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BANTSOLAS v. SUPERIOR AIR AND GROUND AMBULANCE TRANSPORT

March 18, 2004.

NATHAN BANTSOLAS, INDIVIDUALLY AND EX REL. UNITED STATES OF AMERICA, and THE STATE OE ILLINOIS, Relator,
v.
SUPERIOR AIR AND GROUND AMBULANCE TRANSPORT, INC, AND DAVID HILL, Defendants



The opinion of the court was delivered by: DAVID COAR, District Judge

MEMORANDUM OPINION AND ORDER

Relator Nicholas Bantsolas filed a three-count amended complaint against defendants Superior Air and Ground Ambulance Transport, Inc. and David Hill, alleging violations of the False Claims Act. ("FCA"), 31 U.S.C. § 3729, et seq. (Counts I and II) and the State of Illinois Whistleblower Reward and Protection Act ("Whistleblower Act"), 740ILCS 175/3 (Count III). Defendants' motion to dismiss is now before this court.

For the reasons set forth below, the motion is granted in part and denied in part. Specifically, Counts I, II, and III of the complaint are dismissed without prejudice (or their failure to comply with the heightened pleading requirements for fraud under Fed.R.Civ.P. Rule 9(b). The court otherwise denies defendants' motion to dismiss (i.e., to the extent that it is premised on the alleged unconstitutionality of the qui tam provisions of the FCA and the Whistleblower Act and the alleged lack of a nexus between defendants' fraudulent acts and. Illinois state funds). Page 2

 I. Background*fn1

  A. The parties

  Relator Bantsolas is employed as a certified emergency medical technician. Defendant Superior is a medical transport company that utilizes ambulances, medicars, and service cars and operates in the State of Illinois. Defendant Hill is an owner and operator of Superior. Bantsolas worked for Superior from approximately October 1999 through June 2001,

  The federal government administers Medicare through the Center for Medicare and Medicaid Services ("Center"). Within Illinois, the Center administers Medicare benefits through a private insurance carrier. Superior is a qualified Medicare "provider," meaning that it is authorized to participate in Medicare.

  Medicare pays for standard medical and health care services and procedures only in the event that they are "medically necessary" (as defined by Medicare). In the context of medical transports, this standard means that Medicare pays only when other means of transportation would endanger the beneficiary's health. In the absence of such medical necessity, medical transport service is not covered by Medicare,

  As a Medicare provider, Superior submits claims for payment to the private insurance carrier that administers Medicare in Illinois. The claims must include certain information, including the type of services provided, the date and price of such services, and a certification that such services were "medically necessary." Moreover, ambulance service providers like Superior are required to maintain written records documenting each transport of a Medicare beneficiary. The forms, which are to be completed at the time of transport, include the location Page 3 of the pick-up and destination, the beneficiary's physical condition, any medical services performed while the beneficiary was in the ambulance, and the reason that an ambulance transport was needed.

  Bantsolas alleges, albeit obliquely, that the transports of most beneficiaries arc paid under Medicare, but that the transports of hospitalized beneficiaries are paid under Medicaid. Relatedly, he also alleges that Illinois has established a Medicaid program pursuant to which it pays the medical costs of indigent citizens who have qualified to receive benefits under Medicaid, He contends that fifty percent of the funds expended by Illinois in that regard arc reimbursed by the federal government.*fn2

  B. Bantsolas' allegations of wrongdoing on the part of Superior and Hill

  Bantsolas alleges in his amended complaint that defendants violated the FCA by submitting claims to Medicare, through its appointed private insurance carriers, that falsely represented that certain transports were "medically necessary." Bantsolas contends that Hill directed this fraudulent scheme.

  As outlined by Bantsolas, Superior's scheme involved the routine transport of "standing order" patients for whom ambulance transport was not medically necessary and the concomitant submission of false claims to Medicare for those transports (i.e., claims that falsely alleged medical necessity). Bantsolas contends that defendants' fraudulent conduct in this regard occurred throughout the time of his employment with Superior, from October 1999 through June 2001. During that, time, he alleges that he personally and routinely transported by ambulance Page 4 "patients who were ambulatory and whose condition would not otherwise qualify for reimbursement by Medicare." (First Am. Cmplt ¶ 16), Bantsolas identified two of those "standing order patients" by first name and surname initial. (Although the cumulative implication of his allegations is that Superior submitted false claims to Medicare for the transport of those two patients, as well as the other "ambulatory" patients whom he transported, Bantsolas never explicitly makes that allegation.)*fn3

  The first amended complaint does not contain any details regarding the transactions forming or serving the alleged scheme. Bantsolas does not identify any specific instances of the fraudulent billing. Moreover, he makes no allegations regarding the dates of the non-medically necessary transports at issue, the dates of the submissions of the corresponding false claims, any false statements made in connection with the submission of the false claims, the other contents ...


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