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Press Release
Press Release
LOS ANGELES – A Los Angeles nursing home and two physicians who worked at the facility have paid $3,563,140 to resolve civil allegations that they participated in a scheme to improperly transfer patients recruited from the “Skid Row” district to a hospital for medically unnecessary services, and then transfer the patients from the hospital to the nursing home for medically unnecessary stays.
Westlake Convalescent Hospital; Dr. Jasvant Modi, who worked at Westlake; and Jasvant Modi’s wife, Dr. Meera Modi, paid the settlement on August 3 to resolve a federal “whistleblower” lawsuit. The settlement was announced today after United States District Judge Beverly Reid O’Connell dismissed the action.
Between 2008 and 2010, AJIT Healthcare, Inc., doing business as Westlake Convalescent Hospital, allegedly paid illegal kickbacks to a “care consortium” on Skid Row in exchange for patient referrals to Westlake. During that period and after, Jasvant Modi allegedly readmitted patients from Westlake to the now-closed Temple Community Hospital and then back to Westlake to extend the patients’ Medicare-covered stays at Westlake, knowing the patients did not require further services at either facility. Meera Modi allegedly signed medical orders for non-payable services for these same patients. Westlake allegedly billed Medicare and Medi-Cal for medically unnecessary services provided to these patients.
“Patient-transfer schemes such as this victimize vulnerable members of our society as well as taxpayer-funded programs designed to aid them,” said United States Attorney Eileen Decker. “Such schemes are a clear abuse of the physician/patient trust and a fraud on American taxpayers.”
Westlake and the Modis were named in a lawsuit that alleged the nursing home and the Modis knowingly submitted false claims to Medicare and Medi-Cal for services to patients for medically unnecessary services.
“This round-robin system of moving mostly homeless and vulnerable people from the hospital to a nursing home and back, purely for profit not patient care is unacceptable. As this case illustrates, we will work diligently to investigate providers who abuse the system and take advantage of the elderly and disabled,” said Chris Schrank, Special Agent in Charge for the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “These were medically unnecessary services which placed the ‘patients’ and federal health care systems at risk and this type of conduct will not be tolerated.”
This case is related to a large-scale scheme to defraud Medicare and Medi-Cal through the illegal recruitment of Skid Row residents for medically unnecessary medical procedures at area hospitals and medically unnecessary stays at nursing homes. In December 2013, Dr. Ovid Mercene pleaded guilty to a tax offense related to his admission of patients, most of whom where homeless, to Temple Community after they had been referred from a purported “care consortium.” After a short hospital stay, Mercene discharged the “patients” to skilled nursing facilities, even though they did not require such care.
The settlement announced today resolves a lawsuit brought by a former Westlake employee under the qui tam – or whistleblower – provisions of the False Claims Act, which allows private citizens to bring suit on behalf of the government and share in any recovery. The whistleblower, Ricardo Gonzales, has received $534,471 from the settlement in the lawsuit, United States of America and the State of California ex rel. Gonzales v. Dr. Jasvant Modi, et al., CV 11-02987-BRO.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
HHS-OIG and former Assistant United States Attorney and current Justice Department Trial Attorney Shana T. Mintz, of the Civil Division’s Fraud Section, investigated this case.