5 charged in $580M medical kickback scheme

Five people have been charged with kickback scheme related to billing that costs the government and insurance companies to the tune of $580 million.

Doctors and others benefited from this scam by referring patients to two Southern California hospitals.

The said kickback scam for referring patients to hospitals has been in practice for over eight years. Over $100,000 kickbacks changed hands for expanding Hollywood tax credits and benefiting Pacific Hospital.

The five accused include a former hospital executive and two surgeons. Two have already accepted to plead guilty.

The health care scam involving millions of dollars and kickbacks have become a major burden on the US health care system. The huge kickbacks for referrals are also increasing the insurance costs for patients.

According to a statement from the US Attorney's office, the kickback scam involving millions of dollars has resulted in benefiting doctors, chiropractors and others, who referred patients to two Southern California hospitals for spinal surgeries.

These two hospitals billed thousands of operations to California's workers' compensation system, The US Department of Labor and Worker's compensation insurers. 

California Insurance Commissioner Dave Jones said in a statement that workers were "treated like livestock by doctors and hospitals, which paid or accepted kickbacks and bribes in exchange for referrals."

The illegal kickbacks for referrals to hospitals have been taking place for several years. The two hospitals- Pacific Hospital of Long Beach and Tri-City Regional Medical Center in Hawaiian Gardens- billed thousands of operations during the past eight years.

Thousands of patients were referred to Pacific Hospital where they had spinal surgeries resulting over $5.80 million billing that's fraudulently submitted as part of the scheme.

Michael D Drobot, Pacific Hospital's former owner, pleaded guilty for taking part in the scam. He has also acknowledged giving kickbacks to State Senator Ron Calderon, who pleaded not guilty to bribery, fraud and money laundering charges that carry a maximum sentence of 396 years in federal prison.

The US Attorney found out that 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.

Over $100,000 kickbacks changed hands for expanding Hollywood tax credits and benefit Pacific Hospital, which was beneficiary from a provision of workers' compensation laws, according to the Associated Press.

The health care scam and kickbacks have become a major burden on the US health care system and it's also pushing up the insurance costs for everyone. Such practice corrupts the relationship between doctor and patient, thus polluting medical profession. 

"The members of this scheme treated injured workers and their spines as commodities, to be traded away to the highest bidder. This investigation should send a message to the entire industry: patients are not for sale", US Attorney Eileen M Decker said.