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A co-worker of Cull revealed in a tape transcript at a meeting held in HCA Hill Country Hospital in Texas that willingness to compromise medical integrity for profit was practically 100%: “...I’m not getting the information that I would like to have and not getting any communication with the therapists up there, which I think is not real, real, real good medicine, and I wouldn’t do it except that corporate wants us to do it and Jim wants us to do it and we want the Canadians’ business. I’m willing to compromise.”
One psychiatrist who blew the whistle, Dr. Charles S. Arnold, stated that “I have specific knowledge of at least one case where a psychiatrist had thirty-five patients in the hospital and nobody in the world can take care of that many people charging [each] a hundred dollars a day. That’s in the neighborhood of ninety to a hundred thousand dollars a month!”
Schemes to Get Patients
The psychiatrists and psychologists engaged in this human trade resorted to more unethical and illegal marketing tactics than one can easily count. As well as hiring patient brokers (also known as “head hunters” or “bounty hunters”) to find patients, psychiatrists secured cash bonuses, vacations, and other awards for themselves and their staff for each tip that lead to a hospital admission.
In one case, an internal memo established the operating policy that staff had to govern themselves by: “Be vigilant against employees trying to help callers over the telephone instead of bringing them in.... Monitor incoming calls to ensure that clinical screening or phone diagnosis does not result in lost admission.”
Routinely, these facilities infiltrated Alcoholics Anonymous and other non-profit recovery groups and approached employee assistance representatives, police officers, emergency room aides and parole officers, offering them rewards for delivering prospective patients possessing lucrative insurance.
According to a recruiter, psychiatric hospitals routinely had pizza and cookies delivered free to police departments and emergency room staff to encourage referrals of patients.
Children and adolescents were valuable commodities for these psychiatric hospitals, due to the fact that the profit margin on a child or adolescent is 10% higher than that of an adult patient (children need less supervision as they are easier to handle than adults). To tap into this lucrative market, psychiatrists secretly enlisted school guidance counselors and others with access to student populations to identify and refer young patients.
School counselors were found to be secretly linked to marketing operations of psychiatric hospitals. In a San Antonio school district, for example, intervention specialists—psychiatric workers who determine who “should” be turned over for treatment—were given access to records of 62,000 school children.
Recruiters from one hospital chain went to Canadian Salvation Army shelters during the cold winter months to recruit patients by showing them videos of sun-drenched hospitals in Arizona, Florida, Texas, California and other states.
These patient brokers would receive $3,500 or more per person sent to the United States. It has been reported that among the many head hunter groups and referral sources operating in Toronto was Family Plus, Inc., owned and operated by Toronto therapist Tony Pace. In a 1993 article called “The Patient Pipeline,” one U.S. newspaper reported that “Some patient brokers have other jobs. And they used those trusted positions to steer patients to distant treatment centres. Take Tony Pace, director of a Toronto counseling center called Family Plus. ... Pace also acted as a patient broker, referring clients to several U.S. programs, including Future Steps, a now-closed treatment centre owned by Andrew R. Siegel. Last April, Siegel agreed to pay $900 and plane fare for each patient that Family Plus referred to Future Steps, Pace said in a sworn statement. Pace’s commission would be reduced, however, if a patient failed to remain in rehab the full 30 days. Records show [Pace] said American hospitals kept him in business. ...’In a nutshell, the American hospitals pay for our operation here.’”
On January 11, 1996, in United States v. Andrew R. Siegel, Robin T. Doud-Lacher, Angela F. Starks, and Brenda F. Henry, an indictment was issued by a grand jury of a United States District Court against the above individuals (one of whom is the director of Future Steps) for fraudulently billing the Medicaid program. On February 26, 1996, a St. Petersburg, Florida, paper reported that “The founder of a Pinellas Park County drug treatment center and two workers for a Tampa public health clinic were found guilty Thursday of conspiring to pay and receive kick backs for steering Medicaid patients into the program.... [Andrew R.] Single, 41, of St. Petersburg was found guilty of conspiracy and two counts of paying Starks and Henry a total of $5,000 for sending 18 indigent, pregnant drug abusers into the Future Steps program. ...Starks, 38, and Henry, 36, both of Tampa, were each convicted of conspiracy and one count of accepting the money. A fourth defendant, Robin Doud-Lacher, earlier pleaded guilty to the conspiracy count, cooperated with the government and testified at the 13-day trial. The jury reached its verdict after one day of deliberation.”
