City of Angels Medical Center: Recruiting Homeless Patients for Hospital Claims

In the Intercare City of Angels Medical Center settlement, the United States obtained a $10 million consent judgment over allegations that the hospital paid shelter recruiters to bring homeless patients by ambulance for treatment regardless of medical need or patient request. The alleged business began at homeless shelters and ended in Medicare and Medi-Cal hospital claims. For someone working in admissions, at a shelter, on an ambulance crew or in billing, the important connection is between who arranged the patient’s arrival and what the hospital billed afterward.

From a Shelter Referral to a Hospital Claim

City of Angels allegedly paid people employed at homeless shelters in Los Angeles’s skid row area to deliver their clients to the hospital. Intercare Health Systems Inc. had done business as City of Angels Medical Center. The Justice Department’s account of the government’s complaint describes the ambulance as the means of bringing the recruited patient to the hospital, followed by hospital billing for medical services.

The government alleged that recruiters delivered people whether or not they needed or requested treatment. City of Angels then allegedly billed Medicare and Medi-Cal for a variety of services, many of which were medically unnecessary. The patient’s arrival supplied an opportunity to bill. The alleged payment to the recruiter supplied a reason to arrange that arrival.

The complaint also alleged that those recruitment payments were kickbacks under the federal Anti-Kickback Statute. The Justice Department described the law as prohibiting certain payments intended to induce referrals for federally funded health services. Here, the alleged payment went to the person with access to shelter clients, and the hospital sought the resulting treatment business.

We call that putting the bill before the patient. People living in homeless shelters were allegedly brought in for unnecessary medical services, with claims sent to taxpayer-funded programs. The ambulance trip was one part of a hospital revenue arrangement.

Who Is Responsible for Medicare Fraud?

Responsibility can reach the hospital and its owners, as well as the ambulance company. In the City of Angels civil case, the United States and California sued Intercare and its former owners over the hospital recruitment scheme. In the Houston hospital settlement announcement, the government alleged that four hospitals affiliated with Hospital Corporation of America received discounted ambulance services in exchange for patient referrals.

The Consent Judgments Shared One Recovery Ceiling

Intercare and its former owners shared responsibility for the single recovery total stated above. The Justice Department announced Intercare’s consent judgment on May 27, 2010.

One Former Owner’s January Consent Judgment

One former owner entered a consent judgment in January 2010 in the same civil lawsuit. That judgment reached the owner personally.

The Other Former Owner’s January Consent Judgment

The other former owner also entered a consent judgment that January. The government could recover the shared total across all three judgments together.

What Evidence Is Needed to Report Fraud?

We look for the connection between the recruitment payment and the patient’s arrival, treatment and government claim. We examine it with the person who knows how the arrangement worked. A shelter employee may know who offered payment and where clients were sent. A hospital insider may know how those arrivals became encounters and billed services.

The ambulance records add a separate account of the patient. The Inspector General’s ambulance guidance identifies who ordered the trip, dispatch instructions, the patient’s status, reasons other transportation was unsuitable, the services provided and arrival times as information suppliers should record. Those details help connect an instruction to bring someone to the hospital with what the crew actually observed.

Where a run report changes the patient’s medical story, the original account and the version used for billing become important to our review. Hospital charts, certifications and claims can then show whether the asserted need matches the care described. The recruitment payment explains why the patient was sought out. The clinical and billing records explain what the public program was asked to fund.

What Are Some Examples of Kickbacks in Healthcare?

Paying a shelter recruiter for hospital patients, offering a facility cheaper transports for referrals and paying a beneficiary to choose an ambulance supplier are different referral arrangements. The recipient of the benefit tells an insider where to look for the decision that brought in the business. The Brotherly Love Ambulance criminal indictment charged that beneficiaries received cash, checks or valuable items as payments to ride with the company or recruit other patients.

For City of Angels, the central allegation remains hospital recruitment: paying for access to people and then billing for treatment many did not need. The parallel cases show why we examine the recruitment arrangement alongside the medical account used to obtain payment. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Why the Patient Arrived

If you saw shelter referrals bought, hospital treatment arranged around recruitment payments or medical records changed to support those bills, talk with our whistleblower experts about what happened inside the operation. We work beside you to build a case around the patient recruitment and the claims it generated, bringing in healthcare fraud whistleblower lawyers who understand hospital billing and ambulance referrals. Your knowledge of who sent the patients and why is where our work together begins.