A Chappaqua EMS billing services company has been accused of poaching employees and using a subcontractor’s trade secrets to cut the partner out of lucrative government contracts.
Boston-based Public Consulting Group claims that it has lost at least $14 million because of improper actions by Digitech Computer LLC, in a complaint filed Dec. 4 in U.S. District Court, White Plains.
“Digitech … is now competing directly with PCG,” the complaint states, and “has misappropriated more than a decade of PCG’s work.”
Digitech did not reply to a message asking for its side of the story.
The firm specializes in software that enables emergency medical services to maximize billing and collections revenue.
“EMS billing is all we do,” Digitech stated in a 2020 press release. “We know EMS.”
Public Consulting Group has developed a subspecialty that helps state and local governments collect reimbursements for Medicaid patients under the federal Ambulance Supplemental Payment Program.
Digitech, according to the complaint, did not have the know-how or capability, until recently, to collect supplemental payment revenues.
The companies had combined their expertise, with Digitech securing contracts with ambulance services and PCG working for Digitech as a subcontractor.
The arrangement helped the City of Baltimore, for instance, recover tens of millions of dollars for ambulance services provided to Medicaid patients.
But as Digitech was negotiating a long-term contract, the complaint states, it “hatched a scheme … to cut PCG out of the Baltimore deal.”
PCG claims that Digitech hired away two key employees, in violation of the subcontract. Before one of the employees resigned from PCG, he allegedly transferred client records, proprietary tools, marketing materials, and more to his personal accounts, and then shared the information with Digitech.
“By obtaining access to these files,” the complaint states, “a competitor would obtain an unfair competitive advantage because it could free-ride off of PCG’s labor and expertise.”
Digitech began offering a Medicaid payments service, according to the complaint, and taking credit for PCG’s work.
For example, Digitech allegedly told potential customers that it had recovered more than $600 million in supplemental payments for more than 100 clients.
PPG accused the Chappaqua firm of several breaches of their subcontract, violating the federal Trade Secrets Act, interfering with prospective business deals, false advertising, and unfair competition.
It is demanding that Digitech stop using the proprietary information and pay unspecified damages.
