By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
Julio Hernandez says he felt "healthy as a horse" before he agreed to use his body as an instrument for insurance fraud. But during a five-month stretch last year, the 36-year-old Phoenix resident endured the following medical procedures:
Removal of his sweat glands.
A nose operation.
Hernandez admits he needed none of those procedures. But, he says, a work associate persuaded him to travel to Southern California for the operations, again and again.
The associate, Qui Pham, is a shipping and receiving supervisor at Onyx Environmental Services, a huge hazardous-waste company with a recycling plant in west Phoenix. Pham moonlights as a health-care coyote -- a ubiquitous middleman for Southern California surgical clinics that are performing unnecessary, sometimes risky medical procedures on "rent-a-patients" such as Hernandez.
In return for using their bodies as mini-cottage industries, they are getting paid cash in under-the-table payments. Hernandez and five other rent-a-patients tell New Times that Qui Pham gives them $800 in $100 bills after they undergo a medical procedure at one of the clinics.
Pham says he has no knowledge of this or any other health-care insurance scam.
On top of that, several patients have been cashing lucrative insurance-claim checks -- checks that they'd promised to turn over to the clinics. The sums of money they're collecting -- some would call it stealing -- once seemed unattainable to these lower-income refugees.
"They cut on me here, there, everywhere, and nothing was wrong with me," says Hernandez, who admits to cashing Blue Cross/Blue Shield insurance checks totaling about $103,000 since last October.
"They just messed with my body, and I let them. They pay you to be their little animal. I decided to [cash] the checks when they came to me."
And what's in it for the others behind this ongoing scheme -- Pham and his cohorts, the surgical centers, the doctors?
Millions of dollars, according to law enforcement sources in Southern California.
To document this scheme, New Times tracked down and interviewed key participants, analyzed hundreds of pages of insurance, medical and public documents, and spoke with numerous law enforcement and insurance industry fraud investigators.
Rent-a-patient schemes are commonplace to veteran health-care fraud investigators contacted for this story. Normally, they say, "patients" are paid to go to clinics solely for unnecessary diagnostic tests and cursory exams.
What's chillingly different about the California scam is that the Arizona rent-a-patients actually are having unnecessary surgical procedures performed on them. And those operations are beginning to cause physical problems for some of those patients.
In concert with the Southern California outpatient clinics (most prominently, the Unity Outpatient Surgery Center in Buena Park), Qui Pham recruits people with health-insurance plans that allow easy access to out-of-network medical care.
Six rent-a-patients tell New Times that Pham promises to pay them $800 in cash for submitting to unspecified medical procedures. If they do sign on, Pham then faxes their driver's licenses and insurance cards ahead to the clinic.
According to the six, Pham has told them he collects up to $2,000 from an unknown party in California for each person he convinces to undergo a procedure.
Pham and others working with him normally drive the patients to Orange County after work on Fridays. They stay at a motel on Pham's (or someone else's) dime, then awaken before dawn on Saturdays, and stand in line at the clinic. The six say Pham tells them what to say when they get there.
"You've got to say, I sweat too much,' or I got stomach problems,' or Nose always hurts,' something like that," says Oskar Mora, an Onyx laborer who underwent medically unnecessary surgery on his sweat glands in March. He now says he is having great physical distress since the surgery.
Once inside the clinic, the rent-a-patients say, they sign an "informed consent" form, an agreement to accept binding arbitration in case of a dispute, and a promise to turn over all insurance-claim checks sent to them instead of to the clinic.
They then meet with a doctor, usually for the first time, and undergo whatever medical procedures have been chosen for them.
Afterward, according to medical records reviewed by New Times, the clinic often releases the patients to Qui Pham -- who is listed as a "friend." Pham's cell phone number is noted on the records, which is how New Times was able to contact him for comment. In a short phone conversation, Pham continued to insist he knows nothing about the rent-a-patient scheme, but acknowledged that he's an employee at Onyx.
Heath Hildebrand, the general manager of Onyx's Phoenix facility, issued a written statement after New Times informed him about the scam.
"We will be conducting our own internal investigation," he said in part, "in hopes of gaining a better understanding of all the facts. If it appears that any wrongdoing has occurred, we will take appropriate action and cooperate with any law enforcement authorities in their investigation."