Saltville Rescue Squad accused of fraud

The Saltville Rescue Squad is accused of falsifying doctor’s signatures and sending $2.65 million worth of fraudulent billing slips to insurance companies in a federal indictment unsealed Thursday.

Federal prosecutors allege that for nearly six years the squad chauffeured three able-bodied patients to dialysis treatment despite Medicare regulations that limit the service only to people in need of a stretcher.

In all, prosecutors hope to recoup from the squad $800,000, any vehicles bought with fraudulent proceeds, and 40 acres of rescue squad property, documents show.

A woman at the squad building, at 126 Battleground Ave., slammed the door on a Bristol Herald Courier reporter Thursday evening.

“We don’t have no comment,” she said and shook her head as soon as the reporter identified himself.

The indictment targets the entire rescue squad, its board of directors, business manager Eddie Wayne Louthian Sr., 59, of Saltville, and squad employee Monica Jane Hicks, of Meadowview, as the responsible parties.

Court documents state that the non-profit squad falsified the paperwork to transfer three patients to dialysis treatment from December 2005 until September 2011.

At the heart of the case is a Medicare regulation that denies payment for any ambulance trip if the patient’s medical condition allows for a taxi, private car, wheelchair van or any other type of vehicle.

Court documents state that Louthian and Hicks openly defied this regulation by ordering squad members to “submit ‘trip sheets’ that fraudulently stated words to the effect that (the patients) were non-ambulatory and had to be transported by stretcher, even though the patients actually could walk on their own and did not need to be transported by stretcher.”

The volunteer rescue squad began charging for transport in 1999 and became a Medicare provider the next year. Louthian, who joined as a volunteer in 1998, became president of the board of directors in 2001. By 2003, he was one of three paid squad members and its business manager. His annual salary increased from $20,000 in 2003 to more than $52,000 in 2010, documents show.

To skirt the regulations for one patient, court documents state that the squad held meetings specifically to discuss how to continue the transports “despite the fact she is not eligible.”

One way for the squad to legitimately transport a non-emergency patient was with a certificate of medical need (CMN forms) signed by a doctor, court documents state.

“Hicks fabricated backdated CMN forms with the physician’s signature, without the physician’s knowledge or permission,” court records state. “These forms were sent to the Billing Companies by SRS, and were used to bill Medicare and Anthem for dialysis transports,” according to the indictment.

Documents state that federal investigators watched as patients walked to the ambulance only to be placed on a stretcher and hefted into the vehicle.

“After (rescue squad) personnel realized they were being watched, the patients were put on a stretcher from door to door,” the indictment states. “However, patients continued to be observed at other times walking and driving around town.”

In all, court records state that the rescue squad fraudulently billed Medicare for $1.65 million worth of services and was reimbursed $750,000; and fraudulently billed Anthem $1 million and received $130,000.

The squad is charged with one count of conspiracy to commit health care fraud, one count of health care fraud, five counts of making false statements in relation to a health care matter and two counts of money laundering.

Louthian is charged with one count of conspiracy to commit health care fraud, one count of health care fraud, four counts of making false statements in relation to a health care matter, two counts of money laundering and one count of making a false statement to a federal grand jury.

Hicks is charged with one count of conspiracy to commit health care fraud, one count of health care fraud and one count of making false statements in relation to a health care matter.

The investigation is being conducted by the Department of Health and Human Services Office of the Inspector General, the Virginia Attorney General’s Office Medicare Fraud Control Unit and the Internal Revenue Service Criminal Investigations.

Special Assistant U.S. Attorneys Janine Myatt and Vaso Doubles will prosecute the case.

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