awarded the company a five-year, $33 million deal to transport Medicaid patients.
When the contract came before the city’s spending board, lawyers for Transdev, which previously held the contract and was seeking it again, said it was “perplexing” the city would award the work to a company under investigation by federal authorities.
“It’s worth significant weight, to transition from an entity with a known record, known relationships, known contributions and dedication to the city,” attorney Senchal Dashiell Barrolle told board members, “to an entity that on the other hand, does not have that experience, yes, and also has that specter of impropriety on account of the investigation.”
Erin Sher Smyth, city’s procurement officer, told the board that officials were aware of allegations against Hart to Heart but only gave the claims so much weight because they “have not resulted in a final determination of disqualification.”
Smyth said Transdev’s bid was $16 million higher and the company was itself under investigation for overcharging on a different city contract. Smyth didn’t identify that contract, but in September the city sued Transdev, alleging it overcharged for years to run the Circulator bus system. A judge dismissed the case in December; the city is appealing.
The board, then controlled by Democratic Mayor Catherine Pugh, rejected the protest by Transdev and unanimously approved the contract with Hart to Heart. So far, the company has been paid $4.2 million.
City Solicitor Andre Davis said officials stand by the decision to give the company the work.
“We’ve done our due diligence,” he said. “You can’t obviously predict the future with 100 percent accuracy, but we believe the decision to make the award was the right one.”
In the federal case against Hart to Heart, authorities accused the company of submitting thousands of fraudulent claims and receiving millions of dollars in payouts from Medicare.
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The government alleged Jason and Terry Skidmore, a husband and wife who own Hart to Heart, got their employees to carry out the scheme using a mixture of training, threats and coercion. Employees were allegedly disciplined, fired or quit when they wouldn’t go along.
The allegations revolve around whether the company routinely transported patients who could sit, stand or walk, meaning they typically didn’t need to travel by ambulance.
Federal authorities said the company had a policy that required crew members to walk out of a room if they found a patient sitting up and ask the staff at medical facilities to have them lie down instead. Then, the crew would only document discovering the patient lying down.
A former manager at the company told investigators that crews were told to include certain phrases in their reports so that Medicare would be more likely to pay out. They included “assist to stretcher,” “fall risk,” “unable to walk,” and “patient needed maximum assistance.”
Bryan Arvey, the former employee who first brought the case will receive $237,500 of the total settlement. His attorneys will be paid another $50,000.
Nicholas Woodfield, a principal at the Employment Law Group, the firm representing Arvey, said the case shows how giving whistleblowers an financial incentive to come forward can help hold businesses accountable.
"He feels vindicated,” Woodfield said. “It’s nice to be validated in the end.”