The Clinton Herald, Clinton, Iowa

October 12, 2013

Walker Trial — Expert: City failed to train billing staff

By Katie Dahlstrom Herald Assistant Editor
The Clinton Herald

---- — DAVENPORT — The city of Clinton submitted false claims to Medicare, which was in direct connection to the city’s failure to train its billing staff, an ambulance billing and coding expert retained by Michael Walker testified in court Friday.

According to J.R. Henry, a Pittsburgh-based emergency medical services consultant, the city submitted a number of claims that did not comply with Medicare guidelines. This failure to comply with the guidelines of the federal program made those claims false, Henry testified.

Walker retained Henry through healthcare compliance and reimbursement consultant Lamar Blount in order to defend himself against a legal malpractice suit from the city of Clinton, which has been in court for two weeks.

The city is suing Walker because it claims he failed to properly analyze a federal False Claims Act suit that former firefighter Timothy Schultheis filed in 2008. Schultheis alleged the city was improperly billing ambulance runs at an advanced life support level instead of a basic life support level in order to get higher reimbursements from Medicare and Medicaid. That suit ended with the city settling with Schultheis and the U.S. Department of Justice for $4.5 million in 2010.

The city wants to recoup $4.67 million, the cost of the settlement along with attorney and expert fees.

In the 10th day of the legal malpractice suit, the city rested its case and the defense called Henry as its first witness.

Henry told the jury his background in emergency medical services and ambulance coding and billing, which includes several years as the chief of various ambulance services.

Before the underlying False Claims Act case was settled, Schultheis and his attorney hired Henry and asked him to complete a comprehensive claim review to see if the claims submitted to Medicare and Medicaid were compliant with those program’s guidelines, Henry testified.

He looked at 50 claims from 2005 and 50 more from 2008.

The city was not in compliance with Medicare guidelines in 22 percent of the clams from 2005 and 12 percent of the claims from 2008, Henry said.

As part of his work for Walker in the malpractice case, Henry reviewed 330 claims from 2003 through a portion of 2009. Of these claims, 18 percent were non-compliant, according to Henry.

He based this finding on the fact the city did not have an emergency dispatch protocol in place at the time, meaning it could not use the ALS assessment rule. Under the rule, the city can code ALS if it has an emergency dispatch and an ALS intervention or an ALS assessment. The city did not use ALS interventions in the claims he noted as non-compliant.

The city’s wrong-doing extended beyond non-compliance, Henry testified.

“My opinion is that for the claims I found deficient that the city of Clinton filed false claims with Medicare,” Henry said.

He made a direct connection between the city filing false claims and the fact that it did not train the finance department staff who submitted the claims.

“Without the training, they were not submitting compliant claims,” Henry said.

Accounting specialist Sarah Nolan testified Tuesday she was not trained on ambulance coding or billing and that her supervisor at the time, former finance director Deb Neels knew and told her she did not need to be.

Henry also opined the city failed to follow the Office of Inspector General’s compliance provisions by not having regular training and conducting periodic internal audits of the person who was the last one to “hit the button” to send the claims to Medicare or Medicaid for reimbursement.

“That, I believe, was a substantial cause of the claims being submitted that were not compliant,” Henry said.

Henry will return to the stand Monday as the case continues.


Before Henry took the stand, False Claims Act expert Ronald Clark finished his testimony.

Both the city’s attorney and Walker’s attorney focused heavily on the deposition of billing and coding expert Douglas Wolfberg, who the city had retained in the underlying Schultheis case.

Their questions revolved around the reported 60 or 70 percent ALS, 30 or 40 percent BLS split comment from Wolfberg and if Clark had read different portions of the deposition.

Beyond the Wolfberg deposition, Bob Waterman, Walker’s attorney, asked Clark about the city not having a compliance plan to address employee concerns such as those from Schultheis about the city’s coding. According to Clark’s website, an effective compliance plan is the best defense against a False Claims Act case. The common thread in many False Claims Act cases, his website reads, is the employee repeatedly complaining and feeling their complaints weren’t being heard.

Clark said the Schultheis case was not completely analogous to these situations and questions about the Clinton Fire Department having an effective compliance plan were “completely irrelevant.”

Clark further said he did not know if Schultheis’ complaints had been addressed appropriately.

Once the attorneys were done with Clark, the city called its final witnesses: fire department employees Safety Director Jeff Chapman and Lt. Chris Melvin, who both testified they were never told to bill every ambulance call ALS, nor were they told to use a heart rate monitor, IV and oxygen on every patient.

The defense made a motion for a directed judgement in favor of the defendant following the city resting its case, asserting the city had not proven its case. Judge Nancy Tabor denied that motion, saying there was enough evidence to go forward to the jury.