Ambulance agencies have agreed to pay $21 million in a settlement to settle Medicare and Medicaid fraud claims in a False Claims Act lawsuit.

Several emergency response companies have agreed to a whistleblower settlement which will resolve Medicare and Medicaid fraud claims brought under the False Claims Act.

The Medicare and Medicaid fraud whistleblower lawsuit was filed by whistleblower Dr. Stephen D. and claimed that numerous companies conspired together to increase their profits via Medicare and Medicaid fraud.

Stephen claimed that East Texas Medical Center Regional Healthcare System Inc., East Texas Medical Center Regional Health Services Inc. and Paramedics Plus LLC violated federal law by offering kickbacks to entities.

The arrangement allegedly provided kickbacks to Emergency Medical Services Authority (EMSA), Alameda County, California, and Pinellas County Emergency Medical Services Authority in Florida.

“Paramedics Plus paid millions of dollars in illegal inducements over the course of a number of years,” said U.S. Attorney Joseph D. Brown for the Eastern District of Texas, in a press release.

“Williamson allegedly received gifts and also directed Paramedics Plus to make political contributions to local Oklahoma politicians, which EMSA could not do on its own. Sophisticated health care companies do not simply give away millions of dollars to referral sources without expecting something in exchange. Quid pro quo arrangements for the referral of health care business are illegal.”

Numerous parties were involved in the investigation of these Medicare and Medicaid fraud claims due to the widespread nature of the alleged scheme.

The investigation included U.S. Attorney’s Office for the Eastern District of Texas, the Civil Division of the U.S. Department of Justice, the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and the states of California, Florida, Indiana, and Oklahoma.

The Department of Justice settled with Alameda County and Pinellas EMSA before intervening in Dr. Dean’s lawsuit. At a part of the previous settlement, Alameda County paid $50,000 to the federal government. Similarly, Pinellas EMSA paid the $66,000 to the federal government and $5,200 to the state of Florida.

The recent settlement related to Dr. Dean’s lawsuit concerns the other defendants involved in the alleged scheme. East Texas Medical Center Regional Healthcare System Inc., East Texas Medical Center Regional Health Services Inc., and Paramedics Plus LLC have agreed to pay $20.649 million as a part of the settlement.

EMSA has agreed to pay $300,000. Additionally, EMSA’s former president and CEO Herbert Stephen Williamson agreed to pay $80,000 to the federal government and the State of Oklahoma. As a reward for filing the whistleblower lawsuit, Stephen will receive $4.9 million.

“The United States’ efforts in this case ended abusive practices in the ambulance industry,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “These settlements demonstrate our commitment to ensuring that health care decisions are made based on patient needs, not a health care provider’s financial interests.”

The Medicare and Medicaid Fraud Lawsuit is Case No. 4:14-CV-203 in the United States District Court for the Eastern District of Texas.