Documentos de Académico
Documentos de Profesional
Documentos de Cultura
B&atem~ of!'ln1UOt1
FILED
UNITED STATES DISTRICT COURT JUN -1 2017
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION AT LEXINGTON
ROBRT R. CARR
LEXINGTON CLERK U.S. DISiRICT COURT
* * * * *
THE GRAND JURY CHARGES:
BACKGROUND
Relevant Entities
ARROWOOD.
Case: 5:17-cr-00073-KKC-REW Doc#: 1 Filed: 06/01117 Page: 2 of 13- Page ID#: 2
5. At all relevant times, Medicare was a health care benefit program affecting
commerce, under which medical benefits, items and services were provided to
insurance, paid for certain health care services, including ambulance services.
6. At all relevant times, Medicaid was a health care benefit program affecting
commerce, under which medical benefits, items and services were provided to
Kentucky and the federal government. Claims for payment for Medicaid beneficiaries
were sent to the fiscal agent for the Kentucky Medicaid Management Information System
7. The Centers for Medicare & Medicaid Services ("CMS") was a federal
agency within the United States Department of Health and Human Services and was
responsible for administering the Medicare and Medicaid programs. CMS had the
Administrative Contractor that processed and paid Medicare Part B claims on behalf of
CMS.
Case: 5:17-cr-00073-KKC-REW Doc#: 1 Filed: 06/01/17 Page: 3 of 13- Page ID#: 3
9. At all relevant times, Medicare and Medicaid would only pay for treatment
and services, such as ambulance services, which were considered medically necessary,
performed within accepted medical standards, and were rendered for a legitimate medical
purpose. Medicare and Medicaid prohibited payment for items and services that were not
"reasonable and necessary" for the diagnosis and treatment of an illness or injury.
and Medicaid programs and agree to the tenns and conditions of both programs in order
of the claim were true, correct, and complete; the claim was submitted in compliance
with Medicare and Medicaid's tenns and conditions; and the services being billed for
patient's medical condition is such that all other forms of transportation are medically
services, "[i]n any case in which some means of transportation other than an ambulance
could be used without endangering the individual's health, whether or not such other
Case: 5:17-cr-00073-KKC-REW Doc#: 1 Filed: 06/01/17 Page: 4 of 13- Page ID#: 4
ambulance provider or supplier must also obtain a certification from the patient's
attending physician certifying that the medical necessity requirements are met. 42
C.F.R. 410.40(d)(2).
service is medically necessary. 907 KAR 1:060~ Section 1(6). In the context of non-
warrants transport by stretcher." 907 KAR 1:060, Section 4. The ambulance provider
must also maintain a statement of medical necessity from the patient's attending
physician which verifies that the patient was confined to a bed before and after transport,
the patient's condition at the actual time of the transport regardless of the patient's
state was essential for coverage and payment. Medicare and Medicaid required
medically necessary.
ambulance service companies are supposed to document their provided services on a "run
sheet." The run sheet contains patient identifying infonnation, the location where the
Case: 5:17-cr-00073-KKC-REW Doc#: 1 Filed: 06/01/17 Page: 5 of 13- Page ID#: 5
patient was picked up and dropped off, and a basic description of the purpose of the
transport. The run sheet also contains a "narrativen section where EMTs and paramedics
are to accurately and honestly document the patient's condition at the time of transport,
and why that condition necessitates ambulance transport. At all relevant times, the run
sheet was considered part of a patient's medical record and CMS or its contractors could
audit the run sheets to determine the medical necessity of the ambulance transport.
17. The written certifications required by Medicare and Medicaid were called
Physician Certification Statement ("PCS") forms. At all relevant times, PCS forms
needed to be signed and dated by a physician who certified the patient's medical need for
ambulance transport, and needed to be signed no earlier than the sixtieth day before the
ambulance transport was provided. Although required, the presence of a PCS form did
not establish the medical necessity of the service. The enrolled provider was also
18. Medicare and Medicaid required the use of the Healthcare Common
manner. The HCPCS code for basic life support, non-emergency ambulance
transportation was A0428. The HCPCS code for ambulance mileage was A0425.
