FORT KENT, Maine — Northern Maine Medical Center and an area volunteer ambulance service have paid $1.03 million as part of a settlement to claims that they overbilled Medicare and Medicaid.
Ambulance Services Inc. of Fort Kent and NMMC have fully satisfied all outstanding claims that both had falsely billed Medicare and Medicaid for services provided by ASI from 2003 to 2005, U.S. Attorney Paula D. Silsby, of Portland, said in a statement announcing the settlement Friday.
“ASI and NMMC knew or should have known about the false billings, but they failed to investigate or otherwise correct the problem, which resulted in more than $500,000 of false bills to the government,” Silsby wrote in a seven-page civil complaint filed Jan. 7 in U.S. District Court in Portland. Click here to see the complaint
According to internal audits at the hospital and ambulance service, $515,899.39 was overbilled, the complaint states.
The hospital’s chief financial officer, Roger Lagasse, called the overbilling “an unfortunate but innocent incident.”
“The money was all there, in the bank. It was not spent. There was no fraud involved,” Lagasse said when reached at home Friday.
“We made a huge attempt to correct the problem and cooperated fully in the investigation. What they [federal officials] discovered was what we gave them,” he added. “We weren’t interested in pointing fingers. We were interested in correcting the problem.”
The hospital and ambulance service’s quick return of the $515,899 — plus its fast payment of nearly $270,000 each in penalties — illustrates the sincerity of both, Lagasse said.
In their joint complaint, the federal and state governments alleged that an overworked and untrained clerk at ASI had in 2003 begun to occasionally bill Medicare and Medicaid for advanced life support ambulance services when basic life support services, which cost 35 percent less, had occurred, the complaint states.
In 2004, ASI began to bill all ambulance calls as requiring advanced support.
The next year, ASI entered into a verbal agreement with NMMC in which the hospital assumed responsibility for all of ASI’s billing. Lagasse soon learned that the clerk, who was not identified in the civil suit, was about 1½ years behind in ASI’s billings for Medicare and Medicaid reimbursement.
“Despite notice that the billing clerk was overwhelmed and significantly behind in her work, as well as the awareness that it was improper to bill all ambulance services as requiring emergency ‘Advanced Life Support,’ NMMC neither investigated nor rectified the underlying billing problems,” the civil suit states.
The problem was discovered in a statistical review of ambulance billing that federal officials conducted in 2006, the complaint states.
Lagasse disputed that account. He said that he was the first to discover the overbilling problem and that the clerk was “going through a number of personal issues” that contributed to it.
Lagasse said the hospital and the ambulance service contacted a special adviser to discuss the overbilling. The adviser told both to contact federal authorities immediately, and Lagasse said that they did. The hospital and ambulance service were beginning to probe the problem when federal officials arrived, Lagasse said.
One contributing factor in the incident, Lagasse said, was a Medicaid ruling that increasing Medicaid reimbursements to rural medical services.
“We thought it [the increased funding from the overbilling] was additional cash,” Lagasse said. “She [the clerk] was billing it and we had no reason to question her billing ability. When we found out what was occurring, it was too late to fix.”
Lagasse said he felt stung by the civil suit and its aftermath because the hospital became involved with the volunteer ambulance service just to help it keep going. The service is the primary ambulance provider to Allagash, Eagle Lake, Frenchville, Guerette, St. Francis, Wallagrass and Winterville.
“Had we known there were all these issues, we probably would not have made the initial effort,” he said.
“It’s a tough pill to swallow. I feel bad because I was doing this for all the right reasons, and it came back and hit me in the back of the head, and it [ASI] is a good company,” Lagasse added. “If we didn’t have them, I don’t know what we would do.”