Borrego Sun - Since 1949

BCHF: Most Expensive Non-Profit in U.S.

What a tangled web...


Last updated 8/21/2020 at 11:21am

Apologies to our readers. It’s hard to follow the details of the Borrego Community Health Foundation’s (BCHF) misadventures, as it is to report them. The Sun is often as confused as anyone trying to make sense of Borrego Health’s operations. This article will attempt to sum up what has been uncovered.

Also, included are questions the Sun needs answered and has requested management to clarify. Specifically, the Sun’s many concerns about the Foundation’s operations, which have been raised in all articles written about the Foundation.

BCHF’s refusal to explain itself to the Sun and the public, leaves questions of legitimacy, hanging over both the Foundation and its management.


- All information reported about Borrego Community Health Foundation comes from researching and asking questions about BCHF’s IRS Tax Filings from 2017 – 2019, former and present employees, and confirmations from trusted sources.

- However, this is obviously a limited perspective and can only be corrected by an accounting from the BCHF executives or Trustees. Unfortunately, these resources have generally remained silent, despite questioning by the Sun.

- Nothing stated or questioned about the Foundation’s activities is meant to discredit the frontline health care professionals, who do work 40 hours or more a week, and try, despite management obstacles, to give the best care possible, and, who actually make a difference in people’s lives.

- Many sources close to Bruce Hebets, former CEO of Borrego Health, as well as former managers that have spoken with the Sun were unaware and shocked by the amount of questionable activities. While many recounted problems within their employment expertise, knowledge of potentially fraudulent behavior was limited to his inner circle, which included current CEO, Mikia Wallis.

- Internal Revenue Service (IRS) 990’s, are required of non-profit health care providers to show both the public and governing bodies, how Borrego Health spent, justified, and legally disclosed the amount of tax payer funds it was reimbursed for services “delivered,” or received through grants from the federal and state governments. It’s these filings, along with state and government informational and disclosure sites for HealthCare 990s, where the Sun uncovered many of the conflicts of interest, as well as finding failures to account for important financial information.

Bruce Hebets: Genius or Con Man

Many people interviewed, even those unceremoniously fired revered Bruce Hebets and believed, “he always had their back.” According to one long-time associate and medical professional, referred to her firing, stating, “If Bruce were alive, this would never have happened.” Another source explained that Hebets had a habit of transferring salaries of fired employees to spouses working for the Foundation. Some saw this as generosity. Others viewed it as a way to keep the person that was let go from sharing negative information.

Bruce Hebets and his wife, Karen, registered their ethnicity as Native American on census forms. Maybe they were. It’s more likely they were willing to steal one of the few benefits of tribal heritage for extra points, or minority advantage on government grants and business loans.

Bruce Hebets took over Borrego Springs Clinic, a small rural clinic in 2004. According to the latest 2019, IRS-990 filing, in 2018, BCHF reported income of $338 million. That’s a 50 percent increase over the previous year. Total gross receipts for services or facilities provided by a government unit at no charge to the organization for the calendar year beginning in 2014-2018 were $952 million. Round that off to $1 billion.

BCHF had the distinction in 2017 of having the highest total cost per patient, with the average cost $252.

According to the federal reporting site, the Center for Medicaid and Medicare Services (CMS), by earning $929 million, the Foundation had 14.3 percent of the combined costs for all FQHC centers, followed by Family Heath Centers of San Diego Inc, 21 percent less than Borrego Health. This report is not out for 2018.

In 2018, there were approximately 1,000 employees and 20 – 28 clinics, depending on who is counting and when. Eighteen executives were disclosed, along with 22 of the highest paid employees, ranging in salaries from $1.8 million to $350,000 plus.

Bruce Hebets is the employee earning $1.8 million. Disclosed on the 990 as working a 40-hour week. According to sources, the Foundation was considering gifting him $5 million, but felt that amount might draw the attention of regulators. In fact, he retired that year, turned the realm over to Wallis, and was given the money as a “retirement gift.” He didn’t work 40-hour weeks for the year because not only was he retired, he died six months into the financial reporting period for the Foundation. As previously reported, it’s not illegal to pay such a high salary, only unethical, considering the clientele the Foundation’s clinics are mandated to serve. It is, however, illegal to identify a gift as payroll.