Medicare and Medicaid assigned a claim number to each claim submitted by a health care
provider. Medicare and Medicaid then issued remittance advices to providers of health
care services that identified the claims submitted for payment and provided information
TransStar Ambulance Service, including its license and rights to operate within Breathitt
LESA ARROWOOD submitted claims to Medicare and Medicaid for services provided
claims were submitted on electronic or hard-copy claim forms called a CMS1500 claim
fonn. At the time of submission, ARROW-MED certified that the services for which it
sought payment were "medically indicated and necessary for the health of the patient."
to Medicare and Medicaid for patients who were able to walk, did not need ambulance
transport, and otherwise did not qualify for non-emergency ambulance transportation
MED did not complete the narrative portion of its run sheets. In or around July 2013,
CGS, the Medicare contractor for Kentucky, conducted a post-payment audit of twenty
Case: 5:17-cr-00073-KKC-REW Doc#: 1 Filed: 06/01/17 Page: 7 of 13- Page ID#: 7
MED to Medicare. CGS auditors concluded that all twenty claims were not payable
because the services were not medically necessary. Notice of the audit results was sent to
screen" whereby all run sheets related to ARROW-MED's claims to Medicare for non-
falsifYing the narrative portion of the run sheets. ARROW-MED made false statements
on these medical records and omitted true statements in order to obtain payment from
ARROW-MED EMTs and paramedics not to document that a patient could walk to or
from the ambulance, and to omit other accurate information that would contradict a
reviewing run sheets prepared by ARROW-MED EMTs and paramedics and instructed
employees to include false statements about the patients' conditions in the narrative
section, including general statements about medical need copied from the PCS forms.
caused others to falsity run sheets by including false infonnation or omitting relevant
information.
Case: 5:17-cr-00073-KKC-REW Doc#: 1 Filed: 06/01/17 Page: 8 of 13 - Page ID#: 8
sheets for the specific purpose of ensuring that ARROW-MED's claims to Medicare and
COUNTl
18 u.s.c. 1349
29. From on or about nn exact date unknown but at least September 12,2012,
and continuing through on or about August 24, 2015, in Breathitt County, and elsewhere
did knowingly and willfully, with the intent to further the objects of the conspiracy,
combine, conspire, confederate and agree with each other and with others known and
unknown to the Grand Jury to commit certain offenses against the United States, namely,
to knowingly and willfully execute the above-described scheme and artifice to defraud a
health care benefit program affecting commerce, as defined in Title 18, United States
Code, Section 24(b), that is, Medicare and Medicaid, and to obtain, by means of
materially false and fraudulent pretenses, representations, and promises, money and
property owned by, and under the custody and control of, said health care benefit
programs, in connection with the delivery of and payment for health care benefits, items,
and services, in violation of Title 18, United States Code, Section 1347.
30. It was a purpose of the conspiracy for the defendants to unlawfully enrich
themselves by (a) submitting false and fraudulent claims to Medicare and Medicaid, for
services that were medically unnecessary and that were not eligible for reimbursemen~
and (b) diverting proceeds of the fraud for the personal use and benefit of the defendants.
31. The manner and means by which the defendants sought to accomplish the
purpose of the conspiracy included, among others, the following: on or about an exact
date unknown but at least September 12, 2012, and continuing through on or about
TERRY HERALD, submitted and caused to be submitted false and fraudulent claims to
Medicare and Medicaid for non-emergency ambulance services that were not medically
COUNTSl-15
18 u.s.c. 1347
18 u.s.c. 2
aided and abetted by one another and others known and unknown to the Grand Jury,
knowingly and willfully executed and attempted to execute a scheme and artifice to
representations and promises, money and property owned by, and under the custody and
control of a health care benefit program affecting commerce, as defined in Title 18,
United States Code, Section 24(b), that is, Medicare and Medicaid, in connection with the
delivery of and payment for health care benefits, items, and services, by causing the
submission to Medicare and Medicaid, of materially false and fraudulent claims for
services, specifically, for non-emergency ambulance transport that were not medically
FORFEITURE
34. The allegations contained in Counts 1-15 of this Indictment are hereby
realleged and incorporated by reference for the purpose of alleging forfeitures pursuant to
35. Upon conviction of the offenses in violation of Title 18, United States
Code, Sections 1349 and 134 7 set forth in Counts 1-15 of this Indictment, the defendants,
and TERRY HERALD shall forfeit to the United States of America, pursuant to 18
U.S.C. 981(a)(l)(C), 28 U.S.C. 2461(c), and 18 U.S.C. 982(a}(7), any property, real
traceable to the commission of the offenses. The property to be forfeited includes, but is
violations.
36. If any of the property described above, as a result of any act or omission of
the defendants:
f. has been commingled with other property which cannot be divided without
difficulty;
the United States of America shall be entitled to forfeiture of substitute property pursuant
to Title 21, United States Code, Section 853(p), as incorporated by Title 18, United States
Code, Section 982(b)(I) and Title 28, United States Code, Section 2461(c).
246l(c).
A TRUE BILL
CARLTON S. SHIER, IV
ACTING UNITED STATES ATTORNEY
Case: 5:17-cr-00073-KKC-REW Doc#: 1 Filed: 06/01/17 Page: 13 of 13- Page ID#: 13
PENALTIES
COUNTS 1-15: Not more than 10 years imprisonment, $250,000 fine, and 3 years
supervised release.