Long Beach Medicare Fraud Update: Lincare Pays 5.25 Million to Resolve False Claims Act Case 

By  //  October 25, 2018

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The Long Beach Pacific Hospital Medicare fraud is the largest workers’ compensation scheme in the history of the state of California.

The Long Beach Pacific Hospital Medicare fraud is the largest workers’ compensation scheme in the history of the state of California. The fraud was fronted by the former owner of the now-closed hospital, Dr. Michael D. Drobot, who orchestrated a scheme that netted about $580 million worth of kickbacks.

Drobot admitted to paying medical professionals in order for them to refer patients (who were to undergo spinal surgery) to his hospital.

These patients who underwent spinal surgeries had inflated billings of $580 million that were submitted to both federal and state workers’ compensation authorities. The scheme had involved over 150 insurance companies.

Dr. Michael Drobot pleaded guilty to charges of conspiracy and the payment of kickbacks relative to a federal health care program. These charges could land him a decade in federal prison.

It was even found that Dr. Drobot paid $28,000 in bribes to California Senator Ron Calderon in order to delay or to limit the changes that were made to the workers’ compensation laws in respect to the reimbursement charges that are accorded to medical professionals who perform spinal surgeries.

Dr. Drobot also paid kickbacks of $15,000 and $10,000 for each lumbar fusion and cervical fusion surgery performed. Dr. Drobot has since been brought to justice through the Federal False Claims Act.

What is the Federal False Claims Act?

The FCA is the most effective countermeasure against the commision of fraud against the federal government. The FCA was first created during the Civil War in order to combat fraud committed against the federal government by any unscrupulous person who supplied the Union Army with substandard essentials.

The law was initially ineffective for its purpose up until it gained its true fangs when it was amended in 1986 wherein a qui tam provision was added to the law.

According to Lawsuit Legal, this provision accorded “relators” (one who relates to the government the fraud being committed against the government) with both added importance as well as a significant reward (in the same manner that real estate agents get a commission for the successful sale of a house). Under the qui tam provisions, a relator is apt to be rewarded between 15 to 25 percent of the proceeds from a qui tam lawsuit.

Update:

As a result of Dr. Drobots willingness to cooperate with authorities, several medical professionals as well as medical suppliers, have been indicted in relation to the Long Beach Pacific Hospital scheme.

As of August 17, 2018, the Department of Justice has announced that Lincare, one of the largest suppliers of oxygen and numerous respiratory therapy services in the country, has paid a sum total of $5.25 million in order to resolve False Claims Act and Anti-Kickback Statute allegations.

This is indeed progress, especially since the events of last month when 3 more doctors who were connected to the Long Beach Pacific Hospital fraud scheme were charged with conspiracy, honest services fraud, and with using an interstate facility to aid unlawful activities.

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