WINSTON-SALEM — A Greensboro-based medical transport company has been ordered to pay more than $5 million in restitution for health care fraud.
Gate City Transportation Inc. pleaded guilty to one count of fraud in October 2018 in federal court, according to a news release from the Middle District of North Carolina.
On Thursday, U.S. District Court Judge Loretta Copeland Biggs ordered the transportation company to pay a $100 fine, a $400 special assessment, and $5.25 million to the N.C. Fund for Medical Assistance.
“Fraud does not pay in the long run. With today’s judgment, taxpayers will get back over $5 million that was taken from Medicaid,” U.S. Attorney Matthew G.T. Martin said Thursday in the release. “This case demonstrates how agencies work together to find and stop healthcare fraud.”
In April 2008, the company enrolled with the state’s Medicaid Program as an ambulance provider, the U.S. Attorney’s Office said. Initially the company owned and operated convalescent ambulances, which are used for non-emergency transportation to stretcher-bound patients.
From November 2010 until February 2015, the company stopped operating these ambulances and began using vans to transport convalescent patients, the U.S. Attorney’s Office said. The majority of its clients were Medicaid recipients. However, Medicaid did not directly reimburse companies that used vans.
Gate City Transportation could have applied to the Guilford County Division of Social Security Services for approval to provide non-emergency medical van transportation but did not do so, according to the release.
The company continued to use vans for transportation but was submitting claims to Medicaid using ambulance codes. This meant that reimbursement to the company would be done at a higher rate. These false claims caused the Medicaid program to lose more than $5 million, officials said.
During the investigation, law enforcement seized and forfeited more than $5 million in cash and property representing proceeds from the scheme. Federal authorities hope to apply these forfeited funds toward restitution.
“Corporations that defraud the Medicaid program are cheating taxpayers and taking away resources from people who need health care,” Attorney General Josh Stein said Thursday in the release. “My office will continue to fight health care fraud and waste.”