07:42 AM PDT on Friday, November 5, 2010

By LORA HINES and IMRAN GHORI
The Press-Enterprise

Published: 11/4/2010 04:15 PM

Federal and San Bernardino County investigators Thursday served a search warrant at Arrowhead Regional Medical Center and spent the day removing boxes filled with documents from the hospital’s administrative offices.

Investigators from the county district attorney’s public integrity unit and FBI executed the search warrant, officials said.

In a written statement, San Bernardino County District Attorney Michael A. Ramos said Thursday’s operation at the hospital included seizure of documents, without elaboration.

Investigators said that it does not involve patient care or treatment at the county-operated hospital.

Dr. Dev GnanaDev, the hospital’s medical director, refused to comment as he left the medical office building.

Arrowhead is a 457-bed facility with an estimated $380 million annual budget. It opened in 1999 and has about 1,000 employees.

San Bernardino County Supervisor Neil Derry said he didn’t know what investigators were searching for Thursday, but he did say that about eight months ago he went to authorities after receiving “credible information regarding (the hospital) and improprieties related to free services.”

Derry refused to identify who allegedly received free services or what services were provided.

County Administrative Officer Greg Devereaux said he has no idea what authorities are looking for at the hospital and investigators have made it a point of not sharing that information.

Devereaux said that the hospital had waived co-payments for all county employees including members of the Board of Supervisors for an unspecified period of time before he found out about the practice and discontinued it this year.

He said his office has not yet determined how much money went uncollected.

He said the practice was never presented to the Board of Supervisors for approval and appears to have been implemented by hospital administrators who had previously worked in private hospitals.

“It was not exclusive to the board,” Devereaux said. “It was for any county employee.”

Devereaux was hired in January as the county administrator two months after the board fired Mark Uffer, who had been in that job since September 2004. Uffer previously had been the county hospital’s CEO.

Uffer is currently suing the county for wrongful termination.

Derry said he was notified about the operation about an hour before it happened, but refused to say anything else about information he received.

“There have been rumors of potential improprieties at (the hospital) for quite some time,” he said. “I welcome this investigation in an effort to get to the bottom of the truth of these rumors. If there is something that is improper, I hope it is found.”

UNDER SCRUTINY

Throughout the year Arrowhead has faced scrutiny from the Board of Supervisors and state and federal hospital regulators.

In April, the Centers for Medicare & Medicaid threatened hospital administrators that the medical center was in jeopardy of losing its Medicare reimbursements because of problems including patients’ rights, infection control and surgical services discovered during at least two recent inspections. Regulators backed off the threats in August following a re-inspection.

Medicare is the federal government’s health program for the elderly. Most hospitals rely heavily on Medicare reimbursements and usually close if they lose certification, which can take several years to happen. Money from Medicare and Medi-Cal, California’s Medicaid program for the poor, makes up a little more than half of Arrowhead’s budget.

In May, Arrowhead announced that it would consider reducing GnanaDev’s responsibilities as it faced accusations of a conflict of interest.

Two doctors from the hospital told the Board of Supervisors that GnanaDev has financial conflicts of interest that have led to substandard patient care. They claimed GnanaDev controlled hospital contracts awarded to doctors, among them some with whom he shares financial interests.

PAST COUNTY INVESTIGATIONS

Thursday’s search warrant execution at the hospital is the latest in a string of investigations involving county departments during at least the past three years.

On Monday, final arguments are scheduled in the preliminary hearing to decide whether former San Bernardino County Assessor Bill Postmus and a man he hired to work in his office, Greg Eyler, should face trial on corruption charges.

Postmus is charged with four counts of misappropriation of public funds, one count of perjury, two counts of grand theft, two counts of possession of a controlled substance and one misdemeanor count of possessing drug paraphernalia for unlawful use. Eyler, a former taxpayer’s advocate in the assessor’s office, is charged with one count of grand theft and one count of misappropriation of public funds.

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