Dr. Roland Borrasi chuckled as he told three doctors how he used kickbacks and cash bribes to shuttle unsuspecting nursing home residents into Chicago-area hospitals and psychiatric wards.
"Basically, I have a commodity; my commodity is nursing home patients," Borrasi explained.
He didn't know it at the time, but federal agents were secretly recording that meeting.
One of the doctors was wearing a wire as Borrasi matter-of-factly explained the mechanics of patient brokering to physicians in his medical group.
Those recordings, along with court documents and federal investigative reports obtained by the Tribune, describe a web of corruption in which hundreds of thousands of dollars flowed among doctors, nursing home executives and hospital administrators as the facility operators sought to fill their beds with a steady flow of destitute patients.
While taxpayers paid millions of dollars in fraudulent Medicaid and Medicare bills, one Alzheimer's patient was given inappropriate brain radiation treatments, a Borrasi associate told federal agents. A second patient, a disoriented elderly woman, was sent to an acute psychiatric ward after she refused to eat in her nursing home dining hall, another medical professional told federal agents.
"The fact that … greed subordinated the care of elderly and infirm patients who really needed it is horrific at best," federal prosecutors wrote in a court filing earlier this year after Borrasi was sentenced for accepting more than $500,000 in kickbacks to steer vulnerable patients. Prosecutors described "the scope and breadth of the bribes" as "extraordinary."
Borrasi, now serving a six-year stint in a Kentucky federal prison, declined to comment.
The illegal operation centered on Rock Creek Center, a now-shuttered psychiatric facility in southwest suburban Lemont. Also named but never charged in the federal probe were two of the state's largest nursing home chains, whose patients allegedly were used in the scheme, as well as executives from two well-known Chicago hospitals, Methodist and Loretto, which "paid Borrasi for patients," prosecutors wrote in a federal court filing. Federal anti-kickback laws prohibit facilities from offering payments or inducements in exchange for referring Medicaid or Medicare patients.
The crimes took place in 2002 and before, but it took federal agents years to uncover the conspiracy. Their investigative reports and transcripts of undercover recordings have surfaced only recently as the prosecutions near conclusion.
Advocates for the disabled such as ACLU attorney Benjamin Wolf believe similar patient-brokering schemes continue in Illinois today. Government-funded patients, Wolf said, "become a money machine" for the homes and hospitals alike.
Borrasi made himself the indispensible middleman in the patient-brokering racket: He worked at both nursing homes and hospitals and thus could shuttle hundreds of patients to maximize the facilities' profits. The brash medical group boss drove a Porsche, kept several mistresses and began wearing a bulletproof vest after being shot at close range in the parking lot of a nursing home in 2002, records show.
In addition to Borrasi, Rock Creek's CEO and its director of operations were sentenced for related crimes in recent months.
A fourth defendant, Dr. Naseem Chaudhry — a psychiatrist who worked as a consultant for Borrasi's medical group and also as medical director of Rock Creek — pleaded guiltyWednesday to one count of health care fraud. His sentencing is scheduled for August.
Federal agents have traced a cat's cradle of illicit payments, with money allegedly flowing to and from Borrasi through the medical group he owned and operated.
To ensure a steady stream of patients to their facilities, operators of hospitals and nursing homes paid Borrasi's medical group "stipends" that were really "bribes disguised as legitimate income," prosecutors said in court papers.
Four nursing homes linked to the Alden Management Services nursing home group, founded by Floyd Schlossberg, paid Borrasi's medical group stipends totaling $54,000 in 2002, according to records and interviews. Borrasi told his medical colleague and co-worker Abhin Singla that Alden nursing homes were paying him "in exchange for admitting patients" there, according to the federal investigative reports. Schlossberg and Alden representatives declined to comment.
Methodist Hospital of Chicago, on the North Side, paid Borrasi's group stipends of $8,267 in 2000, while Loretto Hospital, on the West Side, paid $12,500 in 2002, records and interviews show. Prosecutors said Borrasi had "payment-for-referral arrangements" at both places, but the facilities declined to comment.
Also paying Borrasi's medical group and serving as a source of patients, according to prosecutors and court exhibits, were nursing homes operated by Philip Esformes and his father, Morris Esformes. They and their companies have an ownership stake or management and consulting role in 28 nursing facilities in Illinois and Florida.
Three Esformes facilities paid Borrasi's group a total of $25,400 from 2000 to 2002, according to government records and interviews. Borrasi was medical director at Burnham Healthcare, for example, from approximately July 2000 through December 2002, and he continued to see patients there for several years afterward, records and interviews show.
Through their attorneys, Philip and Morris Esformes vigorously denied wrongdoing and said the payments to Borrasi "were market rate and ordinary and customary payments for services as medical director," adding that Borrasi did a good job.
