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Hospital pays out in scam involving work done on homeless

By Catholic Online (NEWS CONSORTIUM)
August 27th, 2012
Catholic Online (www.catholic.org)

A hospital that takes in the poor and homeless and then performs medical work on them free of charge sounds, at first, to be a wonderfully humanitarian gesture. But in other hands . to that end, a California-based Hospital chain has agreed to pay out $16.5 million lawsuit that they took in homeless people - and then charged the government for the unnecessary work.

LOS ANGELES, CA (Catholic Online) - Los Angeles Doctor's Hospital, Inc., has entered a guilty plea to conspiring to defraud Medicare and Medi-Cal through the payment of illegal kickbacks to "marketers" who recruited people to act as patients.

In agreements filed last week in U.S. District Court, LADH and PCH admitted that from 2003 to 2008 they and the three PCH hospitals paid more than $2.3 million to the marketers that recruited people to act as patients.

The homeless people were then treated -- even if they did not need treatment. Some of the recruits were found in "Skid Row" in downtown Los Angeles.

"As a result of this illegal conduct, Medicare and Medi-Cal made nearly $16 million in improper payments to the PHC hospitals," the statement added.

According to the plea agreement of one of those "marketers," Estill Mitts, hired "stringers" to recruit homeless people to act as patients from 2004 until 2007 in exchange for promises of small payments. He has previously pleaded guilty to conspiring to recruit homeless people to receive unnecessary health services.

The charges will be dismissed in 2018 if the company follows through with its agreement.

"To root out and deter those who seek to exploit publicly funded health care programs, we need to pursue all available remedies -- civil, criminal, and administrative," U.S. Attorney Andre Birotte Jr. said in the news release.

"The guilty plea, civil settlement agreement, and corporate compliance agreement that we are announcing today ... reflect this approach and should remind unscrupulous health care providers of our determination to bring to justice those who exploit federal and state public health programs for their personal gain."

In the settlement, PHC, along with its parent company, Health Investment Corp. and three subsidiary hospitals have agreed to pay the $16.5 million to settle claims that they were involved in the scheme and submitted false claims to Medicare and Medi-Cal.

Parties to the civil settlement are: Los Angeles Metropolitan Medical Center, Newport Specialty Hospital (formerly known as Tustin Hospital and Medical Center) and Anaheim General Hospital.

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