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Hospitals to pay $16.5M for Medicare fraud

  |   Aug. 24, 2012 at 7:31 AM
LOS ANGELES, Aug. 24 (UPI) -- A California-based group of hospitals must pay $16.5 million to settle allegations the facilities were treating homeless people to defraud the government.

Los Angeles Doctor's Hospital Inc. -- a subsidiary of Pacific Health Corp. -- pleaded guilty to conspiracy to defraud Medicare and Medi-Cal by paying "marketers" to recruit the homeless people who acted as patients from 2004 until 2007, CNN reported Friday.

The patients were treated for health conditions even if they did not require treatment, a release from the U.S. attorney's office said.

"As a result of this illegal conduct, Medicare and Medi-Cal made nearly $16 million in improper payments to the PHC hospitals," the statement added.

"Hospitals colluding with marketers to fatten profits through illegal referrals for costly and sometimes needless medical services are pocketing millions of taxpayer dollars," said Glenn R. Ferry, special agent in charge for the Los Angeles region of the Office of Inspector General of the U.S. Department of Health and Human Services.

The hospitals included in the settlement are Los Angeles Metropolitan Medical Center, Newport Specialty Hospital and Anaheim General Hospital, CNN reported.

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