DOJ secures $10 million consent judgment from Los Angeles-based "Medicare Mill"

by Ben Vernia | May 27th, 2010

The Department of Justice announced on May 27 that Intercare Health Systems, Inc., which formerly did business as the City of Angels Medical Center, has agreed to a joint and several consent judgment for $10 million, joining its previous owners, who agreed to such a judgment, and pleaded guilty to Antikickback Statute violations in January. According to DOJ’s announcement:

The government’s complaint alleged that City of Angels paid “recruiters” employed at homeless shelters in the skid row area of Los Angeles 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. City of Angels would then bill the Medicare and Medi-Cal programs for a variety of medical services allegedly rendered to the homeless patients, many of which were not medically necessary. This scheme violated the False Claims Act.

The complaint further alleged that payments City of Angels made to its recruiters constituted illegal inducements, or kickbacks. This scheme violated the federal Anti-Kickback Statute, which prohibits certain types of remuneration intended to induce the referral of patients for health services paid for by the federal government.

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