A Los Angeles nursing home and two doctors paid more than $3.5 million to resolve allegations that they took part in a scheme to improperly transfer patients recruited from skid row to a hospital for medically unnecessary services, then moved them to the nursing home for needless stays, federal prosecutors announced Friday.
A whistleblower, Ricardo Gonzales, received about $535,000 from the settlement, according to the U.S. Attorney’s Office.
The settlement was announced after U.S. District Judge Beverly Reid O’Connell dismissed the lawsuit alleging the nursing home and the Modis knowingly submitted false claims to Medicare and Medi-Cal for services to patients for unneeded services.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Between 2008 and 2010, AJIT Healthcare Inc. — doing business as Westlake Convalescent Hospital — paid illegal kickbacks to a “care consortium” on skid row in exchange for patient referrals to Westlake, the lawsuit alleged.
During that period, Jasvant Modi allegedly re-admitted patients from Westlake to the now-closed Temple Community Hospital and then back to Westlake to extend the patients’ Medicare-covered stays at the nursing home, knowing the patients did not require further services at either facility.
His wife allegedly signed medical orders for non-payable services for the same patients. Westlake was accused of billing Medicare and Medi-Cal for medically unnecessary services provided to those patients.
“This round-robin system of moving mostly homeless and vulnerable people from the hospital to a nursing home and back, purely for profit not patient care, is unacceptable,” said Chris Schrank, special agent in charge at the Department of Health and Human Services, Office of Inspector General.
“These were medically unnecessary services which placed the ‘patients’ and federal health care systems at risk and this type of conduct will not be tolerated,” he said.
The case is related to a large-scale scheme to defraud Medicare and Medi- Cal through the illegal recruitment of skid row residents for medically unnecessary medical procedures at area hospitals and medically unnecessary stays at nursing homes, according to the U.S. Attorney’s Office.
In December 2013, Dr. Ovid Mercene pleaded guilty to a tax offense related to his admission of patients, most of whom were homeless, to Temple Community after they had been referred from a purported “care consortium.”
After a short hospital stay, Mercene discharged the “patients” to skilled nursing facilities, even though they did not require such care, authorities said.
The lawsuit was brought by former Westlake employee Gonzales under the qui tam — or whistleblower — provisions of the False Claims Act, which allows private citizens to bring suit on behalf of the government and share in any recovery.
— City News Service