Texas Paper Investigates Medicare and Ambulance Company Profits

Chronicle's observation of EMS companies over the past year repeatedly found able-bodied passengers transported by ambulance from home to therapy and back.


 
 

TERRI LANGFORD, The Houston Chronicle | | Tuesday, October 18, 2011


Early each morning, private ambulances charged toward a leafy Tomball subdivision where, for a hefty price to taxpayers, patients are dispatched to psychiatric "therapy" in a brown brick house where two portable potties are perched in the driveway.

The ambulances are but specks among hundreds of emergency medical vehicles across Harris County making millions of dollars off the poor, the sick and the mentally vulnerable, whether they need a costly EMS lift or not.

Medicare and the American public pay for the ride - dubiously and often - billed to the U.S. government as trips of medical necessity to "clinics" or "hospitals," a Houston Chronicle investigation has found. Much of it fueled by the daily trafficking of the mentally ill and fragile to so-called therapy programs in aging strip malls, mid-rises and residential neighborhoods.

Many of the patients are neither physically debilitated nor confined to a sick bed. They are not headed to, or coming from the hospital, and there is no medical emergency.

Their reason for traveling in an ambulance - equipped with a driver, a medical technician, a gurney, a defibrillator and red sirens - is a mystery even to some of them.

Yet, the unabated growth of this enormous EMS industry - 397 companies in Harris County alone - has allowed the nation's largest insurance provider for the elderly and disabled to morph into a virtual ATM, the Chronicle's examination of Medicare billings shows.

By the federal government's own rules, many of these EMS transports should not qualify for federal dollars.

The financial consequence: Nearly $500 million in Medicare dollars have flown into the hands of private EMS operators in Harris County over a six-year period - $62 million in 2009.

Not even New York City came close to matching the cost. Its Medicare bill for private transports that year: $7 million.

But this isn't about one ambulance, one psychiatric program or one mentally fragile Texan.

It's about churning up money in America's fourth largest city, using tax dollars to feed a ravenous machine.

Six days a week

Twenty-three-year-old Daniel McCall answers the front door of his northwest Houston apartment standing in stocking feet, fresh off an EMS ride from Tomball's Cadwalder Behavioral Clinic, dubbed a Community Mental Health Center by the federal government.

He is just back from therapy, or in his words, a place where "they just fed us junk food ... we watch TV and stuff."

No, he is not bedridden or physically disabled. In fact, he easily ambles about his apartment, sometimes deliberately darkened because he says his caretaker, who handles his money, has complained about the power bill.

He doesn't know why he goes to therapy, why he rode in an Urgent Response ambulance or who pays for it, only that one was sent to pick him up every day, except on Sunday.

Medicare's rules say taxpayer dollars should not be used for ambulance services unless it's "medically necessary and reasonable" or should never be used when "some other means of transportation other than an ambulance could be used without endangering the individual's health."

In a region that leads the nation in the number of EMS operators, vehicles and Medicare payments, the Chronicle's observation of EMS companies over the past year repeatedly found able-bodied passengers transported by ambulance from home to therapy and back.

McCall's trip has taken him on a 25-mile trek from his apartment in northwest Houston up Tomball Parkway, past the neighborhood Valero, and east toward Quinn Road to the Cadwalder Behavioral Clinic, the three-bedroom house with portable toilets in the driveway. Visits to Cadwalder found a steady stream of EMS vehicles picking up and dropping off dozens of people.

"Best place in Tomball to have a heart attack," jokes neighbor Roy Woods, tilting his head as the EMS vehicles - sometimes as many as five or more - turn down the street and head toward the house.

Lyndy Ingram, co-owner of Cadwalder, said the ambulances are not arranged by the clinic, but by personal care home operators or home health care businesses.

"We have had them show up randomly," she said. "We have had them drop off patients who haven't had medical benefits. I don't know how they (EMS) get reimbursed."

In EMS Medicare billing records, the suburban setup is documented as a "hospital," a "clinic" or a "partial hospitalization program."

In McCall's case, the ambulance ride was arranged by Brenda Tillman, who in 2008 and 2009 was cited for keeping mentally incapacitated adults in an unlicensed living center in her home on Cactus Forest Drive, not far from McCall's apartment.

When contacted, Tillman denied McCall used ambulances. When it was pointed out that the Chronicle saw him get into the ambulance at Cadwalder's Crescent Drive property that delivered him to his apartment, she insisted he used it on a trial basis and no money, Medicare or otherwise, exchanged hands.

"They (ambulance companies) get it set up and come around and transport them to that facility, wherever they need to go," she said.

The ambulance company's owner also insisted she had no patient matching McCall's name. But Medicare was charged twice that day for trips to and from Cadwalder. Privacy laws prevent the Chronicle from obtaining specific data about McCall's journey.

Urgent Response has collected nearly $800,000 from Medicare since 2005.

Waiting for the ride

On a 90-degree summer day with heat blasting off the asphalt, 54-year-old Alvin Zarker has parked himself on a covered wooden bench in the back parking lot of a Sharpstown mid-rise.

