San Juan Island EMS fined for Medicaid fraud

San Juan Island Emergency Medical Services has been fined $350,000 for Medicaid fraud.

According to the Washington State Attorney Genera’s Medicaid Fraud Control Division, SJI EMS ordered more than 400 medically unnecessary flights from Island Air Ambulance prior to April 2016.

San Juan County Public Hospital District No. 1 held a special meeting on Friday, Oct. 4 wherein it disclosed to the public it had received a letter from Washington Assistant Attorney General Nickolas Bohl stating that SJI EMS had committed Medicaid fraud. The letter, dated Sept. 26, is addressed to the public hospital district’s lawyer James Fredman of Foster Pepper, PLLC of Seattle.

“In many of these instances, a fixed-wing transport was not justified and SJI EMS failed to use more appropriate and lest costly transportation options,” Bohl’s letter stated. “We also have significant concerns about the close relationship between SJI EMS and IAA, especially through the numerous roles that Michael Sullivan, MD, played on behalf of parties that should have maintained an arms-length relationship.”

Sullivan served as both medical director for San Juan County and Island Air Ambulance as well as director of PeaceHealth Peace Island Medical Center’s emergency department. He resigned from the county position in July.

A settlement of $350,000 was requested of SJI EMS by the Medicaid Fraud Control Division. That figure was discounted from an estimate of more than $1 million that it could have been fined: triple the damages plus a fine of more than $11,000 per each violation, Bohls wrote.

The settlement was granted because SJI EMS, as a public entity, will no longer bill the state directly for fixed-wing transport and because Sullivan resigned, according to Bohl.

Along with the financial ramifications, SJI EMS must supply written assurance that it will abide by Medicaid regulations and must develop and follow protocols for making independent judgments about whether air transportation is medically necessary.

The letter outlined four broad categories in which SJI EMS had improperly submitted fixed-wing aircraft transport claims. The categories, according to Bohl’s letter, are as follows:

• There were at least 200 claims for patients with basic life support needs, who could have been transported using groud ambulance and ferry service. These services were “routinely” and inaccurately coded as advanced life support.

• More than 100 patients were transferred between medical facilities for non-emergent purposes.

• At least 34 mental health patients were transported without the authorization of a County Designated Mental Health Professional, as is required by the Health Care Authority.

• Finally, SJI EMS used the fixed-wing aircraft to fly more than 80 patients from outer islands to Peace Island Medical Center for care.

“Should we be unable to settle this matter, we will conclude our investigation and prepare to file an action against SJI EMS for all conduct outlined above, including potential liability for the multiple conflicts of interest SJI EMS had based on at least Mr. Sullivan’s multiple roles,” Bohl wrote. “We … hope we can work together to resolve this matter in the near future.”

The investigation began in September 2015, when SJI EMS and the public hospital district were asked for their compliance in a Civil Investigative Demand wherein the attorney general’s office looked into concerns of Medicaid fraud. In the 25-page document, the attorney’s office requested billing documents, reimbursement claims, forms and “all communication” between Sullivan, Jim Cole, Dr. Michael Edwards, the chairman of the public hospital district, and Larry Wall, director of critical care transport, regarding air ambulance service, medical billing or medical reimbursement.

Representing SJI EMS and the public hospital district, Public Records Officer Nathan Butler said the following regarding the letter, “In matters of litigation we proceed cautiously and carefully. Our attorney is preparing a response which we expect to send to the Attorney General’s office by the end of the month. We should have more information to share at that time.”