A single invoice from Phoenix Alcohol and Drug, a head hunter group operating from various locations in southern Ontario, illustrates the range of profits to be made. The invoice listed referral fees for 26 patients at $3,500 each—a total of $91,000.
In 1992, the FBI raided the facilities of Psychiatric Institutes of America (PIA) owned by National Medical Enterprises. As a result, the company has been forced to pay a total of approximately $927 million in insurance repayments and compensation to victims, including $375 million in federal fines. PIA billed OHIP horrendous amounts of money, averaging $100,000 per patient.
As law enforcement and justice authorities turned up the heat, psychiatrists began to panic. In September 1991, the Houston Chronicle reported that “as many as 50 Canadian patients may have been dumped at Houston’s airports without return tickets during the past two weeks. ... One Canadian patient reached for comment at a private psychiatric hospital in Houston said [her release] by one hospital after a lengthy stay came abruptly. They told me, ‘Pack your bags, you’re leaving,’ she said.” Rather than a release, it was an eviction. As the law enforcement net tightened, she was no longer a patient in the eyes of the hospital, but a possible witness.
U.S. Representative Pat Schroeder, chairwoman of the House Select Committee on Children, Youth and Families, summarized the U.S. federal government’s findings:
“I am referring to the unethical and disturbing practices in mental health care that are taking place from coast to coast. Our investigation has found that thousands of adolescents, children, and adults have been hospitalized for psychiatric treatment they didn’t need; that hospitals hire bounty hunters to kidnap patients with mental health insurance; that patients are kept against their will until their insurance benefits run out;... that hospitals infiltrate schools by paying kickbacks to school counselors who deliver students; that bonuses are paid to hospital employees, including psychiatrists, for keeping the hospital beds filled.... Clearly, this business of treating minds, particularly this big business of treating young minds has not policed itself and has no incentive to put a stop to the kinds of fraudulent and unethical practices going on.”
With profit-pressure on them, and U.S. insurance providers catching on, the psychiatric facilities expanded their zone of influence north of the border to Canada.
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Why No Action?
In December 1992, two Texas law firms advised then – OHIP director Robert MacMillan that the Ministry of Health had an exceedingly good chance of not only recovering defrauded funds, but that it was a relatively easy and painless procedure. These firms had ample evidence in their possession and had already successfully litigated against a number of the psychiatric facilities.
The legal opinion noted that MacMillan was in communication with Congresswoman Schroeder and therefore must have known the extent of the damage that had been done to OHIP. But much to their surprise, the two law firms received no further communication from MacMillan or anyone else at the ministry following their submission. One lawyer who worked on drafting it stated that it was strange that their correspondence line was severed so suddenly, especially since it was MacMillan who initiated the inquiry in the first place.
One possible cause for the ministry’s hasty retreat may have been a barrage of law suits that were suddenly filed by facilities that had been bilking OHIP around the same time. One such claim, filed in the Ontario Court of Justice (General Division), is dated December 11, 1992. It was a breach of contract suit and the claimant was the Family Recovery Center. The defendants included numerous Ontario government officials including MacMillan, Dr. Robert Ecclestone of OHIP and more.
These suits may be designed to defend the facilities from prosecution by Canadian authorities. For example, other than the original filing of the claim, in each case there is no follow-up paperwork in any of the files. This suggests that the real intention may have been other than proceeding to trial against those individuals. Moreover, with the suits still pending, the defendants risk possible media exposure and more.
To government bureaucrats, perhaps $1.5 billion is just a number. But to Canadian taxpayers it is money that could have gone to any one of a number of vital and beneficial projects—not the least of which is crime prevention. Instead it went to crime support.
The Citizens Commission on Human Rights, which began its investigation into this matter in 1988 in the United States and in 1991 in Canada, is calling for a full investigation into psychiatric fraud in both countries. Anyone with information is invited to contact CCHR at 696 Yonge Street, Toronto, Ontario M4Y 2A7. Phone: (416) 922-8447.
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