Riverside General Hospital Heads Await Fraud Verdict

The Reverend Robert Gilmore, a Third Ward resident who protested Riverside's loss of federal funds in August, says the hospital's troubles resulted in a drain of drug treatment services throughout the city.
The Reverend Robert Gilmore, a Third Ward resident who protested Riverside's loss of federal funds in August, says the hospital's troubles resulted in a drain of drug treatment services throughout the city.
Photo by Susan Du

Arguments in the trial of Riverside General Hospital administrators accused of pilfering millions in a federal healthcare scam concluded Monday as the jury left to decide whether Earnest Gibson III, his son and two other defendants bought and sold patients by the head to cash in on Medicare and Medicaid funds.

FBI agents arrested the Gibsons after they raided the historic Third Ward hospital's office in February 2012 as part of a nationwide Medicare fraud purge. The feds found that Riverside routinely paid local group homes to refer mentally ill and drug addicted patients to its programs, but the question remains whether the hospital's top administrators were in on the conspiracy.

The defense stuck to its original plea of total ignorance on the Gibsons' part, likening the CEO to a well-meaning general leading insubordinate troops. Federal prosecutors insist there's no way the Gibsons didn't know that phantom patients were being billed for imaginary services under their watch.

The underlying dispute is a humanitarian one: prosecutors say Riverside administrators took advantage of the most vulnerable to pocket government funds intended for intensive care. Hospital administrators maintain that the hospital was an essential lifeline that helped addicts with nowhere else to turn.

In his closing argument, attorney Dick DeGuerin listed the ways his client Earnest Gibson III had tried to bring the hospital into greater compliance with federal healthcare laws. In 2005 and again in 2008, Gibson consulted lawyers with Brown McCaroll -- including one who had worked with the Department of Justice to write the original anti-kickback law -- on how to keep Riverside's billing records straight.

While the prosecution argued that Gibson increased paperwork required of recruiters to mask fraud, DeGuerin said the policies and procedures he put in place were meant to protect the system.

"He wanted to try to know, but how was he to know when they lied to him?" DeGuerin demanded, going on criticize prosecutors of relying on witnesses who stood to gain from Gibson's conviction. Seven of the prosecution's witnesses are seeking reduced sentences for their confessed involvement in the scheme. One, a former office manager at Riverside, was fired for having prescription drugs in her desk and for allegedly having an affair with a patient.

Prosecutors admitted much of the evidence against Riverside's CEO was circumstantial, but argued that there was just enough circumstantial evidence to find him guilty beyond a reasonable doubt. They pointed out that while it was suspicious some hospital recruiters were paid in fat wads of cash, records of checks paid to others clearly showed that some were compensated a flat rate for each patient they steered toward Riverside.

With jurors poised to make their verdict on Tuesday, the hospital system itself remains in a financial limbo. Services have been cut at all four of its campuses, and it's unlikely to find relief even with the acquittal of its former administrators.


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