A Desert Regional Medical Center lawsuit alleging a local medical group and its physicians harmed the educational development of graduate medical education residents — and misused resources to benefit themselves — is headed to court in October.
A complaint was filed Feb. 3, 2025, in Riverside Superior against Desert Physicians Medical Group (DPMG) Health, Dr. Tae Kim and Dr. Gemma Kim, claiming breach of contract, fiduciary duties, intentional interference with economics and more. Among the allegations are misspending more than $1 million in grant funding, falsifying malpractice insurance records and pressuring resident physicians.
A second amended complaint was filed June 15, adding Dr. Luanne Carlson and Alma Hernandez as defendants who helped
Drs. Tae and Gemma Kim "breach their fiduciary and contractual obligations to DRMC, engage in self-dealing and other misconduct with respect to residents, and helped DPMG economically benefit at DRMC’s expense," according to the court filing.
Tae and Gemma Kim, who are married, are family medicine physicians as well as the principals of Desert Physicians Medical Group, which provides charitable health care and community outreach to those most vulnerable in and around the Coachella Valley. Additionally, Gemma Kim served as DRMC’s designated institutional official (DIO) for residency programs between 2020 and June, 20, 2024. Tae Kim was DRMC's program director for the Family Medicine GME Program between July 19, 2023, and Oct. 14, 2024, according to the complaint. They are listed as physicians working at DPMG, according to its website. Carlson and Hernandez are also employees of DPMG, according to court documents.
Graduate medical education programs provide an opportunity to train and retain future physicians in the Coachella Valley, where there is a doctor shortage. There are six of those programs at DRMC: emergency medicine, family medicine, internal medicine, general surgery, surgical critical care and the transitional year. The court filing states that the programs serve approximately 90 to 100 medical school graduate trainees in any given year.
The Palm Springs hospital is demanding a jury trial for this case. A trial-setting conference is set for Oct. 30.
DRMC said in a statement it does not comment on active litigation, but is "confident in our position and the judicial process." The Kims did not respond to The Desert Sun's request for comment. Their attorney, Benjamin A. Nix, said in an email Aug. 28 that the defendants deny the allegations in the litigation and intend to defend the matter vigorously. He added that DPMG also has its own action pending against DRMC and related parties, that was filed on March 12, 2025, in Riverside Superior Court.
Financial discrepancies
The suit claims that Gemma Kim served in her DIO role "without incident" until August 2022, when her husband, Tae Kim, began consulting for the Palm Springs hospital. Documents allege that they began acting "in a manner entirely inconsistent with their duties to effectively and professionally manage" the residency programs.
Between October 2022 and January 2025, the California Department of Health Care Access and Information provided more than $120,000 in Song-Brown Act funds to DPMG, which was meant to support DRMC’s residency programs. However, court documents allege that the Kims did not transfer those funds to DRMC's accounts, notify the hospital that the funds were awarded to DRMC until February 2024, or disclose if/how they used the grant funds for approved program-related activities. The suit states that DPMG used those funds to acquire and operate a mobile health clinic, which "did not strategically benefit" the residency programs and "deprived" DRMC of using those funds for those purposes.
Additionally, the Kims applied for and secured more than $1 million in grant funds from the Desert Healthcare District based on an application which stated they would use the Song-Brown funds to help purchase and operate the mobile clinic. When applying for the district grants, documents allege that the two physicians misrepresented that they would use $240,000 to pay residents’ salaries. DRMC claims that is false because the hospital "has always paid for its residents’ salaries, without reimbursement from DPMG, Dr. Gemma Kim, or Dr. Tae Kim," according to the document.
During the July 28 Desert Healthcare District board meeting, discussions revolved around the mobile clinic program following an expiration of the district's grant agreements with DPMG (the contract expired in September and October 2025, and was extended for another five months from Feb. 1 through June 30). The extension gave DPMG additional time to obtain audited financial statements required to qualify for future grant funding and continue operating the program, but the medical group was not able to provide the documentation, according to district documents.
Directors raised concerns about the lack of financial information, to which Tae Kim said DPMG believed they were moving away from a grant agreement and toward a vendor contract, thus why they were not providing the audited financials. Interim district CEO Donna Craig interrupted Kim during his comments and requested that the conversation continue outside of the board meeting, adding they have been going "back and forth" for months on the issue and that what he was bringing forward was "not what we talked to him about."
The suit further alleges that the Kims failed to comply with program requirements relating to a CalMedForce grant, which was intended to support residency programs in designated Primary Care Health Professional Shortage Areas. Documents allege that three grant agreements were approved and were meant to reimburse qualifying expenses accrued by the programs. However, the case claims the Kims misspent and did not maintain recordkeeping requirements, which meant they could not provide sufficient documentation to the grantor.
Due to the failed recordkeeping, DRMC breached the grant agreement and received a termination letter in August 2025, according to the case. The Palm Springs medical center claims it has not been able to participate in the CalMedForce grant program since September 2024 or access $360,000 in funding.
