Electronic Health Records

Use & Optimization News

Health IT Leader at Center of $800K Fraud Scandal in California

A former health IT exec has been charged with 49 counts related to false invoices to fraudulent health IT companies.

Health IT Companies

Source: Thinkstock

By Kate Monica

- A former health IT leader at North County Health Services (NCHS) recently pleaded not guilty to defrauding the healthcare organization out of nearly $800,000.

The California-based nonprofit healthcare organization provides comprehensive, affordable care to low-income patients in San Diego County and the Inland Empire. In January of 2015, NCHS hired Hector Ramos to run its health IT department. Ramos has since been charged by the healthcare organization with 49 counts related to money loss.

Prosecuting authorities told the San Diego Union-Tribune the incidences of fraud occurred over the course of eight months in 2015. According to Deputy District Attorney Anna Winn, Ramos could face up to 36 years in prison if he is convicted on all charges.

Winn alleged that Ramos created two fraudulent health IT companies and submitted false invoices to NCHS officials from these corporations. Additionally, prosecutors alleged that Ramos created a sense of urgency among healthcare staff members in the IT purchasing department by saying the entire health IT system would shut down if the invoices were not paid in a timely manner.

Assistants in the IT department allegedly grew suspicious of Ramos’s behavior and investigated the two health IT companies. Staff members discovered Ramos was on the board of both corporations and reported their findings to NCHS officials.

Winn alleged that officials soon discovered there were no purchases related to health IT systems or services in bank statements belonging to the fraudulent health IT companies. While bank statements showed NCHS had been billed for health IT equipment, there was no record the corresponding purchases were ever made by either of Ramos’s companies.

Instead, Winn alleged the bank statements revealed there had been several instances of excessive spending on international vacations, wine, cigars, clothing, and other luxury items. In one instance, records showed Ramos wrote a $44,000 check to a Porsche dealer.

Superior Court Judge David Danielson set Ramos’s bail at $1 million and also granted a request from the prosecutor mandating that Ramos must prove the money was not illegally obtained if he successfully makes bail.

NCHS employees declined to comment on the lawsuit following the court hearing.

In addition to the criminal case, an insurance company that works with NCHS filed a civil suit against Ramos in July to recover nearly $800,000. The civil case is currently pending.

This most recent lawsuit filed by a healthcare organization follows several others earlier this year.

In September, Agnesian Healthcare Inc. filed a complaint against Cerner Corporation for breach of warranty and fraud over issues stemming from its billing software.

The Wisconsin health system alleged Cerner’s billing software led to more than $16 million in losses. According to Kansas City Business Journal, problems with the health IT company’s revenue cycle management solution began immediately after implementation. Agnesian paid $300,000 for the scheduling, billing, and claims software.

Agnesian is seeking direct and indirect damages, punitive damages, and a cancellation of its Cerner contract. The not-for-profit health system stated it needed to resort to issuing payment statements to patients by hand due to pervasive problems with the Cerner solution, leading to a large backlog of unprocessed statements.

On September 21, Cerner filed a motion to either have the case dismissed or transfer the case to the US District Court for the Western District of Missouri, claiming Wisconsin is an improper venue for the case due to an arbitration clause in its Agnesian contract. 



Sign up to continue reading and gain Free Access to all our resources.

Sign up for our free newsletter and join 60,000 of your peers to stay up to date with tips and advice on:

EHR Optimization
EHR Interoperability

White Papers, Webcasts, Featured Articles and Exclusive Interviews

Our privacy policy

no, thanks

Continue to site...