Ambulance Service Files Federal False Claims Act Petition; State and County Ethics Called Into Question in California Cost Regulation.

Business Editors/Health and Medical Writers

PALO ALTO, Calif.--(BUSINESS WIRE)--April 26, 2000

The Supreme Court of the United States is currently considering a petition in a "whistle-blower" Federal False Claims Act case filed by California physician/attorney Eugene Dong on behalf of A-1 Ambulance Service of Salinas, California and a former manager of the company. At issue in the Court is whether the company can litigate the claims because the allegations were allegedly publicly disclosed prior to filing of the suit.

However, the case also raises the level of public scrutiny of state and county ethics in regulating the cost of ambulance services in the state of California. At issue is how the cost of ambulance services for indigent medical patients is being covered in California. An indigent ambulance user is one whose own resources, or those of family and friends, are inadequate to pay the cost of service. California courts have unequivocally stated that those costs are to come out of the county treasury. In that manner, the financial risks of emergency illness of the poor are borne evenly by society by spreading it over all taxpayers.

Dr. Dong asserts, on the basis of its own experience, counties are colluding with private ambulance companies to dodge their responsibility by shifting the expense of all ambulance services to uninformed Medicare and private medical insurance clients. While the counties require no billing, or heavily discounted billing, for their own patients in contracts they let for ambulance services, they routinely look to the contractor to offer a price to the public far in excess of their actual costs, with approval by the state EMS authority.

"Though the counties have a legal responsibility to bear the cost of indigent transport, counties are saying, `We don't care what you charge the public, as long as you don't bill us.'," said Dong.

The company has contracted with a web design company to use internet technology to inform the public of the counties' activities. The information, based upon court documents filed by the counties of San Mateo, Monterey and Los Angeles, is explained in detail at www.emsripoff.org.

"The average cost of ambulance service to the public was 44% higher because of the discount to the county in San Mateo," said Dong

In 1995 in Monterey County, Peninsula Paramedics boasted that its service was economical for the elderly since they only had to pay $110 as co-payment. "What the contractor did not say publicly was that that amount was the total payment by the county for exactly the same level of service," observed Dong.

In Los Angeles County, between 1988 and 1995, the insured user's average ambulance bill increased from $280.00 to $407.00, while Los Angeles County decreased its payments from $3 million to near zero.

"Calculations reveal that LA County was only paying about $28.00 per patient up to 1995 and about $6.00 per patient after 1995," Dong said. Recently revealed LA County documents show that the ambulance contractors shifted the costs of over 28,000 indigent patients per year to the insured patients and their insurers. "That is about an $11 million differential per year," Dong said.

The web site documents how San Mateo County and its ambulance operator, Baystar, meld a "dispatch" fee of $32.06 into the insured patient's bill to finance county functions, yielding an excess of $249,000 per year over the operator's cost of service. "A fee," Dong says, "insurers would rightly decline to pay if they knew it was charged. But they do not since it does not appear on patients' bills."

All told, in San Mateo County, the web site shows that ambulance costs have increased in excess of $2 million per year over the legitimate costs of service.

The counties examined have passed their obligation for transport and emergency medical services care of the indigent onto Medicare, the privately insured public, and the working poor. How? They raised rates paid by everyone but themselves. It is a de facto transfer of responsibility from the counties to the insured, Dong said.

To paraphrase the New York Times' recent complaint, "Nobody has satisfactorily explained why the insured have to pay the debts of the county and state," Dong said.