Notice it took federal agents to accomplish this.
FBI raids three Southern California hospitals in probe of Medicare fraud - Los Angeles Times
They allegedly used skid row homeless to fill empty beds and boost revenue. A federal grand jury has indicted 2 figures in the case, and L.A. City Atty. Delgadillo announces civil litigation.
By Cara Mia DiMassa and Richard Winton, Los Angeles Times Staff Writers
12:20 PM PDT, August 6, 2008
FBI agents served search warrants this morning on three hospitals as part of an investigation into alleged Medicare fraud involving homeless patients who were recruited from skid row.
Dr. Rudra Sabaratnam, an owner and the chief executive of City of Angels Medical Center, and Estill Mitts, an alleged patient recruiter, were indicted by a federal grand jury last week on 21 counts of healthcare fraud, money laundering and income tax evasion.
The men were arrested this morning as part of the federal government's criminal investigation, according to FBI spokeswoman Laura Eimiller.
"It's a scheme that ranged from street operatives to the CEO of a hospital," said U.S. Atty. Thomas P. O'Brien, adding that he expects several more arrests in coming weeks.
At the same time, Los Angeles City Atty. Rocky Delgadillo announced civil litigation against the three hospitals and their operators in what officials said was a "scheme to defraud the Medi-Cal and Medicare programs out of millions of dollars."
The hospitals allegedly were aided by a patient recruiting operation on skid row that plucked homeless people from the streets and delivered them with fake medical conditions to the hospitals.
Metropolitan Medical Center in 2006 was accused by the Los Angeles Police Department of using ambulances to "dump" five patients in one day onto the streets of the downtown skid row area against their will after their discharge from the hospital. At the time, officials at the hospital strongly denied any wrongdoing.
But the city attorney now alleges that those patients had been recruited "by runners" who directed them to an assessment center on 7th Street, where their Medicare and Medi-Cal benefits eligibility was checked and a "fabricated description of conditions" was prepared by non-doctors so they could be eligible for treatment. All five of the patients were admitted to Metropolitan Medical Center.
Each of the patients received $20 to $30 when they returned to the assessment center after spending one to three days in the hospital, according to the suit.
Among those named in the suit are Pacific Health Care Corp.; Los Angeles Metropolitan Medical Center, its Chief Executive John Fenton and admitting physician Frederick Rundall; Tustin Hospital and Medical Center, its Chief Executive Daniel Davis, Chief Financial Officer Vincent Rubio and admitting physicians Kenneth Thaler and Al-Reza Tajik; and City of Angels Medical Center and its owner-operators Robert Borseau and Sabaratnam. Mitts, the owner and manager of Metropolitan Healthcare LLC and the president of the 7th Street Christian Day Center, which was until recently located on skid row, is also named in the suit.
City attorneys allege that the Tustin hospital was guaranteed 40 to 50 patients a month while City of Angels got 25 to 30 patients month. Metropolitan Medical Center received patients whenever beds were available, according to the suit. City attorneys allege the admitting Drs. Rundall, Thaler and Tajik did not see their patients until shortly before their discharge. City attorneys allege that for patient referrals, Mitts' group was paid $20,000 per month each from Metropolitan Medical Center and Tustin, while City of Angels paid between $400 to $1,000 a week to the recruiting group.
Authorities have expressed concern about schemes that use the area's homeless population to defraud the federal government. State and federal investigators have broken up two food stamp scams, one of which involved a merchant who allegedly gave homeless people 50 cents on the dollar for their stamps then charged the entire value -- $6 million -- to the government.
Last month, in a separate federal lawsuit stemming from alleged Medicare and Medicaid false claims involving a Chula Vista psychiatric hospital, the U.S. 9th Circuit Court of Appeal upheld a $15.6-million award against Sabaratnam, Borseau and firms they operated.
Times staff writers Rich Connell and Sue Horton contributed to this report.