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Eastern District of Kentucky

FI l ED

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON

UNITED STATES OF AMERICA, ET AL. )
EX REL. [UNDER SEAL]
)
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Plaintiff,
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v.
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[UNDER SEAL]
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CASE NO. ~
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APR 2 4 2015
AT LEXINGTON
ROBERT R. CARR
CLERK U.S. DISTRICT COURT

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Qui Tam COMPLAINT

FILED UNDER SEAL
DO NOT FILE ON PACER UNLESS UNSEALED BY COURT ORDER

Case: 5:15-cv-00105-JMH Doc #: 1 Filed: 04/24/15 Page: 2 of 22 - Page ID#: 2

Ea.stern District of Kentucky

FILED

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON

APR 2 4 2015
AT LEXINGTON
ROBERT R. CARR
CLERK U.S. DISTRICT COURT

UNITED STATES ex rel.
DARRELL STEPHEN MCINTOSH
BRINGING THIS ACTION ON
BEHALF OF THE UNITED STATES OF
AMERICA

Case No: 5:/'S- C:v-/D 5-JAA.H

c/o Kerry Harvey
United States Attorney
230 W. Vine Street, Suite 300
Lexington, KY 40507-1612
-andc/o Eric H. Holder, Jr.
Attorney General of the United States
Department of Justice
1oth & Constitution Avenue, N. W.
Washington, D.C. 20530
Plaintiff,

v.
ARROW-MED AMBULANCE, INC.

Serve: Hershel Jay Arrowood
68 Shacks Lane
Jackson, KY 41339
Defendant.

QUI TAM COMPLAINT

Comes the Relator, Darrell Stephen Mcintosh, by and through the undersigned counsel,
and on behalf of the Plaintiff, the United States of America, alleges based upon personal
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knowledge and relevant documents, as follows for his Complaint under the Federal False Claims
Act, 31 U.S.C. § 3729-3733, et seq., against the Defendant, Arrow-Med Ambulance, Inc.
INTRODUCTION

This is an action brought pursuant to the Federal False Claims Act, 31 U.S.C. § 37293733, et seq., by the Relator, Darrell Stephen Mcintosh, to recover reimbursements obtained
from Medicare and other government programs by the Defendant, Arrow-Med Ambulance, Inc.
The fraudulent submissions made by the Defendant include (i) medically unnecessary nonemergency ambulance transport; (ii) billing for non-qualified ambulance transport; and (iii)
violating anti-kickback laws with referral sources.
The medically unnecessary ambulance transports by the Defendant include the
transportation of patients to and from kidney dialysis clinics where the patients demonstrated no
medical necessity for such transportation. Furthermore, the Relator has been informed that the
unnecessary medical transports were routinely accomplished by exaggerating the conditions of
patients on documentation, including run reports and claims for reimbursement submitted
through Medicare. In addition, Arrow-Med billed for non-qualified ambulance transport through
Medicare by utilizing the services of an individual as an EMT, when the individual was not
licensed to provide these services. Also, Arrow-Med engaged in a swapping scheme with a
nursing home wherein Arrow-Med provided deeply discounted runs billable to the nursing home
in exchange for referrals for Medicare Part B patients. The scheme is a violation of AntiKickback laws. As a result, the Defendant's fraudulent scheme caused the submission of false
claims for payment to government healthcare programs.

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PARTIES
1.

The Relator, Darrell Stephen Mcintosh, is an individual residing in Jackson,

Breathitt County, Kentucky ("MCINTOSH"). MCINTOSH has personal knowledge of the facts
and allegations contained in this Complaint by virtue of his position, during the relevant time
periods, as the owner of Mcintosh Ambulance Services, Inc. Mcintosh Ambulance Services,
Inc. is a recognized ambulance agency operator in Breathitt County, Kentucky.
2.

