To grasp Medicare's staggering bill for ambulance rides in New Jersey, just visit the busy parking lot of the DaVita St. Joseph's dialysis clinic in Paterson.
More than 20 ambulances were parked outside on a recent morning there. Emergency medical technicians wheeled patients in and out on stretchers. As soon as one ambulance departed, another took its place.
For each one-way ride, Medicare pays ambulance companies nearly $200, plus $6 a mile. The program only covers ambulance rides if a doctor certifies that other modes of transportation would endanger a patient's health. That happens rarely in most parts of the country. But not here.
Dozens of New Jersey ambulance companies — most of them headquartered within 15 miles of Paterson — billed Medicare for unusually large numbers of non-emergency ambulance rides in 2012, a ProPublica analysis of Medicare payment data found.
Some 37 operators claimed an average of 50 trips or more per patient, collecting more than $46.5 million from Medicare that year. By comparison, in 33 other states, not a single ambulance company billed Medicare for that many rides per patient.
In interviews, New Jersey ambulance providers insisted they followed Medicare's eligibility rules, but several acknowledged hearing of others who transport patients who don't need the service — a form of fraud. Competition has become so cutthroat, one operator said, that some providers pay patients up to $4,000 in cash to switch to their companies.
"A couple of providers have said that there's other providers who are paying patients," said Robert Davis, owner of Alert Ambulance Service in Lakewood, N.J., and president of the Medical Transportation Association of New Jersey. "That would be illegal."
Evidence has been building that Medicare is likely overpaying for ambulances to ferry New Jersey dialysis patients to and from their thrice-weekly treatments. The number of dialysis-related ambulance rides increased 857 percent in the state from 2002 to 2011, more than three times the national average, according to a report from the U.S. Department of Health and Human Services' inspector general.
The Centers for Medicare and Medicaid Services announced recently that it would begin requiring prior authorization for certain types of ambulance rides in New Jersey, Pennsylvania and South Carolina, states with high utilization rates and costs.
But the new program won't begin until the fall — and for now, business continues as usual.
The DaVita center in Paterson is the state's largest, with 60 treatment stations that sometimes run 19 hours a day. By 9 a.m., ambulances come and go every few minutes.
In a statement, DaVita said it does not "have a financial interest in how a patient is transported to and from treatments," but acknowledged it was aware of concerns with ambulance providers' practices.
"We understand that this particular geographic area has a fiercely competitive ambulance services market and that some of these companies have resorted to aggressive and questionable tactics in the fight for market share," DaVita's statement said. "We have sent cease-and-desist letters to companies that have attempted to solicit business inside our centers."
Doctors who oversee dialysis clinics in other regions called the ambulance traffic jam at DaVita St. Joseph's highly unusual.
"That really, really sounds excessive," said Philadelphia nephrologist Joel Glickman, medical director at one of Penn Medicine's dialysis centers. "One of our facilities has 36 stations, and three or four ambulances at a time is what I'll see outside."
ProPublica's analysis showed Freedom Emergency Medical Services of Hillsborough, N.J., billed for the most rides per patient in the country in 2012. Freedom transported only 14 Medicare patients that year, but each received an average of 275 rides, the data shows. Medicare paid the company $829,000.
"My patients are all qualified to ride in an ambulance because of the kind of illness they have," said Sunny Ewere, the company's chief executive.
Medicare officials said in a statement that the agency's billing contractors "analyze claims to determine provider compliance ... and take appropriate corrective action when providers are found to be non-compliant."
Davis said he supports Medicare's new push to verify that patients need the rides the program is covering.
"The ones that need it will get it and the ones that don't won't," he said.
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