By Barbara Feder Ostrov and Lauren Weber: For More Info, Go Here…
“We were robbed.”
The money was so good in the beginning, and it seemed it might gush forever, right through tiny country hospitals in Missouri, Oklahoma, Tennessee and into the coffers of companies controlled by Jorge A. Perez, his family and business partners.
It was his “secret sauce,” the rotund Miami entrepreneur would smilingly tell people in their no-stoplight towns. The money-making ventures he proposed sounded complicated, sure, but he said they would bring in enough cash to save their hospital and dozens, even hundreds, of good jobs in rural towns where gainful employment is hard to come by.
And, in town after town, the people believed him. He offered what they could not resist: hope, and the promise of survival.
Then a few major health insurance companies got suspicious, as did some government officials. How could Unionville, Mo. — a town of 1,790 — generate $92 million in hospital lab fees for blood and urine samples in just six months? Why had lab billings at a 25-bed hospital in Plymouth, N.C., nearly tripled to $32 million in the year after Perez’s company took control?
The lab billings, insurers alleged, were simply fraudulent. Blue Cross Blue Shield and other insurers started filing lawsuits, stopped making reimbursements and shut off the spigot.
At the height of his operation, Perez and his Miami-based management company, EmpowerHMS, helped oversee a rural empire encompassing 18 hospitals across eight states. Perez owned or co-owned 11 of those hospitals and was CEO of the companies that provided their management and billing services. He was affiliated with companies that owned or managed the rest.
Now, with funding from the lab-billing venture dried up, 12 of the hospitals have entered bankruptcy and eight have closed their doors.
The staggering collapse left hundreds of employees without jobs and many more owed months of back pay. Only in recent months did they learn that their medical coverage had been terminated because EmpowerHMS had stopped making payments, according to interviews and bankruptcy documents.
At some of the hospitals, EmpowerHMS stopped paying employee payroll taxes, Perez acknowledged in an interview. Some of the shuttered hospitals owe hundreds of thousands in property taxes, according to local officials.