The Defendant, Arrow-Med Ambulance, Inc. is a Kentucky corporation with its

principal place of business in Jackson, Breathitt County, Kentucky ("ARROW-MED").
ARROW-MED is a licensed ambulance agency operator with the Kentucky Board of Emergency
Medical Services ("KBEMS"). According to publicly available records on KBEMS, ARROWMED does business as "Breathitt County Ambulance" and "Wolfe County Ambulance". The
principal of ARROW-MED is Hershel Jay Arrowood.
JURISDICTION AND VENUE
3.

Jurisdiction in this Court is proper pursuant to 31 U.S.C. §§ 3732(a) and 3730(b).

This Court also has jurisdiction pursuant to 28 U.S.C. § 1331.
4.

The Court may exercise personal jurisdiction over the Defendants, and venue is

proper in this Court pursuant to 31 U.S.C. § 3732(a) and 28 U.S.C. § 1391 because the acts
proscribed by 31 U.S.C. §§ 3729 et seq., and complained of herein took place in part in this
District and the Defendants transacted business in this District:
a. At all times relevant to this Complaint, ARROW-MED operated an ambulance
service in Jackson, Breathitt County, Kentucky.

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b. On numerous occasions from January 26, 2012 to current date, ARROW-MED
provided patient transport to patients who were beneficiaries of Medicare for
which there existed no medical necessity for such transport in the District.
c. Many of ARROW-MED's patients who receive frequent and routine transport for
which there is no medical necessity reside in this District.
d. The United States made payments, directly or indirectly, for benefits under
Medicare Parts A and B to ARROW-MED within this District.
5.

Pursuant to 31 U.S.C. § 3730(b)(2), the Relator prepared and served the original

Complaint on the Attorney General of the United States, and the United States Attorney for the
Eastern District of Kentucky, and a statement of all material evidence and information in his
possession, of which he is the original source. This disclosure statement was supported by
material evidence known to the Relator at the time of filing that establishes the existence of
Defendants' false and fraudulent claims. Because the disclosure statement included attorneyclient communications (including common interest privilege) and work product of Relator's
attorneys, and was submitted to those Federal officials in their capacity as counsel for the United
States - a potential and real party in interest in this action - the Relator understands this
disclosure to be confidential and exempt from disclosure under the Freedom of Information Act.
5 U.S.C. § 552; 31 U.S.C. § 3729(c).

LEGAL BACKGROUND
A.

Federal False Claims Act
6.

The Federal False Claims Act ("FCA"), originally enacted in 1863 during the

Civil War, was substantially amended by the False Claims Amendments Act of 1986 and signed
into law on October 17, 1986.

Congress enacted these amendments to enhance the

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Government's ability to recover losses sustained as a result of fraud against the United States and
to provide a private cause of action for the protection of individuals who act in furtherance of the
purposes of the Federal False Claims Act.

Congress amended the FCA as a part of the Fraud

Enforcement Recovery Act of 2009 on May 20, 2009, making certain amendments retroactive,
including 31 U.S.C. § 3729(a)(l )(B). It amended the FCA again as part of the Patient Protection
and Affordable Care Act on March 23, 2010.
7.

Violations of the FCA subject the defendant to civil penalties of not less than

$5,500 and not more than $11,000 per false claim, as adjusted for inflation, plus three times the
amount of damages that the Government sustains as a result of the defendant's actions. 31
U.S.C. § 3729(a).
8.

The complaint is to be filed under seal for 60 days (without service on the

Defendant during such 60-day period) to enable the Government: (a) to conduct its own
investigation without the Defendant's knowledge and (b) to determine whether to join the action.
31 U.S.C. § 3731.
B.

Medicare Part A and Part B; Medicaid
9.

The Defendant, ARROW-MED, improperly submitted reimbursement claims

under Medicare and other federally-funded healthcare programs by billing for the provision of
medically unnecessary ambulance transportation.
10.

In 1965, as part of the Social Security Act, Congress established the Medicare

program of health insurance for the elderly and disabled. The Medicare Act, 42 U.S.C. § 1395 et

seq., established a federally subsidized health insurance program.
11.

