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California
Related: About this forumFormer Hospital Owner Sentenced- over $40 Million in Illegal Kickbacks-for Spinal Surgery Referrals
https://www.justice.gov/usao-cdca/pr/former-hospital-owner-sentenced-over-5-years-prison-orchestrating-scheme-paid-over-40Department of Justice
U.S. Attorneys Office
Central District of California
FOR IMMEDIATE RELEASE
Friday, January 12, 2018
Former Hospital Owner Sentenced to over 5 Years in Prison for Orchestrating Scheme that Paid over $40 Million in Illegal Kickbacks to Doctors, Other Medical Professionals for Spinal Surgery Referrals
SANTA ANA, California A federal judge today sentenced the former owner of Pacific Hospital in Long Beach to 63 months in prison for overseeing a 15-year-long health care fraud scheme that involved more than $40 million in illegal kickbacks paid to doctors and other medical professionals in exchange for referring thousands of patients who received spinal surgeries. The scheme operated by Michael D. Drobot led to more than $500 million in fraudulent bills being submitted during last five years of the scheme much of which was paid by the California workers compensation system.
(snip)
Drobot pleaded guilty in 2014 to charges of conspiracy and paying illegal kickbacks, admitting that he orchestrated a wide-ranging fraud scheme in which [t]housands of patients received surgeries at Pacific Hospital not knowing that [Drobot] bribed their physician to perform their surgery at Pacific Hospital, prosecutors wrote in a sentencing memorandum filed with the court. Drobot was motivated by greed and ultimately profited millions of dollars through the scheme.
From at least 1997 thorugh 2013, Drobot, who owned and/or operated Pacific Hospital during this time, ran a scheme in which he billed workers compensation insurers hundreds of millions of dollars for spinal surgeries performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.
(snip)
The kickbacks were financed largely by money generated from Drobots sale of medical devices implanted into state workers comp patients during spinal surgeries. Drobot set up a scheme that exploited a now-repealed California law known as the spinal pass-through legislation, which permitted hospitals to pass on to workers comp insurers the full cost of medical devices implanted in spinal surgery patients.
Drobot generated the kickback money through his own medical hardware company the Newport Beach-based International Implants (I2) to sell hardware used in spinal surgeries performed at Pacific Hospital. I2 submitted bills to Drobots Hospital and tacked on an additional $250 per device knowing that the pass-through law required to state to pay the full amount of the invoices.
Through the operation of I2, [Drobot] generated substantial profits that he used to pay at least $40 million dollars in kickbacks, prosecutors wrote in court papers. According to the former CFO of Pacific Hospital, his income, bonuses, and other compensation at the hospital was in excess of $20,000,000.
As part of the health care fraud scheme, Drobot paid bribes to California State Senator Ronald Calderon in exchange for Calderon performing official acts to keep the spinal pass-through law on the books. Calderon is currently serving a 3½-year sentence in federal prison after admitting that he took bribes from Drobot and undercover FBI agents.
Drobot typically paid a kickback of $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery. Some of the patients lived as much as hundreds of miles away from Pacific Hospital, and closer to other qualified medical facilities.
(snip)
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Former Hospital Owner Sentenced- over $40 Million in Illegal Kickbacks-for Spinal Surgery Referrals (Original Post)
nitpicker
Jan 2018
OP
democratisphere
(17,235 posts)1. American Healthcare Criminal Enterprise System.
It is never enough for these scrubs covered crooks.
marble falls
(57,102 posts)2. Only five years??? How much of that $40M is still in his pockets?
safeinOhio
(32,688 posts)3. There are people that got 20 years
for selling a dime bag of pot.