California Schemin'

The national press takes note as a major lawsuit is filed in the "Rent-a-Patient" scam

But North Carolina wasn't the only jurisdiction that apparently was lax in attacking the rent-a-patient menace. The 2003 New Timesstories identified about 125 Arizonans who had gone to southern California for the unnecessary surgical procedures, including a now-fired Onyx supervisor named Qui Pham -- who was both a capper and a patient.

Also in 2003, an Arizona Department of Insurance (DOI) spokesperson confirmed that the agency was doing its own investigation into the rent-a-patient scams. That December, DOI public information officer Erin Klug reiterated DOI's "deep commitment to fighting fraud."

But California investigators have told New Timesthat white-collar prosecutors with the Arizona attorney general's office kept the DOI investigators from pursuing grand-jury indictments and arrests of the alleged wrongdoers. In fact, the California investigators claim that the AG's office declined to allow a DOI investigator to even seek a search warrant for confirmed capper Qui Pham's west Phoenix home.

The state of Arizona's investigation into the rent-a-patient fraud seems have slipped away into oblivion.

"The reality is that the decision to prosecute cases is up to the [AG] prosecutor's office, not us," says DOI deputy director Gerrie Marks. "We have continued to stay in touch with our counterparts and others in California on this matter, but beyond that I really can't say much."

Nationally, at least, the forces seem to be well-aligned against many of the scamsters who perpetrated the rent-a-patient scheme for at least two years and probably longer.

Tom Brennan Jr., director of special investigations for Highmark Blue Cross Blue Shield (which serves Onyx Environmental, among other clients), sees the litigation as an important step toward reform.

"This [lawsuit] is a significant milestone in the fight against health-care fraud," he says.

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