"There is absolutely no evidence that these payments were tied into patient referrals," said attorney Michael Pasano.
Attorneys for the Esformeses say their clients have never been contacted by federal investigators regarding the patient-brokering allegations.
Government records raise questions about the quality of care provided by Borrasi's medical group at Esformes homes. At Burnham, for example, Borrasi knew two of his doctors were not visiting some patients, but he "fixed all the charts ... to conceal the fact that services were not provided," one of those doctors, Singla, told authorities.
For his part, Borrasi allegedly told co-workers that he felt obliged to do financial favors for nursing home operators who supplied patients. As federal prosecutors put it in one court filing, Borrasi "‘bought' control of (patients) from corrupt nursing home operators and rented them to those hospitals that were willing to pay him for (the) privilege of housing them."
"I have to, you know, quite honestly, pay some people off. Pay money," Borrasi told fellow doctors on one recording. Prosecutors did not specify who those people were.
The corruption embedded into a medical system meant to care for society's most vulnerable was fueled by competition for Medicare and Medicaid patients to fill nursing home and hospital beds, the federal reports show.
Hospital and nursing home "recruiters" got new patients "from the gutter, they get them from shelters. They get them from the sidewalks," Borrasi said on one undercover recording. The recruiters spotted likely candidates "just kind of like being bummed out and sitting in the emergency rooms and talk to 'em and say, ‘... We can get you some food, get you a nice place to live.'"
A single homeless person could bring a nursing home $100 per day in Medicaid reimbursements and become a "$35,000-a-year item," Borrasi told his fellow doctors.
At Rock Creek, the impoverished patients were so valuable that the hospital admitted them from as far away as Florida and California, paid for plane tickets and dispatched limousines to pick them up at O'Hare or Midway, records and interviews show.
"I was sending a lot of people up there. Street people," Rock Creek recruiter Robert Revels told the Tribune. "It's a moneymaking thing, buddy." Revels was convicted of conspiring to receive payments from Rock Creek in return for referring patients there.
One employee at Rock Creek referred to Revels' patients as "psychiatric hobos" who were "looking for a vacation on public aid," federal investigative reports show. The facility paid Revels as much as $8,500 a month based on the number of patients he sent to the facility — a violation of federal law. And for other recruiters, who scoured Chicago's South Side for homeless people, envelopes stuffed with $500 cash for each new admission were allegedly left at the Rock Creek switchboard, one former hospital worker told federal investigators.
Housed at Rock Creek among vagrants, felons and substance abusers supplied by the recruiters were frail nursing home residents trapped in the scheme without their consent, records show.
When Rock Creek's census was low, a center employee would call one of the nursing homes and get patients admitted, former social services director Ilona McDougal told federal agents. Likewise, when a nursing home had a low census, Rock Creek patients were discharged there.
Many Alzheimer's and dementia patients were sent to Rock Creek with papers from the nursing homes alleging they had been "acting out," former Rock Creek discharge planner and clinical social worker Kimberly Reevas told federal agents. But those elderly people seemed docile and "not aware of their surroundings," Reevas said. Assigned to group therapy sessions, "they just sat there."
Reevas and McDougal were among numerous health care professionals who helped authorities uncover the fraud and mistreatment.
In addition to Rock Creek, Borrasi also sent nursing home patients to Methodist and Loretto. At Methodist, Singla told agents, only 10 percent of those medical admissions had legitimate illnesses, while the other 90 percent were placed in the hospital "under vague or false diagnoses."
Some patients were subjected to questionable procedures. At Methodist, Borrasi hospitalized an elderly Alzheimer's patient in 2001 with the sketchy diagnosis of "mental status change," then ordered several cycles of what Singla described as inappropriate brain radiation treatments.
When Singla raised questions, Borrasi responded by asking why Singla should care, "as long as (Singla) received the $80 a day for seeing the patient," a federal report said.
One mentally ill 66-year-old woman was transferred 35 times among five hospitals and three nursing homes while she was treated by Borrasi and his medical group from July 2000 through August 2003, according to court exhibits filed by prosecutors.
Such repeated shuttling of elderly or infirm patients can increase the likelihood of serious illness or death, according to a study cited by prosecutors. Yet, prosecutors alleged, "Borrasi seemed almost oblivious to the terrible impact his referral practice would inevitably have on his patients."
On tape, Borrasi acknowledged that once people were returned to their nursing homes, "they probably get even sicker."
Still, ailing nursing home patients were good for business, he said. "You get like X number more admissions because of that."
Through their attorneys, Philip and Rabbi Morris Esformes vigorously denied wrongdoing and said the payments to Borrasi "were market rate and ordinary and customary payments for services…"Photo: Rabbi Morris Esfrmes.
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