When Bruce Hebets took over the Borrego Clinic in 2004, he filed with the California state and federal governments as a non-profit, federally qualified health clinic (FQHC). This status allowed the Foundation to be reimbursed for services to the poor and uninsured by Medicaid/Medi-Cal and Medicare, and other government funded programs, including grants. From that one, small clinic in Borrego Springs, the BCHF website boasts anywhere from 20 to 28 clinics, depending. Some are large, and some are one doctor, residential-type offices. Some may not have any staff at all. The internet is not a correct gauge for the quality, variety of services or number of providers at any given clinic.

Bruce and Karen Hebets made approximately $1 million in salaries annually with both employed by the Foundation. Karen Hebets had extra special treatment. She was given $3 million “to support and sponsor,” and loaned another $460,000 plus, by the Foundation to a private healthcare network the Hebets’ founded called, Borrego Independent Physicians Association (BIPA). The BIPA advertised dental, pharmaceutical and OBGYN services in San Diego Directories. Mikia Wallis and Dr. Alfredo Ratniewski were both officers.

This facility was located on Harbor Island where Bruce Hebets had previously been employed as a sergeant in the Harbor Police. It was here he kept his yacht, and engaged in filings for a number of government-backed and private health care programs. Only two survived, (BCHF and the BIPA). Most never got off the ground, even the BIPA, was eventually discontinued. However, it managed to keep Karen Hebets well-funded with Borrego Foundation money from 2010 – 2014.

Some of the filings show attempts to start a health care management company. Keep this in mind, when facts about Premier Healthcare Management come up. Persons involved with Hebets in the early days include, Dr. Ratniewski, also serving as employee of Borrego Health, Wallis, formerly a federal prosecutor, who took over as CEO of Borrego Health in 2018, as well as Margaret Smith. Smith, former CFO, who took the fall for a legal suit against the Foundation by the State of California. According to sources, Smith is, apparently, still on the payroll. However, the $90,000 she makes annually for not working and keeping quiet, has never been officially disclosed, even though the IRS provides a place to identify disqualified personnel.

Questions are: What business did a non-profit, serving the poor and uninsured, have in sponsoring and funding Karen Hebets’ BIPA? A bigger question is how, or if the $400,000 loan was repaid, as well as the $2 million plus purchase of two of Dr. Ratniewski’s “clinics,” which were actually patient practice lists. Even after the State of California sued Borrego Health, citing refusal to reimburse the Foundation for Dr. Ratniewski’s two client practice lists, as insufficient data to approve compensation. The deal is this: The Foundation paid Dr. Ratniewski for his lists, didn’t get reimbursed, by the state: yet didn’t sue the good doctor, who was also acting as Borrego Health’s Chief Medical Officer to get the money back. We can be pretty sure none of the executive team took a cut in salary to cover the Dr. Ratniewski purchase debacle. And it has never shown up in any of the disclosures, despite questions on the 990s to disclose losses.

However, during the disclosures of 2016, Dr. Ratniewski had already received $1.4 million in salary.

The filing also shows loans to key personnel of $2.5 million. What happened to these loans? Were they written off? If so, why?

The clinic never loses money, it just keeps getting richer.

There are so many red flags, it’s hard to believe state or federal regulators have not seen fit to investigate.

The biggest red flag is well hidden. It’s the management contract that the Foundation has with Premier HealthCare Management, located in El Cajon, and owned by Daryl Priest. Priest is a successful real estate developer and philanthropist, owning 30 incorporated companies. Only two involve health care management, Premier Health Care Management, incorporated in 2016, and Summit Health Care Management, incorporated in 2017. Summit is now inactive. The CEO is Priest’s son Nicolas, whose past work experience included employment in the sports and real estate industry, conveniently returned to a University to get a degree in HealthCare Management at the same time his father was incorporating a management company and contracting with BCHF.

