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How Rural/Metro Beat a Whistleblower Claim

A civil lawsuit brought by two former Rural/Metro employees acting as whistleblowers under the federal False Claims Act was dismissed by U.S. District Court Judge Susan Bolton in January. The reasons have implications for all ambulance organizations that bill Medicare.

The plaintiffs in the case, Vassallo et al. v. Rural/Metro Corporation et al., filed in the U.S. District Court of Arizona, had both worked in the billing department of Rural/Metro, a national EMS and ambulance service corporation, until their jobs were dissolved by a transition to a new billing process. In the lawsuit the plaintiffs alleged the new process led to the submission of claims for ambulance services that were “falsely upcoded” and contained false records that were material to the government’s decision to pay those claims.

After the Department of Justice declined to get involved in the case, defendant Rural/Metro filed a motion for summary judgment, claiming the plaintiffs/whistleblowers had failed to show any intent to defraud the federal government or Medicare program. The court pointed out that the False Claims Act does not require specific intent to violate but allows for claims to be considered false not only when the defendant has actual knowledge of false information but also when the defendant acts in “deliberate ignorance” or even with “reckless disregard” of the truth or falsity of the information.

However, even with that lower standard, the court found the plaintiffs had not met their burden of proof.

In dismissing the case, the court pointed to five key facts that showed Rural/Metro had not acted with deliberate ignorance or reckless disregard in submitting its claims for ambulance transport payments:

  1. The transition to the new billing process took place over several months and included soliciting feedback from everyone involved in and testing the system;
  2. Instructions were given to coders to err on the side of undercoding claims;
  3. Coders were limited to responsibility for one or two markets to ensure they would be familiar with the payers and processes specific to those locations and patients;
  4. The coders and some of the project coordinators had ambulance-specific billing training through the National Academy of Ambulance Compliance (NAAC) and had obtained the Certified Ambulance Coder (CAC) certification;
  5. The defendant engaged in ongoing training and compliance efforts, including claims reviews.

For these reasons the court found there was no “reckless disregard” for the truth of the claims submitted by Rural/Metro and dismissed the case. Under the False Claims Act, a party found to have submitted false claims could be required to repay not only the amount of those claims but also triple damages, plus civil monetary penalties of $5,500–$11,000 per false claim. Therefore, Rural/Metro avoided what could have been millions of dollars in repayment, damages, and civil monetary penalties by demonstrating its lack of intent to file false claims.

Of course, knowing what’s in someone’s mind or their true intent is impossible. “Intent” in litigation is normally implied by the defendant’s actions. In this case the defendant had taken precautionary steps and documented the proof.

For any healthcare provider that bills claims to the federal government, a lesson can certainly be learned from this case. Taking proactive steps to show you’re trying to comply with billing regulations, documenting those steps with written policies, providing your employees with ambulance-specific coding training and certification, having an active compliance program led by a certified ambulance compliance officer, and keeping those policies and certifications up to date will go a long way toward limiting your liability and showing your good-faith compliance efforts.

Once again, an ounce of prevention is certainly worth a pound of cure!

Doug Wolfberg and Christopher Kelly are lawyers with Page, Wolfberg & Wirth LLC, who focus on regulatory healthcare law as it relates to the EMS and ambulance industry. This article is not intended as legal advice. For more information or for assistance with your compliance efforts, reach them at 717/691-0100 or by e-mail at or


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