New Defendants Plead Guilty in Scheme- $600 Million in Fraudulent Claims by SoCal Hospitals

[nitpicker]

https://www.justice.gov/usao-cdca/pr/3-new-defendants-including-chiropractor-plead-guilty-scheme-involving-nearly-600

Department of Justice
U.S. Attorney’s Office
Central District of California

FOR IMMEDIATE RELEASE
Friday, June 3, 2016

3 New Defendants, including Chiropractor, Plead Guilty in Scheme involving nearly $600 Million in Fraudulent Claims by SoCal Hospitals
(snip)

The three new defendants join six others who were previously charged in relation to the government’s ongoing investigation into kickbacks for patient referrals and fraudulent bills for spinal surgeries performed at Pacific Hospital in Long Beach. The scheme involved tens of millions of dollars in illegal kickbacks to dozens of doctors, chiropractors and others. As a result of the illegal payments, thousands of patients were referred to Pacific Hospital, where they underwent spinal surgeries that led to more than $580 million in fraudulent bills being submitted during the last eight years of the scheme alone. Many of the fraudulent claims were paid by the California worker’s compensation system and the federal government through the Federal Workers’ Compensation System.
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•Michael R. Drobot, 44, of Newport Beach, the son of Pacific Hospital owner Michael D. Drobot (Drobot Senior), pleaded guilty on March 4 to conspiracy and illegal kickback charges. Drobot Junior is scheduled to be sentenced on November 18.

•Chiropractor Michael E. Barri, 48, of San Clemente, who owned and operated the Santa Ana companies Tri-Star Medical Group and Jojaso Management Company, pleaded guilty on March 11 to a conspiracy count and admitted that he received illegal kickbacks for referrals to Pacific Hospital from 2009 through October 2013. During a nine-month period that ended in 2013, Barri admitted receiving $158,555 in illegal kickbacks after referring a dozen patients to Pacific Hospital, where they had back surgeries. As a result of his referrals, Pacific Hospital billed insurance carriers approximately $3.9 million for spinal surgeries. Barri is scheduled to be sentenced by Judge Staton on January 13, 2017.

•Linda Martin, 66, of Clovis, California, who was a marketer for Pacific Hospital who recruited medical professionals and others to refer patients with promises of kickbacks, pleaded guilty to a conspiracy charge on May 27. She is scheduled to be sentenced on August 19.
(snip)

As described in court documents, Drobot Senior – who was the owner and/or CEO of Pacific Hospital of Long Beach until late 2013 and who pleaded guilty in April 2014 – ran a 15-year-long scheme in which he and others submitted hundreds of millions of dollars in bills to workers’ compensation insurers and the U.S. Department of Labor for spinal surgeries and other procedures performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.

As part of the scheme, members of the conspiracy typically paid a kickback of $15,000 for each lumbar fusion surgery and $10,000 for each cervical fusion surgery. Some of the patients lived hundreds of miles away from Pacific Hospital, and closer to other qualified medical facilities. The patients were not informed that medical professionals had been offered kickbacks to induce them to refer the surgeries to Pacific Hospital. From 2005 through 2013 (which is only part of the overall scheme), Pacific Hospital billed insurers more than $580 million for spinal surgeries related to over 4,400 patients. Insurers paid the hospital more than $226 million for the surgeries performed as a result of illegal kickbacks.

Those involved in the scheme concealed the kickback payments by entering into bogus contracts to provide a “cover story” for the doctors, chiropractors and others who received illegal payments.
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[flamingdem]

1. Hideous people