With the aid of Baltimore’s inspector general, the city has denied an estimated $637,300 overpayment to an ambulance company that sought to raise its rates due to the coronavirus pandemic, according to a report on the investigation.
Online city procurement records show Hart to Heart Transportation won a five-year contract with the city beginning June 27, 2018, worth $33 million, to provide medical transportation for Medicaid clients.
Under the terms, the price the city pays for the service cannot change during the five-year period. But the inspector general reported that the vendor contacted the city in May to increase its rate to cover personnel costs, changes in volume and additional training costs due to the COVID-19 pandemic.
The report issued Wednesday did not name the vendor, and Inspector General Isabel Mercedes Cumming declined to identify the company that was the subject of her office’s report.
But the start and end dates for the contract described by the inspector general’s office match that of Hart to Heart’s contract on Baltimore’s CitiBuy procurement website. Also, the report said the company received a $1 million federal Paycheck Protection Program loan this spring before requesting the additional payment from the city; federal records show Hart to Heart was approved for such a loan in the range of $1 million to $2 million.
Hart to Heart did not immediately respond to an email seeking comment but late Thursday night emailed a statement saying that it “formally and appropriately” asked for the increase because of “extraordinary hardships” and “major revenue shortfalls” with its existing contract with the city.
“The global pandemic continues to impose severe financial hardship, health risks and uncertainty for all businesses, particularly those critically operating on the front lines, including Hart to Heart Transportation,” Hart to Heart owner J. Jason Skidmore wrote in the statement. “It is important to note, Hart to Heart never charged any higher rates for services during this process or its contract period.”
Skidmore said all communication was handled through “official” channels and by the right process in the “most transparent” manner possible.
The inspector general’s office uncovered the vendor’s request to increase its rate charged to the city during an ongoing investigation into a health department contract.
The inspector general’s office — charged with investigating complaints of fraud, financial waste and abuse — alerted the mayor’s office.
“Specifically, the vendor stated that they are requesting a 4% increase for all services provided to the city of Baltimore due to a decrease in service volume, increased operating costs, and additional costs associated with the COVID-19 illness,” the inspector general wrote.
If such an increase had been approved, the inspector general estimated it would have cost the city an additional $637,322.40 for the remainder of the contract. The contract is to expire June 30, 2023.
The vendor wrote to the health department saying it lost revenue when the agency told it to stop providing services that were not for “life-sustaining purposes,” according to the inspector general’s report. However, it was the Maryland Department of Health that ordered certain services to be postponed, including some of those the vendor provides.
In a letter attached to the report, Kim Morton, chief of staff for Democratic Mayor Bernard C. “Jack” Young, said the health department has confirmed with the vendor there would be no compensation increase. Similar matters in the future will be reviewed by the health department’s program managers and legal counselors, Morton said.
Hart to Heart, a Harford County-based company, agreed to pay $1.25 million after a federal investigation into allegations it defrauded Medicare thousands of times by billing for rides that were not medically required. The city hired the ambulance company in 2018 over objections concerning that investigation.
An attorney for Hart to Heart told The Baltimore Sun last year the company denied the allegations. Jonathan Biran said Hart to Heart decided to settle that matter so its executives could “refocus their energy on managing day-to-day operations and to reinvest in the company and its future.” The settlement did not require Hart to Heart to admit liability.
The city approved the contract in 2018 over objections from lawyers for Transdev, a company that previously held the contract. Those lawyers called it “perplexing” that the city would award the work to a company when it was, at that time, under investigation by federal authorities in the case that led to the settlement.
Baltimore Sun reporters Emily Opilo and McKenna Oxenden contributed to this article.