Why was Summit Healthcare Management created a year after Premier, and then allowed to go inactive? One theory is that Bruce Hebets had expressed an interest in having BCHF buy into Premier Healthcare Management to the Board of Trustees. Remember, Hebets had envisioned getting into the management side and created a healthcare management company in 1999, but never activated it. Maybe, it was just another golden web, the spider was thinking of spinning.

By coincidence, or conspiracy, Hebets’ good friend and construction partner, Daryl Priest was inspired to get into healthcare management in 2016. Then in 2017, Priest decided to add another management company to his impressive list of corporations. Maybe, his partner was going to be Bruce Hebets.

The Foundation admits that dental visits comprise 63 – 65 percent of its income, showing almost 900,000 patient treatments in the 2019-990 filing.

The kicker about Premiere Healthcare is that when the subject of contracting was brought before the board in 2016, Harry Isley, chairman of the BCHF Trustees at the time, remembers, “It was denied.” When asked by the Sun, “If the contract was denied, how come Wallis and Hebets went forward with the agreement?” Isley replied, “I don’t know.” Dan Anderson, then a Trustee, now chairman of the Foundation, confirms that he voted against the contract at that meeting.

However, Bruce Hebets and Wallis signed the contract without trustee approval; and it’s been hidden somewhere in Borrego Health 990s ever since. Are there other Premier contracts also undisclosed to the trustees or the state?

According to knowledgeable sources, the deal with Premiere is that the management company, credentials doctors and handles the payroll for which they receive a fee of $25 per visit. They do the necessary paper work to allow dentists, who would not otherwise be entitled to Medicaid/Medi-Cal services, to access state funding. Premier invoices the state on behalf of BCHF and upon reimbursement, take out the $25 fee, pay the dentists and forward the rest of the money to Borrego Health.

No one on the Foundation’s Board of Trustees has actually seen the Premier contract, and it has not ever been included in the 990 form.

Depending on which figures used, the Foundation’s, 2019 disclosure of 840,485 dental visits would have netted Premier approximately $21 million in just that one year. Surely a contract of that magnitude should have been disclosed on the IRS schedule, where it asks specifically to name outside private contractors, and payment amounts. It’s not illegal for non-profits to engage outside for profit contractors, according to the IRS, as long as the payments reflect reasonable industry standards. In other words, a contract is okay if that contractor is not profiteering!

While the Foundation does not admit to contracting with Premier Healthcare, the management company boasts of its relationship with Borrego Health (one of only two FQHC clients). On Premier’s website, the company claims that 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.”

Premier goes on to say, how this is a better deal for dentists than “Denti-Cal,” the state reimbursed program of preventive dental care. “Because a dentist can charge higher reimbursement rates per-visit and no pre-authorization to perform necessary dental care, the system incentivizes dentists to prevent dental problems.”

“The Premier program “covers both children and adults, with additional coverage such as Crown and Root Canal for adults.” Plus, with Premier handling the payroll paperwork, dentists receive payments faster. The company actually uses the federal reimbursement status of Borrego Health to allow dentists to charge more, do more, and get paid quicker. The services Premier provides include, “recruitment and credentialing of dentists, and payroll management, pushing claims through the pipeline.”

The actual accounting of dental services in the BCHF 2019-990 is beyond confusing. Is there any way of knowing if the patients for which Premier charged made actual visits, or were faked? Did the state pay for fake patients taken from Medi-Cal lists?

How does anyone reconcile this with the Borrego Health 2019, IRS-990, which ”identifies independent contractors that received more than $100,000 compensation for the organization” with five dental corporations.

They are identified as: Husam E. Aldari, compensated $6 million; New Millennium Dental Group of Aram Arakelyan Inc, $5 million; Marcelo Toledo, $3 million; Stephan Waleed Dental Corp., $3 million; and WA Stephan A Dental Corp, $3 million. The total disclosed adds up to $20 million.

A footnote by BCHF adds that “200 independent contracts (including but not limited to those listed above) received more than $100,000 of compensation from BCHF.” Who can answer, what are 200 contracts times more than $100,000?

Plus, there are the six dental offices owned and operated by the Foundation itself.

Very strange dealings indeed. Makes one wonder what else lurks, or is omitted, or hidden in the BCHF tax filings?