Medicare provides reimbursement for healthcare benefits, items and services,

including pharmaceutical drugs and supplies. It provides reimbursements to participating

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healthcare providers on behalf of its beneficiaries, through contracted intermediaries, or directly
to its beneficiaries.
12.

Medicare consists of two parts. Part A authorizes the payment of federal funds for

hospitalization and post-hospitalization care. Part B authorizes the payment of federal funds for
medical and other health services, including separately payable ambulance services.
13.

The fraudulent practices discussed herein involved reimbursements under both

Medicare Part A and Part B.
14.

The Defendant ARROW-MED is a participating ambulance service provider in

federally-funded healthcare programs including Medicare.
15.

Medicaid provides healthcare benefits for certain groups, primarily low income

and disabled persons. Medicaid is administered and funded in part with federal funds.
16.

The federal involvement in Medicaid includes providing matching funds and

ensuring that states comply with minimum standards in the administration of the program.
17.

The federal share of Medicaid payments, known as the Federal Medical

Assistance Percentage, is based on each state's per capita income compared to the national
average.
C.

Reimbursement for Ambulance Services
18.

Medicare pays only for those services that are "reasonable and necessary for the

diagnosis or treatment of illness or injury". 42 U.S.C. § 1395y(a)(l)(A).
19.

Medicare covers ambulance services only "where the use of other methods of

transportation is contraindicated by the individual's condition [ ... ] but only to the extent
provided in regulations." 42 U.S.C. 1395x(s)(7).

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20.

To be reimbursable under Medicare Parts A and B, the transport must be

medically necessary. Thus, the beneficiary's medical condition must require both the ambulance
transportation itself and the level of service provided in order for the billed service to be
considered medically necessary. 42 C.F.R. 410.40(d)(l).
21.

Non-emergency transportation by ambulance 1s reimbursable only if the

beneficiary is bed-confined and it is documented that the beneficiary's condition is such that
other methods of transportation are contraindicated, or if a patient's medical condition is such
that the ambulance transportation is medically required. To be considered bed-confined, the
following criteria must be met: (1) the beneficiary is unable to get up from bed without
assistance, (2) the beneficiary is unable to ambulate, and (3) the beneficiary is unable to sit in a
chair or wheelchair. Id
22.

Nonemergency, scheduled, repetitive ambulance services are reimbursed only if

the beneficiary's physician certifies that the medical necessity requirements are met, no earlier
than sixty (60) days before the date the service is furnished. 42 C.F.R. § 410.40(d)(2).
23.

Nonemergency ambulance services that are either unscheduled or that are

scheduled on a non-repetitive basis are also reimbursed only under specific circumstances
enumerated in 42 C.F.R. § 410.40(d)(3).
24.

Medicare covers four kinds of ambulance transportation subject to the

requirement that the transports are medically necessary: (1) from a point of origin to a hospital or
skilled nursing facility ("SNF") capable of furnishing the required level of care; (2) from a
hospital or SNF to the beneficiary's home; (3) to and from a SNF to the nearest supplier of
medically necessary services unavailable at the SNF where the beneficiary resides; and (4) for

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beneficiaries receiving renal dialysis treatment for End-Stage Renal Disease to and from the
beneficiary's home to the nearest facility that furnishes renal dialysis. 42 C.F.R. § 410.40(e).
25.

Furthermore Medicare regulations require ambulance service providers to

adequately staff both emergency and non-emergency transport vehicles in order to be eligible for
reimbursement. Pursuant to 42 CFR 410.4l(b)(l)(i), a Basic Life Support ("BLS") vehicle must
be staffed by an individual who is "certified as an emergency medical technician by the state or
local authority".
26.

Similarly, under Kentucky regulations, a Class I BLS ambulance must at a

minimum be staffed by one (1) emergency medical technician and one (1) first responder. 202
KAR 7:501, Sec. 8.
27.

An ambulance supplier must, upon a Medicare carrier's request, complete and

return the designated CMS form and provide the carrier with emergency vehicle and staff
licensure and certification requirements. 42 C.F.R. § 410.41(c)(2).
28.

