Feds tag five in med scam

Federal prosecutions seek to implicate five players in a major medical scam in California

Insurance News


The defendants, including the former chief financial officer of a hospital in Long Beach and two surgeons, stand accused of inflating their medical billings to a total of nearly $600 million.
The Justice Department said that the alleged perpetrators of the schemes benefited from kickbacks (as much as $15,000 per treatment) by directing patients to particular hospitals in Hawaiian Gardens and Long Beach. In many of the cases, patients even traveled hundreds of miles for surgeries, despite already having qualified facilities near their actual homes.
The prosecutors added that the accused have inflated by as much as 10 times the cost of medical hardware for use in spinal surgeries. Many of the patients were receiving care through worker’s compensation, so the scammers allegedly submitted the claims to insurance carriers and the State Compensation Insurance Fund.
Prosecutors expect the case will only grow in the next few weeks as more defendants will be added, including the former owner of Pacific Hospital Michael D. Drobot (who himself pleaded guilty to charges of conspiracy and kickback payments in April 2014).
“The investigation is far from over,” Assistant U.S. Attorney Joshua M. Robbins told the Long Beach Press Telegram.

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