Thursday, July 10, 2014

The Blob of Fraud

The medical malpractice and associated complaints stemming from the kickback and counterfeiting schemes alleged of Michael D. Drobot and Pacific Hospital of Long Beach have long tentacles and are starting to populate California courts with allegations against other physicians, medical facilities and companies along the manufacturing and supply chain.

A complaint filed in June alleges that Parkview Community Hospital in Riverside, CA knew or should have known that surgeons were using counterfeit devices, but “turned a blind eye” because it profited from the procedures that were performed at its facility.

Another complaint filed in January alleges that Olympia Medical Center in Los Angeles was part of a criminal enterprise designed to defraud insurance companies through the use of phony implants, in violation of the Racketeer Influenced and Corrupt Organizations Act.

Drobot and Pacific Hospital are not named as defendants in the latest cases. But the allegations in the suits are similar to those in a 2012 whistleblower case filed by Mark Sersansie, chief executive officer of MedHealth Medical in Irvine, and William Reynolds, a former investigator for Berkshire Hathaway and Travelers Insurance Co. and now pending in Los Angeles Superior Court.

The allegations are that surgeons used counterfeit implants not approved by the Food and Drug Administration prepared by Crowder’s Machine and Tool Shop of Temecula, CA and distributed by Spinal Solutions in fusions performed at Pacific Hospital of Long Beach, Riverside Community Hospital, St. Bernardino Medical Center in San Bernardino and Tri-City Regional Medical Center in Hawaiian Gardens.

The individual owners of the various defendant entities are also named in the complaints.

These activities combined with the recent indictment and ongoing legal issues involving Landmark Medical and people associated with compound pharmaceuticals, also all out of the Greater Los Angeles area, could account for a large part of the "LA Bubble" noted by recent reports published by the California Workers' Compensation Institute.
The Blob of Medical Fraud
In the Landmark case, indictments, filed with the court on June 17, allege more than $25 million in kickbacks to doctors who prescribed and dispensed three different compound creams formulated based on the profitability of the ingredients being used.

The indictments allege the kickbacks were concealed by the purchasing of accounts receivables from physicians.

It should be noted that, other than Drobot's guilty plea in the criminal case against him, none of the defendants have admitted any wrongdoing and in fact have said publicly that they are innocent. Drobot sold Pacific Hospital some time ago and its current management is not implicated in these schemes.

Nevertheless, if one considers that workers' compensation tends to be a microcosm of society in general, the breadth and depth of medical fraud could be astounding if spread to the general health and Medicare markets.

I suspect that the fallout from the scheme will continue to expand.

Unknown for now is whether attorneys or other individuals who referred their clients to physicians that were part of the scheme could be liable for claimed damages as a result of the surgeries, the counterfeit hardware or whether there were any kickback schemes involving referrals or other parts of the alleged conspiracy.

Though its sad to see workers' compensation cast against the negative light of medical fraud, the optimist in me says that at least an effort is being made to start cleaning. Sure, there's probably others out there, and perhaps all of this action won't deter those with nefarious intent in the future.

What will be interesting is whether future statistics will show a decrease in the LA Bubble, and if so by how much.

I suspect the answer to the first part is "yes" and that it will be measurable.

In the meantime this story will continue to spread like The Blob. How much and whom it consumes along the way depends upon how many fire extinguishers can be deployed by those who encounter it.


  1. I was lucky to dodge the current fraud but was still involved with some of these doctors involved in most of the current fraud cases, it saddens me to know so many other injured workers were not so lucky and will suffer for life because of this fraud and the God almighty dollar. Being an injured work in southern California is more hazardous than the original injury we received when we have no way of knowing what doctors can be trusted with our health that’s in the insurers MPN.
    I hope when more of this kind of fraud hits the media that their attention will be more focused on the one really responsible or work comp fraud and not us helpless injured workers, yes I know injured workers commit fraud but focus on the numbers, we are but a tiny part of all fraud.

  2. ....

