FBI Raids BCHF
Shock, Questions and Concern...
Last updated 11/3/2020 at 9:42am
On Oct. 20, federal and state Federal Bureau of Investigation Agents (FBI), along with officers from the California Department of Justice arrived early at the local Borrego Community Health Foundation (BCHF) offices and Borrego Springs clinic. Armed with search warrants, they cordoned off the BCHF administration office, removed boxes, computers, files, and began to interview Foundation officers. Setting the town buzzing with shock, questions and concerns, they came to finally begin an investigation of the BCHF.
Teams with warrants also closed down business at four additional locations – El Cajon and San Diego. Specifically, the FBI were interested in the BCHF administration office in Kearny Mesa – a plush and expensively furnished office of Borrego Health, in contrast to the humbler
office in Borrego. The offices of Premier Healthcare Management Corp. and two dental offices that have contracts with Premier Health and BCHF were also targets of the sealed warrants.
Laura Eimiller, FBI spokesperson, confirmed the execution of multiple warrants related to the Foundation. However, since the warrants are sealed, Eimiller could give no details of the investigation, except to say that there were no immediate arrests, and the ongoing investigation was being conducted by the FBI and the California Department of Justice. The state Attorney General’s office, along with the Federal Department of Justice has enforcement authority over healthcare non-profits, like Borrego Health, receiving state and federal funding
The Borrego Sun did learn that “red flags” on data collected by the federal government precipitated the investigations.
Red flags, flashing like stop lights on the Foundation’s IRS-990 tax returns, have been the subject of an investigation by the Sun since 2015. The most recent five-month series of articles have focused on seemingly, fraudulent misappropriations of government funds; failure to disclose questionable management practices; sketchy contract dentists; and other concerns that include: officers’ receiving excessive salaries and benefits in comparison with non-profit standards for their positions; doctors paid $600,000 plus without working, or reported to the IRS by the Foundation; illegal purchases; and leasing kickbacks to individuals, charging and receiving exaggerated amounts of rental fees, in some cases for clinics that are losing massive amounts of money; and an undisclosed management contract, handling dental Medicaid/Medical clients, some of which may have been falsified, and profit sharing, abusing the Foundation’s nonprofit status.
The Sun reported repeatedly on many, many red flags on the Foundation’s IRS-990 filings from 2017 – 2019 for healthcare nonprofits acting as FQHCs. FQHC stands for federally qualified health clinic. This status means the Foundation was receiving federal and state funds to provide healthcare to low income and other vulnerable populations. Because of the Foundation’s reliance on tax-payer funded state and federal programs, the requirement for transparency and IRS reporting is set at a higher standard than for privately owned corporations, with strict oversight by state and federal regulators.
The Sun’s investigations exposed many incidents where it appeared funds were hidden, misappropriated, or falsely reported. An example was the newspaper’s reporting of incredibly large amounts of dental income, resulting from annually increasing client visits of 200,000. In one case, $6.1 million, was earned by a legally challenged dental provider, recruited, credentialed and invoiced by Premier, on behalf of, and using BCHF’s non-profit status. Income to Premier – $20 million in 2018 – 19, and BCHF was not appropriately disclosed, nor was the management contract with Premier as required by the IRS and federal law. However, without subpoena powers or governmental authority, the Sun was only able to expose and question the activities disclosed in the IRS 990’s and gleaned from sources. The newspaper was limited to what is now described as the “tip of the iceberg.”
In a statement from the Foundation, Dan Anderson, chairman of the BCHF Board of Directors said: “Borrego Health remains committed to its goal of improving the health of under-served populations in our service areas by delivering high quality and compassionate care. Borrego Health intends to continue its full cooperation with all government inquiries.”
The problem with this statement is that officers of the Foundation, and some Trustees were not committed to the healthcare of the populations its clinics serve. Actions contrary to this mission, demonstrated by draining clinic resources in order to generate profits benefiting a few, and a formula for profiteering, masterminded by former CEO Bruce Hebets, are exactly what precipitated the investigation.
Anderson additionally claimed that the BCHF Board of Trustees had invited the FBI in to investigate problems they identified through a law firm hired to check out claims made by the Borrego Sun. The major scam being a dental services management contract with Premier Healthcare Management, owned by Hebets’ friend and BCHF’s builder contractor, Daryl Priest. Miraculously, and with speedy deliberation, it only took the Board of Trustees five months to appreciate the seriousness of the issues the Sun raised.
Two weeks ago, Anderson announced some housecleaning with termination of CEO Mikia Wallis. However, it was later revealed, she is staying on as a consultant and earning her salary of $500 plus, assisting with the transition. For how long, or how much money that implies, is unknown.
Unfortunately, Borrego Health has a proven practice of ghosting problem people and continuing to pay them, possibly, buy their silence, or pay for back room deals in the form of purchasing clinics and leasing agreements.
Anderson stated that there is a national search for a CEO and that “there will be an interim individual named in the meantime.” However, the latest reporting is that Mark Connelly, long time COO will be the acting CEO, and the Foundation has stopped recruiting.
When asked about the removal of other officers, who were involved, or at least complicit with knowledge of the Foundation’s questionable activities, Anderson responded that “no other firings were planned.” Why aren’t other firings planned? Diana Thompson, chief financial officer, for example, signed false IRS tax disclosures, participated in meetings with Hebets, Wallis and other accomplices, and obviously knew what was going on. As long as officers, who knew about, or carried out plans that were illegal remain at BCHF, it’s hard to believe the Foundation is serious about making changes.
Nevertheless, changes may be forced on them as result of the federal and state investigation.
