Pa. U.S. Attorney: Defense Contractor to Pay $940,000 to Resolve Allegations of Withholding Discounts From TRICARE

PHILADELPHIA, Pennsylvania, Aug. 29 -- The U.S. Attorney for the Eastern District of Pennsylvania, William M. McSwain, issued the following news release:

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- Company alleged to have fraudulently increased profits by negotiating discounts with air ambulance providers, and not passing the discounts on to TRICARE

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United States Attorney William M. McSwain announced that International SOS Assistance, Inc., International SOS Government Services, Inc., International SOS, LP, Air Rescue Americas, Inc. Arnaud Vaissie; and Pascal Rey-Herme (collectively, "International SOS"), will pay $940,000 to resolve allegations that it overcharged TRICARE, a health care insurance system for members of the military services and their families, for aeromedical evacuation services by concealing discounts it received from third-party air ambulance providers in violation of the False Claims Act.

The settlement resolves allegations that, between 2013 and 2017, International SOS, a provider of overseas healthcare services for the government, submitted to TRICARE false claims for payment relating to International SOS's provision of aeromedical evacuations. International SOS negotiated discounts from third-party air ambulance providers, which it was required to pass along to TRICARE. Instead, International SOS did not disclose the actual cost of the aeromedical evacuation services during the quoting process; billed TRICARE at the higher non-discounted amount; and received payment from TRICARE for the inflated costs, which International SOS contends it retained as a fee.

"My Office is committed to protecting the integrity of federal healthcare billing regulations," said U.S. Attorney McSwain. "We will hold accountable any federal contractor who chooses to engage in conduct that undermines those regulations, and therefore overburdens American taxpayers, by overbilling federal healthcare programs."

"Protecting the integrity of the U.S. Department of Defense's (DoD) procurement process and combating healthcare fraud impacting the DoD are top priorities for the Defense Criminal Investigative Service (DCIS)," stated Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office. "By concealing discounts and overcharging TRICARE, the DoD's healthcare program, International SOS sought to profit at the expense of the American taxpayer. The settlement agreement announced today is the result of a joint effort and demonstrates DCIS' continued commitment to work with the U.S. Attorney's Office to ensure that U.S. military members and their beneficiaries continue to receive high quality and cost-effective healthcare."

This settlement resolves allegations in a lawsuit by a former International SOS Regional Flight Desk Manager, under the qui tam (or whistleblower) provisions of the False Claims Act. The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery. The relator here will receive $165,000 as his share of the recovery in the case. The relator was represented by Franklin J. Rooks, Jr., Esq. of Morgan Rooks, P.C., and Jared A. Jacobson, Esq. of Jared Jacobson Law, LLC.

"We thank the whistleblower for coming forward and providing essential assistance to the government. This concerned citizen's information and assistance was critical to our office's investigative efforts in this matter, and we deeply appreciate that contribution," said U.S. Attorney McSwain.

This case was a cooperative effort among the U.S. Attorney's Office for the Eastern District of Pennsylvania, and the Defense Criminal Investigative Service. For the United States Attorney's Office, Assistant United States Attorneys Scott W. Reid, Colin Cherico, and Auditor Dawn Wiggins handled the investigation and settlement.

The lawsuit is captioned United States ex rel. Richard Nicholas v. International SOS Assistance, Inc., et al., Civil Action No. 16-3927 (E.D. Pa.). The claims resolved by the settlement are allegations only; there has been no determination of liability.