Kentucky state regulations regarding the reimbursement of ambulance transport

through Medicaid similarly require that the transport be "medically necessary". 907 KAR 1:060
Sec. 1(6).
29.

Medicaid reimburses non-emergency ambulance services only if the patient's

medical condition warrants transport by stretcher; the patient is traveling to or from a Medicaidcovered service, exclusive of a pharmacy service; and the service is the least expensive available
transportation for the patient's needs. 907 KAR 1:060, Sec. 4.
30.

Alternative transportation methods are available for individuals whose medical

condition does not necessitate the use of ambulance transport, including medical van

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transportation. Medical van transportation is serviced in the area of Breathitt County through
Middle Kentucky Transportation, Inc.
31.

The Medicare and Medicaid Patient Protection Act, 42 U.S.C. § 1320a-7b(b),

commonly referred to as the Anti-Kickback Statute ("AKS"), prohibits any person from offering
or paying remuneration in order to induce or reward referrals for services paid for under federal
healthcare programs. The statute provides in relevant part:
(b) Illegal remuneration [ ... ]
(2) whoever knowingly and willfully offers or pays any
remuneration (including any kickback, bribe or rebate) directly or
indirectly, overtly or covertly, in cash or in kind to any person to
induce such person (A) to refer an individual to a person for the furnishing or
arranging for the furnishing of any item or service for which
payment may be made in whole or in part under a Federal health
care program, or
(B) to purchase, lease, order or arrange for or recommend
purchasing, leasing or ordering any good, facility, service, or item
for which payment may be made in whole or in part under a
Federal health care program, shall be guilty of a felony and upon
conviction thereof, shall be fined not more than $25,000 or
imprisoned for not more than five years, or both.
42 U.S.C. § 1320a-7b(b)(2).
32.

The AKS is violated if any one purpose of the remuneration is to induce or reward

referrals of federal health care program business. 66 Fed. Reg. 856, 918 (Jan. 4, 2001).
33.

The AKS arose out of Congressional concern that providing things of value to

those who can influence healthcare decisions may corrupt professional healthcare decisionmaking, and may result in federal funds being diverted to pay for goods and services that are
medically unnecessary, of poor quality, or even harmful to a vulnerable patient population.
34.

The AKS prohibits payment of kickbacks in order to protect the integrity of

Medicare. See Social Security Amendments of 1972, Pub. L. No. 92-603, §§ 242(b) and (c); 42
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U.S.C. § 1320a-7b, Medicare-Medicaid Antifraud and Abuse Amendments, Pub. L. No. 95-142;
Medicare and Medicaid Patient and Program Protection Act of 1987, Pub. L. No. 100-93.
35.

When a provider submits a claim for payment, it does so subject to and under the

terms of its certification to the United States that the services for which payment is sought were
delivered in accordance with federal law, including, without limitation, the AKS.
36.

At all times material to the Complaint, the Defendant entered into agreements

with selected healthcare facilities to provide ambulance service to the Medicare Part A patients at
prices far below the MFS rate, and on information and belief, the cost to Defendants. Defendants
offered or paid remunerations to induce healthcare facilities to hire Defendants for services for
which payment may be made in whole or in part under a government healthcare program.
FACTUAL ALLEGATIONS/ FRAUDULENT SCHEME

37.

The Defendant, ARROW-MED, regularly and fraudulently submitted claims for

payment to government healthcare programs.
38.

The fraudulent activity raised by the Relator in this Qui Tam Complaint involves

three fraudulent schemes: (A) medically unnecessary non-emergency ambulance transport; (B)
billing for non-qualified ambulance transport; and (C) providing kickbacks to a referral source.

A.

Medically Unnecessary Non-Emergency Ambulance Transport
39.

The Defendant, ARROW-MED, regularly provided transportation for government

healthcare beneficiaries who were able to ambulate and did not meet the material conditions to
be eligible for payment.
40.

For example, ARROW-MED routinely transported patients for dialysis treatments

where there was no medical necessity for the transport.

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41.

