NEW YORK, May 26 (Reuters) - American Medical Response, one of the nation's largest private ambulance services, will pay the government $2.7 million to resolve allegations that it defrauded Medicare and other federal health insurance programs, the U.S. Attorney in Brooklyn has announced.

Prosecutors alleged that AMR "knowingly submitted falsely inflated claims" between 2001 and 2005 through its Brooklyn and Long Island offices.

The settlement agreement, which AMR signed on behalf of subsidiaries Park Ambulance Service, Five Counties Ambulance Service and Associated Ambulance Service, does not include any admission from AMR that it engaged in the alleged fraud, according to the U.S. Attorney's Office.

The case began when several former employees filed a whistleblower lawsuit against the company on behalf of the federal government, according to prosecutors. Under the False Claims Act, private individuals can file complaints on behalf of the U.S. if they uncover fraud against the government.

The lawsuit claimed that the ambulance services coded "basic life support" calls as "advanced life support" calls when seeking reimbursement, since the latter bills at a higher rate.

The case is U.S. v. American Medical Response et al, U.S. District Court, Eastern District of New York, No. 04-cv-4119.

For the prosecution: Assistant U.S. Attorneys Erin Argo and Paul Kaufman

For AMR: Craig Wilson, general counsel for AMR; Carrie Valiant of Epstein Becker & Green

(Reporting by Joseph Ax)