BCHF: 990 Update
Last updated 8/13/2020 at 11:18am
It’s out for public review. Yes, anyone can see the Borrego Community Health Foundation’s (BCHF) 2019-IRS990. It’s not on the Health and Human Resources Agency web page yet. Since the Foundation does no public postings, all an interested party has to do, according to the 990, is contact Diana Thompson, Chief Financial Officer, and she’s obligated to share. That, of course, depends on whether she answers her phone.
Sadly, all of the rumors of mismanagement the Sun reported, “might be in this filing,” are true. Despite hoping the Foundation would think twice if the Sun, suggested in advance that certain disclosures might be a misappropriation of funds. Here they are in black and white. Either pure arrogance or no fear of repercussions, keeps Borrego Health following former Chief Executive Officer, late Bruce Hebets’ playbook on manipulating the system for self-aggrandizement. Maybe, it’s just that government regulators have overlooked the excesses for so many years, Borrego Health management can easily rationalize, taking money intended to be spent on health services for sick people and children is either OK, or a common practice.
The Sun does not.
The Trustees haven’t stepped up to stop the abuse. The document was approved by the Foundation’s trustees and signed by CFO Diana Thompson.
What was Chief Executive Officer Mikia Wallis’ role in the final product. Doubly shocking, Wallis was once a federal prosecutor. However, she has been associated with Hebets as legal counsel and advisor for at least 25 years, participating in his many health care misadventures. The list includes Borrego Independent Physicians Association, and most likely, the other defunct, Desert Health Care Management, LLC., also operating out of his Harbor Island location. Borrego Community Healthcare Foundation, according to state records, was filed with the state from the Harbor Island Dr. location, as far back as 1990.
BCHF 2019-IRS 990
As earlier reported, the non-profits’ 2019-IRS990 confirms BCHF pulled in $338 million. The majority of the income came from federal and state Medicaid/Medi-Cal and Medicare refunds. While the Sun predicted this, it’s still dumbfounding. That’s 50 percent increase over the 2017 filing. Almost $1,000,000 a day, or $6,500,000 a week. The patient count was 469,035 visits for medical and 842,482 dental visits.
One of the mysteries the IRS form doesn’t answer is, “how does BCHF arrive at patient visits?” Another is, “how many of the 27 listed-clinics are actually really functioning with adequate numbers of healthcare providers to accommodate so many patient visits?” Julian lists one doctor as the only staff. Others appear not to even have doctor. Some appear to have large provider staffs, even Borrego Clinic is shown to have professionals that are no longer there, and specialists that have stopped coming on a monthly basis. If Borrego looks good on the BCHF website, can anyone trust that other clinics are functioning as advertised?
Big Problem: As rumored, BCHF did disclose Bruce Hebets, founder and retired CEO, as an employee, working 40 hours a week, earning $1.8 million. There’s a legal problem with this accounting since Hebets, was not only retired, but he died six months into the fiscal year in which he was reported working five days a week. This is not just an ethics gaffe. It qualifies as an illegal gift, falsely reported to the IRS as salary. It’s not illegal to pay an employee $1.8 million. It’s only wildly excessive and maybe, unethical, considering the source and purpose of government healthcare subsidies. But it’s egregious when Hebets didn’t work 40 hours a day for a year, and Borrego Health expenses taxpayers for a $1.8 million gift.
Add to this, for the 15 years Hebets was CEO, he and his wife Karen managed to milk millions annually in combined salaries from the Foundation, which had its humble beginnings as one clinic in Borrego Springs. The magic formula was becoming a Federally Qualified Healthcare (FQHC) provider, and all that free money from the state and federal government.
Of note is the Borrego Independent Physicians Association (BIPA), which operated from 2010 – 2014 from the Hebets’ Harbor Island address. The same address of Hebets’ original filing with the state for BCHF in 1990. BIPA was filed as an IPA with California’s Department of Managed Health Care, and reported a total of 18 physicians. A Riverside affiliate was also recorded. It was known as Borrego Management Services Organization, LLC. But, evidently, it had no employees.
The individuals involved included, Bruce and Karen Hebets, Mikia Wallace, Margaret Smith, and the always, ready-to-play-for-pay, Dr. Alfredo Ratniewski. Dr. Ratniewski is listed as the official contact for Hebets’ BIPA. According to a number of San Diego directories for pharmacies and dentists, BIPA offered these services from the Harbor Island Dr. address, along with specializing in OBGYN. Sources told the Sun that BIPA was a way to justify outside income for Karen Hebets.
This is one group of busy creative folks, obviously, throwing health care services and organizations at the wall to see which will earn the most money. On the BCHF IRS-990 form, Part IV, item 26 states: “Did the organization provide grants or other assistance to an officer, director, trustee, key employee, highest compensated employees or a disqualified person?”
Was the $2,750,000 given by Borrego Health to Hebets’ Borrego Independent Physicians Association, “for sponsor and support of IPA,” plus a $460,000 loan in 2012 – 2013 (reported in the Borrego Sun by Ellen Fitzpatrick) ever explained? Also missing in the tax filings, is the two-day gala, BCHF held to crown Wallis as the new CEO. Partying at one of the premier resorts, the gala is said to have had “a large attendance, been quite the event, and quite expensive – $250,000.” It was probably accounted for as “doctors’ training weekend.”
