The fallout of the $31.5 million fine to settle kickback allegations continues to hit Fresno’s Community Health System, this time from Fresno City Hall.
Thursday, City Councilman Miguel Arias sounded off on the healthcare provider for spending money on strip clubs and lavish vacations for top executives.
The backstory: Last week, a 2019 whistleblower complaint was unsealed in federal court which unveiled a number of salacious allegations that Community was fined $31.5 million by the federal government for.
- Community and affiliate Physician Network Advantage Inc. (PNA) allegedly provided executives and physicians with cash, expensive wine, cigars, private flights to strip club-filled Las Vegas trips, and expensive vacations in exchange for referrals as part of a wide-spanning kickback scheme.
- The scheme included PNA’s north Fresno office, known as HQ2, which had a luxurious wine and cigar lounge with around $1 million in alcohol on hand. Executives and physicians could make reservations for service at HQ2. Community allegedly used the office to recruit physicians to join their networks.
- Former Community CEO Craig Castro was also allegedly given a paid trip to Paris with his family, which PNA purportedly shelled out $63,000 for before Castro ascended to the provider’s top job, per the unsealed complaint.
What he’s saying: Arias discussed the settlement during Thursday’s city council meeting, saying his concerns with Community were evident from his first year on the council in 2019.
- He and now-Asm. Esmeralda Soria (D–Fresno) met with Community leadership to discuss their concerns that Community’s resources were not being adequately used to address patient care.
- “We happened to meet them in their new headquarters in Clovis with a five-course breakfast meal and all the shiny chandeliers that you could think of, and this amazing roundabout driveway into their amazing facility,” Arias said. “And all that indicated to us is that money was being spent everywhere but downtown Fresno with the Medi-Cal and Medicare patients that desperately needed the care.”
- Community told Arias that his concerns were not accurate and promised to build a new tower in downtown Fresno to enhance patient care.
- Arias then pointed to how Community was sued last year by local nonprofits for allegedly shifting $1 billion in tax dollars meant for downtown Fresno’s Community Regional Medical Center to Clovis Community Medical Center.
- “This fine comes out that confirms that the medical healthcare system in our city was spending money on strippers instead of patient care. Let that sit for a moment. The folks that we’ve given tens of millions of dollars to, the folks that we eminent domain people’s homes for, the folks that we gave them public property for have spent money meant for patient care on strippers, lounges and trips to Europe,” Arias said. “And that resulted in a $31 million fine by the federal government of which will be paid for by patient care funds. They’ve misused patient care funds, and that they pay the fine with patient care funds. And I’m sure they’ll respond as they usually do – with more PR, expect more commercials celebrating Community, expect more vendor relationships and political relationships that they will double down on.”
- Arias said he hopes Community’s board members recognize that they have lost their way and that they ended to focus on patient care.
- He added, “In America we should not be giving people treatment in the hallways of our hospitals in this community and this country while we spend money on strippers and clubs.”
