Mass. Attorney General Sues Ambulance Firm for Overbilling the State

Attorney General Maura Healey has filed a lawsuit accusing Cataldo Ambulance Service Inc. of overbilling the state by $600,000 over a 10-year period.

Healey’s office alleged in Suffolk Superior Court earlier this month that the ambulance company from 2005 to 2015 charged MassHealth, the state’s Medicaid program, for advanced emergency medical services it did not provide because the patients didn’t need them.

But Dennis Cataldo, vice president of the 39-year-old family-owned company, which serves Greater Boston, said Saturday that the company properly billed the state. He said MassHealth has never cited the company’s billing practices in repeated audits over time.

“They have never questioned our billing as it relates to this matter in any way, shape, or form,” he said of MassHealth. “They have never communicated with us that we were doing anything inappropriately.”

The attorney general’s office said the May 12 lawsuit alleges that Cataldo Ambulance Service billed MassHealth for advanced emergency services when the patient only needed, and only received, basic services. MassHealth reimburses ambulance providers at a higher rate for advanced emergency services

The state claims that more than 40 percent of Cataldo’s requests for reimbursement for advanced emergency services should have been billed at the lower rate.

Officials said Cataldo’s “inappropriate billing practices persisted despite being notified that, in many instances, the patient’s condition and the services rendered were insufficient to justify billing” at a higher rate.

The state is seeking civil penalties, restitution, and other compensation.

MassHealth provides health care services to eligible low-income people. The attorney general’s office said it investigated the matter after it was referred to the office by the state Insurance Fraud Bureau and the FBI.

Cataldo said the state’s lawsuit follows a civil complaint the company filed just three weeks ago in the same court asking a judge for a legal interpretation of a regulation that covers the disputed billing practice.

He said the state’s press release announcing the lawsuit should have disclosed that they had differed over the cost.

Cataldo said the firm billed at the higher rate — which he contends is about $30 extra a visit — because it spent the resources to send high-level professionals and other resources to emergency calls that could have been more serious.

“We can’t determine if the person is sick until we send the higher-level person to evaluate them,” he said.

He compared it with going to an emergency room visit for a possible broken rib, only to find out after an X-ray that there was no fracture. “It’s not broken, but the X-ray isn’t free,” he said.

Cataldo said fewer than 2,000 emergency calls a year are involved in the billing dispute, a fraction of the more than 120,000 calls a year the company responds to in Greater Boston.

“We’re not running our company on the backs of some improper billing,” he said. “This is a small amount of money and a small amount of calls.”

In 2009, then-attorney general Martha Coakley’s office reached an agreement with Cataldo after allegations that the company had unlawfully billed customers for ambulance services after automobile accidents.

Coakley’s office had alleged that Cataldo had charged customers for the portions of the company’s ambulance bills that auto insurance companies had rejected, when the company and the auto insurers should have handled the matter directly.

Under a settlement, Cataldo agreed to reimburse consumers, change its billing practices, and pay at least $50,000 to the state.

Maria Sacchetti can be reached at msacchetti@globe.com. Follow her on Twitter @mariasacchetti.

// //