Many of the patient transports, including those of dialysis patients, failed to meet

the medical necessity requirements permitting reimbursement from Medicare.
42.

The examples of unnecessary medical transport for kidney dialysis patients

include patients such as Patient JB, Patient DS, Patient ST, Patient VR, Patient JN, Patient CH,
Patient CE, and Patient DE. 1
43.

The Relator is familiar with Patient JB's medical condition as a result of the

services he performed with Mcintosh Ambulance Services, Inc. and as a result of his familiarity
with citizens in the community.
44.

Patient JB received kidney dialysis treatment three times per week: Monday,

Wednesday, Friday.
45.

Despite the medical need for the kidney dialysis treatment, Patient JB was able to

ambulate and transport herself to and from the kidney dialysis treatment center.
46.

On numerous instances, the Relator witnessed Patient JB engaging in behavior

that indicated that her medical condition did not reflect the medical necessity for the use of
ambulance transport.
47.

On September 9, 2014, Patient JB was viewed by Relator demonstrating physical

ability that would indicate that Patient JB was able to transport herself including driving a motor
vehicle and pumping gas.
48.

The following day, on September 10, 2014, Patient JB was viewed by Relator on

a stretcher outside of the kidney dialysis treatment center being transported in an ambulance
identified as "ARROW-MED" for transport.
49.

Despite Patient JB's lack of medical necessity for ambulance transport, she was

routinely transported approximately twelve (12) miles by ARROW-MED.
1

Patient names are abbreviated to maintain each patient's confidentiality.

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50.

On July 30, 2014, December 23, 2014, and August 20, 2014, Patient JB was also

viewed by Relator or by employees of Mcintosh Ambulance Services, Inc. During these
occasions, Patient JB 's physical ability did not demonstrate the medical necessity for ambulance
treatment.
51.

By way of further example, the Relator is familiar with Patient DS's medical

condition as a result of the services he performed with Mcintosh Ambulance Services, Inc. and
as a result of his familiarity with citizens in the community.
52.

Patient DS received kidney dialysis treatment ambulance transport from

ARROW-MED that lacked medical necessity.
53.

On or around October 17, 2014, the Relator was informed by employees of

Mcintosh Ambulance Services that ARROW-MED transported Patient DS for kidney dialysis
treatment. The lack of medical necessity for Patient DS was so apparent during the transport that
ARROW-MED permitted Patient DS to ride in the front seat of the ambulance.
54.

By way of further example, the Relator is familiar with Patient ST's medical

condition as a result of the services he performed with Mcintosh Ambulance Services, Inc. and
as a result of his familiarity with citizens in the community.
55.

Patient ST received kidney dialysis treatment transports from ARROW-MED.

56.

On or around October 17, 2014, the Relator was informed by employees of

Mcintosh Ambulance Services that ARROW-MED transported Patient ST for kidney dialysis
treatment.
57.

In addition to being medically unnecessary, the October 17, 2014 transport of

Patient ST and Patient DS constituted a "double transport" which if reported properly, results in
lower Medicare reimbursements.

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58.

By way of further example, the Relator is familiar with Patient VR's medical

condition as a result of the services he performed with Mcintosh Ambulance Services, Inc. and
as a result of his familiarity with citizens in the community.
59.

Patient DS received kidney dialysis treatment transports from ARROW-MED that

lacked medical necessity.
60.

The Relator has personally witnessed a number of ARROW-MED's patients

transported to kidney dialysis centers who were able to walk outside for the purpose of smoking
cigarettes, demonstrating the lack of medical necessity.
61.

In addition, the Relators has been informed by staff for Fresenius Medical dialysis

clinic in Jackson, Kentucky, that ARROW-MED transports patients that lack medical necessity
for the non-emergency transport. These patients were dropped off at the waiting room of the
clinic by ARROW-MED and were able to walk without assistance. The clinic manager also
informed Relator that ARROW-MED had solicited the business of Medicare dialysis patients.
62.

