Undercover Video Leads To Medicare Fraud Conviction

Undercover Video Leads To Medicare Fraud Conviction

CREATED Feb 4, 2014

by Ben Hall
Investigative Reporter

NASHVILLE, Tenn. -- Undercover video obtained by NewsChannel 5 sheds light on a Medicare fraud scheme that will send a local couple to prison.

Woody Medlock Sr., 69, and his wife, Kathy Medlock, 57, will begin serving prison terms for Medicare fraud this month.

The couple owned Murfreesboro Ambulance Service.

Hidden camera video, shot by federal agents, played a prominent role in the trial that led the Medlock's conviction.

"They worked very hard to conceal the fraud from everyone," said Assistant Special Agent in Charge Chris Covington with the U.S. Department of Health and Human Services.

Covington helped shoot videos that revealed how the private ambulance company ripped off taxpayers.

"This particular patient is going to get in the front seat of the ambulance," Covington said as he pointed to a video screen.

Numerous videos show patients easily walking to ambulances and getting  in the front seat as they go to a dialysis clinic.

In each case, the ambulance company claimed the patients were so sick that they had to be transported by stretcher.

Because Murfreesboro Ambulance Service told Medicare that the patients were on stretchers, it received up to $485 per transport, when a $5 shuttle ride would have been sufficient.

NewsChannel 5 Investigates first interviewed the owner of Murfreesboro Ambulance Service in 2009.

We asked, "Medicare was billed $485 for something that could have been done for $5?"

Woody Medlock responded, "Well, Medicare sets what we get paid.  We don't set what we get paid."

Our interview took place shortly after federal agents had frozen the Medlock's bank account and seized the family's $57,000 Corvette.

"We know we haven't done any Medicare fraud," Medlock insisted.

But last month a federal judge sentenced Woody Medlock to more than six years in prison.

His wife, Kathy, received just under six years for submitting more than $1million in fraudulent claims to Medicare.

"I think the video was one of the lynch pins of the success of the case," Covington said.

One clip showed that after an ambulance had picked up two patients, which is a violation, it made a sudden stop in front of a restaurant.

"We had no idea what was going to happen next, and then the patient got out of the front seat and walked in to get his lunch," Covington said.

Minutes later, the same patient came out of the restaurant carrying his food.

The ambulance service told Medicare that patient was so sick he was on a stretcher.

"I think this was the most shocking video we found," Covington said.

"I don't think there's any question that Murfreesboro Ambulance Service was operating as a taxpayer funded taxi service."

Prosecutors also showed how the Medlocks forged doctor signatures on medical necessity forms, claiming dialysis patients could only be transported by stretcher.

The patients did nothing wrong.

"The patients ultimately had no idea what the Medicare rules and regulations were.  They simply saw this as a service they were entitled to under Medicare," Covington said.

This is a common type of Medicare fraud.

Murfreesboro Ambulance Service was one of the most profitable private ambulance companies in the state, and that's why agents started following their vehicles.

The fraud took place between 1996 and 2008.  

The conviction has nothing to do with a current company by the same name.

Email: bhall@newschannel5.com

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