New York City will pay $4.3M to settle Medicare fraud case

Accusations of improper Medicare reimbursements by the New York City Fire Department (FDNY) for ambulance services will be resolved with a $4.3 million settlement from the city to the federal government, according to Reuters.

The U.S. Department of Justice (DOJ) had argued the city had violated the False Claims Act by submitting millions of dollars in claims for unnecessary services between October 2008 and October 2012.

“The City was aware that Medicare was paying reimbursements for these claims, but did not take steps to inform Medicare of the reimbursements for more than four years,” the DOJ’s complaint said.

In court documents, the blame is placed on FDNY’s ambulance billing contractor. In 2010, FDNY is said to have asked the contractor about ambulance services claims being denied for not meeting the Medicare medical necessity requirement. The department had submitted more than 76,000 claims to Medicare that year for emergency ambulance services, and FDNY identified more than 12,000 as failing to meet the necessity standard.

“Yet in June 2010, in response to the FDNY’s May 2010 inquiry, the ambulance billing contractor informed the FDNY that upon reviewing data for a period of several months, the contractor identified only one claim for which Medicare had denied reimbursement on the ground that the services did not meet the Medicare medical necessity requirement,” the complaint said.

FDNY didn’t alert the office of the U.S. Attorney for the Southern District of New York about the improper reimbursements until December 2012, but the department changed how it handled Medicare claims in September 2013.

“As a result of this joint look into Medicare billing practices at the FDNY, the agency has completely revamped its policies and has stronger procedures in place to reduce the risk of recurrence and to immediately correct erroneous or improper payments," the New York City Law Department said in a statement, according to Reuters.