Everything is bigger in California, and that includes insurance fraud. Five individual, including the CEO of a hospital, have been indicted on charges stemming from nearly $600 million in fraudulent billing.
Pacific Hospital, of Long Beach, and Regional Medical Center of Hawaiian Gardens are accused of spending tens of millions of dollars on kickbacks to doctors, surgeons and chiropractors who referred patients to the hospitals for spinal surgeries.
“Injured workers were treated like livestock by doctors and hospitals who paid or accepted kickbacks and bribes in exchange for referrals,” said California Insurance Commissioner Dave Jones.
Pacific Hospital’s former owner, Michael D. Drobot has already pleaded guilty. The hospitals are accused of paying between $10,000 and $15,000 to doctors and others for each referral. The hospitals then billed insurers a total of $580 million for surgeries on 4400 patients. Individual doctors are charged with receiving as much as $5 million or more in kickbacks over a period of several years.
“Health care fraud and kickback schemes burden our health care system, drive up insurance costs for everyone, and corrupt both the doctor-patient relationship and the medical profession itself,” said US Attorney Eileen M Decker.
In some cases, payments to doctor were disguised as other costs, with some doctors receiving payments of up to $100,000 a month from Drobot-owned companies in exchange for those companies having the right to purchase the doctor’s medical practice. Other doctors received bogus contracts saying they would help Drobot or his companies collect medical debts.
