A Los Angeles hospital chain Thursday pleaded guilty to conspiring to defraud Medicare and Medi-Cal by paying recruiters to find homeless people to act as patients, Catholic Online reported. The homeless people were given unnecessary treatment, for which hospitals submitted false claims.
Under the agreement, Pacific Health Corp. and its subsidiary, Los Angeles Doctors Hospital Inc., agreed to pay $16.5 million to settle the charges. The suit also involved Los Angeles Metropolitan Medical Center, Newport Specialty Hospital (formerly known as Tustin Hospital and Medical Center) and Anaheim General Hospital.
However, if Pacific Health pays the full sum by March 2017, the U.S. attorney's office for the Central District of California said it would dismiss the criminal conspiracy charges filed against the hospital chain, the Los Angeles Times noted.
Pacific Health and Los Angeles Doctors Hospital admitted that between 2003 and 2008, they and the three hospitals paid about $2.3 million in kickbacks to recruiters. The "recruited" homeless patients led to $16 million in improper Medicare and Medi-Cal payments to the Pacific Health hospitals, the state U.S. attorney's office said late last week.
"Hospitals colluding with marketers to fatten profits through illegal referrals for costly and sometimes needless medical services are pocketing millions of taxpayer dollars," Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the Office of Inspector General of the U.S. Department of Health & Human Service said in the statement. "Our agents are monitoring such schemes, and those entering into similar sham contracts should expect investigation and prosecution."
Several individuals and organizations faced charges in connection with the kickback scheme, Catholic Online noted. For example, Estill Mitts formerly operated a downtown Los Angeles center that recruited homeless people to receive unnecessary healthcare, and pleaded guilty in September 2008 to conspiracy to commit healthcare fraud, money laundering and tax evasion.
To learn more:
- read the Catholic Online article
- here's the LA Times article
- read the state attorney's office statement