California hospitals accused of using homeless in scam

LOS ANGELES — A hospital CEO was arrested Wednesday in what authorities said was a scheme to recruit homeless people as phony patients and bill government programs for millions of dollars in unnecessary health services.

Federal agents raided three medical centers, and the city of Los Angeles sued the hospitals, saying they used homeless people as "human pawns."

Hospitals in Los Angeles and Orange counties submitted phony Medicare and Medi-Cal bills for hundreds, perhaps thousands, of homeless patients recruited from downtown’s Skid Row, authorities allege.

While treating minor problems that did not require hospitalization, such as dehydration, exhaustion or yeast infections, the hospitals allegedly kept homeless patients in beds for as long as three days and charged the government for the stays.

Over four years, a mentally ill woman identified as "Recruit X" was admitted to all three hospitals for conditions she said she never had, such as shortness of breath and chest pains. After her stays, she would return to Skid Row and use money she received for participating in the scheme to buy crack cocaine, authorities alleged.