Borrego Sun - Since 1949

Borrego Community Health Foundation (BCHF) announced permanent layoffs of 113 employees that are currently employed in the Borrego Health Billing Department, and clinics in Barstow and San Bernardino. The employees will be terminated on February 1, 2022, according to a December 3, 2021 media advisory.

The 113 employees being laid off have been given a 60-day notice, and may apply for transfer to internal positions within Borrego Health.

The Borrego Health Billing Department, located in The Mall on Palm Canyon Drive in Borrego Springs, will be outsourced to Greenway Health based in Tampa, Florida, to process billing on behalf of the organization.

Clinics in Barstow and San Bernardino, two of three properties owned by Daryl Priest and named in a lawsuit by Borrego Health for inflated rental charges since 2016, are being shut down. The lawsuit claims that Priest owes Borrego Health over $11 million in illegal revenue the non-profit has paid to rent three of Priest’s properties. It is illegal for a FQHC non-profit organization to pay above fair market prices.

As a result of the lawsuit, Priest terminated the leases for the two clinics, forcing Borrego Health to close both and terminate the employees.

The long-time friend and contractor of Borrego Health’s now deceased, former CEO, Bruce Hebets, and Priest are under investigation for fraudulent dental income of $100 million plus, and illegal practices as Premier Management, the dental management contractor for Borrego Health.

According to Dan Kramer, publicist for Borrego Health, patients at either of the closing clinics will be offered the opportunity to continue their health care plan at one of the 24 other Borrego Health clinics, or to transfer to another FQHC clinic.

The outsourcing and layoffs at the Borrego Health’s Billing Department is being explained by the media advisory, as “adding efficiencies to existing operations.” The Borrego Sun has long held that BCHF is facing a financial crisis. Due to the FBI/DOJ investigation of the contract dental operations and loss of the fraudulent dental income, which comprised 60 percent of the BCHF’s operating budget, in addition to refusal of the state Department of Health Care Services (DHCS) to reimburse for any future dental services, Borrego Health’s network of clinics are facing severe budget cuts.

Instead of acknowledging the income crisis, outsourcing the Billing Department is disguised as adding something of value, rather than tightening the budget due to revenue losses, and oversight by the DHCS, forcing the Borrego Health Trustees to deal with the organization’s failure in both management, and funding the network of clinics with alleged fraudulent income.

Other “efficiencies” noted in the press advisory, is the closing and relocating of the Desert Oasis Women’s Health Center, located in Palm Springs. Employees, according to the media advisory, will be retained at the new location.

The Palm Springs women’s clinic is probably moving to less posh digs, with lower rent than the current location adjacent to Desert Regional Medical Center.

The termination of two of properties in the BCHF lawsuit against three Priest-owned properties, no doubt, creates a new wrinkle in the case which will be heard in the United States District Court Southern District of California. Both parties have requested a trial by jury. No court date has been set.

In the lawsuit, Borrego Health is specifically suing landlord Priest over three rental contracts between BCHF and Priest owned properties. The Trustees claim they had no previous knowledge of fraudulent contracts, “Because the true facts were suppressed by Hebets, and others acting in concert with him after his death.” The rental contracts provided the perfect cover to hide and funnel up to $100 million of government health care funds to Priest as legitimate expenses.

The Borrego Health Trustees have essentially requested relief by the court, citing various options where the court could intervene on behalf of the organization. The dilemma for which Borrego Health is asking for judicial intervention, is that the state has directed BCHF to stop making all rental payments for clinic offices, over FMV, specifically to Priest owned properties. The Trustees were directed to negotiate with Priest and change the contracts to Fair Market Rates.

Priest refused to negotiate or reduce the rental fees. In fact, his lawyers stated on his behalf, that if one property was short changed, per the contract with Hebets, he would terminate all three leases. Why he chose to terminate only these two leases is not known and his attorneys aren’t talking. Caught between the proverbial rock and a hard place with pressure from DHCS, which holds the purse strings to the organization’s future revenues, to only pay FMV for clinic rental space; and Priest’s refusal to budge on lowering the fees at the three clinics listed in the lawsuit, the BCHF Trustees appealed to the court to intervene and solve the problem for them. One solution being proposed to the court by Borrego Health is to let DHCS Director, Will Lightbourne, and Priest work out the conflict, claiming that the organization is innocent, caught between the state demands to correct illegal activities, and the landlord’s refusal to reduce the illegal rental fees.

Mudding the water, is the fact that Priest made good on at least part of his threat and terminated leases for two clinics. Thus, forcing Borrego Health to close them down and let the employees go. The question is why Borrego Health did not choose to relocate the clinics, and keep the employees on as done with the Desert Oasis Women’s Clinic?

Just as the financial future and continued operation of the 24 clinics left in the Borrego Health network face challenges and unknown futures, there are some new lawsuits on the horizon, and, likely, many more to come before the dust settles on Hebets’ sketchy health care empire. The empire it seems, like the emperor, is naked and exposed at last. And the picture isn’t pretty.

Among the interesting lawsuits hitting Borrego Health is one by Dr. Husam Aldiari, the contract dentist who made $8 million dollars last year, and is a subject of the FBI probe. Then there’s a request for protection from harassment by Dr. Timothy Martinez, Borrego Health’s former Chief Dental Officer, against Dr. Maura Tuso, who has been quoted by the Borrego Sun, and damage to his reputation by the San Diego Union-Tribune and articles by Dr. Mike Davis, an expert on dental issues, including fraud, in dental trade magazines.

More to come.