On January 25, 2010, the former owners of Los Angeles’ City of Angels hospital, businessman Robert Bourseau and Dr. Rudra Sabaratnam, agreed to pay $10 million to resolve allegations that the City of Angels hospital paid “recruiters” employed at homeless shelters in the skid row area of the city to deliver their homeless clients by ambulance to the hospital for medical treatment regardless of whether their clients in fact needed or requested such treatment. According to the Department of Justice (DOJ) press release, the City of Angels would then bill Medicare and California’s Medicaid program for medical services allegedly rendered to the homeless patients, many of which were not medically necessary, in violation of the False Claims Act. The government further alleged that payments the City of Angels made to its recruiters constituted kickbacks in violation of the federal Anti-Kickback Statute. In addition to this civil case, Bourseau and Sabaratnam pled guilty to criminal charges for violating the Anti-Kickback Statute. A former senior executive of City of Angels and two “recruiters” also pled guilty to similar charges in connection with the scheme. http://www.justice.gov/opa/pr/2010/January/ 10-civ-082.html

While this case involves conduct that is particularly egregious, providers should always ensure that the services being provided are medically necessary and that the medical judgment being exercised by caregivers is not biased due to financial influences.