Borrego Sun - Since 1949

BCHF: Going, Going....


Last updated 9/11/2020 at 10:14am

Healthcare fraud, waste, and abuse is a major problem for Medicare, Medical/Medicaid, and other government funded healthcare programs. The National Heath Care Anti-Fraud Association estimates conservatively that health care fraud costs the nation about $68 billion annually — about three percent of the nation’s $2.26 trillion in health care spending. Other estimates range as high as 10 percent of annual health care expenditure, or $230 billion. The FBI estimates losses could be as high as 10 percent per year or $300 billion.

The Federal and State regulators of non-profits have laws and penalties against Fraud, Waste, and Abuse. They are defined as: 1. Fraud is the intentional misrepresentation of information to gain undeserved payment for a claim. 2. Waste involves spending federal health care dollars on services that are unnecessary. 3. Abuse involves a questionable practice, which is inconsistent with accepted medical or business policies.

The Borrego Sun began investigating Borrego Community Health Foundation (BCHF) in 2016. It has included a revisit and expansion of previous concerns the Sun reported when land was bought by the Foundation for a new clinic in Borrego Springs that was never built. The recent research has been built on red flags in the Foundation’s last three annual IRS-990 tax filings, previous reporting by the Sun, and information from past and current employees.

The concerns, uncovered from such a small window into the behavior and pattern of profiteering established by former CEO, the late Bruce Hebets, are likely just the tip of the iceberg. With so much questionable behavior found by the Sun, without the advantage of subpoenas or auditors trained to detect fraud, imagine what remains to be uncovered by professionals?

Background: In 2017 – 18 filings, Borrego Health outpaced every other San Diego healthcare, non-profit, with an income $236.6 million, and $67.8 million in assets, outpacing, the second runner up--Family Health Centers of San Diego with $77.5 million in revenue. Borrego Health also earned third place in the top 25 healthcare non-profits in the United States that year.

In the 2018 – 19 filing, BCHF reported income of $338,088,854, with assets of $94,515,537. Since the 2014 filing, Borrego Health has accrued a total of $990 million plus, nearly reaching one billion in income. Plus, it’s listed by the federal Center for Medicaid and Medicare (CMS) as the most-costly, per visit, non-profit in the U.S. With clinics in three counties – San Diego, Imperial, and Riverside, BCHF has done very well for a nonprofit corp. that started with one humble clinic in Borrego Springs in 2004.

In 2018 – 19, Borrego Health disclosed 469,035 medical visits and 842,482 dental visits. For the past three years, BCHF has increased annual income by $100 million or 50 percent, with dental visits growing by 200,000 plus.

What Does Non-Profit Fraud Look Like? IRS Code 501(c)(3)

According to, “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.”

“Every dollar raised over what is spent is meant to go back into the mission of the organization not to enrich people who run it,” according to Trent Stamp, executive director of Charity Navigator, which evaluates non-profits.

Federal law states that nonprofits should pay reasonable salaries: “An amount as would ordinarily be paid for like services under like circumstances.”

The guide of Charities issued by California’s Office of Attorney General states that “a non-profit,” like Borrego Community Health Foundation, “cannot distribute profits, gains, or dividends to any person.” The office also says that “payment of excessive compensation is illegal. Failing to follow these restrictions can result in the termination of a non-profits tax status.”

Here’s where one must ask, with so much money flowing in, money that has by law be reinvested in the mission of providing health care to the poor and undeserved. Why was the Borrego Springs Clinic, like others in the network, being slowly starved of personnel, equipment, and services, prior to the pandemic?

Note There is an advantage to independent contractors if a non-profit seeks to hide information: As privately owned corporations, they are not audited as part of BCHF or disclosed as an employee. The same is true of privately held management companies, such as Premier Healthcare Management with which BCHF contracts with to handle recruitment, credentialing and payroll for the foundation’s dental programs.

Note: Regarding the employment of interns, in the coding for government reimbursements, higher return income is paid to licensed professionals. While it’s easy to make extra money billing for professionals when a medical treatment is actually executed by non-licensed individuals, it’s considered fraud.

Interesting Insights:

Borrego Springs clinic is not the only BCHF facility suffering from incompetence and chaotic service delivery under the foundation’s management. Despite its income, and BCHS websites’ glowing lists of doctors and services offered at the clinics, the reality is not so glowing, according to employees.

BCHF recently received a federal grant of $13 million for scientific and laboratory research. Following the usual pattern of going after the money, and then figuring out how to make it work, the Foundation will find ways that advance profiteering.

Much like going after grants in other specialty areas, this will be interesting to watch, since the Foundation does not have any significant experience, inhouse expertise, or infrastructure to accommodate serious research.

The Sun has produced a special cheat sheet on the Foundation’s dental services, and has not even begun the research the pharmacies, assisted living facility, or other school and non-profit partnerships, BCHF operates.

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