Douglas Moore was a fraud investigator for Dallas when he noticed something wrong with the way the city billed Medicare and Medicaid for city-dispatched 911 ambulance calls.
All calls were being billed as more expensive advanced life support calls, though some of them were basic life support calls, according to a whistleblower lawsuit Moore filed.
When Moore brought the improper billing to the city's attention in April 2009, he was told that because all the city's ambulances are equipped for advanced life support, the city had been billing every call at the higher rate for a long time.
Moore, a former Hurst police officer, investigated the billing company Dallas was using, Southwest General Services of Dallas, and found that 11 other Texas cities, including North Richland Hills, were doing the same.
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Moore told Dallas officials that the practice, called "upcoding," was not allowed, and when nothing was done to stop it, Moore filed the whistleblower suit against Dallas.
Moore later sued the 11 other cities, claiming that they violated the civil False Claims Act and the Texas Medicaid Fraud Prevention Act, resulting in federal and state investigations, U.S. Attorney James T. Jacks of the Northern District of Texas said.
Dallas paid $2.47 million to settle its suit, according to a June 7 Justice Department news release.
North Richland Hills paid $149,300 as its part of a $1.69 million settlement with the 10 other cities to resolve the allegations.
Plano, Frisco, Richardson, Mesquite, Celina, DeSoto, Corpus Christi, Cedar Hill, Rowlett and University Park are the other cities.
As part of the settlements, none of the cities admitted wrongdoing.
Dallas City Attorney Tom Perkins said his city "cooperated with the United States government in resolving the case and we think we reached a fair resolution in the matter."
An employee with Southwest General Services declined to comment.
Billings for North Richland Hills resulted in $68,508 in overcharges to Medicare and Medicaid between Jan. 1, 2006, and Sept. 30, 2009, city spokeswoman Mary Peters said.
"Although all aspects of the billing process were handled solely by the contractor, the federal government alleged that the cities that contracted with Southwest General Services were also liable," Peters wrote in a news release.
The federal government initially offered to settle with North Richland Hills for $843,516, but the city agreed to the reduced amount after negotiations, Peters said.
North Richland Hills did not recover any money from Southwest General Services, which was replaced by another company, Intermedix, in 2009, Peters said.
"Intermedix is well versed on Medicare/Medicare laws and is very cautious about coding ... and charging appropriately," she said. "An internal committee including members of the fire department/EMS and finance department are monitoring and auditing this as well."
Moore could get up to 30 percent of the total $4.16 million paid by the cities to settle the lawsuits, Jacks saidHe's also suing Dallas on allegations that the city fired him in retaliation for reporting the billing practice, said his attorney, David Haron of the Frank, Haron, Weiner law firm in Detroit.
Haron said that his firm helped Moore file the whistleblower suit and that the U.S. attorney and Texas found that the allegations were credible. In November 2009, Assistant U.S. Attorney Sean McKenna showed Dallas officials a copy of the lawsuit, Haron said.
On Dec. 2, 2009, Moore was terminated, Haron said. It was the result Moore feared from the day he decided to go to federal and state authorities, Haron said.
"Doug was frustrated," Haron said. "He called us in Detroit, because he was suspicious that if he called anyone in Dallas it would get back to his employer."
Perkins said that the retaliation lawsuit "is in litigation and we're not going to litigate the case in the press. We believe that the termination was justified under the circumstances. I'm not going to comment on the circumstances. We'll present our case when we go to trial."
Haron expects the suit to go to trial in November.
"The bottom line is [Moore] saved the government money," Haron said. "He brought money back to Medicare and Medicaid. Rather than erecting a monument to Doug the city fires him and doesn't touch anyone who missed this [upcoded billing] for years."
Terry Evans, 817-390-7620