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Four Houston Hospitals Resolve Allegations of Kickbacks

October 23rd, 2017

Four Houston-area hospitals affiliated with the Hospital Corporation of America (HCA) will settle allegations that they gave rights to transport Medicare and Medicaid patients to specific ambulance companies that paid to receive this business. The hospitals were said to be in violation of the Anti-Kickback Statute (AKS) that prohibits paying anything of value to induce or receive referrals of services that are covered by Medicare or Medicaid.

The United States Attorney’s Office for the Southern District of Texas alleged that some patients received free or discounted ambulance transportation to the four hospitals in exchange for the hospitals’ referral of the Medicare and Medicaid business to those same companies, an arrangement known as “ambulance swapping.” The case was brought by relators under the False Claims Act (FCA), which is tied to the AKS by the provisions added to the fraud and abuse sections of the Affordable Care Act (ACA).

In 2015, allegations stemming from the same investigation led to the almost $3.2 million settlement with a skilled nursing facility owned by Regent Management Services, also in the Houston area. As in the current case, Regent was accused of giving lucrative Medicare and Medicaid transport referrals to ambulance companies in exchange for discounted ambulance rides for other patients. These are believed to be the only two cases of settlements with healthcare entities over ambulance swapping that do not include the ambulance company itself. It is the ambulance company that bills Medicare and Medicaid for the services.

The settlement of this case was for $8.6 million, of which $300,000 will go to the state of Texas, as it was responsible for the Medicaid transportation.


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