Officials at three California hospitals and the institutions have been accused in criminal actions and civil lawsuits of defrauding Medicare and the state health program of millions of dollars.

According to allegations by state, federal and city of Los Angeles authorities, the hospitals exploited homeless and mentally ill people in a well-organized scheme using them as "human pawns" to receive public funding for unnecessary services.

Authorities allege that "runners" sought out homeless people on Skid Row and paid them $20 or $30 to seek medical care. One mentally ill patient went to three of the medical centers reportedly involved in the scheme. The patients would be hospitalized for conditions that did not require hospital stays, such as dehydration, and Medicare and the state's Medi-Cal then billed for their care. The public payments amounted to millions of dollars, according to authorities.

The charges remain to be proven, but as authorities noted the pursuit of fraud ensures that public funds are being properly spent and in turn bolsters public confidence in the programs.