Judge: Va. Town's Ambulances Can't Be Confiscated

Judge: Va. Town's Ambulances Can't Be Confiscated

News Feb 19, 2013

Feb. 19--Prosecutors cannot seize the ambulances and other property of a Southwest Virginia volunteer rescue squad after its acquittal on charges of health care fraud, a federal judge has ruled.

Such an effort "would seem to run counter to the interests of justice," U.S. District Judge James Jones wrote in denying an effort by the government to forfeit assets of the Saltville Rescue Squad.

The small-town rescue squad and its president, Eddie Louthian Sr., had been charged with cheating Medicare and a private insurance company out of nearly $1 million by using ambulances to repeatedly transport three patients to and from dialysis treatment without a legitimate medical reason.

To do that, prosecutors claimed, Louthian and other rescue squad members fabricated billing statements to make it appear the patients were bedridden and in need of an ambulance, when in fact they were capable of making the half-hour trip to a dialysis center on their own.

The case is just one in a larger effort to crack down on health care fraud in Western Virginia and beyond.

In September, a jury in U.S. District Court in Abingdon convicted Louthian of health care fraud but acquitted the rescue squad of similar charges.

Prosecutors nonetheless argued that the organization's assets were proceeds of the crime and thus subject to forfeiture.

In an opinion posted Monday, Jones approved a monetary judgment against Louthian for $907,521, the total amount illegally billed to Medicare and Anthem Blue Cross and Blue Shield.

But the judge rejected an attempt by prosecutors to take four ambulances and other rescue squad property in which Louthian had no financial interest.

"It is noteworthy that all of the property the government seeks to forfeit is owned by the Rescue Squad, which was acquitted of all charges," Jones wrote.

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However, his ruling turned on a finer point of the law: the government's inability to show that the items it sought to forfeit could be traced to Louthian's fraud.

Because a rescue squad savings account used to buy the ambulances contained some legitimate funds, "there is no reliable way of knowing whether the assets were purchased with the fraud proceeds rather than with the untainted money," Jones wrote.

Prosecutors have argued that other members of the rescue squad submitted false billing records. The Medicare reimbursements were then used to purchase land and equipment for the squad, they argued.

"While the squad was acquitted of criminal wrongdoing, such does not entitle it to retain a windfall of over $900,000, comprised largely of taxpayer money," special Assistant U.S. Attorney Janine Myatt wrote in legal papers detailing the government's case.

Louthian's attorney, Michael Khouri, had earlier voiced concerns that the prosecution could put the rescue squad out of business. Khouri and a second attorney representing the rescue squad could not be reached for comment Monday.

Louthian is awaiting sentencing and faces up to 45 years in prison.

The case is part of a larger effort to recover money lost to health care fraud, which amounts to between 3 percent and 10 percent of total health care expenses annually, according to the FBI. The cost of health care nationally was an estimated $2.4 trillion in 2012.

Copyright 2013 - The Roanoke Times, Va.

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The Roanoke Times, Va.
Laurence Hammack
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