By way of further example, Relator was informed that Patient CH received kidney

dialysis treatment transports from ARROW-MED that lacked medical necessity.
63.

By way of further example, Relator was informed that Patient CE received kidney

dialysis treatment transports from ARROW-MED that lacked medical necessity.
64.

By way of further example, Relator was informed that Patient DD received

kidney dialysis treatment transports from ARROW-MED that lacked medical necessity.
65.

The Relator, MCINTOSH, has also been informed by a former employee of

ARROW-MED that ARROW-MED pressured paramedics and Emergency Medical Technicians
("EMT") to exaggerate patients' medical conditions for purposes of justifying patient transports
on patient run reports.

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66.

Furthermore, the Relator, MCINTOSH has been informed by former employees

of ARROW-MED that ARROW-MED pressured employees to forge a physician's signature on
the physician certification statement in furtherance of the fraudulent scheme to obtain Medicare
reimbursements.

B.

Billing/or Non-Reimbursable Ambulance Transport
67.

The Relator, MCINTOSH has witnessed ARROW-MED utilizing the services of

an individual in the capacity of an EMT even though the individual lacked proper credentials to
act in the capacity of an EMT.
68.

ARROW-MED utilized the services of an employee whose license was suspended

byKBEMS.
69.

The EMT, hereinafter referred to as Employee KM 2, had his license suspended or

revoked by KBEMS in December 2014.
70.

ARROW-MED was continuously searching for EMTs and paramedics to employ

through newspaper advertisements.
71.

ARROW-MED did not have the staff licensed or qualified to operate the

ambulances for the runs to obtain Medicare reimbursements.
72.

As a result, ARROW-MED continued to allow Employee KM to perform EMT

services for ARROW-MED and sought and obtained reimbursement from his services as though
he was properly licensed.
73.

By way of example, the Relator is aware that Employee KM was involved in a

non-emergency patient transport on March 10, 2015 to a nursing home.
74.

Because Employee KM was not a licensed EMT, patient transports were not

reimbursable under Medicare regulations.
2

The employee's name is abbreviated to protect the employee's privacy.

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75.

The submission of runs for Medicare reimbursement by Employee KM are

fraudulent because the runs were not qualified for Medicare reimbursements by the staffing
requirements of state and federal regulations including 42 CFR 410.41(b) and 202 KAR 7:501,
Sec. 8.

C.

Providing Kickbacks to Referral Sources
76.

The

Relator,

MCINTOSH,

has

knowledge

regarding

ARROW-MED's

engagement in a referral swapping scheme with a referral source.
77.

At or soon after ARROW-MED commenced operating business on January 26,

2012, a nursing home known as the "Nim Henson Geriatric Center" ("NHGC") entered into a
swapping scheme with ARROW-MED to receive deeply discounted patient transports in
exchange for referrals for Medicare Part B referrals.
78.

As a nursing home, the NHGC is a significant referral source to ambulance

service providers.
79.

A nursing home is responsible for payments under Medicare Part A to

compensate an ambulance service provider for medical transport that lacks a reimbursable
medical necessity, or a "skill" as it is frequently referred to.
80.

A patient of a nursing home who has a "skill" may be transported and the

transport may be reimbursable under Medicare Part B.
81.

NHGC is a referral source under the AKS to an ambulance service provider like

ARROW-MED.
82.

ARROW-MED offers NHGC significantly discounted rates on transport for

Medicare Part A patients to NHGC.

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83.

In exchange for the deeply discounted rates, NHGC exclusively refers its patients,

including Medicare Part B patients, to ARROW-MED for patient transport.
84.

As a result, ARROW-MED's deeply discounted patient transport under Medicare

Part A operates as a "kickback" to NHGC for the right to transfer all of NHGC's patients under
Medicare Part B.
85.

The Relator has knowledge of this fraudulent scheme as a result of his services

provided for and on behalf of Mcintosh Ambulance Services, Inc.
86.

Mcintosh Ambulance Services, Inc. provided services to NHGC prior to January

26, 2012.
87.