"I'm waiting for my ambulance," he offers, on this day provided by Heights EMS.

He can't say why he rides in an ambulance. Only that Medicare pays for it.

"It's an arrangement between the (assisted living facility) owner and the EMS," he said.

Lumbering and heavy-set, he lives at St. Francis Health Care Services, an assisted living facility in southwest Houston.

David Opara, who owns the 10-bed facility, said of the ambulances, "Sometimes we look at the phone book and sometimes the ambulance people leave their business cards on the door."

Zarker exited his four-hour mental health therapy session at the Bellaire Care Clinic with the aid of a walker.

"They have catered-in food," Zarker said, tell-tale signs of spaghetti stains still visible on the neckline of his polo shirt. "We used to have junk food."

Only Medicare can determine whether people like McCall and Zarker are eligible for an EMS ride.

Medicare requires ambulance companies to obtain a "physician certification statement" for patients who receive transports. Those statements are supposed to explain why the patient needs them.

After a request by the Chronicle to view those records - essentially a prescription to ride at taxpayer's expense - Medicare officials conceded they are never submitted to the federal agency. Instead, EMS providers need only keep them on file.

"Ambulance providers are not required to submit the physician certification statement form when submitting a claim," wrote David Wright, the Centers for Medicare and Medicaid Services' acting deputy administrator for the Texas region, in a letter to the Chronicle.

The Bellaire Care Clinic Zarker visited in a small second-story office belongs to Dr. Gurdip Buttar. Medicare records show Buttar last year was paid $1.2 million worth of psychiatric services through his South Texas Health Services business listed at the same address.

Calls placed to Buttar for comment were not returned.

Medicare officials have declined to comment about the Texas ambulance industry or its role in overpayments. But the agency has been keenly aware of something askew for more than two decades.

Earlier this month, Medicare's billing contractor for Texas, TrailBlazer Health Enterprises, issued a warning to ambulance companies that it has "targeted non-emergency ambulance transports in Texas" as its number one problem since 2007. This year, it randomly sampled 100 Texas EMS claims. The error rate was nearly 80 percent.

Even last November, TrailBlazer was citing the very transports documented for this story, EMS rides to and from homes: "From a medical necessity standpoint, if the patient had recovered sufficiently to allow him or her to be discharged to home, in most cases, an ambulance transport would not be required," the report stated.

"I think it's safe to say that the system down there is out of control and it's the Wild West," said David Taylor, president of the Tyler-based Texas Ambulance Association.

Billing problems

In 2010, records show, 333 EMS companies were the subject of reviews by Medicare in Harris County because of billing irregularities or mistakes, the Chronicle's investigation found.

"We believe that there's kickbacks going back and forth to purchase patients and that's really the main connection that we've seen from an investigative law enforcement angle," said Joseph Prekker, the U.S. Health and Human Services' top agent for the Office of Inspector General in Houston.

"You have ambulance companies sometimes paying the patients to ride in the ambulance," he said. "You have personal care homes selling patient information to either the ambulance company or the CMHCs (Community Mental Health Centers). It's kind of like a circle. (Some) CMHCs are paying the ambulance companies to bring the patients."

Buried deep inside a 2008 federal criminal court case, transcripts and records document the ever-escalating quest for Medicare dollars by the Houston EMS industry and the parade of transports that initially targeted kidney dialysis patients.

The case, a culmination of a federal investigation that started in 2003, unraveled a conspiracy of kickbacks, fraud and the hunt for patients with Medicare benefits, many of whom didn't need an EMS ride and others who were fictitious characters created by cunning EMS and health care providers.

Records documented EMS companies swarming a dialysis center waiting room and fighting over clients, so much so that one Houston doctor scripted an edict banning solicitation.

"We had a lot of solicitation of the EMS among each other's patients ..," Dr. Shatish Patel, the director of the Beechnut Dialysis Center, testified at the trial of two Houston men accused of fraud. "They (ambulance drivers) used to have arguments in there. So, we asked them that you bring your patient, you take your patient with you, but don't try to look for another patient."

At the time, the FBI and federal regulators were closing in on fraudulent billings by EMS transports, or as Patel conceded, "We were finding so many of our patients riding ambulance service they did not require and there was quite an investigation going on at that time, also."

Among the patients was a woman who suffered from renal failure, diabetes, asthma and depression - but who managed to walk each day to a clinic from her home less than a mile away.

Another woman, according to records, was regularly transported by EMS, even though she rode to church in her brother-in-law's "old little truck," and used her walker to shop at Walmart.

The conspiracy, prosecutors argued, was cooked up by the owners of the now-defunct Americare EMS: Mazem and Weslam Abdallah, two brothers from New Orleans who came to Houston after Hurricane Katrina. Both men went to prison for conspiracy to commit health care fraud after a jury found that patients' medical conditions did not qualify them for Medicare-reimbursed ambulance transport.

