Sweating out sweaty-palm surgery

By Jim Quiggle
January 1, 2006
Tam Vu Pham didn’t need sick and suffering patients to bill health insurers. He just needed enough cash to pay perfectly healthy people to go under the surgeon’s scalpel.

Pham unleashed one of America’s largest insurance scams. He recruited more than 5,000 mostly low-income immigrants to undergo invasive surgery they didn’t need at his Unity Outpatient Surgery Center, in Southern California.

He billed insurers more than $96 million for the worthless procedures, raking in at least $15 million before he was caught for masterminding the notorious “rent-a-patient” scheme.

Immigrants who needed fast cash quickly flocked to Pham’s scheme. The money was too good to pass up. He paid them $300-$1,000 each in hard cash so surgeons could cut them open at Unity. His recruiters looked for people with health coverage that didn’t require pre-approval for certain surgeries.

Inflated surgical costs

The clinic billed health insurers thousands of dollars at a time, often wildly inflating the costs. A single operation could net the clinic as much as $70,000.

One perfectly healthy man had a circumcision, removal of his sweat glands, a nose operation, colonoscopy and endoscopy.
The money rolled in so fast that Pham could afford to import entire families from across the US -- paying their cash fee, airfare, hotel and meals. His surgeons operated on kids as young as 12.

Some of the procedures were dangerous. Many people went under the knife for useless sweaty-palm surgery, to relieve excessively sweating hands. Surgeons had to collapse the patient’s lung and sever a nerve near the spine to control the claimed sweating.

Several surgeries for some

Another favorite was fake problems with the gastrointestinal tract. The clinic billed insurers for treating gastritis, ulcers, acid reflux, polyps, internal hemorrhoids and colitis. To diagnose the problems, the clinic inserted a tube with a mini-camera down the patients’ throats or into their rectums.

Nasal and gynecological surgeries were among the other favorite procedures.

Many patients received several needless surgeries – sometimes the same day.

The clinic created fake symptoms and diagnoses for each patient, and forged detailed medical records to try and fool insurers. The clinic even coached patients how to lie about their symptoms if nosy insurers started asking questions.

The patients’ palms sweated so badly they couldn’t do normal life activities properly, such as their jobs and gripping steering wheels to drive cars, the records stated.

Patients scammed Pham

In a touch of irony, some patients actually bilked Pham. They cashed their insurance checks then walked away without giving his clinic the money. They had Pham over a barrel – he couldn’t exactly report the stolen checks to the police.

The scandal at Unity Outpatient was part of a larger pattern of rent-a-patient swindles that stole more than $345 million from insurers, the FBI estimates.

The scandals surfaced as a public menace when the Coalition Against Insurance Fraud passed a news tip to ABC Primetime. The TV investigative show did a national Emmy-nominated undercover story in which a reporter posed as a potential surgery patient. A small newspaper in Arizona, the Phoenix New Times, first broke the story locally.

Pham pleaded guilty after a lengthy probe by the Orange County DA’s office, which earned the conviction. He faces up to 13 years in prison when sentenced.

“They cut me here, there, everywhere, and nothing was wrong with me,” patient Julio Hernandez told reporter Paul Rubin at the New Times. “They just messed with my body, and I let them. They pay you to be their little animal.”

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