Olive View-UCLA staffers allegedly accepted gifts from nursing home employees

Los Angeles County officials are investigating allegations that Olive View- UCLA Medical Center staff accepted gifts from nursing home employees in exchange for placing Medi-Cal and Medicare patients at their facilities, a possible violation of the county’s code of ethics, as well as state and federal anti-kickback laws.

Three staff members at the county hospital in Sylmar — a clinical social worker and two medical case workers — have been accused of receiving gifts in exchange for referring Medi-Cal and Medicare patients to at least three local nursing homes, according to three county employees who asked not to be identified for fear of retaliation.

Staff members named by the employees as having taken gifts did not return inquiries from The Times, nor did their supervisor or the person investigating the complaint.

Michael Wilson, a spokesman for the county’s Department of Health Services, confirmed that the department’s audit and compliance division was investigating the complaint this week, but he declined to say whether the employees involved have been disciplined or transferred. He said department officials have not notified law enforcement agencies because the investigation is unfinished.

When asked whether the allegations, if proven, could result in criminal prosecution, Los Angeles County district attorney’s officials said they believed the allegations should be investigated by their prosecutors.

“The Public Integrity Division has the responsibility of investigating and prosecuting allegations that public employees are committing crimes during the course of their official duties,” Jane Robison, the district attorney’s spokeswoman, wrote in an e-mail to The Times. “This is clearly a matter that should be referred to us.”

Nursing homes named in the complaint include Valley Manor Convalescent Hospital and Valley Palms Care Center both in North Hollywood, and Sun Air Convalescent Hospital in Panorama City, one of the employees said. All three are for-profit facilities certified to treat Medi-Cal and Medicare patients. Each has been cited by state regulators in recent years for providing substandard care.

Managers of the nursing homes have either refuted the allegations or declined to comment.

According to the employees who spoke to The Times, the alleged gifts included a Coach bag, Cirque du Soleil tickets, Target gift cards and a gift basket delivered to the clinical social worker in front of a supervisor during an office baby shower. In addition, the employees said one case worker told coworkers that she had received about $100 in gifts for each Medicare patient she referred to the nursing homes.

The allegations were reported to a department hotline in November, according to the employee who made the complaint. A county investigator first interviewed the employee in March, but did not ask for an affidavit until after The Times contacted the department about the allegations last month.

On May 6, Olive View’s chief executive, Carolyn Rhee, called a town hall meeting to address allegations of substandard care at the hospital’s neonatal intensive care unit. At that meeting, one of the employees said two members of the placement department complained to Laura Sarff, the hospital’s director of quality improvement, about alleged gift giving. Sarff did not return calls from The Times.

The department’s clinical social workers earn between $57,449 and $70,628, while medical case workers earn between $42,046 and $55,057, according to the latest county salary breakdown, Wilson said.

Under the federal Medicare and Medicaid Anti-Kickback Statute giving or receiving gifts in exchange for referring patients covered by the healthcare programs is a felony. If convicted, individuals face a $25,000 fine and up to five years in prison.

State anti-kickback laws make it a misdemeanor or felony for employees of licensed Medicare and Medi-Cal providers to give or accept gifts in exchange for referrals, punishable with a fine of up to $50,000 and up to three years in prison.

The county health department’s code of conduct requires that employees, “Conduct business with vendors, contractors, and other third parties free from gifts or other inducements,” and specifies that, “Gifts or other incentives must never be given if a principle purpose is to induce the referral of patients.”

The code of conduct also bars staff from accepting cash or gifts of any value from vendors. All department employees are required to sign the code of conduct annually, according to Carol Meyer, the department’s chief network officer.

Olive View does not have a formal arrangement with any nursing homes, Meyer said, but often must find nursing facility placements for patients whose condition is no longer acute and therefore no longer qualify for the same government-subsidized hospital care.

“Many times we can’t even get a patient into nursing homes because there are not beds,” said Dr. Gail V. Anderson Jr., the department’s interim chief medical officer. “We’re trying to get these patients out as best we can. It’s a very difficult situation.”

But the employee who complained disputed that explanation, saying nursing homes often have trouble filling beds and will call the hospital or fax advertisements to compete for Medi-Cal and especially Medicare patients, whose care is subsidized by the government.

Olive View records reviewed by The Times indicate that between January 2009 and May 5, 2010, the three staff members who the employees said accepted gifts referred at least 42 patients to the nursing homes in question. The staff members also referred patients to nursing homes with better or comparable ratings, according to the logs, and other members of the staff also referred patients to the nursing homes named by the employee who complained.

Beatriz Urquiza, 64, of Panorama City, was a Medi-Cal patient transferred to Valley Manor from Olive View in Jan. 2009 by one of the workers under investigation, according to relatives and records reviewed by The Times. Urquiza had gone to the hospital in September 2008, where she was diagnosed with esophageal cancer. She stayed there until January. About a month after she was transferred to Valley Manor she died of the disease, according to her son, Raul Urquiza of Panorama City.

Urquiza, 37, a trainer for a paramedic company, said he never understood why his mother was transferred to the nursing home, which he thought was substandard. Told about the investigation by The Times, Urquiza said he was shocked.

“It makes me think they just wanted to get rid of her. They didn’t care if she died or anything — they just wanted their gifts,” he said.

A Valley Manor employee accused in the complaint of giving gifts denied involvement and said he was unaware of the county investigation.

Doug Easton, a management representative for Anaheim-based TSW Management Group Inc. which is in the process of taking over Valley Palms, said he told county investigators who visited the facility May 25 that there are “no gifts for referrals.”

“Absolutely, positively that is not the way we work,” Easton said. “Valley Palms’ philosophy and culture is we take care of patients, we could care less who is paying for them or where they come from.”

Glen Bennett, administrator at Sun Air, said he was unaware of the investigation and rejected the allegations. Bennett said his employees knew not to give gifts to Olive View staff members.

“Olive View is very, very careful about that, you can’t even give them a pie there. They make it very clear,” Bennett said. “Rarely do you get a Medicare patient out of Olive View.”

molly.hennessy-fiske@latimes.com