In the summer of 2008, Schultheis met with his attorney, Ihnken and Assistant U.S. Attorney Maureen McGuire in Des Moines to share his concerns the city had been committing Medicare fraud. He testified they told him they would investigate the potential fraud. Schultheis filed suit in Septemeber. His complaint contained six alleged examples of false claims, though one was never billed to Medicare or Medicaid for payment and Schultheis was not involved in the call.
Walker’s testimony started Wednesday afternoon and quickly moved into his role in the city settling the lawsuit for $4.5 million. The city retained Walker on Oct. 1, 2009 to defend it in the whistleblower case brought on by Schultheis. Around 10 months later, the suit was settled.
Prior to being retained, Walker said, he was called by then-city attorney Paul Walter to speak to the City Council about the suit, which he did on Sept. 29, 2009. Based on six years of infractions, which the suit covered, Walker estimated the city could have had 8,760 infractions and told council members the city could have faced up to $100 million in fines. Walker also used the ratio supplied by purported EMS coding and billing expert Douglas Wolfberg that said an average city should have 60 percent ALS calls and 40 percent BLS calls. The city had an average of 99 percent ALS calls, meaning if the Wolfberg ratio held true it could face up to $40 million in fines, Walker told the council.
McGovern provided Walker with information regarding other cities’ ALS/BLS rates, which showed five Iowa cities with rates ranging from 69 to 100 percent ALS.
Walker testified he received this information very close to the mediation in August 2010 when the settlement was reached. While he could have postponed the mediation, he did not, he testified.
Walker further testified he was told to retain Wolfberg as an expert witness by McGovern, who called Wolfberg the “best in the business.”