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Bad News for BH, Worse News for Patients

The state is suspending 100% of Borrego Health Medi-Cal Services


Last updated 9/19/2022 at 12:49pm

On August 19, Borrego Health’s administrative offices, individual clinics, and others outside of the organization were notified by the State of California Health and Human Services Agency – Department of Health Care Services (DHCS) that the state intends to reimpose its 100% payment suspension on all Borrego Health Medi-Cal services beginning September 29.

“This unexpected decision is unjustified, and if it is implemented, it will significantly and abruptly reduce access to care for thousands of at-risk Californians,” Dan Kramer, spokesman and public relations consultant for Borrego Health, said. “Borrego Health has demonstrated significant progress in a short period of time in adherence to guidelines previously provided by DHCS and monitored by the state. Borrego Health is pursuing informal and formal appeals and will avail itself of all resources at its disposal to reverse this misguided DHCS action.”

Kramer added, “Patients do not need to reschedule appointments and Borrego Health is not considering staff reductions as a result of this notification. The organization remains committed to improving the health of the populations in its service area, many of which have no other accessible options for care aside from their local Borrego Health clinic.”

Really? Add these two facts: One source close to the Board of Trustees informed the Borrego Sun that on September 2, Borrego Trustees are holding a very important meeting. One can assume the meeting is about the Medi-Cal suspension, and whether to fight or surrender.

The big question facing the Borrego Springs Clinic and the other 23 clinics, including one newly opened clinic in East Coachella Valley, (see side story of the opening on Page 10) and 10 mobile clinics, is what does the suspension mean? And what does an appeal really mean to daily operating schedules, patients and employees? One answer may be found in a notice sent last week by the San Diego Integrated Network (of FQHC clinics), asking other FQHC clinics to accommodate 82,000 Borrego Patients. This includes Borrego Springs clinic’s patients. In other words, Borrego Health’s San Diego patients are to be transferred to other FQHC clinics, like the San Ysidro Health Center, which has clinics in the east county, like El Cajon, and was the recipient of Borrego Health’s Julian Clinic.

Another thing that is clear. Without Medi-Cal and Denti-Cal payments, Borrego Health will have great difficulty surviving financially. Denti-Cal reimbursements were permanently suspended in 2021, following the FBI/ DOJ raids, October 2020. In 2020, Dental services accounted for the largest percentage of Borrego Health revenue. For example, the latest IRS 990, for the year 2020, submitted by Borrego Health shows income for Dental Services at $307,776, 257. While Medi-Cal services provided $18,527,195 of revenue. Medicare provided for a total of $7,597,001 in both dental and health revenues. Private Pay accounted for $12,118,446 for both dental and health; and Commercial (company co-pays) were $12,641,163.

“I cannot overemphasize the concern we have with a change of this magnitude being applied on such short notice to communities with few or no other options for care. These types of transitions usually take months to complete to ensure patients don’t experience gaps in care,” Rose Maclsaac, Interim CEO, told the Borrego Sun.

“We are being asked to execute this transition in a matter of weeks for at-risk populations with limited time and resources to overcome even more barriers to care than they already face. Everything about this is concerning and that’s why we’ll continue doing everything in our power to protect our patients and team members.”

Following the October 2020 raid, in 2021, DHCS suspended all reimbursements for dental care, closing down the Premier/Borrego Health/ dental management contract services and also suspended Medi-Cal for a brief period. While dental funding is permanently ended, Borrego Health appealed the suspension of Medi-Cal funds, which were reinstated, with conditions placed on the organization. The conditions included a Corrective Action Plan (CAP) developed by the state DHCS to train the organization in good business practices, and address the problems that led to the FBI/DOJ investigation of fraud, and suspension of reimbursements for dental services. The CAP also named a monitor to be paid by Borrego Health, with the power to make recommendations, fire and hire personnel, and, generally, enforce the correction plan for the state.

The monitor, the Borrego Sun discovered, charges $990 an hour, and has been with Borrego Health since 2021, when the CAP agreement was signed by Borrego Health Trustees and the state. The Sun is purposely not revealing the name of the monitor or his company. Which brings up the subject of money spent by Borrego Health trying to right and protect itself; and money that may be required as a court settlement at the end of the Department of Justice Investigation. Money which will be deducted from Borrego Health’s funds, further incapacitating services to the majority of the clinics.

These include fighting lawsuits by Dr. Husam Aldairi, whose fraudulent dental practices earned him $8,894,487, in 2020; and Mikia Wallis, former CEO, fired for continuing the corrupt policies and practices of former, deceased CEO, Bruce Hebets. There may be others that are not public knowledge.

