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Goeggel, once he learned of the settlement talks, thought it was time to go public. "We felt that this thing had been under seal for a sufficient period of time, and that an additional four-month extension, which would have taken us to Sept. 11, was not warranted," he says. Goeggel also believes that Abbott knew, by then, that he had triggered the investigation. "I figured, what the heck, let's let this become part of the public domain and let the community at large make its own decision." Judge Hamilton agreed, and the case was unsealed May 26.
On June 18, federal prosecutors filed a 29-page civil complaint, accusing Dougherty of defrauding Medicare beginning as early as January 1984. The complaint, which names only Dougherty and Abbott as defendants, portrays Dougherty as the final decision-maker at Abbott on "matters relating to Medicare billing policies or procedures."
According to the complaint, Abbott engaged in a practice described as "ticket managing" systematically submitting false information on state ambulance reporting forms and Medicare claim forms. Trips were described as "medically necessary" when they weren't. Billing codes and diagnosis indicators were falsified. Destinations were inaccurately reported: Abbott would say a patient had been transported to a hospital for emergency treatment, the complaint alleges, when "those patients had, in fact, been transported to a doctor's office buildings for routine care."
The false claims, according to the federal complaint, weren't just isolated billing errors but submitted intentionally. In fact, say the feds, the false claims were built into the system.
Ten years ago, Abbott acquired new computers. In a short business feature in the St. Louis Post-Dispatch, published in 1989, Dougherty said the new computers were being used to predict where ambulance calls were likely to originate. "It's an extremely sophisticated system using historical data and probability modeling that tells where ambulance calls are likely to occur," Dougherty told the Post.
Abbott's computers had another purpose, prosecutors allege. According to their investigation, Dougherty instructed his company's computer personnel to program "at least two improper automatic defaults into the billing computer system" in order to qualify the claims for Medicare payments. The first default automatically changed the destination of ambulance trips from doctor's-office buildings to hospitals. The second default automatically reported a patient's condition as a Medicare-covered medical necessity regardless of what the Abbott crew reported on the separate state ambulance reporting form.
According to the federal complaint, the defaults could not be overridden.
Dougherty, says the complaint, also told Abbott's training personnel to instruct crews to complete the ambulance reporting forms in a way that would ensure the biggest Medicare reimbursement, regardless of the patient's actual condition.
The result? Prosecutors offer eight examples of false claims submitted by Abbott. For instance, according to one claim form, Abbott said it transported a 74-year-old nursing-home resident suffering from uncontrolled bleeding, and collected $132 from Medicare. In reality, the patient's hand had already been sutured and Abbott simply gave the patient a ride back home. In another case, Abbott told Medicare it had transported an 89-year-old Medicare patient with a "spinal cord or column injury," and collected $130. In reality, Abbott took the patient to a podiatrist to have an ingrown toenail evaluated.
According to prosecutors, Abbott's ambulances were taking so many Medicare patients on routine doctor visits that the company became known, even among its own employees, as "AbaCab" for providing a taxi service for such patients.
A week after the U.S. attorney's office filed its civil complaint, Goeggel's attorneys filed an amended complaint accusing Abbott of violating the federal Anti-Kickback Act by offering remuneration to hospitals and nursing homes in exchange for referring elderly patients who are eligible for Medicare and Medicaid services.
Goeggel's complaint also accuses Abbott's owners Barnes-Jewish and SLU of not only benefiting from the fraud but actually orchestrating part of it. On the basis of what Salvati told Hubbard in 1996, Goeggel's complaint says the hospitals "directed Abbott to provide ambulance service" to dialysis patients that were served by its affiliated dialysis centers "because otherwise the hospitals may "lose the patient' to another dialysis center that was "not part of their network.'"
Rather than charge the cost of the transportation to the hospitals, Abbott management, including Dougherty and Salvati, were told to bill those services to Medicare, according to Goeggel's complaint. "Mr. Salvati stated that the hospitals and Abbott knew that billing Medicare for this transportation was against the law, discussed that it was against the law, and "did not ... care,'" the complaint says.
Matt McCormick, who was hired by Abbott three years ago and never worked with Salvati, says he can't discuss specific charges in the lawsuit but rejects any assertion that Abbott's owners benefited from the ambulance company's operations. "During all of my experience at Abbott, neither our board nor our sponsoring institutions have never, to my knowledge, been at all involved with who we transport (or) where we transport to," says McCormick. "I certainly do not believe our sponsoring institutions direct us to transport any patient to any specific location other than when our sponsoring institution is our client and they're paying for our service."
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