PINELLAS COUNTY, Fla. (WFLA) — A recently unsealed federal lawsuit alleges that Paramedics Plus, doing business as Sunstar in Pinellas County as the sole ambulance provider for Pinellas EMS, engaged in an illegal kickback scheme involving Pinellas County EMS and millions of dollars in “false claims” against Medicare and Medicaid.
Craig Hare, Director of EMS and Fire Administration in Pinellas County, has deferred all comment to the Pinellas County Attorney’s Office. But, no one in that office will discuss the allegations made by a former top executive of Paramedics Plus, citing pending litigation.
“We are now obviously dealing with litigation matters and we don’t speak about litigation,” said assistant Pinellas County Attorney Don Crowell. “This will work itself out through the court system, and we’re not in a position to talk about this matter at this point.”
Paramedics Plus VP and Sunstar’s Chief Operating Officer in Pinellas, Mark Postma, also declined comment, but the President of Paramedics Plus, based in Texas, later issued a statement denying any wrongdoing.
The whistleblower complaint was filed by former Paramedics Plus executive Stephen Dean, who served as Director of Corporate Training, Chief Oprating Officer in Oklahoma and Corporate Deployment Director.
Dean secretly filed the lawsuit in the Eastern District of Texas Federal District Court under seal in March 2014. It only surfaced in public records last month, after a federal judge in Texas judge ordered the action unsealed.
Essentially, the lawsuit accuses Paramedics Plus of conspiring with government ambulance authorities in Pinellas County, Oklahoma City, Tulsa, and Alameda, California to kick back profits to local ambulance authorities under the pretense of “rebates,” “gain sharing” and payment of “profits in excess of a cap,” which the lawsuit alleges is a violation of state and federal laws.
The so-called “false claims” in the suit involve charges to Medicare and Medicaid programs that were later “kicked back” to local government ambulance authorities as profits that exceeded the margins in contracts between Paramedics Plus and local ambulance authorities, such as Pinellas EMS, where the allowable profit margin was nine percent.
“The documents speak for themselves, as for what it says and the allegations,” Crowell said.
The U.S. Attorney in Texas has filed an intervening complaint that basically takes over prosecution of the whistleblower lawsuit, as it pertains to the kickback allegations in Oklahoma.
In the Oklahoma case, prosecutors allege that Paramedics Plus paid more than $20 million in kickbacks to the local ambulance authority and bribed local government ambulance officials with cash and gifts, as well as making political contributions to Oklahoma elected officials.
According to the lawsuit: “Paramedics Plus later claimed that it was giving money back to the communities by paying cash to the public entities that award its contracts.”
Paramedics Plus President Ron Schwartz issued a statement to 8 On Your Side regarding the Oklahoma allegations that says, “The whistleblower and the federal government now say that limiting our profit and returning a portion of it back to these communities somehow violated federal law. One of our most precious freedoms is the right to defend ourselves against false allegations, even when brought by the federal government. We intend to vigorously exercise that right and expect to be vindicated.”
Federal prosecutors insist the “profit cap” contracts between Paramedics Plus and local ambulance authorities from Florida to California was a sham that not only violated federal kickback laws, but also stifled competition from rival ambulance providers.
Fines and damages related to the federal complaints could run into millions of dollars.
The whistleblower action alleges “the State of Florida has been damaged to the extent of millions of dollars exclusive of interest.” Federal prosecutors claim that kickbacks in Oklahoma “often exceeded 40 percent of Paramedic Plus’s profits on the contract.” The federal suit claims another ambulance provider in Oklahoma bid $44 million less when it finally wrestled the contact away from Paramedics Plus, as an illustration of how much excess profit was built into the deal.
So far, there are no allegations of bribery or personal enrichment related to the Pinellas contract, and no one in Pinellas County government is specifically named in the whistleblower lawsuit or federal complaint. The so-called illegal “kickbacks” were reportedly returned to Pinellas County at the expense of Medicare and Medicaid.
Florida’s Attorney General found about the allegations in March 2014 and is still investigating the case, and according to a spokeswoman, working toward a resolution.
Meanwhile, the Pinellas County Attorney’s Office won’t acknowledge when it found out about the kickback allegations, or say what it is doing to defend against them.
“I’m not here to provide information to you,” Crowley said. “I’m here to provide legal advice to our clients [Pinellas County] and that’s really all there is to talk about at this point.”
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