Then, there is the lawsuit undertaken by Borrego Health Trustees to try to correct money laundering practices and abuse of state and federal funds for inflated rental agreements with Daryl Priest and his real estate companies. Finally, the recent, big lawsuit by Borrego Health suing former Borrego Health officers, trustees, Priest’s Premier Healthcare Management company; and 15 dentists, involved in scams to steal Medicaid and Medicare funds. James Hebets, Bruce Hebets’ brother was also named for setting up insurance policies that avoided income tax payments, and faulty employee insurance programs, garnering him large amounts of commission. The entire lawsuit reveals individuals involved in incredible scams and schemes, benefitting private individuals with taxpayer funds intended for the health care needs of people that cannot afford or access private insurance.

The lawsuit names Individuals and schemes that included abuse of federal and state funds for salaries, rent, meetings, outrageous benefits for officers, and nepotism, hiring family and friends to also get on the money train, as well as, to incur favors. Then, there were the four “Others” named in the lawsuit, which will be discussed in a future article. Likely intended to wipe away the stain, and prove to regulators that Borrego Trustees were cleaning up their act, and moving Borrego Health forward, as a newly born, honest, transparent, and law abiding FQHC. Sadly, this conversion is causing a drain in Borrego Health’s present and future revenues.

Unfortunately, the expensive effort by an army of lawyers has failed to impress the regulators. Too little, too late, would be a good meme. As the Borrego Sun has constantly pointed out, too many of the crooks remained on the payroll long after the raid, and the recognition that they had been caught. The same is true of the Board of Trustees, like Dan Anderson, former chairman of the Board of Trustees, who was fully aware of what was transpiring, and approved of illegal IRS submissions, was allowed to stay on and influence the board until June 20. One of his acts was to fire Board members who had questions, particularly of the Premier deal, of which he was fully aware. Then there were the questionable inflated rents for offices Borrego paid to his foundation. Then, there is the current chair of the Board of Trustees, formerly serving as vice president under Anderson’s reign. She can only claim, she wasn’t aware, didn’t do her due diligence as a trustee, or, like so many others, turned a blind eye to the fraud, and investigations alleging corruption. She stood by while other board members asked questions about Premier; and has repeatedly stated, until the recent Borrego sues Borrego lawsuit, that, “There are absolutely no problems.”One can see where DHCS might be suspicious, even if Sandra Hansberger was really trying to convince the regulators there was a “new Borrego Health.”

Every crime, and every individual, outlined in the lawsuit, with a couple of exceptions, had previously been exposed by the Borrego Sun and written about time and time again. However, others, known by the Sun to be complicit, and who became wealthy at the expense of patients and clinics, like the Borrego Springs Clinic, still remain unindicted, for reasons, which will be explored in future articles.According to Kramer, Borrego Health’s spokesperson, “The organization is focused on finding answers to questions this notification raises and the information needed to correct them. As Borrego Health proactively addresses this issue, it will continue to care for its patients and support its team members.

Kramer graciously continues to disseminate Borrego Health information at the direction of the Trustees, which consistently denies the financial realities, which should be, in all fairness, available to patients, clinics and employees. And, why would Borrego Health indulge in pretending the status quo by opening a new extravagant clinic in East Coachella Valley, where the majority of the clientele will be dependent on state and federal Medicaid. (California’s Medi-Cal, and Denti-Cal)? How Borrego Health failed to live up to the requirements of the CAP, which allowed the organization to keep Medi-Cal, is unknown, and may never be revealed by the state. However, trying to turn around an organization that was rife with incompetent individuals, lacking neither fear or respect for regulations and law; and continues to place complicit individuals in offices most responsible for the corrections, is one thought. Another, is the time lag for removing the guilty from offices. Even more egregious, the Borrego Sun believes, some of the most responsible for the schemes to steal from taxpayers, have yet to be called out by Borrego Health.

There are other dangers lurking in the future for Borrego Health, including the IRS, not taking lightly to being lied to; and pulling the organization’s non-profit status. And the best Borrego Health may expect as a result of the state’s investigation, is a large settlement figure. Money that went to benefit individuals, which the organization will be required to repay to the federal and state government insurance programs. Settlements and fines in cases like this, according to experts that follow dental fraud, tend to be very costly. Add this to the fact, there might be a need to set an example, as Borrego Health’s alleged fraud and corruption is believed to be the biggest case of this kind in the nation.

Amazingly, with all these problems, Borrego Health just opened a new East Coachella Valley Clinic, where at the opening celebration, Riverside County Supervisor, Manual Perez, dedicated the clinic to Bruce Hebets, stating, “This never would have happened had it not been for him.” After all, what can be expected of an elected official, who once was hired by Bruce Hebets as Borrego Health’s Government Affairs Officer in between elected positions? Wouldn’t it be nice if Borrego Springs could have a modern full-service clinic like Coachella, instead of struggling to keep one doctor on location?

Holding a collective breath, that the Trustees will apprise the community of their decisions; and what the future holds for the 82,000 patients and 24 clinics, after they “sort everything out” at the Friday meeting.