In December, WorkCompCentral reported that "More than 14,500 patients had surgeries or other procedures performed at Pacific Hospital," which were “likely the result of a kickback payment.” That is an astounding allegation. 14,500 people have had their lives affected by people accused of criminal activity.
The foundation of this particular story included disclosures in an order that was proposed in the prosecution of one of the physicians accused, a Dr. Philip Sobol. There is also a discussion of Federal Bureau of Investigation (FBI) documents regarding the surgeries performed and referrals made by Dr. Sobol during the "time the kickback arrangement was in place.” Allegedly, an appreciable percentage of the total (2,800), about 90 "underwent a spinal fusion."
On January 15, 2018, WorkCompCentral reported that the former owner of Pacific Hospital, and the mastermind of the fraud scheme, will serve just over 5 years in prison. He was charged with "overseeing a $500 million workers' compensation fraud scheme for 15 years." A press release from the U.S. Attorney's Office also provides details.
There is frustration in various circles as this Pacific Hospital situation has been discussed. There are questions raised at various conferences regarding how such widespread activity could have prevailed for so long. Many have mentioned that essentially "all the signs were there" and yet the procedures and the referrals continued.
At a conference in October, one attendee claimed that limousines were provided to transport patients to Pacific Hospital for care. That one might be a red flag. If anyone is providing you a free limousine ride, there may be a few questions that come to mind before accepting.
Another frustration cited by WorkCompCentral in December is locating those many patients who were involved. The FBI has purportedly been unable to locate some of those patients to "notify them of their rights as possible victims." As much as some of us follow the news in workers' compensation, and try to engage in conversation, apparently, the scandal at Pacific is not coming to the attention of everyone potentially affected.
Having failed to reach those patients using information obtained from Pacific, the FBI is currently seeking information "from third parties who maintained medical records for Pacific Hospital." Through that effort, the FBI hopes to send each "a victim notification.” Despite these challenges, prosecutors express confidence that the "workers’ compensation carriers that paid for surgeries have been identified and notified."
Certainly, there is confidentiality to consider. However, a subpoena or two to those companies might well produce the identities and locations of those victims. In the absence of a subpoena, those carriers might nonetheless drop a line to those injured workers directly and provide them with a few of the articles that have been published about the Pacific prosecutions. Perhaps those patients might be encouraged to come forward?
The scope of this Pacific situation is significant. Dr. Sobol has agreed to a "plea agreement" regarding the 2,800 procedures that he performed, and will "pay restitution totaling $5.2 million." This is “to disgorge defendant of the kickbacks that he received from Michael Drobot,” who is "the former owner of Pacific Hospital."
An important distinction is suggested by this statement. This is not $5.2 million to compensate the victims of the scheme. This is “to disgorge the defendant of the kickbacks that he received." That could be a misstatement. But, if true that is an average kickback of $1857.14 (5,200,000/2,800) per surgery performed by Dr. Sobol.
Allegedly, Mr. Drobot funded "the kickbacks" by profiting from another enterprise, the International Implants company. This distributed hardware, surgical implants" to Pacific Hospital. Mr. Drobot has reportedly been under investigation regarding that hardware, its manufacture, and the interesting relationship between Pacific and International.
The WorkCompCentral report in December stresses that Dr. Sobol was not part of International, "and there is no evidence that he participated in any billing fraud with respect to the medical hardware." However, in the plea deal, Dr. Sobol "has agreed" to make the restitution payment in order to return funds to the "entities who were likely over-billed for medical hardware.”
In addition, Dr. Sobol is likely to spend some time in prison following sentencing in 2018. Estimates are for a recommended prison term of 46 to 71 months. The doctor might spend close to 6 years in prison. That is interesting in light of this week's sentence of 63 months for the overseer of the entire scheme? It will be interesting to see if other medical care providers are likewise penalized for participation in this scheme.
It is positive to see the criminal justice system addressing both the provider (Drobot) and recipients (such as Sobol) of the kickbacks. It is certain that some patients may never be found. The fact is that as time passes people move, change names, and become difficult to locate. It is entirely possible that the carriers that paid these medical bills might be as frustrated in finding these victims as prosecutors and the FBI have been.
However, it seems that some effort should be directed to the attempt. These patients have been victimized by a criminal enterprise. That does not mean that any or all have been damaged. It is possible that the care delivered was absolutely the best possible, and the damage is all financial. But it is also possible that some or all of these patients would want to know of the motivations that influenced the selection of Pacific for their surgeries.
If they are due nothing beyond knowing, they still deserve to know. Hopefully, the FBI and prosecutors experience greater success in locating them, or hopefully, others with information strive to contact these patients.
