San Diego Union-Tribune (Sunday)
PROVIDER IN FEDERAL PROBE LINKED TO MAYOR’S BUSINESS
Wells: Company contracted with Borrego Health, but has no part in investigation
After years of working for other people, El Cajon Mayor Bill Wells wanted to run his own company, be his own boss.
So when Bruce Hebets, the late CEO of the Borrego Community Health Foundation, offered Wells a job as staff psychologist at the nonprofit health care provider five years ago, the mayor had a different idea.
Instead of working directly for the foundation known as Borrego Health, Wells said, he would form his own corporation and provide mental health treatment under a contract with Borrego Health.
“I had always had a job,” he said. “I wasn’t interested in doing that anymore and I told (Hebets) that. I wanted to start my own business.”
Wells established Broadwell Health in 2016 and quickly began providing outsourced psychologists and
psychiatrists to Borrego Health. He has subsequently expanded his client base to include three other nonprofit providers.
Now the foundation that gave Wells his start as an entrepreneur is the subject of a criminal investigation.
In October, state and federal agents raided multiple offices of Borrego Health and its billing contractor, Premier Healthcare Management of El Cajon.
The next month, state regulators cut off all Medical reimbursements to the nonprofit health care provider — withholdings that now exceed $24 million. Since the initial searches, according to multiple sources, the FBI has served at least seven more warrants.
Wells said he and his company have no connection to the joint investigation by the FBI and state Department of Justice. Nor have any investigators approached him about his business arrangement with Borrego Health, Wells said.
“We’re seeing between 500 and 600 patients a week total,” he said. “I would say Borrego Health probably accounts for a quarter of that. We don’t know if that’s going to continue or if that’s going to diminish.”
The two-term mayor of San Diego County’s sixthlargest city, Wells said early this month that Borrego Health had stopped paying him after the California Department of Health Care Services suspended reimbursements to the foundation as a result of the criminal probe.
But last week, after The San Diego Union-tribune asked Borrego Health about the debt, Wells said he has since been paid. Even so, he said he is not sure if he will continue his arrangement with the Borrego Springs health care provider.
“We are scaling down. I don’t know if we’ll continue or not,” Wells said. “Payment is an issue. We are obligated and committed to our patients, (but) we can’t just stop seeing patients. We have to scale down in a clinical way.”
Borrego Health Chairman Daniel Anderson declined to comment on Broadwell Health. He also would not say how long Borrego Health can keep serving patients without the reimbursements.
Instead, Anderson issued a statement saying the Borrego Health clinics remain open.
“Our primary concern is the welfare of our patients,” the statement said. “We are committed to doing whatever we can to make sure that our patients can continue to access the services that they need.”
Immediately after the search warrants were served in October, both Borrego Health and Premier Healthcare Management issued statements saying they were cooperating with investigators.
Daryl Priest, a politically connected developer who is friends with Wells, founded Premier Healthcare in 2016, the same year the mayor opened Broadwell Health. Priest’s development company also built several Borrego Health facilities.
The monthly lease payments Priest charged the organization were notably higher than market rates, the Union-tribune reported last fall. Priest has not responded to requests for interviews.
Borrego Health officials previously said they would re-evaluate its relationship with Priest and his companies.
‘It troubles me’
The Borrego Community Health Foundation began as a modest clinic providing medical services to the tiny Borrego Springs community in northeast San Diego County.
Under Hebets’ management, Borrego Health grew to become one of the biggest federally qualified health centers — or FQHCS — in the nation. By the time Hebets died in 2019, the foundation was operating dozens of clinics in Riverside, San Bernardino and San Diego counties and generating hundreds of millions of dollars a year in revenue.
As a federally qualified health center, Borrego Health is designed to provide medical, dental, behavioral health and other services to patients who live in rural communities with less access to health care.
The government reimbursement rate for FQHCS is higher than the routine Medicaid and Medi-cal payments, in order to encourage doctors and other providers to deliver services in remote areas.
Borrego Health officials acknowledged they expanded faster than they should have and did not always pay close enough attention to operating practices. Records show revenue climbed from $44 million in 2011 to just under $340 million in the year ending June 30, 2019.
