FBI: Sleep clinic bilked Medicare out of $1 million

Sunday, February 26, 2006

SAN FRANCISCO - The FBI arrested the owner of a San Francisco sleep clinic last week for a scheme that involved recruiting senior citizens to undergo unnecessary exams and apply for $5,000 power wheelchairs. The scam ultimately cost Medicare more than $1 million, according to the agency.

The FBI charges that the clinic fraudulently billed Medicare for nearly $500,000 in medical exams and tests that weren't necessary, weren't performed or were performed by people not entitled to bill Medicare. In all, Medicare paid $750,000 for DME prescribed fraudulently by the clinic, the agency claims.

The clinic and its owner, Harut Korakossian, allegedly gave seniors $100 bills to take van rides to a sleep study center in San Jose, where they were coerced into ordering Medicare-funded wheelchairs even though they could walk, reported the San Francisco Chronicle.

Two doctors, as well as an administrator who worked at the clinic part time, were indicted on one count of conspiracy and 11 counts of healthcare fraud.

Dr. Wilson Fung, who never saw patients, allegedly received $120,000 for allowing the clinic to bill Medicare in his name. Dr. Edward Ridgill allegedly performed the exams at the clinic.

The administrator, Daisy Cruz, allegedly recruited seniors to come to the clinic for exams, tests and free wheelchairs. (Cruz also worked for the West Bay Pilipino Multi-Services Center, the clinic's landlord. The center, a nonprofit, has since lost city funding.)