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A settlement agreement with the U.S. Department of Justice is set to cost four Houston hospitals $8.6 million.

The settlement involves instances where the area hospitals agreed to swap lower-cost ambulance rides for higher-priced transports with a number of local ambulance service providers.

The hospitals – Bayshore Medical Center, Clear Lake Regional Medical Center, West Houston Medical Center and East Houston Regional Medical Center – were all affiliates of Nashville-based Hospital Corporation of America.

According to a press release from the Justice Department, the hospitals agreed to pay the $8.6 million to “settle allegations they received kickbacks from various ambulance companies in exchange for rights to the hospitals’ more lucrative Medicare and Medicaid transport referrals.”


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“This settlement demonstrates our office’s commitment to combatting health care fraud,” Acting U.S. Attorney Abe Martinez said in a statement. “Ensuring the integrity of our federal health care programs is one of our highest priorities. We will continue to work to protect the public and hold accountable those who attempt to defraud the system.”

The case stems from allegations provided by sources within the hospitals describing how the facilities would swap out ambulance rides in an attempt to maximize profits.

According to reports from whistleblowers, the ambulance companies would take on rides from the hospitals for as little as $25, as long as they could be eligible for more lucrative rides from those same hospitals, which could sometimes reach $500.

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An attorney for one of the whistleblowers spoke to a local newspaper, addressing the situation between ambulance providers and hospitals:

“Everybody knew if you were an ambulance company in the Houston market and you wanted to survive, you had to play the game and provide free and discounted services to the hospitals in order to get the lucrative government business,” the attorney said in the interview.

This is a developing story.

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