Additional allegations made in the court documents state that the Kims directed personnel and attending physicians to work at clinics not affiliated with the residency programs, to the benefit of DPMG, and that DPMG personnel were instructed to falsify — or allowed to falsify — timesheets submitted to DRMC.
Allegations relating to falsifying insurance documents
The lawsuit also alleges the Kims and Hernandez falsified professional liability (malpractice) insurance policies relating to two people identified as Dr. E.T and Dr. A.L, who documents state were DPMG physicians, DRMC’s family medicine and transition year programs faculty members and DPMG’s obstetrics fellows.
On Jan. 25, 2024, as part of a normal compliance check, DRMC staff asked Gemma Kim to provide copies of E.T and A.L's malpractice insurance or a DPMG group insurance policy that covered their fellowships. The request was forwarded to Hernandez, and the following day, they provided a false document to DRMC, the suit claims. In March, the insurance carrier confirmed that no obstetrics insurance coverage existed for those two people.
The hospital claims it was harmed by those false statements. That came into play in March 2024 when E.T delivered a baby. According to allegations later raised in another Riverside County Superior Court case, E.T and others acted negligently in baby F.R.’s delivery, "includ[ing but] not limited to, the negligent failure to provide informed consent, and the negligent failure to timely anesthetize, deliver, treat, care for [baby F.R.’s] intolerance of labor, fetal distress, and delay in performing C-Section such that [baby F.R.] suffered and will continue to suffer from profound neurological injuries and its sequelae."
Court documents claim that Gemma Kim denied instructing Hernandez to submit the falsified insurance document to DRMC. The hospital later terminated Hernandez, but weeks later, DPMG hired them as its operations manager, the suit states.
The defendants claim that they did not make any actionable misrepresentation to DRMC, conceal or suppress any material fact or intend to deceive or defraud the hospital, according to the second amended complaint.
Impacts on medical residents
Further, the case alleges that the Kims began coercing/pressuring residents and dictating their schedules and activities to the "exclusion and detriment of DRMC."
Among those allegations, documents claim the Kims pressured certain graduating students to lease apartments owned by them for $2,800 a month. They also allegedly required DRMC residents to attend off-site retreats, one such being a mandatory three-day retreat in Lake Arrowhead that people paid $2,300 to Tae Kim. He later instructed those participants to seek reimbursement from DRMC.
Other claims in the case include them instructing a program resident to not file worker’s compensation claim; allowing DRMC residents to treat and consult with patients without the supervision of licensed and qualified physicians; allowing residents to improperly access patient information databases through an account belonging to Carlson; appointing employees even though DRMC was still conducting interviews; and instructing residents to ignore instructions from and supervision by DRMC coordinators and core faculty members.
The defendants allege that they have fully and/or substantially performed any and all obligations to DRMC, court documents state.
Around July 2024, DRMC identified a replacement for the DIO position, Cristin L. Hart, M.Ed., and around October 2024, appointed an interim director for family medicine, Dr. Sam Lin, according to documents. Once those positions were filled, DRMC terminated Gemma and Tae Kim from their leadership roles.
DPMG litigation against DRMC
In DPMG's own litigation against the Palm Springs hospital, it alleges that staff raised complaints about DRMC's failure to pay faculty and staff in a timely manner and complaints about DRMC's failure to follow institutional requirements relating to resident contracts’ payment and reimbursement. They also claim that the hospital went on a "relentless campaign" to interfere with DPMG’s business, contractual relationships, physicians and engage in other unfair and unlawful efforts to harm DPMG.
Defendants in the case include the hospital, First Choice Physicians Partners (which operates a medical clinic in Palm Springs), Tenet Health (which owns/operates the hospital) and Group CEO for Desert Care Network Michele Finney (which includes DRMC and two other area hospitals). A trial setting conference is scheduled for Oct. 30.
In 2020, DRMC's medical residency programs were slated for closure after being placed on probation by the Accreditation Council for Graduate Medical Education. When Gemma and Tae Kim stepped into their roles, the suit states they started new residency programs and maintained accreditation, leading to a productive relationship with the hospital.
However, the case alleges that the relationship changed in 2024 once DPMG made complaints about the hospital failing to follow ACGME’s institutional requirements relating to resident contracts. DPMG and the Kims claim that led to DRMC terminating their contracts and doing so without following ACGME protocol.
The suit also alleges that DRMC locked DPMG staff out of offices/clinical space; accessed their offices without permission; harassed and solicited DPMG physicians to breach their term agreements and work for DRMC instead; failed to pay amounts owed under written agreements; eliminated access to computer files containing patient records; and contacted insurance payers to inform them that DPMG was being displaced, according to court documents.
Documents claim that DPMG suffered multi-million dollars worth of damages and irreparable harm as a result.
Ema Sasic covers entertainment and health in the Coachella Valley. Reach her at ema.sasic@desertsun.com, on X @ema_sasic or on Instagram @emasasic.
This article originally appeared on Palm Springs Desert Sun: Palm Springs doctors face lawsuit over alleged grant misspending
