MIDTOWN — A paperwork snafu caused Medicare to overpay the city by more than $4 million for FDNY ambulance rides, according to a federal lawsuit and sources.
The city reached a proposed $4.3 million settlement with the Manhattan U.S. Attorney’s office on Tuesday after a billing vendor filled thousands of FDNY ambulance claims between 2008 and 20012 not covered under Medicare, according to the suit.
“As a result of this joint look into Medicare billing practices at the FDNY, the agency has completely revamped its policies and has stronger procedures in place to reduce the risk of recurrence and to immediately correct erroneous or improper payments, if they do occur,” the New York City Law Department said in a statement.
The vendor had failed to check a box indicating that the ambulance ride did not meet a medical necessity requirement, sources said.
People within the FDNY budgeting office became aware of the overpayments and department leaders then brought to the issue to the Law Department, sources added.
The city notified the U.S. Attorney’s Office in December 2012 after finding out about the issue, according to court papers.
“For the Medicare program to function properly and fairly, it is essential that providers be reimbursed only for those services that are covered," U.S. Attorney Preet Bharara said.
"For more than four years, the New York City Fire Department received reimbursements for emergency ambulance services that did not meet Medicare’s requirements.
Investigators then worked with the FDNY to review their books from 2008 to 2012 to determine the overpayment amount.
The FDNY also modified its claiming procedures in September 2013, according to court papers, to try and "reduce the risk" of future overpayments.
A lawsuit was filed the same the day a settlement was reached in order to finalize the settlement amount, the Law Department spokesman said.
The settlement still needs to be officially approved by a judge.
