California Hospitals Use the Homeless for Fraud

Unfortunately, Medicare fraud is not a new thing.  It has been around for years, though it has grown over the years to a multi-million dollar business.  Whether it is unscrupulous sales people selling bogus supplemental policies to unsuspecting seniors or whether it is people sending in claims with dead doctors’ identification numbers or other creative ways to cheat and defraud the Medicare system, there are many ways that the system has been bilked out of millions of dollars – in fact, researchers say that it is now over a billion dollars.

In California, three hospitals have stooped to a new low.  The hospitals are accused of picking up homeless people from the skid row area of downtown Los Angeles and bringing them to the hospitals with fake conditions.  Once these people were admitted and served their usefulness by being set up for fake treatment for the fake illnesses, they were then shoved back into the ambulance and dumped back off on skid row.

Skid row is a very poor area of downtown Los Angeles where there are quite a large number of homeless individuals, so it was an easy place to perpetrate this hoax.  “Runners” working for the hospitals as recruiters would get homeless people to go to a center near the hospital where they were assessed and where their Medicare and Medi-Cal were verified.  Once this was done, the recruiters created the information regarding the conditions for these individuals – conditions which would get them into the hospital and get Medicare to pay the bill to the hospital. 

The biggest problem is that these homeless individuals didn’t really realize what was happening and didn’t really get treated for those fraudulent conditions, when they may have actually had some actual conditions that needed to be addressed and treated.  Sadly, the recruiters actually guaranteed certain numbers of these “patients” to the hospitals and once these individuals were treated – minimally – and released, everyone got paid to the tune of millions of dollars.  Each of the homeless individuals was paid $20 to $30 after being released from the hospital.

One thing that the hospitals and their administrators – who were indicted on various charges – did not realize is that they were being closely watched by the FBI.  This became their undoing.  The FBI and local law enforcement raided the hospitals within the past few days and arrested administrators and others involved in the schemes.

With fraudulent schemes like these and some of the other issues that plague the Medicare system it’s no wonder that overhauling the system and prosecuting fraud to the full extent of the law is essential and needs to happen right now, as this situation in California shows.

Filed under: General-Medicare

Tags: General-Medicare, homeless, Hospitals, Medi-Cal, medicare fraud