I had learned about Michael Drobot and Pacific Hospital of Long Beach, and their co-conspirators, preying on workers' compensation patients some time ago.
On Friday though, Federal prosecutors announced that Michael D. Drobot faces up to 10 years in prison after he pleaded guilty to paying kickbacks in a $500 million fraud scheme relating to spinal fusions and admitted to bribing state Sen. Ron Calderon to delay legislation to repeal the separate reimbursement for spinal hardware.
Calderon, D-Montebello, was indicted one day earlier on 24 charges, including bribery, money laundering, wire fraud and filing a false tax return. His brother, former Assemblyman Tom Calderon, was also indicted on Thursday for charges of money laundering and conspiracy to commit money laundering.
Drobot has agreed to surrender and be arraigned in the U.S. District Court in Santa Ana on March 31. Ron Calderon, who faces up to 400 years in prison, will surrender to authorities today, Monday. His brother, Tom, who faces up to 160 years in prison, was arraigned Friday afternoon.
According to authorities, 90% of the fraudulent bills submitted by Drobot were for workers' compensation claims.
The criminal complaint alleges that between 2008 and 2013, Drobot billed California workers' compensation carriers about $500 million for spinal surgeries performed at Pacific Hospital that were the result of an estimated $20 million to $50 million in kickbacks to "dozens of doctors, chiropractors, marketers and others for their referring workers' compensation patients to Pacific Hospital for spinal surgeries, other types of surgeries, magnetic resonance imaging, toxicology, durable medical equipment and other services."
Drobot paid a kickback of $15,000 for each lumbar fusion procedure that was referred to his hospital and $10,000 for each cervical fusion procedure, the complaint alleges. To conceal the illegal kickbacks, Drobot entered into “bogus contracts” with doctors and others that purported to be collections, research and development, lease and rental, consulting, marketing, management and other types of agreements.
Drobot paid a kickback of $15,000 for each lumbar fusion procedure that was referred to his hospital and $10,000 for each cervical fusion procedure, the complaint alleges. To conceal the illegal kickbacks, Drobot entered into “bogus contracts” with doctors and others that purported to be collections, research and development, lease and rental, consulting, marketing, management and other types of agreements.
In order to prevent and delay efforts of lawmakers and the Division of Workers' Compensation to change the pass-through provisions, Drobot bribed Calderon by hiring the senator's son to work for him during the summer. Calderon's son was paid $10,000 each summer from 2010 to 2012 “for approximately 15 days of work” he performed for Drobot, the complaint alleges.
Drobot also plied Calderon other benefits, including trips on privately-chartered airplanes, golf and high-end resorts and meals at expensive restaurants.
Drobot also plied Calderon other benefits, including trips on privately-chartered airplanes, golf and high-end resorts and meals at expensive restaurants.
More details of this despicable scheme are in the WorkCompCentral story this morning.
Much is written about "what is wrong" with workers' compensation and this story highlights EXACTLY what is wrong: politics and the undue influence of rapacious business interests that seek to profit from the unsuspecting injured in an abominably corrupt fashion.
I hope this case goes further. I hope this case goes deeply into all of the business interests that were a part of the Drobot scheme - the "doctors, chiropractors, marketers and others" who got the kickbacks. Each and every one of the should be held accountable for their lapses in judgement, morality, ethics and, yes, destruction of the lives of thousands.
I can virtually guarantee that this case is just an example of one of probably hundreds of schemes whereby politicians are corrupted to protect unscrupulous business interests in workers' compensation around the country: physician dispensing, hardware pass-through, receivables financing - the list of potentially abusive and unethical (if not illegal) politically connected abuses is only limited to the imagination of the criminally inclined and greedy politician.
I'm glad that finally something was done in this case. Unfortunately it's too late for the victims that have been thrown to the curb-side by these contemptible people; their lives will never be made whole regardless of the level of benefits provided by the workers' compensation system.
And with all your comments about throwing the book at the providers, you don't mention (except in passing) the Legislators they admitted bribing, and their betrayal of the public, that made all this possible.
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