Yellow Cab parent company pays $1.125 million to settle Medicaid fraud allegations for medical transports

Three cab companies have agreed to pay the U.S. more than $1 million to resolve Medicaid fraud allegations. Three at Irving Holdings, the parent company of Yellow Cab — will pay a total of $1.125 million for violating the False Claims Act, a law that penalizes parties for defrauding government programs, U.S. Attorney John Bales announced Monday. The settlement also includes Irving Holdings and six other affiliated companies. The whistleblower case settlement resolves a lawsuit filed by former Yellow Cab employees who worked for its Medicaid services. The government provides transportation for Medicare and Medicaid patients if they cannot travel or have no access to transportation.

Yellow Cab has a medical transportation contract to provide services to Medicare and Medicaid patients, according to the lawsuit. The former employees alleged that virtually every claim that Irving Holdings, related entities and employees submitted did not comply with Medicaid regulations.

The former employees were all fired by the company. The lawsuit says that the Medicaid drivers’ employee manual listed a series of fines and punishments for drivers if they committed Medicaid fraud. One of them included a $50 for if drivers changed the price of trips in their records, even if Medicaid was being overcharged.

Yellow Cab would be paid for a claim two or three times by the state, according to the lawsuit. Yellow Cab’s CFO and comptroller, allegedly said that if the state was “too stupid” to realize it paid a claim twice, she would put the money in Yellow Cab’s account,according to the suit.

Jeffrey Newman represents whistleblowers but not in this case.