The Clinton Herald, Clinton, Iowa

October 5, 2013

Defendant: City knew there were EMS billing concerns

By Katie Dahlstrom Herald Assistant Editor
The Clinton Herald

---- — CLINTON — Too many people knew what was going on and chose to do nothing for the city of Clinton to have called its alleged Medicare fraud a big mistake, attorney Michael Walker testified Friday.

Walker returned to the witness stand Friday as the city of Clinton's legal malpractice suit against him continued at the Scott County Courthouse.

Walker and his firm Hopkins and Huebner represented the city in the emergency medical services case that resulted in the city settling with whistleblower Timothy Schultheis and the U.S. Department of Justice for $4.5 million in 2010. Schultheis and his attorneys received $1.35 million of that settlement, with three payments already made.

Schultheis filed a federal False Claims Act complaint, claiming that emergency medical calls handled by city ambulances were being improperly coded. By coding even routine calls as emergency calls, Schultheis claimed the city was able to receive higher reimbursement rates from Medicare and Medicaid.

The city alleges Walker negligently failed to properly and adequately analyze the case and is seeking to recoup the expenses of the settlement along with other fees, totaling $4.67 million.

Walker's attorney, Bob Waterman, spent Friday morning asking Walker questions about himself and the federal False Claims Act suit. To be deemed in violation of the FCA, the party must have knowingly submitted a false claim to the government, which can be done through actual knowledge, deliberate ignorance or reckless disregard. Innocent mistakes or negligence are not actionable under the FCA.

However, the city couldn't contribute its 99 percent ALS billing rate from 2002 to 2008 to a mistake, Walker believed. He testified that he found several red flags or obstacles in the defense of the city's case as he worked on it from October 2009 to September 2010.

Among the red flags was the credibility of EMS Director Andrew McGovern, who was the one training the city's paramedics how to code an ambulance run. Schultheis alleged the city was billing all its calls as advanced life support instead of basic life support for the city to get more money out of the federal programs. This was knowingly being done at the direction of McGovern, Schultheis claimed.

Mike Hannafan, one the attorney's representing the city, in prior days of testimony asked Walker why he didn't take any depositions in the 10 months he was retained by the city, including that of Schultheis. Walker testified he didn't want to depose Schultheis because he believed it would lead to McGovern being deposed and he had concerns about McGovern's credibility.

Concern over McGovern's credibility grew from comments from McGovern about the coding changes being dictated by changes in a computer program and automatically coding as ALS if an ambulance was sent for an emergency response. The fact that McGovern's way of coding directly contradicted the experts also raised concerns, Walker testified.

"He repeatedly said he's 'just doing it right,'" Walker said.

Purported coding and bill expert Douglas Wolfberg who the city retained for the fraud case relayed several of his concerns about the coding and billing during a conference call held on March 15, 2010. McGovern, Walker, former city administrator Jeff Horne, former city attorney David Pillers, finance clerk Sarah Nolan, and three other Hopkins and Huebner attorneys joined Wolfberg on that call.

Wolfberg commented on the city's 99 percent ALS billing rate, saying anything over 60 percent is difficult to defend, Walker testified.

The expert also commented on the city and county's lack of a protocol in place when dispatching ambulances. Without a dispatch protocol, the city was not entitled to code everything as ALS; the coding had to be determined by what was going on at the scene.

McGovern and former fire chief Mark Regenwether had been requesting a dispatch protocol since 2002, another red flag in Walker's eyes.

"I was concerned because it showed they knew they didn't have the protocol in place to do what they were doing," Walker said.

They also requested for billing to be outsourced, which Walker believed showed that McGovern was not comfortable with billing or wasn't trained to do the work.

Duplicate reports with different wording for the same ambulance runs further concerned Wolfberg, which translated to credibility concerns for Walker. McGovern's request for paramedics to change codes from BLS to ALS and the fact that the city did not have copies of those e-mails but Schultheis had three also would have hindered the city's defense, Walker said.

Wolfberg said to "get these guys trained immediately," Walker testified.

McGovern, battalion chief Joel Atkinson and former fire chief Mark Regenwether subsequently attended a Medicare/Medicaid coding seminar. Upon returning, they maintained the city's procedures were correct.

Schultheis' repeated complaints to McGovern about the coding procedure and the fact that no changes were made went against the city's ability to say it did not knowingly submit false reports, Walker testified. The city's use of oxygen, IV and heart rate monitors on all patients regardless of care, the fact that McGovern spot checked 1 percent of reports and that he had made no changes to the coding procedures further fueled Walker's concerns.

Red flags for the city's defense went beyond McGovern. The fact that city had budgeted for several years to have all their ambulance calls billed as ALS showed Walker the city knew what was going on. When Walker learned Nolan was just inputting data for the bills to Medicare or Medicaid and not reviewing the reports sent to her from the fire department, it gave him further cause for concern because it showed the city was acting in deliberate ignorance, he testified.

Waterman asked Walker if he knew anything about the performance of former finance director Deb Neels, who was Nolan's supervisor.

"I heard she had issues," Walker said.

Further questions about Neels' performance were barred on the basis of hearsay.

Given all the things Walker found during his work on the case, he said the city couldn't claim it billed at a higher rate than it deserved through a mistake or misunderstanding.

"There were too many red flags. Too many people who knew what was going on. Too many people who were informed and chose to do nothing," Walker said.

Walker has been on the witness stand since Wednesday afternoon and will return for more testimony Monday as the case continues.