Federal judge refuses to dismiss kickback lawsuit against Paramedics Plus, ETMC

(Photo courtesy of Paramedics Plus)

A Tyler hospital, an affiliated ambulance company and an Oklahoma agency have agreed to pay about $21 million to settle a federal kickbacks lawsuit, according to the U.S. Department of Justice.

The former East Texas Medical Center, its former subsidiary Paramedics Plus and the Oklahoma agency Emergency Medical Services Authority agreed to settlements totaling $20,949,000, according to the federal government.

The whistleblower lawsuit, picked up by the Department of Justice in 2017, alleged that the entities had been involved in an illegal kickback scheme. Austin-based attorney Patrick O’Connell represents the original whistleblower, Dr. Stephen Dean, who first brought the issue forward in 2014.

The federal government alleged the parties created a slush fund controlled by East Texas Medical Center and Paramedics Plus and used it to pay more than $20 million in kickbacks in the form of cash payments, political contributions, marketing expenses and payments to contractors.

Paramedics Plus and Emergency Medical Services Authority had agreed “in principle” in April to settle the case with the federal government, court documents say. Since then, the parties have been involved in discussions to reach a final settlement, according to online judicial records.

“This was a case where Paramedics Plus, a provider of ambulance services, violated the anti-kickback statute by creating an unwritten profit cap agreement to ensure that Paramedics Plus obtained and retained the contract to provide ambulance services for (Emergency Medical Services Authority),” O’Connell said in a news release.

“In addition, Paramedics Plus made political contributions to local Oklahoma politicians which (Emergency Medical Services Authority) could not do on its own,” O’Connell said. “Without our client, the government would have been unaware that these inappropriate activities were ongoing.”

The Department of Justice said in a news release Monday that all defendants in the suit, including some who are no longer involved, will pay a total of $21 million to the United States, the state of Oklahoma and the state of Florida. Dean will receive $4.9 million of that amount, the Department of Justice says.

The money includes $20,649,000 from ETMC and Paramedics Plus, $300,000 from Emergency Medical Services Authority and $80,000 from the Emergency Medical Services Authority's former president and CEO, Herbert Stephen Williamson, among others, the Department of Justice says in the news release. The $300,000 and $80,000 sums were based on the defendants’ ability to pay, the Department of Justice says.

Joseph Brown, the U.S. attorney for the Eastern District of Texas, said in a news release that the situation between Paramedics Plus and the Emergency Medical Services Authority amounted to “quid pro quo,” in which Williamson received gifts and directed Paramedics Plus to make political donations.

“Sophisticated health care companies do not simply give away millions of dollars to referral sources without expecting something in exchange,” Brown said. “Quid pro quo arrangements for the referral of health care business are illegal.”

East Texas Medical Center, which was the parent company to Paramedics Plus, sold its assets earlier this year to the University of Texas Health Sciences Center at Tyler and the Tennessee-based company Ardent Health Services. The system now goes by the name UT Health East Texas.

Rebecca Kirkham, a spokeswoman for UT Health East Texas, said Ardent and UT Health East Texas are not involved in the case and are not impacted by the settlement.

TWITTER and INSTAGRAM: @_erinmansfield 

Government Reporter

Erin came to Tyler from Vermont, where she worked for VTDigger.org and previously the Rutland Herald. She received her B.A. in Economics and Spanish from the State University of New York at Stony Brook, where she also attended journalism school.

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