Lankan doctor in US indicted in healthcare fraud

A Sri Lankan doctor based in Los Angeles, in the United States, has been indicted, along with others, on charges of healthcare fraud, money laundering and income tax evasion. This week FBI agents served search warrants on three hospitals as part of an investigation into alleged Medicare fraud involving homeless patients recruited from skid row.

Dr. Rudra Sabaratnam, an owner and chief executive of City of Angels Medical Center, and Estill Mitts, an alleged patient recruiter, were indicted by a federal grand jury on 21 counts of healthcare fraud, money laundering and income tax evasion.

Dr. Sabaratnam, who migrated to the US in the 1970s, lives in the wealthy Los Angeles neighbourhood of Beverley Hills. The men were arrested as part of the federal government’s criminal investigation, according to an FBI spokesperson.

“It’s a scheme that ranged from street operatives to the CEO of a hospital,” said US Attorney Thomas P. O’ Brien, adding that he expected several more arrests in coming weeks.

At the same time, Los Angeles City Attorney Rocky Delgadillo announced civil litigation against the three hospitals and their operators in what officials said was a “scheme to defraud the Medi-Cal and Medicare programs out of millions of dollars”.

Agents working with the federal Department of Health and Human Services, the Internal Revenue Service and the California Department of Justice raided City of Angels Medical Center, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center.

The raids cap what law enforcement sources described as a nearly two-year investigation of alleged medical fraud on skid row. The city attorney’s office alleged that the hospitals tried to fill empty beds in a bid to boost their finances.

The hospitals allegedly were aided by a patient-recruiting operation on skid row that plucked homeless people from the streets and delivered them with fake medical conditions to the hospitals. Sabaratnam and Robert Borseau are owner-operators of City of Angels Medical Center.

Last month, in a separate federal lawsuit stemming from alleged Medicare and Medicaid false claims involving a Chula Vista psychiatric hospital, the US 9th Circuit Court of Appeal upheld a US$15.6 million award against Sabaratnam, Borseau and firms they operated.

According to the court, the defendants submitted a series of false claims in the late 1990s for rent, legal fees and interest expenses related to operations of Bayview Hospital, which was operated by firms that Sabaratnam and Borseau controlled. The court rejected an appeal by Sabaratnam and Borseau that argued the federal government had not proved the disputed claims were false.

(Los Angeles Times)

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