“The problem is money was made fast and furiously and the people making the money were dizzy with the thoughts of how lucrative this business is,” said Martha Deichler, a retired school superintendent who serves on the Borrego Health board.
According to Deichler and others, Hebets and other senior staff did not inform the board about key contracts, like the decision to pay Priest tens of millions of dollars a year for billing, leases and other services.
Mike Hickok, a longtime treasurer who was voted off the Borrego Health board of directors last fall, said he was never told about the charity’s arrangement with Broadwell Health. A longtime executive at The Irvine Co., Hickok said he has been interviewed by FBI investigators twice in recent weeks.
“It strikes me as strange now,” said Hickok. “I never heard of (Broadwell) the whole time I was there. I never saw any documents about an agreement, nothing.
“It troubles me that it never came to the board,” he said. “He (Wells) is nowhere in any of our reports.”
Mental health accounts for a relatively small percentage of Borrego Health’s patient visits.
Internal records reviewed by the Union-tribune show the nonprofit health care provider estimated just over 10,000 behavioral health treatments during the current fiscal year, which runs through June.
The same records show the average charge per visit was $400, for an annual revenue of just over $4 million, although billing adjustments averaging $150 per visit drove down the yearly income closer to $2.5 million.
Wells declined to say how much of the $250 that Broadwell Health bills per visit is paid to his company, or the rate he pays the contract psychiatrists and psychologists hired by his company to treat patients.
“It’s not a percentage,” he said. “In the beginning, we negotiate a per-encounter fee. It’s a volume business. To make much profit on that, you have to see a lot of patients.”
Psychologist Carolyn Lopez spent several years working for Borrego Health before she was let go last spring as part of a wave of departures that senior management blamed on the coronavirus pandemic.
A few years ago, she said, the outsourced experts from Broadwell Health began assuming a larger role at Borrego Health. At the urging of top administrators, the contracted psychologists and psychiatrists began cutting patient visits to as little as 15 minutes, she said.
“Broadwell worked very well with me; the difference is I engaged with my patients,” Lopez said. “The weakness of Broadwell is they came late and the women they hired, some were not well trained.”
Wells said his experts are properly certified and never reduced the duration of patient visits as a way to increase caseloads or reimbursements.
Gross negligence
The criminal investigation into Borrego Health is focused on the organization’s billing practices, and whether all of the services reimbursed by Medi-cal were actually delivered.
The Union-tribune reported in October that one of Borrego Health’s affiliated dental clinics in Desert Hot Springs expected 445,000 patient visits in the year ending June 30. Another dental provider in El Cajon expected almost 225,000 visits this year.
Most of the organization’s other dental sites budgeted between 2,000 and 5,000 patients a year, according to records reviewed by the newspaper.
Wells said his contract work for Borrego Health differs from that of Borrego’s dental partners now under investigation because his company treats patients inside Borrego facilities — not in private offices that might otherwise see the same patients for a lower reimbursement.
“It’s a completely different model,” he said.
Under the agreement, Borrego Health pays Broadwell Health to provide contracted behavioral health experts, Wells said. He said he bills Borrego Health weekly and does not know if Premier processes those invoices. He said he has not spoken to Priest in months.
“We send what we call a master bill to each of the FQHCS we work for, basically just noting what patients we saw and what provider saw them,” Wells said.
Broadwell Health has faced prior challenges.
Dr. Yashwant Chaudhri, the longtime Broadwell Health medical director, was publicly disciplined by the Medical Board of California after he was accused of gross negligence, repeated negligent acts and unprofessional conduct, state records show.
“Respondent purportedly terminated his treatment of Patient A without discussion or notification to Patient A,” the records state.
Chaudhri admitted to the allegations in a stipulated settlement he signed in 2019. He declined to comment on the allegations when reached by the Union-tribune.
Wells said Chaudhri left Broadwell Health last month in a business dispute unrelated to the state disciplinary action.
The FBI has declined to comment on the investigation since the search warrants were executed in October.