Once ARROW-MED began operating business, NHGC discontinued the use of

Mcintosh Ambulance Services, Inc.
88.

The Relator estimates that the number of referrals for runs that Mcintosh

Ambulance Services, Inc. received from NHGC prior to the commencement of the fraudulent
scheme on January 26, 2012, was ten (10) to twenty (20) referrals per month. During this period,
NHCG would provide Mcintosh Ambulance Services, Inc. with a monthly list of "skilled"
patients so Mcintosh Ambulance Services, Inc. would have knowledge on how to appropriately
bill for these patient transports.
89.

After the commencement of the fraudulent scheme, Mcintosh Ambulance

Services, Inc. did not receive any referrals except for the rare and limited circumstance when
ARROW-MED was unable to fulfill NHGC's transfer requests due to prior commitments. The
Relator estimates that this would occur once every three (3) to four (4) months. Also, NHGC
discontinued transmitting the monthly list of "skilled" patients to Mcintosh Ambulance Services,
Inc.

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90.

The Relator has been informed by an agent of NHGC that they only use

ARROW-MED because ARROW-MED gives them a "better rate''.
91.

The Relator, on behalf of Mcintosh Ambulance Services, submitted a competitive

bid to NHGC but NHGC refused to respond to the bid from Mcintosh Ambulance Services.
92.

The Relator also discovered a written directive instructing NHGC personnel to

use only ARROW-MED for the transport of Medicare Part A patients.
93.

On information and belief, the fraudulent schemes complained of above are on-

going by ARROW-MED, except for the scheme involving Employee KM. The Relator has
obtained information that Employee KM obtained his EMT license on or around March 26,
2015.

COUNT I - SUBMISSION OF FALSE CLAIMS
FEDERAL FALSE CLAIMS ACT, 31 U.S.C. §§ 3729(a)(l)(A), et seq.

94.

Relator repeats each and every allegation of Paragraphs 1 through 93 of this

Complaint with the same force and effect as if set forth herein.
95.

Through the foregoing conduct, ARROW-MED knowingly presented, or caused

to be presented, false or fraudulent claims for payment or approval, in violation of the False
Claims Act, 31 U.S.C. § 3729(a)(l)(A), including, without limitation, claims for ambulance
transport that were not reimbursable and lacked medical necessity for reimbursement.
96.

The claims relevant to this Count include all claims within the fraudulent scheme

of the Defendant, ARROW-MED, which fraudulent scheme commenced upon the inception of
ARROW-MED on January 23, 2012 and continues to date upon presumption and belief.
97.

Defendant, ARROW-MED had knowledge (as defined by the False Claims Act,

31 U.S.C. § 3729(b)(l)(A)) of the claims' false or fraudulent nature because the Defendant
knew that the claims were being submitted for Medicare reimbursement and the Defendant
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knew that the patient transports lacked medical necessity to justify reimbursement under the
applicable federal or state regulations regarding reimbursement.
98.

Defendant, ARROW-MED submitted claims for payment in amounts that were

falsely inflated or exaggerated; and claims for payment for services rendered to patients
unlawfully referred to ARROW-MED by referral sources and others to whom ARROW-MED
provided kickbacks and/or illegal remuneration and/or with whom ARROW-MED entered into
prohibited financial relationships, in violation of the AKS.
By virtue of the false or fraudulent claims presented or caused to be presented by

99.

the Defendants, the United States suffered damages.
100.

Defendant, ARROW-MED, is liable to the United States for treble damages under

the FCA, in an amount to be determined at trial, plus a civil penalty of $5,500 to $11,000 for
each false claim presented or caused to be presented by Defendant.
COUNT II - USE OF A FALSE RECORD
FEDERAL FALSE CLAIMS ACT, 31 U.S.C. §§ 3729(a)(l)(B}, et seq.

101.

Relator repeats each and every allegation of Paragraphs 1 through 93 of this

Complaint with the same force and effect as if set forth herein.
102.

Through the foregoing conduct, Defendants knowingly made, used, or caused to

be made or used, false records or statements material to false or fraudulent claims, in violation of
the False Claims Act, 31 U.S.C. § 3729(a)(l)(B).
103.

