Whistleblower Receives $3.5 Million for Reporting Fraudulent Billing Practices

Mary Jane Wilmoth

Published On: April 7th, 2017

Medstar Ambulance Inc., including four subsidiary companies and its two owners, Nicholas and Gregory Melehov, have agreed to pay $12.7 million to resolve allegations that the Massachusetts-based ambulance company knowingly submitted false claims to Medicare.

The settlement resolves allegations that from Jan. 1, 2011, through Oct. 31, 2014, Medstar submitted false claims to Medicare for ambulance transport services. Specifically, the United States alleged that Medstar routinely billed for services that did not qualify for reimbursement because the transports were not medically reasonable and necessary, billed for higher levels of services than were required by patients’ conditions, and billed for higher levels of services than were actually provided.

The allegations were filed in a lawsuit by Dale Meehan, a former employee in Medstar’s billing office, under the whistleblower provisions of the False Claims Act. Those provisions allow private individuals to sue on behalf of the United States and to share in the proceeds of any settlement or judgment. Meehan received approximately $3.5 million.

The False Claims Act also allows the whistleblower to receive a share of any funds recovered through the lawsuit. The False Claims Act is one of the most powerful tools to combat government contract fraud. Violators of the False Claims Act are liable for three times the dollar amount that the government is defrauded and civil penalties of $5,000 to $10,000 for each false claim. A qui tam plaintiff can receive between 15 and 30 percent of the total recovery from the defendant, whether through a favorable judgment or a settlement. Whistleblower must file a qui tam lawsuit to be eligible to recover money under the FCA. Merely informing the government about the violation will not qualify you for an award.