Ricardo Gonzalez is a happy man today. Last week the U.S. Attorney in Los Angeles announced that Gonzalez would be receiving $534,471 for blowing the whistle on his former employer. According to a federal complaint, Westlake Convalescent Hospital, Dr. Jasvant Modi and his wife, Dr. Meera Modi ran a scheme to recruit patients from “skid row”, send them to a hospital for unnecessary medical treatments and then after they were “treated,” bring them to Westlake Convalescent to recover. The entire scheme was designed to simply defraud Medicare and California’s state healthcare program, Medi-Cal.
Ricardo Gonzalez was hired by Westlake in August 2008 as the facility’s Health Information Director. Part of his duties included making sure the facility complied with Medicare laws and professional practice standards. One of those standards includes making sure that patients are seen at least once a month by a doctor for the first 90 days and then at least once every 60 days thereafter. These are minimum standards… most nursing home residents receive constant visits from their doctor.
In March of 2010, Gonzalez discovered that a patient at Westlake had been transferred even though the patient’s physician never authorized the transfer or knew about it. Worried about compliance issues, Gonzalez began investigating. He soon learned that there was a scheme to transfer certain patients to acute care hospitals. The transfers were being authorized by Dr. Meera Modi and her husband, Dr. Jasvant Modi. When Gonzalez began investigating further, he was reprimanded according to the complaint. (It is a common tactic to pressure would-be whistleblowers to “mind their own business” or not rock the boat.)
Despite the reprimand, Gonzalez was undeterred and even more determined to explore his suspicions. He soon learned that many patients were going back and forth from Westlake and a local acute care hospital. Why is this relevant? Medicare will ordinarily only pay for a patient to stay 100 days in a skilled nursing facility. Because he had access to all patient records, Gonzalez found that patients were being transferred to from Westlake repeatedly to the same acute care hospital and then back to Westlake. That action restarts the Medicare payment clock.
According to Gonzalez, one patient questioned why he was being transferred to an acute care hospital for high blood pressure when no one at Westlake had checked his blood pressure!
Digging more, Gonzalez found that one patient was transferred back and forth to the same hospital 11 times in 6 years. He says that patient served “as a commodity for Defendants upon which they can collect large, unwarranted payments. The residency of this patient was for no other reason than to bring in revenue for [Westlake], despite the fact that this patient was healthy and could have resided independently in an assisted living facility or on his/her own for a significant portion of the end years of his/her life.” In other words, this otherwise healthy patient was essentially hospitalized unnecessarily for the last 6 years of his or her life.
Ultimately, Gonzalez decided that he had to report the fraud and protect the patients. Like so many other conscientious healthcare workers who are ignored or face retaliation for speaking up, Gonzalez became a whistleblower and filed a complaint under the federal and California state False Claims Acts.
Gonzalez filed his complaint after it became clear that the hospital was participating in the fraud. His complaint said one patient questioned why she was in the hospital for four or five days when she wasn’t sick and because she received no treatment at the hospital. She was told it was a “vacation” from Westlake.
The complaint also says that the Modis’ were the true owners of Westlake. By signing the transfers and resetting the 100 day Medicare stay limit, they were benefitting from the reimbursements. Unfortunately, they were doing so at the expense of both their patients and taxpayers.
Ultimately the federal government intervened in the case and took over prosecution. The hospital involved in this case, Temple Community Hospital, is now closed.
The Modis and Westlake settled the case before trial for $3.5 million. In announcing the settlement, Los Angeles U.S. Attorney Eileen Decker said, “Patient-transfer schemes such as this victimize vulnerable members of our society as well as taxpayer-funded programs designed to aid them. Such schemes are a clear abuse of the physician/patient trust and a fraud on American taxpayers.”
A federal agent from the Department of Health and Human Services said, “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. As this case illustrates, we will work diligently to investigate providers who abuse the system and take advantage of the elderly and disabled.” He also acknowledged that the scheme put patients at risk.
Whistleblower Awards and Medicare Fraud
A healthcare whistleblower reporting Medicare or Medi-Cal fraud is entitled to receive a percentage of whatever the government receives from the wrongdoer. To qualify for a whistleblower award, one must be the original source of the information and generally be the first to file a sealed complaint in federal court.
Gonzalez named many other people in is complaint and we are pleased to share that one of the doctors connected to this scheme, Dr. Ovid Mercene received a criminal conviction for his role in the events.
Further awards for Dr. Gonzalez are possible. California is one of two states that sometimes pays whistleblower awards for schemes involving private insurance.
Doctors take an oath to help heal their patients. Unfortunately, in this case, it appears the doctors elected to put profits before their patients… patients that were often elderly and vulnerable. It’s sad to know that some of these patients didn’t need skilled care and could have spent their last years at home, with family or even outside. Just because the patients came from “skid row” doesn’t mean they should have been deprived of their freedom or dignity.
If you have inside knowledge of Medicare or Medicaid fraud (called Medi Cal fraud in California), give us a call. Our whistleblower clients have received over $100 million in awards in just the last 5 years. The next award could be yours. Plus by stepping forward you are protecting patients, stopping fraud and reducing taxes.
For more information, contact attorney Brian Mahany at or by telephone at (direct). All inquiries protected by the attorney – client privilege and kept confidential. We have the drive, the dedication, the experience and the knowledge to protect you, stop the fraud and help you get the maximum award possible.
MahanyLaw – America’s Whistleblower Lawyers