Courthouse News Service reports that eleven cities in Texas will be paying a total of $1.69 million in settlements with the federal and state government to resolve claims related to the False Claim Act and Medicaid fraud. Medicaid fraud is part of a larger category of crimes called health care fraud, which include billing for services not performed, accepting kickbacks for patient referrals, or falsifying a diagnosis in order to justify tests.

The cities allegedly involved in the illegal activity are Plano, Frisco, Richardson, Mesquite, Celina, DeSoto, Corpus Christi, Cedar Hill, Rowlett, North Richland Hills, and University Park. According to state and federal prosecutors, the cities submitted "upcoded" claims for ambulances dispatched by the city between 2006 and 2010.

Investigation into the illegal activity began after a whistleblower suit was brought in February 2010. The individual who brought the suit may be able to receive up to 30 percent of the money recovered under the settlement.

Sources said that ambulance services are typically coded as either advanced life support or basic life support. Ambulance services are reimbursed according to the code used, advanced life support at a higher rate than basic. According to the U.S. Attorney's Office in Dallas, the federal government and the state of Texas accused the cities of billing contractor coded 911-dispatcher transports at the advanced life support level in cases where those services were never performed or the patient did not require the services.

Sources said that Dallas agreed to pay $2.47 million to settle upcoding claims similar to those involved in those discussed here.

Source: Courthouse News Service, "Texas Cities Pay $1.7M for Medicaid Fraud," David Lee, August 25, 2011.