    She went on to say I have not received medical care nor reimbursements because there is protest about body parts. Amazing that a slip and fall, with a witnessed trauma to the head and immediate confusion, dazed, speech impairments, along with orthopedic symptoms COULD POSSIBLY EXCLUDE THE BRAIN AS AN ACCEPTED BODY PART when the initial acceptance was for "head contusion".

    The trickey Defense tactic to ignore medically necessary recommended treatments adds to the fraud, and, combined with omission of medical evidence, appears to be a matter for the Department of Justice, as there is clearly little-to-no enforcement of anti-fraud rules. Even the Commissioner's office sent me a note saying to save my time and money....they can't help me.

    Curious that the I & A suggests my brain is not an accepted body part for a clearly diagnosed TBI, traumatic brain injury. As to the orthopedic injuries, more than a year later they authorized 6 physical therapy sessions, wherein a torn shoulder rotator cuff was discovered via an authorized MRI.... and guess what, the Defense demanded that the PTP CEASE CALLING THE INJURED SHOULDER AN INDUSTRIAL INJURY by Summer 2013. (Date of initial injury 1/9/12; D'oh) They were also apparently threatened to be removed from the alleged "MPN" network if they continued to request medical treatment and further evaluations for #TBI.

    One of those doctors, in 2012, mailed me several tubes of a 'creme' that sounds suspiciously like one you mentioned in a prior blog. Another mailed a hand-help ultra-sound machine, and I never figured out which brain lobe to apply it to, as it came with no instructions. And when the Corvel UR letter came regarding 'spinal fusion' consideration (FOR MY BRAIN INJURY!!!) you might imagine the sheer terror felt.

    Thanks for what you're doing. Stay safe. It seems to be a well-funded organized crime racket. Americans Maiming and Killing Injured Americans ...for profit. The only known way to deal with psychopaths of that nature is full-on attack to expose, to ultimately expunge.

    Could your WorkCompCentral site have a bulletin board for Injured Workers desperately in need of competent legal representation? I have talked to just about every SuperLawyer in the State of California with Brain Injury expertise.... they all just shrug and say, "good luck"...and remind me that it's not personal, nor unusual. It's every day terrorism in America's work comp systems.....nationally. OUR NATIONAL SHAME. JUST ONE OF THEM.

    If any of your readers are applicant attorneys of the competent persuasions, unafraid of tackling yet another case of "maim to kill" by the World's Largest Hospitality Industry Employer's insurance carrier and defense counsel, please encourage them to help me. You know how I can be reached. Till then, I, too continue to fight the good fight, till last gasps. "Ask About Work Comp Gravy Trains" Now.

  3. Ooops, Part 1: Good job David. SPREAD THE BLOG ON THE FRAUD.
    'We are the Media Now'.... Let's see what we can do to get your 'reads' up! :)

    I was just looking up your blog to comment on yesterday's, but I'll start here. The "breadth and depth of medical fraud" is the essence of WorkComp in California, and the USA. Ask any injured worker; we know beyond any reasonable doubt.

    Take my case. 2 years, 6 months, 1 day..... failure of my employer to provide medically necessary treatments for a witnessed slip and fall backwards on ice, hitting my head. In light of denied medical care, according the the Chris Bell book that is recommended by you and on the WC site, I am entitled to self-procure medical care. I have done my best and accrued expenses of $25,262.99, not all self-procured, not all unauthorized, and it includes medical miles as well, since 2012.

    The Defense Counsel basic said politely, "you can't make us pay you."

    I know you're fond of referring people to their local I&A Officer. I just got off the phone with one. The issues of denied medical care and unreimbursed miles were first presented in December 2012, along with issues of fraudulent omission of medical records by defense with clear intent to successfully deny medical treatments, evidenced since at least October 2012. Said I & A Officer said I never her provided with the list of more than, at the time, 300 pages of medical treatments, and even though I advised nearly 8 hours were spent in WCAB Court with the Judge and obtaining an Court Order for the records to be included with a request for supplement reports, said I & A officer said, "I was not in Court. I just know my experience of you." :?