It is ashamed that people themselves to be used like that. The 800 dollars compared to the thousands the clinic pocketed is nothing. They should be prosocuted also.
By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
The day-to-day responsibilities of running Anaheim West fell to the Lincoln Management Group, a corporation owned by three individuals and two entities, Sorrento Equities and Ocher County Clinics. Sorrento and Ocher own 40 percent each of Lincoln.
Records filed with the Nevada Secretary of State indicate that Sorrento's president is Huong Ngo. Her husband is Tom Vu, who served as Anaheim West's business manager and now is running St. Paul, according to several law enforcement sources.
Earlier this year, a co-owner of Ocher County Clinics from whom Vu had become financially estranged wrote in an affidavit, "I am informed and believe that Tom Vu is one of several aliases used by this person."
In response, Vu filed his own affidavit alleging that he had invested $300,000 to improve Anaheim West's facility. Vu said that as that operation burgeoned, he had recruited Dr. Daniel Rose to be medical director at an offshoot clinic in nearby Buena Park. (Outpatient clinics in California need a "medical director" to operate legally.)
First called St. Francis Outpatient Surgery Center, the second clinic opened in early 2002 at 5730 Beach Boulevard -- the current location of St. Paul.
"Under our management, the business had been thriving," Tom Vu wrote last March. "As of June 7, 2002, the facilities fees were being collected at a rate of about $2 million per month."
Vu claimed that the clinic had operating expenses of about $400,000 monthly, adding, "Not all of the remainder was profit, because we spent generously on advertising and marketing, which is why business was as good as it was."
He estimated that, by June 2002, Anaheim West and the new St. Francis clinics had more than $46 million in uncollected billings out to the insurance companies. Vu didn't say how much the clinics had been reimbursed by the insurers.
But that month, according to Vu, Lincoln Management's other faction allegedly changed the locks at the Anaheim West clinic and shut out Vu and his associates.
Vu's affidavit claimed that "the coup was more consistent with an intent to loot the surgery center by seizing the [outstanding billings] than to keep it operating as a going concern."
That "going concern," say criminal investigators familiar with the case, was the rent-a-patient scam.
The Vu faction soon focused its attention on the St. Francis clinic. Records obtained by New Times show that, within months, St. Francis -- which changed its name to Unity in mid-2002 -- was doing fabulously well.
Like they'd done at Anaheim West, doctors completed most procedures at the new clinic on Saturdays. That's because most of the patients -- the rent-a-patients -- were arriving from out of state after finishing their own workweeks.
According to the Arizona patients interviewed by New Times, their recruiter (the "capper") would fax their health-insurance cards to the clinic a few days before they drove over to Orange County, usually in a rented van.
That in itself is a telltale sign of fraud, says Becky Busch, president of Medical Business Associates, which is located in Oakbrook, Illinois. Says Busch, a certified fraud examiner and a registered nurse:
"A health-insurance card is like a credit card, and it has elements that are considered protected information under federal law. The actual solicitation of the card -- when the clinic got it -- is critical. Those clinics and those doctors need to know before the patient goes out there whether he or she is going to be useful to them."
By mid-2002, Unity was churning out the surgeries with increasing frequency. A sampling of the clinic's records indicate that between July 5, 2002, and August 24, 2002, alone, 33 patients from Arizona underwent 60 surgical procedures there.
The clinic then billed various insurance companies -- Blue Cross/Blue Shield of Red Bluff, California, most prominently during that stretch -- more than $1.2 million, about $20,000 per procedure and $36,000 per patient.
Of that amount, the insurers remitted all but about $250,000. (The doctors and laboratories billed separately. Their fees and rates of collection were not available.)
Unity's records also show that in October 2002, the Onyx capper himself, Qui Pham, underwent unspecified surgery at the clinic. Unity sent Highmark Blue Cross its bill for $57,735.
Highmark reimbursed that amount in full.
An unexpected turn of events in the fall of 2002 had a crucial impact on Unity Outpatient's rent-a-patient scheme.
Highmark's health-care plan for the Onyx employees had called for reimbursement checks to be sent directly to patients, instead of to the out-of-network clinics and other medical providers.
But at least 12 of the Arizona patients decided to cash those checks themselves, rather than turn them over to Qui Pham as they'd promised. Those rent-a-patients cashed more than $400,000 in Highmark checks earmarked for Unity during the final months of 2002.
Last January, Unity's attorney, Roy C. Dickson, sued the Onyx employees (and, in one case, the wife of an employee) for fraud, breach of contract and other alleged wrongdoing.
The irony of the Orange County lawsuit -- that a clinic whose foundation was built on financial gluttony was suing patients for expressing their own form of greed -- wasn't lost on Phoenix lawyer Holly Gieszl, who wound up representing six of the defendants.
"That these guys went after my clients after luring them out to undergo utterly unnecessary surgeries for the almighty dollar is just about laughable," says Gieszl, a veteran health-care attorney. "It was also unintentionally kind of Mr. Dickson to open up the public record by filing this unfortunate action."