Accused of bilking the federal government and the state of Texas out of $40 million, the city of Dallas has reached a settlement to resolve fraudulent claims involving the Medicare and Medicaid programs.

According to a press release from the U.S. Attorney’s Office, “Ambulance services generally are coded either as basic life support level or advanced life support (ALS). ALS transports are reimbursed at a higher rate by both Medicare and Medicaid. The U.S. and Texas contend Dallas directed its billing contractor [Southwest General Services] to code every 911-dispatched transport at the ALS level.” At least 40% of the transport calls should have been billed at the lower rate.

The scam was revealed by a whistleblower, Douglas Moore, who worked in the auditing department at Dallas City Hall.

The overcharges totaled $40 million. However, the federal and state governments agreed to accept only $2.47 million from Dallas, which did not have to acknowledge any wrongdoing.

-David Wallechinsky, Noel Brinkerhoff