The City of Santa Monica has agreed to shell out $250,000 to settle a lawsuit stemming from complaints about services provided by its former ambulance contractor.
The lawsuit, filed in 2011 in the U.S. District Court’s Central District of California, alleged that the City and Gerber Ambulance Service billed for services beyond what patients actually needed.
Specifically, the suit alleged that the agencies billed Medicare for advanced, life support-level ambulance services for all 911 pre-hospital emergency medical transports “regardless of whether the beneficiary’s medical condition required that level of service,” according to a settlement agreement signed last month.
More than $144,000 was due to the U.S. government and more than $105,000 was payable to four plaintiffs and their lawyers, according to the agreement. The plaintiffs – Mark Baird, Justin Frith, Rick Jerome Larson and David Moran – were set to receive $10,000 each.
The City and Gerber Ambulance deny the allegations brought forth in the suit and admit no wrongdoing in settling with the plaintiffs and their attorneys at San Francisco firm Hersh and Hersh.
The payments “are not to be construed as an admission of any act, omission, liability or damages,” the agreement reads.
In a statement, spokeswoman Debbie Lee said the original complaint alleged millions of dollars in overbilling and civil penalties of between $5,500 and $11,000 per occurrence, as well as other damages.
“Though the City did not knowingly submitted false claims to Medicare,” Lee said, “it elected to resolve this case to avoid the expense of further litigation.”
The plaintiffs agreed not to file complaints against the City or Gerber Ambulance over matters covered in the original lawsuit.
Mark Burton, the Hersh & Hersh attorney who represented the plaintiffs, did not immediately respond to a Daily Press request for comment.
The settlement agreement was signed by City Manager Rick Cole, who was hired earlier this year as Santa Monica’s top administrator. The allegations described in the lawsuit took place during the tenures of former city managers Rod Gould, P. Lamont Ewell and Susan McCarthy.
“Santa Monica continues to provide the highest level of emergency medical response service to the public,” Lee said. “Our new ambulance provider has a strong understanding of the Medicare system and on behalf of the City, complies with billing requirements.”
Gerber Ambulance offered services in Santa Monica from 2004 to 2011, when City Council entered a contract with AmeriCare. The switch came as a surprise to founder Robert Gerber, who told the Daily Press at the time that he saw the item on the council agenda before hearing from city staffers.
The loss of the City contract led Gerber Ambulance to lay off 45 employees, according to Daily Press archives.
Gerber Ambulance responded to more than 44,000 calls for service and brought in $6 million to the city’s general fund during its time as a contractor, according to Daily Press archives. The company also forgave low-income clients for more than $100,000 in fees they couldn’t afford.
“We’re walking away with our head up high,” Gerber said at the time.