Prosecutors allege that an East Texas health system and its affiliated ambulance company tapped a slush fund to pay kickbacks that secured ambulance contracts.
Seven ambulance industry defendants will pay the government more than $21 million to settle whistleblower allegations of kickbacks and bribes paid to local government authorities in three states to secure ambulance contracts, the Department of Justice said.
Federal prosecutors said that Tyler-based East Texas Medical Center Regional Healthcare System, Inc., East Texas Medical Center Regional Health Services, Inc., and affiliated ambulance company, Paramedics Plus, LLC allegedly created a "slush fund" controlled by ETMC and Paramedics Plus that funneled the kickbacks to municipal emergency services providers in California, Florida and Oklahoma.
The government authorities identified by prosecutors include: Emergency Medical Services Authority, Alameda County, California; Pinellas County Emergency Medical Services Authority in Florida; and Oklahoma's Emergency Medical Services Authority.
Federal prosecutors said the kickbacks and bribes included cash payments, political contributions, marketing expenses, direct payments to the Oklahoma EMSA's contractors, and a direct payment of $50,000 to former EMSA President Herbert Stephen Williamson, which prosecutors said was for his "personal benefit."
The bulk of the settlement, $20.6 million, will be paid by ETMC and Paramedics Plus. Alameda County's Emergency Medical Services Authority will pay $300,000.
Williamson will pay the federal government and Oklahoma $80,000, which prosecutors said was based on what he could afford.
"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.
"Williamson allegedly received gifts and also directed Paramedics Plus to make political contributions to Oklahoma politicians, which EMSA could not do on its own," Brown said.
"Sophisticated healthcare 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," he said.
The whistleblower suit was originally filed in 2014 by Stephen Dean, who was the chief operating officer at Paramedics Plus and oversaw the EMSA contract. Dean will collect $4.9 million as his share of the settlement.
East Texas Medical Center Regional Healthcare System was purchased in May by Ardent Health Services and The University of Texas Health Science Center at Tyler and is now part of the 10-hospital UT Health East Texas system.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
Paramedics Plus allegedly paid millions of dollars in 'illegal inducements.'
A former executive at Paramedics Plus will collect $4.9 million as a whistleblower.
'Quid pro quo arrangements' included contributions to Oklahoma politicians.