Dr. Kenneth Thaler Gets Year in Prison and $11 mil Fine for Tustin Hospital's Skid Row Scheme

Dr. Kenneth Thaler, a 61-year-old physician who admitted homeless patients to the Tustin Hospital and Medical Center after they had been driven from "Skid Row" in downtown Los Angeles as part of a Medicare fraud scheme, has been sentenced to one year in federal prison. Chief U.S. District Court Judge George H. King in Los Angeles sentenced the Westminster 61-year-old Monday, when Thaler was also ordered to pay Medicare about $11 million in restitution for admitting around 60 patients per month, including some who did not require hospitalization.

Thaler pleaded guilty in 2010 to having patients driven from Skid Row, past various hospitals, to be admitted in Tustin. He also copped to being aware the hospital paid illegal kickbacks to recruiters such as Estill Mitts to refer homeless Medicare and Medi-Cal beneficiaries for in-patient hospital stays.

The doctor and the hospital billed Medicare and Medi-Cal for in-patient services after the admissions, even if it was not medically necessary for the patient to be hospitalized. Many recruited patients were coached to recite false symptoms, according to Thaler, who also conceded to sometimes falsifying medical records to justify the admissions.

According to a statement from federal prosecutors, Thaler faced a much longer prison stretch but he was helped at sentencing by having cooperated in the investigation of the Skid Row scheme. He did resign his license to practice medicine.

Recruiter Mitts, 68, of Los Angeles, pleaded guilty in September 2008 to conspiracy to commit health care fraud, money laundering and tax evasion. He is scheduled to be sentenced on Jan. 14

Vincent Rubio, Tustin Hospital's former chief financial officer, previously pleaded guilty to paying illegal kickback to Mitts and others for patient referrals. He is scheduled to be sentenced Jan. 28.

The investigation, the feds say, is ongoing. Anyone with information that can help investigators is asked to call the Department of Health and Human Services at 1.800.HHS.TIPS or email HHSTips@oig.hhs.gov.

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