Calif. Docs Indicted in ‘Rent-a-Patient’ Scheme to Bill Insurance Companies

October 14, 2005

In the latest legal action targeting “rent-a-patient” scams, two medical doctors in California have been charged with health care fraud for allegedly performing unnecessary medical procedures on patients who were compensated with money or other benefits.

A federal grand jury in Los Angeles indicted the two doctors, as well as the Bel Air Surgical Institute, on conspiracy and health care fraud charges for allegedly submitting fraudulent bills to numerous private insurance companies and for allegedly providing false patient records to support those fraudulent bills.

Earlier in the week, William W. Hampton, 50, surrendered to special agents with the Federal Bureau of Investigation.

Mamdouh S. Bahna, the owner of the Bel Air Surgical Institute, had been scheduled to surrender the same day, but he reportedly failed to appear at the designated time. Bahna, 51, of Los Angeles (90077), was considered to be a fugitive who was being sought by federal authorities.

The 17-count indictment outlines a scheme in which Bahna allegedly hired “marketers” who oversaw the recruitment of people who had private health insurance and were willing to undergo unnecessary surgical proceedures in exchange for cash or discounted cosmetic surgery procedures. The procedures performed by the doctors at the Bel Air Surgical Institute included Esophagogastroduodenscopy (EGD), colonoscopy, sinus surgeries, laparoscopy and thoracic sympathectomy, which is commonly called “sweaty palm surgery.” According to the indictment, those willing to undergo the unneeded procedures were promised $300 for EGDs and colonoscopies and up to $1,200 for sweaty palm surgery.

Patients were instructed by recruiters to describe false and exaggerated symptoms which were used to create medical charts used to make the surgical procedures appear to be justified.

In some cases, patients were allegedly brought in from Texas and other states to undergo unneeded procedures.

The indictment accuses all three defendants of conspiracy and nine counts of health care fraud. Bahna and the Bel Air Surgery Institute are additionally charged with five counts of health care fraud, while Hampton faces another two health care fraud charges on his own.

The indictment alleges that Bahna hired marketers – including Huynhhoa Thi Bui, 53, of Garden Grove – to bring patients into Bel Air Surgery Center. Bahna allegedly instructed Bui to set up a corporation so he could make payments to Bui without raising suspicion.

Bui pleaded guilty on Sept. 12 before United States District Judge J. Spencer Letts, reportedly admitting that she worked with doctors, recruiters and patients to cause unnecessary procedures to be performed. Bui was paid up to $4,500 to deliver patients willing to undergo sweaty palm surgery.

Previously in this investigation, Carlos Farias, 34, of Fontana, pleaded guilty to four counts of health care fraud. During the hearing on Sept. 19 before United States District Judge Percy Anderson, Farias reportedly admitted that he acted as a recruiter for doctors and outpatient surgery centers that offered medically unnecessary surgeries and surgical procedures and fraudulently billed private insurers.

Farias is scheduled to be sentenced by United States District Judge John F. Walter early next year.

Bui is scheduled to be sentenced by Judge Letts on Jan. 30, 2006.

Two other people have been indicted by a federal grand jury in Los Angeles on charges related to their alleged roles as recruiters.

Danny O. Valle, 25, who formerly lived in Los Angeles and currently resides in Las Vegas, Nevada, is charged with seven counts of health care fraud. The indictment accuses Valle of causing insurance companies to be billed no less than $920,175 for unnecessary procedures. Valle has pleaded not guilty to the charges, and he is scheduled to go on trial Nov. 15 before United States District Judge Audrey Collins.

Another defendant – Jon C. English, 34, a fugitive who formerly resided in Rialto – is charged with 12 counts of health care fraud. The indictment alleges that English recruited patients and caused more than $1.1 million in fraudulent claims to be submitted to insurance companies.

Each count of health care fraud carries a maximum possible sentence of 10 years in federal prison.

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