Just this year, Kelvin Washington, an administrator at a Sugar Land nursing home, was arrested and accused of receiving kickbacks from the Abdallahs' ambulance company for providing patients.

He supposedly solicited fraudulent ambulance prescriptions from unsuspecting doctors, though some of the patients were no longer nursing home residents and others never had been.

In return, Washington is accused of receiving commissions of $1,000 or more and in one instance, a $697.80 airline ticket for a trip to Hawaii.

"At what point is this so big that no one can handle it anymore?" asked Daniel Block, a former EMS executive, who filed a whistle-blower's lawsuit years ago that exposed Texas EMS operators offering kickbacks to facilities in exchange for Medicare and Medicaid patient referrals.

Watched by the state

Off County Road 144 in Alvin, the first of three Promise EMS vehicles slides into the driveway of a rural ranch-style house at 4:30 in the afternoon. An elderly woman emerges, steps out of the ambulance and shuffles to the Desire to Live personal care home, an unlicensed care facility she shares with others.

The women, some of them frail, have been to therapy at Cadwalder in Tomball, a round trip of 135 miles, one they make nearly every day.

According to state reports, the home's owner, Wanda Butler, has been illegally operating an assisted living facility and has been ordered to shut down.

Though she wouldn't tell the Chronicle why the women needed an ambulance, she did tell state investigators probing conditions at the home that none of the women are physically incapacitated.

In fact, she adamantly declared them competent to care for themselves - though she did decide they needed a taxpayer-sponsored medical ambulance each day.

The owner of Promise EMS, which gets paid by Medicare to carry the women, offered this explanation: "They need to be monitored around the clock ... They go to a program, a psych center," owner Egbe Ware said.

Not only did the Chronicle watch the women unload more than once, but a state investigator did, too.

Last year, the investigator visited Cadwalder to interview the women - just as they were arriving by ambulance.

"At approximately 10 a.m., residents … arrived to the program in an ambulance," the investigator wrote. "(Resident's name) was brought in on a stretcher. The EMS said that she was very weak."

The investigator's notes detailed her interview with one resident who was "very unsteady and very thin." She noted she could see the resident's "bone structure protruding in her neck and shoulder." Another woman, the investigator reported, exited yet a different ambulance and walked to an office out back.

But nothing in state records indicates the investigator questioned why one woman was traveling 65 miles to Cadwalder for therapy if she was so weak, or why the other was riding in an ambulance at all.

Medicare billing records show dozens of pickups and drop-offs in the same Alvin ZIP code as the County Road 144 home over the past 10 months, with the cost to taxpayers more than $1,000 for each round trip.

Federal records show Promise EMS has been paid more than $1.5 million by Medicare since 2005.

'A pretty big barrel'

No one agency - not the Texas Department of State Health Services, the city of Houston's Health Department nor the Centers for Medicare and Medicaid Services - has complete regulatory control of private ambulances.

The state of Texas issues an EMS license to anyone with an ambulance, a few thousand dollars for fees and licenses, basic emergency equipment and a post office box for an address.

At least two people in the ambulance are supposed to have, at a minimum, an emergency technician's license.

Once licensed and permitted, the companies submit to a one-time inspection from the Centers for Medicare and Medicaid Services, are issued a provider number and can submit claims for payment and collect tax.

The city of Houston requires another $1,000 for a permit, a sticker that gives EMS vehicles access to pick up patients inside the city limits.

Only two city EMS inspectors are charged with monitoring safety on the nearly 1,000 ambulances, including whether equipment is operating properly. That's one inspector for every 500 ambulances.

"It's a pretty big barrel," Houston EMS safety inspector Chris Hoff says of the violators who, because of their sheer numbers, are able to elude detection.

In two hours conducting random inspections in the parking lot of a kidney dialysis center, Hoff picked off at least six companies with expired ambulance permits, expired Texas license plates, Epi-Pens past their expiration dates and heart defibrillators without working batteries.

Stream of ambulances

"At the end of the day, who is responsible?" asked Elia Gabbanelli, who along with her husband owns an accordion store in southwest Houston. "These are tax dollars."

For more than a year, Elia and Mike Gabbanelli witnessed with troubled fascination the private ambulances streaming into the parking lot of the strip center at 4975 West Bellfort.

On any given day, dozens of "patients" emerged from the EMS vehicles and headed to a sign-less building tucked behind a Kroger grocery store.

Clients, they said, roamed through the parking lot, even stopping in their store. They called the Texas health department's ambulance inspection team to complain about the high volume of ambulances, but no one called them back.

Yet again, the unmistakable routine: EMS vehicles congregate in the pot-holed parking lot, first in the morning for drop-off, later for pickup.

The deposited patients, many walking, saunter into the building for treatment.

When asked about the ambulances, Ann Castillo, facility manager of Behavioral Medicine, which operated the clinic, said patients arrange the EMS transport.

A few days after the Chronicle's visit, however, the West Bellfort building had been inexplicably vacated, the ambulances equally vanished.

"They don't really go away," said Prekker of the U.S. Office of the Inspector General.

They just move someplace else.



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