Medicare: $5 Billion Ambulance Tab Signals Area of Abuse

The patient smoked cigarettes in the passenger seat of the ambulance every week, chatting with the driver while taxpayers foot the $1,000 bill to drive him four blocks for his dialysis treatment.

The routine was part of a $1.5 million scheme to defraud Medicare by Penn Choice Ambulance Inc., according to an indictment against the Philadelphia company. The case helps explain part of why Medicare paid $5 billion to ambulance companies in 2012, more than went to cancer doctors or orthopedic surgeons, according to newly released federal data.

The U.S. Department of Health and Human Services has identified ambulance service as one of the biggest areas of overuse and abuse in Medicare -- companies billing millions for trips by patients who can walk, sit, stand or even drive their own cars. 

“It’s a cash cow,” said Assistant U.S. Attorney Beth Leahy, who prosecuted Penn Choice and five other ambulance fraud cases. “It’s basically like a taxi service except an extremely expensive one that the taxpayers are financing.”

Penn Choice received $833,000 from Medicare in 2012, the year before it was indicted, according to the new data for the U.S. government health program for the elderly and disabled. The company went out of business after the indictment. Founder Anna Mudrova pleaded guilty to fraud charges and is facing more than five years in prison, said Thomas Kenny, her lawyer.

Federal regulators and investigators have ramped up efforts in the past year to fight ambulance fraud and overuse, with rides to dialysis centers one of the problem areas. HHS estimates Medicare overpaid ambulance providers by $314 million last year, a third of it for medically unnecessary claims to the U.S. government health program for the elderly and disabled.

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