Rural/Metro to Pay $2.8 Million Settlement for Billing Patient Transports as Emergencies

Rural/Metro Corporation agrees to pay the federal government $2.8 million to settle allegations that it ripped off Medicare by falsely billing patient transports as emergencies.

From 2007 to the end of 2011, says Arizona U.S. Attorney John Leonardo, Rural/Metro's ambulance divisions including Southwest Ambulance and Tucson's Kords Ambulance would routinely send Medicare higher bills for reimbursement based on false claims.

After transporting patients from one hospital to another, the company sent Medicare bills for the services and classified them falsely as emergencies, which cost "substantially" more, Leonardo's office says. (Why an emergency transport would cost so much more, even if no emergency medical services were provided during the trip, sounds like a separate story.

The government's action is intended to fight "fraud, waste and abuse" of federal funds by companies and people who profit unfairly from false claims, Leonardo stated in a news release.

Rural/Metro didn't admit to any wrongdoing in the settlement, but the feds say the settlement isn't a concession "that its claims are not well-founded."

The company is recovering from bankruptcy and Chapter 11 proceeding that was begun on August 4 and is just now being finalized. According to a December 17 article in the Wall Street Journal, the Chapter 11 plan offers investors a chance to recoup some of their losses and "wipes out the equity stake of Warburg Pincus LLC, which bought Rural/Metro for $738 million in June 2011, in a deal with substantial debt funding."

Company spokesman John Karolzak tells New Times that the $2.8 million settlement and allegations of fraud aren't expected to hurt investor relations.

After we spoke to Karolzak, Rural/Metro sent us a news release about the settlement emphasizing that it didn't affect the Chapter 11 proceedings. But Rural/Metro's statement doesn't argue over the government's allegations, either, or bother claiming the false claims were some sort of mistake.

"The Company agreed to settle the matter in order to avoid expensive and time-consuming litigation..." the statement reads.

It's not really clear, however, if that means the company feels it would have paid less or more than $2.8 million had the allegations resulted in a lawsuit.

Got a tip? Send it to: Ray Stern.

KEEP PHOENIX NEW TIMES FREE... Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.
Contact: Ray Stern