Hollywood Pavilion: Buying Patients and Disguising the Payments

Hollywood Pavilion billed Medicare nearly $70 million for improperly rendered services, patients who did not qualify and patients obtained through kickbacks, according to the Justice Department’s account of the criminal trial. The Hollywood Pavilion Medicare fraud case exposed a scheme to buy psychiatric admissions and disguise the bribes as payments for legitimate services. The people arranging the payments also helped control the admissions and the paperwork. That is the connection a hospital insider may recognize before anyone outside the building does.

Hollywood Pavilion was a state-licensed psychiatric hospital in Hollywood, in Florida’s Broward County. Its Medicare billing involved inpatient and intensive outpatient psychiatric care. The billing described at trial ran from at least 2003 through at least August 2012. The case reached inside the hospital’s management, its clinical operations and the businesses helping it obtain patients.

How Bought Admissions Became Medicare Claims

The criminal trial evidence showed a direct exchange: executives and their co-conspirators paid patient brokers to bring Medicare beneficiaries to Hollywood Pavilion, admitted patients who did not qualify for psychiatric treatment, and submitted claims for them. The referral payment came before the government’s bill.

The hospital’s chief executive created false documents to make the bribes look like payments for legitimate services. That gave the payment a second story, one suitable for the business records. A hospital employee reviewing the supposed service would be looking at the explanation the executive had manufactured to conceal the purchase of patients.

The clinical roles mattered just as much. According to the Justice Department’s trial account, the inpatient clinical director and the head of the intensive outpatient program facilitated payments to recruiters and oversaw fraudulent admissions and treatment of unqualified patients. Clinical management sat on both sides of the transaction: helping obtain the patient and overseeing the treatment the hospital claimed to provide.

A physical therapy director at a business associated with Hollywood Pavilion also facilitated bribes and supervised the creation of false documents to conceal them. His role shows why the payment trail can extend beyond the hospital department sending the Medicare claim. A connected business and a hospital’s clinical program can participate in different parts of the same scheme.

The hospital paid to acquire an admission, then asked Medicare to pay for the treatment. The paperwork dressed the first payment up as a service. Bought patients became billable patients.

Psychiatric Eligibility and the Care Actually Delivered

Hollywood Pavilion’s criminal case involved both patients who did not qualify for the psychiatric services billed and services that were not properly rendered. The Justice Department said the executives targeted disabled people with substance abuse problems and conned them into spending weeks locked down in the psychiatric hospital. The harm went beyond the Medicare bill: people needing care became a source of paid admissions.

The distinction between inpatient and intensive outpatient care helps explain the clinical side. Inpatient psychiatry is active treatment in an institutional setting. Intensive outpatient treatment is organized ambulatory care. An admission record, a program attendance record and a treatment record answer different questions.

For today’s freestanding psychiatric hospitals, Medicare’s payment model uses a daily rate adjusted for patient and facility characteristics. The clinical basis for being in the hospital therefore belongs beside the billing record. A filled bed supplies a day of occupancy. The patient still needs the active psychiatric treatment that the hospital is being paid to furnish.

For an admissions worker, the clinical reason given for accepting the patient may be the part they know. For someone in finance, it may be what the recruiter was supposedly paid to do. Our work connects those views to the service billed to Medicare.

Recruiter Payments Behind Business Labels

Other behavioral health cases show how a business label can conceal a payment for patients. Hollywood Pavilion’s false documents served that same purpose: making bribes appear to purchase legitimate work.

In the criminal case involving Biscayne Milieu Health Center, the Justice Department’s account of the trial evidence described sham case-manager contracts, recruiter payments, falsified records and patients who did not qualify. That case involved partial hospitalization. Hollywood Pavilion operated a psychiatric hospital with inpatient and intensive outpatient services. The common feature is the disguise around the referral payment, even though the treatment settings differ.

A separate whistleblower complaint against Oglethorpe alleged that marketers received kickbacks based on the patients they brought into inpatient treatment. The complaint’s wording ties the money directly to the admissions:

That allegation puts a price on both the number of patients and their billing value. It gives the insider a more concrete question than whether a department calls a payment marketing: what was the recipient actually being rewarded for delivering?

The same complaint alleged that staff later added missing documentation during charting parties and wrote nursing notes for patients they had never treated. Those allegations show another part of the pattern worth examining: records can be manufactured around the care as well as around the referral payment.

Calling a payment case management or marketing gives it a label. The underlying work and the admission decisions tell the rest of the story.

What the Jury Found

On June 28, 2013, a jury found Hollywood Pavilion’s chief executive and inpatient clinical director guilty of conspiracy, wire fraud and health care fraud. The physical therapy director was convicted of conspiring to pay Medicare bribes. The chief executive and physical therapy director were also convicted of paying bribes. The Justice Department also identified the head of the intensive outpatient program as a convicted executive.

The FBI and the Department of Health and Human Services Office of Inspector General investigated the case. The Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Southern District of Florida brought it as part of the Medicare Fraud Strike Force.

What Evidence Is Needed to Prove Fraud?

For a scheme like Hollywood Pavilion’s, the evidence connects the referral payment, its stated purpose, the admission decision and the Medicare claim. The trial account shows why those connections matter: false business records concealed the bribes, clinical managers oversaw unqualified admissions, and the hospital billed for the patients obtained through that arrangement.

We examine the business explanation alongside the clinical one. What service did the payment records say the recruiter supplied? What did the person approving the admission know about the patient’s eligibility? What treatment did the claim represent? Those questions concern different decisions, and the person who understands one of them may hold the connection that makes the others intelligible.

An insider’s value is the ability to explain how the operation worked. Knowing who directed the payment or why a document was created can be as revealing as knowing the amount billed. We build that account with you and connect it to the evidence behind a potential civil whistleblower case.

How Much of a Settlement Does a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For a hospital insider seeing purchased referrals or false treatment claims, our whistleblower experts assess how the conduct and the government billing fit together in a civil qui tam case.

When the Referral Payment Explains the Admission

If you saw recruiter payments disguised as services or psychiatric admissions driven by those payments, talk with our whistleblower experts about what happened inside your hospital. We work beside you to build your strongest psychiatric hospital whistleblower case and bring in healthcare fraud whistleblower lawyers who understand psychiatric admissions, referral payments and Medicare billing. You bring the inside view; we bring the judgment and partnership to pursue it with you.