Hospital to pay $16.5 Million over Kickback Scheme

LA-based chain accused of recruiting homeless for unnecessary services to defraud Medicare, Medi-Cal.


A Los Angeles-based hospital chain has agreed to pay the government $16.5 million to settle allegations that its subsidiaries paid illegal kickbacks for patients recruited from among the homeless and provided them unnecessary services in an attempt to defraud Medicare and Medi-Cal, according to court documents.

The U.S. attorney's office for the Central District of California said it would drop criminal conspiracy charges filed Thursday against Pacific Health Corp. if payment is completed by March 2017, among other conditions.

A Pacific Health subsidiary, Los Angeles Doctors Hospital Inc., has agreed to plead guilty to conspiracy charges, according to prosecutors. The company provided payroll services to three hospitals that allegedly paid nearly $2.4 million in kickbacks to two patient recruiters and submitted $15.9 million in improper claims to Medicare and Medi-Cal between 2003 and 2008, prosecutors said.