Big Problem: The biggest money maker for BCHF is dental care. The 2019-IRS990 disclosed 848,482 dental visits. Private contractors enjoyed significant re-numerations. They are: Husam E. Aldiari, 40/30 Dental, paid $6.2 million; Aram Arakelyan, New Millennium Dental Group, Inc, $4.7 million; Marcelo Toledo, $2.9 million; Stephan Waleed Dental Corp., $2.7 million; WA Stephan A. Dental Corp, $2.9 million, and 200 more independent contractors, paid over $100,000. That’s a hefty sum, plus payments from dental services provided by BCHF were not identified.
Here’s one of the problems. The main goal and priority reimbursement of Denti-Cal is preventive care. That’s an easy visit, and fairly lucrative for BCHF. For example, preventive dental care for children is one of the bread and butter expenses. Visits for children are scheduled at the same time a child has their physical and preventive care health-screening. However, it doesn’t make as much money as all those other more intensive dental services.
Enter the scene, Premier Healthcare Management.
As Premier boasts on it’s web page about its money-making collaboration with BCHF:
“11,670,308 people are currently enrolled in Medicaid just in California. The (PHCM) program allows the dentist to expand the range of services provided to patients not covered by the Denti-Cal program (including Crowns, Root Canals, Adult Dentures, and more). There are no pre-authorization requirements in this program.”
The Premier web page goes on to explain how Borrego Health gets past Denti-Cal’s limitations. “Borrego remits the payments and PHCM handles the heavy lifting for you. The dentist’s office staff does NOT have to handle the billing process with Denti-Cal. The dentists provide the patient care information, an encounter form, and Medi-Cal eligibility to submit to PHCM. Borrego processes all the billing with Denti-Cal and then remits premium payment to the dentists in a timely manner, within three to four weeks from date of submission.”
The website also emphasizes that Borrego Health is a FQHC, and the advantages of being a Federally Qualified Health Care provider. This is critical because only a FQHC can trade on its federal non-profit status. In other words, only non-profits, qualified to game government programs, need to apply.
“What does FQHC mean?” asks the Premier website. “FQHC stands for Federally Qualified Health Center. Borrego Community Health Foundation has been a FQHC for over 25 years and is state funded.” BCHF was only registered by Hebets in 1990, but he didn’t start making money until he became the owner, otherwise known as CEO, of Borrego Health in 2004.
“Why is this program a great alternative to Denti-Cal?” asks Premier, promoting its capabilities. “It is a great alternative because, unlike Denti-Cal, the emphasis is on preventative care. As well as some higher reimbursement rates per visit and no pre-authorizations to perform necessary dental care, this system incentivizes dentists to prevent dental problems.” The result is more visits, more cash for BCHF.
Bragging about how there are more visits for BCHF and more opportunity for private dentists to make money, Premier advertises: “Over 125 dentists are currently billing Medi-Cal eligible patients through Borrego and over 18,000 claims a month. This includes about 90 offices in our covered areas.”
This is worth repeating: 125 dentists are currently Medi-Cal eligible patients through Borrego, and over 18,000 claims a month.
Premier Health Care Management further explains what it does for Borrego stating, “PHCM helps administer the dental program by checking the claims within 24 hours of submission and also markets the program to other dentists looking for a Denti-Cal alternative or expanding their practice to new Medi-Cal patients.”
So why does Borrego Health hire Premier to cook the books, rather than have their own dentists on staff? According to the Premier web page, “Borrego quickly realized that in order to expand their reach to many patients in under served areas they must partner with private practices. The Health Clinic does not employ dentists in the covered areas and since dental work is extremely technical and particular to the mouth, they decided that this will benefit more patients. Not to mention the necessary equipment needed to perform procedures. Other health clinics using their own staff have up to three to four months wait time so that does not benefit the patient, especially when in pain.”
Premier paints a lovely picture for Borrego Health’s bottom line and patients in pain. However, nowhere in the 2019-IRS990 disclosure does BCHF report it has a contract with a private management company. This, despite specific questions by the IRS to address outside management contracts. Why not disclose this association if it truly benefits patients?
It can be assumed; Premier is receiving fees for its services. What these are, or the total dollars BCHF pays Premier is not known, disclosed, or even checked off Borrego Health’s 990 as a “yes,” under “outside management contracts.” It would appear, that Premier Health Care Management has been with Borrego Health for a number of years, piling up an undisclosed amount of cash.
According to all of its advertisements, Premier Healthcare Management is providing BCHF management services that include, business administration, recruiting, credentialing, and handling government payroll claims.
Also not known is if BCHF is taking a commission for sharing its FQHC status with dentists, and patients, that, otherwise, would not qualify? Not disclosing, possibly, extra-under-the-table income, is one thing. Paybacks are another.
Premier has only two FQHC non-profit clients, eligible for Medicaid/Medi-Cal and Medicare. They are Borrego Health and Omni Health. A tiny bit of research into Omni Health, disclosed a CEO, again following in the footsteps of Bruce Hebets’ health care playbook. Equally interesting, is that Premier is located, and privately owned by a real estate developer, in El Cajon. The relatively, new company seems to have formed as dollars from real estate lost luster and rewards, and health care became the cash cow of the new millennium.
To be continued…
There’s so much more in the BCHF, 2019-IRS990: Big dollars in expenses and benefits, extravagant salaries for people working, maybe, two days a week. Expansions in the already bloated executive team. Newly resigned doctors, still drawing salaries. While thinking about all this, consider the Trustees?
They seem to be asleep at the wheel. Specifically, Trustees from Borrego that approved this and past IRS filings. More importantly, where were local Trustees as Borrego Springs Clinic lost its future as a quality health care provider, and slowly slid into a non-functioning entity? Perhaps, they didn’t know. Likely the Trustees never visited the clinic, despite the requirement that “trustees come from the population that uses the services.”
More to come.