The false or fraudulent records or statements relevant to this Count include all run

reports, physician certification statements and other requests for reimbursement which were
intended to mislead Medicare into providing reimbursement for services that were not qualified
for reimbursement.

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104.

The claims relevant to this Count include all claims within the fraudulent scheme

of the Defendant, ARROW-MED, which fraudulent scheme commenced upon the inception of
ARROW-MED on January 23, 2012 and continues to date upon presumption and belief.
105.

By virtue of the false or fraudulent claims presented or caused to be presented by

the Defendants, the United States suffered damages.
106.

Defendant, ARROW-MED, is liable to the United States for treble damages

under the FCA, in an amount to be determined at trial, plus a civil penalty of $5,500 to $11,000
for each false claim presented or caused to be presented by Defendant.
DEMAND FOR JURY TRIAL
Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Relator hereby demands a
trial by jury.
PRAYER FOR RELIEF
WHEREFORE, the Relator, Darrell Stephen Mcintosh prays that the Court enter
judgment against the Defendant, Arrow-Med Ambulance, Inc., as follows:
(a)

that the United States be awarded damages in the amount of three times the
damages sustained by the United States because of the false claims alleged within
this Complaint, as the Federal False Claims Act, 31 U.S.C. §§ 3729 et seq.,
provides;

(b)

that civil penalties of $11,000 be imposed for each and every false claim that
Defendant caused to be presented to the United States and/or its grantees, and for
each false record or statement that Defendant made, used, or caused to be made or
used that was material to a false or fraudulent claim;

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(c)

that attorneys' fees, costs, and expenses that the Relator necessarily incurred in
bringing and pressing this case be awarded;

(d)

that the Relator be awarded the maximum amount allowed to it pursuant to the
False Claims Act; and

(e)

that this Court award such other and further relief as it deems proper.

Ni

allingford, Esq.

WALLINGFORD LAW, PSC

1050 Monarch Street, Suite 100
Lexington, Kentucky 40513
Telephone: (859) 219-0066
nick@wallingfordlaw.com
Mark A. Wohlander, Esq.
WOHLANDER LAW OFFICE, PSC

P.O. Box 910483
Lexington, Kentucky 40591
Telephone: (859) 361-5604
CO-COUNSEL FOR RELATOR

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CERTIFICATE OF SERVICE
The undersigned hereby certifies that a copy of the foregoing Qui Tam Complaint filed
under seal pursuant to 31 U.S.C. § 3730 was sent to the following:

Hon. Eric Holder
Attorney General of the United
States
Department of Justice
10th & Constitution Avenue, N.W.
Washington, D.C. 20530
/Via Federal Express]

Hon. Kerry B. Harvey
United States Attorney for the Eastern
District of Kentucky
260 West Vine Street
Suite 300
Lexington, Kentucky, 40507-1671
{Via Hand Delivery]

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Court Name: US DISTRICT COURT EOKY
Division: 5
Receipt Number: 5017691
Cashier ID: lcapezzu
Transaction Date: 04/24/2015
Payer Name: Wallingford Law

--------------------------------CIVIL FILING FEE

For: Wallingford Law
Case/Party: D-KYE-5-15-CV-000105-001
Amount:
$400.00

---------------------------------

CHECK

Check/Money Order Num: 9503
Amt Tendered: $400.00
--------------------------------Tot a1 Due:
1400.00
Total Tendered: 400.00
Change Amt:
0.00

U.S. District Court Eastern District of Kentucky DCN Site

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http://156.125.6.194/cgi-bin/CaseAssign/CVCA.pl

Case: 5:15-cv-00105-JMH Doc #: 1-2 Filed: 04/24/15 Page: 1 of 1 - Page ID#: 24
...

Case number 5:15-CV-105
Assigned : Senior Judge Joseph M. Hood
Judge Code : 4311
Assigned on 04/24/2015
.....

4/24/2015 9:02 AM