Homeless People

LA man admits to paying homeless to be hospitalized

Anne Zieger — Tue, 02 Sep 2008 12:37:22 -0400

A Los Angeles man tied to the scandal over hospitals allegedly paying homeless people to be admitted has copped to his part in the scheme. Estill Mitts has entered a plea agreement with federal prosecutors, under which he admitted that he paid homeless people to fake illnesses and be admitted to three for-profit hospitals as a means of defrauding Medicare and Medicaid. According to prosecutors, Mitts deprived state and federal programs of at least $11.8 million, which he will be required to repay.

In his plea agreement, Mitts conceded that that from 2004 to 2007, he operated the 7th Street Christian Day Center on LA's Skid Row, handing out "production" money to stringers whose job it was to recruit homeless people. The homeless who agreed to the scheme were given phony assessments at the center and referred to City of Angels Medical Center and two other facilities. Mitts then entered into fraudulent consulting contracts with the hospitals to disguise the fact that he was getting kickbacks for the patients he brought to the hospitals.

Charges against Rudra Sabaratnam, owner and CEO of City of Angels Medical Center, are still pending.

To learn more about the case:
- read this Modern Healthcare article

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Exec in CA homeless patient scam denies charges

Anne Zieger — Tue, 12 Aug 2008 13:50:20 -0400

A man operating a health assessment center on Los Angeles's Skid Row has formally denied charges that he took kickbacks from three metro LA hospitals to locate homeless people for needless treatment. The executive, Estill Mitts, has pleaded not guilty to conspiracy, money laundering and a handful of other charges in U.S. District Court.

The indictment against Mitts accuses him of participating in a scam to bilk Medicare and Medicaid, under which he lured in homeless patients and paid them to be needlessly tested and hospitalized at the hospitals, City of Angels Medical Center, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center. According to the indictment, the 64-year-old Mitts allegedly was paid as much as $20,000 per month to recruit homeless patients, who received small sums of money, food or cigarettes for their participation. He's posted a $25,000 bond and been ordered to home detention. His trial is set for September 30.

Meanwhile, City of Angels CEO Rudra Sabaratnam has also been ordered to home detention, after posting $700,000. He'll be arraigned August 18.

To learn more about the case:
- read this Modern Healthcare article (reg. req.)

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Anne Zieger — Thu, 07 Aug 2008 10:39:31 -0400

Three hospitals in the Los Angeles area are facing lurid charges that they recruited homeless people on the city's skid row and subjected them to unnecessary tests and procedures in an effort to generate extra income. The hospitals are accused of bilking both Medicare and Medi-Cal, the state's Medicaid program. In addition to facing state and federal charges, the three facilities have also been sued by Los Angeles City Attorney Rocky Delgadillo, whose suit accuses the hospitals of fraudulent business practices.

The alleged scheme appears to have involved the CEO of City of Angels Medical Center, and executives with two suburban facilities, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center. While federal, state and local investigators are still tallying the dollars generated by these schemes, at present it appears that City of Angels alone collected $5 million in federal healthcare reimbursements.

To recruit sham patients, the hospitals used "runners" who canvassed the streets of the city's skid row section. Homeless people were offered $20 to $30 when they finished a needless hospital stay of one to three days. The runner would get $40 for each homeless recruit eligible for Medicare and $20 for each recruit with Medi-Cal benefits, according to Delgadillo's lawsuit. One hospital, meanwhile, worked with a sham "Assessment Center" that reached out to potential patients and attempted to bring them in to City of Angels, offering money, food or even a pack of cigarettes.

To learn more about the scandal:
- read this Los Angeles Times piece

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