A Floyd County ambulance service will pay the federal government almost $1 million to settle allegations that it filed fraudulent claims with the federal Medicare program.
Lafferty Enterprises, doing business as Trans-Star Ambulance Services, agreed to pay $948,000 to settle accusations that it violated the False Claims Act by transporting "Medicare patients to and from dialysis clinics by ambulance, when an ambulance transport was not medically necessary" from 2006 to 2012, according to a news release from the U.S. Attorney's Office.
Medicare will only pay for an ambulance to take patients to and from dialysis if other forms of transportation pose a medical risk, and that was not the case in this instance, the government argued.
As part of the settlement, Trans-Star will also have to undertake "substantial internal compliance reforms" and its claims will be reviewed by a third party for the next three years.
The investigation began after Kevin Fairlie, the former owner of another Eastern Kentucky ambulance company, filed a complaint. Fairlie will get $189,600 under whistleblower provisions of the Fair Claims Act that permit private individuals to bring lawsuits on behalf of the government.
"It is vitally important that the resources available to federally funded healthcare programs be used only to pay for medically necessary services," Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, said in a news release. "Our office and our agency partners are committed to protecting the integrity of these important programs on which so many of our citizens depend."