The U.S. government has chosen to intervene in a False Claims Act lawsuit filed against a Texas hospital system and an ambulance company by a whistleblower who alleges the defendants entered into an illegal kickback scheme to secure and retain a lucrative public ambulance services contract.
The lawsuit names multiple defendants: East Texas Medical Center Regional Healthcare System, Inc., East Texas Medical Center Regional Health Services, Inc. (together, ETMC), Paramedics Plus, LLC, Emergency Medical Services Authority (EMSA), and EMSA’s President, Herbert Stephen Williamson.
According to the U.S. Attorney for the Eastern District of Texas, ETMC, one of the largest health care systems in Eastern Texas, entered into an unlawful kickback scheme to acquire a public ambulance services contract awarded by Mr. Williamson and EMSA, a public trust organization established under Oklahoma law.
The complaint alleges the defendants created a slush fund controlled by ETMC and Paramedics Plus that paid more than $20 million in kickbacks and bribes in the form of cash payments, political contributions, marketing expenses, and direct payments to EMSA’s contractors. The U.S. alleges that the ETMC and Paramedics Plus even paid at least $50,000 for Mr. Williamson’s personal benefit as part of the scheme.
The scheme allegedly helped ETMC and Paramedics Plus boost their profits by walling out competition and boosting Medicare and Medicaid billings.
“The law prohibits paying kickbacks, such as those alleged in this lawsuit, in order to gain access to Medicare and Medicaid funds,” said Acting U.S. Attorney Brit Featherston. “Kickback schemes are anti-competitive, undermine the integrity of our nation’s health care programs, and wrongly prioritize profits over patient care.”
The lawsuit was originally filed in 2014 by Stephen Dean, the former Chief Operating Officer of Paramedics Plus, who oversaw the EMSA contract as part of his responsibilities. Mr. Dean filed the lawsuit under the whistleblower provisions of the False Claims Act, which allow private parties to sue on behalf of the government in cases of alleged fraud and other wrongdoing.
Mr. Dean’s lawsuit includes allegations that several additional defendants including other municipal organizations in California, Florida, and Indiana, entered into similar kickback schemes with Paramedics Plus.