Authorities recently arrested the owner of local hospital and another man who ran a medical facility in the Skid Row district of Downtown, where they allegedly recruited homeless individuals as part of a scheme to defraud the publicly subsidized Medicare and Medi-Cal healthcare programs.
Federal agents took Rudra Sabarathnam and Estill Mitts into custody on August 6. The two faced various counts of fraud, money laundering and tax evasion at presstime, with a hearing scheduled for U.S. District Court.
Court documents identified Sabarathnam as the owner of City of Angels Medical Center, which operates a sizeable facility in the Echo Park district northwest of Downtown. They said that Mitts operated an “assessment center” in Skid Row.
Authorities said that thousands of homeless individuals have been paid $20 to $30 apiece since 2004 to be transported to City of Angeles Medical Center, where they have received unnecessary medical treatment. Doctors and hospitals involved in the scheme would bill Medicare and Medi-Cal for those treatments, some of which were never actually performed, prosecutors allege.
Prosecutors allege that City of Angeles Medical Center paid Mitts as much as $4,000 a month to recruit homeless individuals. They claim that he paid “runners” $40 for finding recruits who were eligible for Medicare, and $20 for patients who could receive Medi-Cal benefits.
Mitts received $20,000 a month from the Los Angeles Metropolitan Medical Center in South Los Angeles to recruit patients to fill unused beds, and $20,000 a month from Tustin Hospital in Orange County to recruit 40 to 50 patients per month, according to Los Angeles City Attorney Rocky Delgadillo, who has filed a civil lawsuit against all three hospitals involved in the case. Representatives for the hospitals had not returned calls seeking comment on the allegations, at presstime.
The recent arrests followed a two-year investigation. The Los Angeles Police Department (LAPD) sparked the investigation after two of its officers spotted five patients dropped off on the streets of Skid Row (see related Commentary, home page).
