John Huter
Credo, K.
MGMT 525 – ORGB

Acadian Ambulance: Billing Practices
Acadian Ambulance Service was originally founded in 1971 as Test Acadian by Roland Dugas, Richard Zuschlag, and Richard Sturlese. It was a privately owned ambulance service company created to fill a void after funeral homes stopped providing the service because of troublesome federal regulations. The Lafayette Parish Policy Jury (the governing body of the parish at that time) approved of the three men’s idea on July 21, 1971 and granted them exclusive rights to provide ambulance service for the parish. Over the years, Test Acadian evolved into Acadian Ambulance Service, and has since expanded into two other states and has grown exponentially. The firm’s parent company is Acadian Companies, Inc. Under Acadian Companies, the firm has six other companies that provide medical transportation for citizens and education and training for potential employees, amongst others.
Today, Acadian’s headquarters is still based in Lafayette, Louisiana and continues to provide ambulatory service in both emergency and non-emergency situations. The company is a regional powerhouse covering 3 states and maintaining approximately 4000 employees and a fleet of ambulances, helicopters, and other transportation vehicles. The firm was recently designated as the largest privately owned ambulance service provider in the U.S.
Of the three original founders, Zuschlag remains active CEO of the company. When a company becomes this big, especially in the medical field, ir must constantly be worried about liability. Unfortunately, Acadian is no stranger to lawsuits. Over the course of the company’s 45-year history, there have been numerous lawsuits brought against them for various reasons. One of the most recent and possibly most notable cases: a class action lawsuit claiming customers had been over-charged at one time or another within the past 20 years, based mainly on Acadian’s billing practices. The lawsuit was filled back in 2010 and the settlement was just finalized this past June.
It was no secret that the privately-owned company charged a hefty price for a ride in their well-kept, boxed vehicles. Acadian consistently ranked at the top of the charts for best locally owned business and best customer satisfaction. They held a key role in convincing public officials to grant them exclusivity that, in my own opinion, played a major part in their rapid growth and takeover of the markets they moved in to.
This particular lawsuit was filed in 2010 as a class-action lawsuit in Avoyelles Parish, Louisiana, spear-headed by an attorney representing a woman who felt she was unjustly billed by the company. The lawsuit claimed that Acadian was offering services to insured customers at an agreed upon, reduced rate for medical emergencies. Yet, if a third party was at fault in, for example, a car accident in which Acadian’s patient was involved, Acadian would bill individual patients in full, not through the insurance. Acadian would therefore recoup the full cost of services provided, ignoring the agreed upon terms of service and disregarding the notion of unfairness by collecting more.
The story begins to get complicated. The suit was filed in response to a law that was enacted in 2004 in response to balanced billing practices, intended to specifically address this issue. Acadian’s billing practices were common amongst most providers in the health care industry prior to this law being passed. However, the law was put in place to end this questionable billing practice. It appears as though the high ranking executives at Acadian collectively decide to try and deceive Louisiana law to increase profits. There were no whistle blowers, and if there were, they were promptly hushed because we have not heard of any throughout this case.
Acadian would collect full recovery cost from a patient if said patient were granted any liability money, settlement money, etc. instead of the agreed upon reduced rate when a third party was at fault. The way they would ensure collection of these funds would be to put a lien on the patient so in order for the patient to collect their settlement from, for example, a car accident, they would have to pay Acadian first. Because Acadian is so big and has so much power, they could hold off as long as necessary just to collect what, for them, is probably a nominal amount; whereas the patient may desperately need that settlement money just to get through the day. Ultimately, most patients would accept the loss and just pay Acadian to get rid of the lien and get a portion of their money and not have to fight.
Whether or not someone agrees with the practice is irrelevant. From my understanding, the law enacted in 2004 was to prevent this and Acadian appears to blatantly disregard the law in their own personal interest. Several professionals have suggested that this is a result of a monopolistic service. When a company has a monopoly as Acadian does in almost all areas of where it provides service, it can get away with more than an average firm in a competitive market.
When the case was originally filed, the class was expecting to have around 2000 patients file with the claim and have a pay out of approximately 17 million dollars. Acadian disagreed with plaintiffs and didn’t think they deserved any recovery funds. They remained firm in their position and maintained their innocence. They asked for a retrial was it was granted. The class is composed of anyone who paid more for services than the agreed-upon reduced rate. Since the case was pushed back, the actual number of patients who entered the class action has only reached 440 patients with a settlement amount of 5.9 million dollars.
