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Attorney General's News Release
September 26, 2005

Nixon recovers $2.4 million for state in antitrust, Medicaid fraud settlement with transportation contractor

Jefferson City, Mo. — Attorney General Jay Nixon announced today that his gasoline price gouging investigation will be extended for several more weeks to include any reports of gouging following Hurricane Rita, which is expected to hit Texas and Louisiana tonight.

The out-of-court settlement resolves the Attorney General's concerns that Medical Transportation Management Inc. (MTM) violated antitrust laws during the contract bid process, and breached its contract with the state by billing and accepting payments from the Missouri Medicaid program above what was allowed. The Missouri Medicaid program will receive $2 million under the agreement, and MTM will pay the remaining $400,000 to the Antitrust Revolving Fund.

"Whether it is overbilling, fraudulent claims or collusive bidding, we will continue to aggressively pursue waste, fraud and abuse of the Medicaid system," Nixon said. "Anyone who tries to manipulate the Medicaid system should know there's a cop on the beat in Missouri to protect taxpayers."

Nixon's concerns about antitrust violations focused on agreements reached in February between MTM and competitor LogistiCare Solutions, of College Park, Ga. Under the agreements, LogistiCare would have become a subcontractor to MTM. Nixon said LogistiCare's parent company and MTM also signed a now-withdrawn letter of intent to acquire MTM. When bids were submitted for the transportation contract in February, MTM was the sole bidder. Only nine months earlier, LogistiCare had successfully bid for the state contract, before OA canceled the award.

"We were concerned that the elimination of bidding competition resulted in a higher bid for these services than what it should have been," Nixon said. "Quite simply, Missouri is paying too much for this service."

Under the contract, MTM received reimbursement for arranging transportation for Medicaid recipients for non-emergency medical visits, such as to a physician's office or to a pharmacy to fill a prescription. The transportation could include public transit, a third-party vendor, or the recipients providing their own transportation or being driven by friends or family.

In cases where recipients drove themselves or had friends or family drive them, MTM received money from the state not only to reimburse the recipients for the mileage, but also to pay MTM for the number of "legs" involved in the trip. Nixon alleged the overbilling occurred when MTM overstated the number of legs involved in the gas mileage reimbursements; was paid for third-party vendor trips that did not occur; and received payment from the state in excess of what was allowed by the contract.

For example, in two cases from 2005, Medicaid recipients notified MTM that they had to cancel their appointments after the vendors had not shown up to provide transportation, but MTM billed Medicaid and received payment for the trips. In another case in February 2005, MTM submitted bills for three round trips allegedly provided to a recipient on Jan. 17, Jan. 19 and Jan. 21, when the recipient had died on Jan. 11.

In addition to the $2 million to be paid to the Medicaid program, MTM agreed to no longer seek approximately $17.4 million from the state for claims that were denied or that MTM said were underpaid. MTM also agreed not to resubmit or appeal any of the claims that were denied as a result of MTM's conduct alleged by Nixon.

As long as MTM has a contract to provide services to the state of Missouri, the company will provide the Attorney General's Office with written notification of any acquisition or merger with any transportation provider or broker, or formation of a joint venture with any broker, engaged in provided Medicaid non-emergency medical transportation services.

Last week, Nixon reached a settlement with LogistiCare over its conduct in the bidding process. Under that agreement, LogistiCare will pay $150,000 to the state's Antitrust Revolving Fund. LogistiCare also agreed to dismiss its pending appeal over the previous contract action and notify the Attorney General's Office if it would merge in the future.

 

LogistiCare: Stop The Unfair Wage War

Providence Service Corporation acquired LogistiCare for $220 million in 2007

FY 2011, the Department of Health and Human Services spent 19.4 Billion Dollars in contracts. The third largest spender next to the DOD and the DOE.

Providence maintains 773 Social Services and Non-Emergency Transportation Services contracts in 35 states, the District of Columbia and British Columbia as of September 30, 2007.

"Despite being under bid by our competitors, we were successful winning five of five new state contracts and won eight of nine incumbent contracts up for rebid," commented Fletcher McCusker, Chairman and CEO.

LogistiCare pays lobbying firms:
$22,550
$20,000
$52,500
States lobbied in: Arkansas, Colorado, Connecticut, Florida, Georgia, Idaho, Kentucky, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, Oklahoma, Pennsylvania, South Carolina, Texas, Virginia, Wisconsin

Total LOGISTICARE SOLUTIONS Contributions to Candidates and Party Committees from 2003 to 2011- $617,303

"If we fail to establish and maintain important relationships with officials of government entities and agencies, we may not be able to successfully procure or retain government-sponsored contracts, which could negatively impact our revenues", according to 'Form SC 13 G regarding Providence Service Corporation' (LogistiCare Solutions), filed with the' United States Securities and Exchange Commission, on March 30, 2012'

For fiscal 2011, the Providence Service Corporation expects revenue in the range of between $944-$949 million.

As of Dec. 30, 2010
Basic Compensation:
Name Position Fiscal Year Total
Fletcher McCusker Chairman of the Board, Chief Executive Officer 2,943,920
Michael Deitch Chief Financial Officer, Vice President, Corporate Secretary, Treasurer 1,408,590
Herman Schwarz Chief Executive Officer of LogistiCare Solutions, LLC 1,416,060
Craig Norris Chief Operating Officer 1,558,460
Fred Furman Executive Vice President, General Counsel 1,437,950
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