On Oct. 20, as a result of the raids, Borrego social media lit up with questions and concerns about the clinic, access to health care, as well as wondering why the FBI was at the Foundation’s offices and local clinic. Some commented that it was about time Borrego Health was being brought to justice, including many other healthcare non-profits in San Diego County that believed the Foundation was involved in unethical, if not illegal practices.
Notwithstanding the generic public relations statements by Anderson regarding the clinic, the clinic’s services will continue thanks to the professional providers, the online workers, who did not benefit from the profiteering schemes, and are, themselves, victims of the Foundation’s activities. A reminder the Borrego clinic is only one of many clinics and other Foundation programs such as pharmacies, residential living, and Borrego dental offices – all of which could be impacted by the investigation.
Hebets originally put forward the concept of getting out of providing services by simply facilitating private providers to benefit from the Foundation’s non-profit status for a fee. Using Premier as the middleman manager of the private providers, the Foundation has expanded this program beyond Medicaid dental services to actual Medicare health services. Anderson admitted, at least three clinics are not being operated by BCHF, but by private providers, under contract with Premier. The reason is: It costs to provide services, and management of clinics requires expertise and work.
However, simply leasing out the non-profit status for a fee and the ability to access federal and state funding allows the Foundation to not just grow, but increase revenues exponentially. All without the headaches of actually delivering health or dental services.
For Borregans concerned about the future of healthcare in Borrego Springs, the investigation actually creates an opportunity to engage local resources with medical expertise and funding to do more than just keep the clinic limping along, but upgrade to weekends, emergency care, labs, installation of functional and modern equipment, and hiring qualified personal that actually meet the specific medical needs of the local populations. This is something that people are thinking about and working on right now based on a proposal by Dr. Carrolee Barlow, which she originally submitted to Wallis and BCHF trustees. A proposal, according to Connelly, has been kicked to the curb along with Wallis.
Another fascinating aspect of local social media response to the FBI raid, has been an outpouring of stories about inadequate and even deadly care received in the past at Borrego Springs Clinic. Despite valiant efforts by a few professionals at the local clinic, the community has not been pleased with the overall quality of services. Those professionals were let go, or resigned in May, and the good work is carried on by the clerical and social services staff. The community spoke out in a 2013 survey of residents, about the lack of trust and inadequacies of the Foundation’s local operations. However, nothing was done at that time despite critical community feedback. Just as nothing was done about the red flags on the Foundation’s IRS-990 filings until reporting by the Sun attracted the attention the situation deserved.
When you starve the golden goose to buy expensive homes and cars, people get hurt. Just a few examples conveyed to the Sun or posted on Borrego 92004 Facebook page include: Jenny Henley reported that her father, a patient of Nurse Practitioner Jan Jones, went to the clinic with back pains. Jones had been unceremoniously fired by Borrego Health in May, and Judy’s father was seen by someone else, who was not familiar with the elderly gentleman’s medical history, and prescribed muscle relaxants without tests to identify the actual source of the pain.
As a result, the elderly 90-year-old fell, which Henley believes was a result of the prescription; developed a brain concussion, and later died. The back pain it seems, which was undiagnosed by the Borrego provider, was revealed by another doctor as kidney stones. Another patient posted; he went to the clinic one time for normal vaccinations for college. He explained, “They gave me a set of shots that I believe were improperly administered. Had a seizure in their office and they just brushed it off. And Dr. James Huot released private and false information about me to someone without my permission. I wanted to sue for malpractice, but you know how that goes.”
And the stories continued, from billing problems to a patient’s advocate being kicked out of the clinic by Hebets for photographing a receipt for an elderly man, paying with coin tips. She only wanted to make sure he had a receipt for his visit. The story was told by Ellen Fitzpatrick, who was one of the first to write articles in the Sun, questioning the clinic and Foundation’s practices in 2015. According to Fitzpatrick, the old man was wheezing, frail and very ill. He eventually died. However, she was sure Hebets had something to hide the way he quickly shooed her out of the clinic, and told the then editor of the Sun that she should be fired. Fitzpatrick wasn’t even a reporter at the time.
Postings of shock, concern, questions, comments, and new evidence of poor care from interested Borregans has numbered in the hundreds. Some also offered new leads of wrongdoing to investigate.
Finally, the excesses and disregard for the health and well-being of their patients may have caught up with the Foundation. The profiteering activities have continued for so long that BCHF officers and some Trustees felt emboldened to expand their illegal practices without regard for their clients or fear of the regulators.
Thanks to tips and information from employees, and the courage of former employees, willing to go on the record, the Borrego Sun was able to undertake an investigation of the Foundation. An investigation that even moved the current chairman of the Board of Trustees to make moves to correct or cover up compliance by some officers and trustees with Hebets. Not to mention, the benign neglect and ignorance shown by other trustees of their oversight duties.
Gratitude also to residents that took the Sun’s reporting seriously, and used the published research to personally reach out to the California Attorney General’s office.
Finally, for purposes of clarification, it appears employees of BCHF’s clinic, pharmacy, and dental programs (those that are operated by BCHF, and in the process of being phased out in favor of contract dentistry – where more money can be made) are not under investigation. Except, maybe, for a few hundred family members whose jobs are dependent on friends and family in high places.
As stated before, the Sun has great appreciation and regard for the front-line workers, who truly care and struggle with obstacles created by BCHF’s decision to drain the clinics in favor of padding their bank accounts. This appreciation has grown with hearing from the professional providers, who have lost their jobs, and whose salaries paled in comparison to many of the officers. Officers, who don’t do the work, aren’t qualified to hold their administrative positions, and made bad decisions.
Stay tuned. Things are going to be really interesting.