One must question the motives of the executives when there are suspicious billing practices that continue, despite the criticism. This could have a major effect of how both customers and employees view the company. In a monopolistic service, it would be very hard to start a grass roots effort to change company, but an employee based, negative attitude could cause damage to the morale and perception of the firm. This could ultimately affect the organizations behavior as no one would want to work for an immoral company, especially if the employees are not benefitting from the practice. If they were, they may be more inclined to turn the other cheek, or have a blind eye to what is happening because they are not directly involved or at fault, nor are they directly benefitting. However, since the company is employee-owned, higher profits for the company means higher profits for them even though employees don’t immediately see that money. Their stock options rise. We must remember time value of money.
This way of thinking is very dangerous, but the company has an advantage. If they admit they are wrong, they would probably end up having to pay out much more than previously expected. They would have to settle for a larger amount if they admit fault. If they argue that they truly believe their practices are legal, then they can settle for as little as possible, maintain innocence, and try to keep a healthy public perception of the company.
I think the biggest issue in this lawsuit is the blatant disregard for the law. If I was an executive of this firm, I would suggest the firm find out what the law intended and abide by it to boost public perception. I think to try and skirt by and evade being called out for continuing to bill this way after the law was in place is unjust and proves the company understood its actions are probably wrong. It’s common knowledge that since the law has been in place, practically all medical firms who were billing this way changed their practices in order to abide by the new law. Acadian did not. They also understood the intricacies of how to bill this way and make it work in their favor, because they have been doing it since their founding. They developed a very sophisticated way of tracking the patients who they believe have a good chance of collecting a settlement or liability payout in order to place the lien on them and collect the full service cost rather than the discounted rate from these patients.
Moral obligations and commitment to customers become a key role in these types of situations. The fact that Acadian continues to maintain their innocence after the settlement and state that the firm decided to not admit fault, but to put this behind them after 10 years of fighting to focus on their customers, is absurd. It reminds me of the most recent presidential debates when Obama and Romney would literally say the exact opposite, both claiming what they said was “fact”. Obviously, someone is lying. I feel that Acadian is completely out-of-line and will continue to be the “big bully” because of their political pull, their enormous size, and their monopoly of the markets in which they provide care.
Communication is key here as well. Acadian did an excellent job of handling the media and containing the story. Although the case was widely covered, you didn’t hear too much about this story. They did a great job of maintaining their innocence, and sticking with their original story. Despite which side someone is on, when looked at it from a legal standpoint, they had a strong case. Despite all of the evidence against them, they convinced people they truly believe their billing practices are legal.
The things that Acadian didn’t do so well deal with moral obligation as well as not following suit with the rest of the industry in 2004 and continuing to bill in these questionable ways. When they do this, they are not putting the customer first. They are taking funds from the patient. So, that patient gets hit because the insurance pays out, then gets hit again when Acadian tries to collect from their settlement.
Unfortunately, I don’t think there is much I would have done differently as far as handling the situation once the news broke. However, I would hope that as an executive I would have the moral conscience to stand up to everyone and suggest the firm not bill this way. It may cause a complete restructuring of the firm’s accounting practices, but it will benefit them in the long as they will have less lawsuits brought against them. Making such a huge change would also make a great impact on the people they serve, proving that the firm believes in what they say: the customer comes first.
The best suggestion moving forward would be to have more regulations on an ambulance monopoly. Acadian is extremely unregulated and is a large reason of why they are able to continue to get away with practices that others would not be able to do. I would also consider trying to move in newer executives with a different mindset. If they company as a whole believes in what it is doing, nothing will change. Considering this company’s history, it will not change until the CEO is replaced. Overall, I think that regardless of the company’s opinion, the only way to prevent future lawsuits is to change the billing practices to abide by the law. It can only benefit them.

Works’ Cited

http://www.ambulanceclass.com <accessed 4 Dec 14>

http://www.katc.com/news/settlement-approved-in-acadian-ambulance-lawsuit/ <accessed 5 Dec 14>

http://www.washingtontimes.com/news/2014/jun/30/settlement-approved-in-acadian-ambulance-lawsuit/#ixzz3KbSoJYx7 <accessed 7 Dec 14>