On October 30, 2010, seven people (including two physicians) were arrested and charged with seven counts relating to the operation of a medical clinic in North Hollywood. The criminal counts charged were: conspiracy, making fraudulent claims for healthcare benefits, making illegal referrals, and receiving illegal kickbacks.
This case is being prosecuted by the Los Angeles City Attorney's Office which makes it unusual since this office only has the jurisdiction to prosecute misdemeanors. However, the complaint seeks restitution to Medi-Cal and Medicare of $5 million. It is therefore clear that all prosecuting agencies are putting health care fraud as a priority.
The persons charged were: (1) two physicians, Dr. Eleanor Santiago Arthur and Dr. Rodney Stephen Barron, who were held on $500,000 bail; (2) the alleged owner of the clinic Artur Vic Manasarian who has also been charged in a federal health care fraud case; and (3) four individuals who worked at or on behalf of the clinic. All individuals are presumed innocent and a criminal complaint is not evidence or proof of guilt.
The allegations in the criminal complaint were that "cappers" recruited Medicare and Medi-Cal enrollees (including mentally ill homeless people) by paying them $100 each and drove them to and from the clinic. The government deemed it suspicious that some patients were recruited from Long Beach to go to the North Hollywood clinic. The clinic then allegedly performed unnecessary tests (such as abdominal ultrasounds) and other procedures at the North Hollywood clinic. This is the basis for the allegation that fraudulent bills were submitted to government insurance programs for seniors, the poor and the disabled.
One allegation was that in some instances, the patients' blood was drained into unsanitary, open containers and the clinic submitted the blood for tests under multiple patients' names so they could bill multiple times. After the visits, the cappers drove the patients back to where they picked them up. The City Attorney alleges that the clinic billed the government for up to $1,000 worth of medical care per patient, and each physician saw 30 to 50 patients a day.
Attorney Commentary: These cases are not usually prosecuted by the City Attorney's Office since a misdemeanor count has a maximum of a one year sentence. However, the City Attorney's Office contends that if any of the charged individuals are convicted of all seven counts, the counts would be consecutive and they could face up to seven years in prison. This is one way for the City Attorney's Office to make misdemeanor counts serious for those charged with healthcare fraud and illegal kickbacks.
The City Attorney alleges that "owner" of the clinic is a non-physician indicating that there is the issue of the corporate practice of medicine in this case and it would not be surprising if there were allegations that the clinic was in control of the billing in this case. However, since only physicians can bill and receive payment from Medicare and Medi-Cal in California, the billing would have been in the names of the physicians and the City Attorney's Office will seek to hold them responsible even if they did not receive all the money received from Medicare and Medi-Cal.
Thus, the days where these physicians were treated as "victims" appears to be over and physicians who work at clinics where there is illegal marketing, kickbacks and unnecessary tests cannot stick their heads in the sand and act like an "employee" when the billing and ordering of tests is under their name. Physicians must be very careful where they work and it is our experience that physicians who are young, elderly or have problems (such as medical, psychological, alcohol/substance abuse, or legal) are targeted to work at these illegal clinics. Even if a physician has trouble getting employment or making a living, working at any clinic which does not follow the law will cause more problems for the physician in the long run. We often advise physicians to do due diligence and make sure that their license and UPIN number will not be jeopardized. The short term benefits are not worth it.
Any questions or comments should be directed to Tracy Green, a very experienced California health care fraud and Medicare fraud attorney at tgreen@greenassoc.com.
The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and in health care fraud related matters in California and throughout the country. Their website is: http://www.greenassoc.com/