Add to this, Borrego’s former, Credentialing Manager, claims, she wasn’t allowed to review the credentials of Premier or its dentists. According to Rita Anderson, “I was told by both Bruce Hebets and Wallis, to leave the issue alone, and stay out of it.” She was not allowed to see the contract, and when Anderson pointed out that she was required by regulators to put the contract out to bid, Wallis and Hebets told her, “No.”

There are so many other red flags including, disclosures of family ties. BCHF is definitely a family and friend employer. The 990 lists 22 people on the payroll associated with executives and highest compensated employees.

Accounting for many of the bad decisions made by the Foundation, an example is Diana Thompson, the Chief Financial Officer, whose only work experience is in the Human Resources Department at a small Borrego Resort, and her service on the BCHF Board of Trustees. She does not have a CPA license, and, according to former employees, failed the CPA exam. Thompson has three family members on the BCHF payroll.

Credentials don’t matter; because Thompson’s part of the Hebets family, since her son married Hebets’ daughter. One of the many internal problems of BCHF is too many family and friends, including Wallis’ new husband-to-be, now on the payroll. Too many at BCHF are lacking the experience and expertise to run “the Second,” or “Third,” or “Fifth” (depending on who is quoted) fastest growing health care Foundation in the United States.

It is also, according to the federal government, the nation’s most expensive.

Another former employee told the Sun, female employees used their maiden names for payroll purposes, while husband’s kept their sur names to hide relationships.

What’s new: After the Sun began to ask questions, following the firing of two of Borrego’s four medical staff, in May 2020, the following has transpired:

Claiming the pandemic resulted in the aforementioned, “‘painful’ firing of one third of Borrego Health employees,” the Foundation finalized purchase of another clinic in Palm Springs. Two members of the executive team have resigned – the Chief Quality Officer and Chief Compliance Officer. Former BCHF employees have also begun speaking out publicly about the Foundation’s questionable practices.

Additionally, Dr. Ratniewski, listed as Chief Medical Officer, earning $682,000, in 2018, supposedly resigned after the Sun began reporting on the Foundation in May, 2020. His name was recently erased from all internet connections with BCHF, where he had once been prominently displayed. However, it has been confirmed, that he remains on the payroll, only pretending to have left, and drawing two-thirds of his salary, or $400,000 for two days work. His daughter is also an employee with a salary of $220,000.

Dr. Dauod Ghafari, the other Chief Medical Officer, making $651,000, annually, who also was said to have resigned, remains as a doctor, drawing a meager $400,000, like Dr. Ratniewski, for two days work. Dr. Ghafari also has a family member on the payroll.

One big surprise: The Foundation recently, received $13 million for research, evidently a growing new enterprise and source of income.

Of note, in August 2019, Dr. John Heydt left his position at Borrego Health as Chief Academic Officer to join KPC Health as Chief Clinical Officer and Chief Executive Officer, of Apex Medical group, a subsidiary of the KPC Group.

Evidently, he won’t be missed as BCHF Chief Academic Officer, who was inexplicably paid $695,000 in 2018. He also has a family member working for Borrego Health.

Dr. Ratniewski admitted to the Sun that “he didn’t know what Dr. Heydt did.” He wasn’t alone. Other sources reported that, “Dr. Heydt didn’t actually work for Borrego Health, but rather another organization,” possibly, the Hemet health care connections.

In the interim, since the Borrego Sun began investigating the Foundation, one Borrego Health Trustee has resigned.

Others have demanded the undisclosed, closely-held secret of Premier Healthcare Management be investigated and shared with the Board of Trustees, along with other issues the Sun has exposed. To date, that request has not been met. Although Dan Anderson, chairman of the Board, has assured board members, an investigation is underway.

Conflicts of interest continue to exist both in the Foundation, and with, at least, one trustee. Anderson, for example, receives rental money and financial support from the Foundation, and at least two of the Riverside Trustees have business relationships with Anderson. The Sun has asked for the trustees’ Conflict of Interest Statements, but so far, Wallis has refused to share them.

It’s time BCHF’s questionable, if not, potentially illegal business practices were turned over to professionals, who are equipped to untangle the web of deceit.

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