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| | Pacific Hospital in Long Beach, California, Was Served Friday With A Search Warrant By The FBI By Lonce LaMon - April 10, 2013
Pacific Hospital was served last Friday with a search warrant by Federal Agents on allegations of fraud. The Long Beach Post confirmed this information with an FBI spokesperson named Laura Emiller, who was not able to give further details as she expressed the search warrant order was sealed by the court.
The Long Beach Post stated the nature of the allegations are still unclear and that several agencies are involved in the investigation: the IRS, California Department of Labor, California Department of Insurance, USPS Inspector General’s Office and the DCIS.
Also the Long Beach Post speculated that given the number of agencies involved the incident had to be larger than an employee fraud discovered by Pacific Hospital in 2009 in which the employee obtained patients’ personal information and used it to open fraudulent telephone accounts.
In the Press Telegram of Long Beach, it was stated that the search warrant was served at around 8 am and that agents were looking through computer files. The search warrant had been signed by a U.S. District Court judge.
Adjustercom can speculate that the search could have much to do with alleged workers’ compensation fraud, as Pacific Hospital is owned by Michael Drobot who has had a long association with Paul Randall, an exploitive and opportunistic marketing magnate for spinal surgeries of questionable scruples. Twenty years ago, Randall was convicted of a felony and sentenced to a 21-month term in a federal prison for racketeering. According to the Wall Street Journal, the racketeering involved him buying wooden shipping pallets on credit and then reselling them without paying the original vendors, henceforth simply ripping them off.
The Wall Street Journal researched and ran a series of articles about questionable spinal surgeons and the practices employing them, starting around 2011. The lead writer, John Carreyrou, contacted adjustercom inquiring about one notorious spinal surgeon, Munir Uwaydah, who is now on the lam in Lebanon since the 2010 indictment for murder against his close associate, Kelly Soo Park. Ms. Park’s trial is set to begin in Downtown Los Angeles on May 13th 2013.
The Wall Street Journal article published on February 12, 2012 was specifically about Michael Drobot and Paul Randall and their association dating back most likely to the 1990s. Michael Drobot bought Pacific Hospital in 1997. Both Drobot and Randall set up and own distributorships for spinal hardware and resell the hardware to their hospitals for up to ten times the purchase price from suppliers.
Drobot and Randall target specifically workers’ compensation back surgery patients, and especially exploit monolingual Spanish laborers who speak little English. The California Workers’ Compensation Division permits hospitals to bill separately for spinal implants, as does the Medicare and Medicaid systems. But although the workers’ compensation system restricts how much a hospital can mark up its own implant cost, it had not traditionally thought to impose restrictions on distributors.
The Wall Street Journal reported that the U.S. Attorney’s office prepared a draft charge in 2011 alleging that Paul Randall conspired to pay chiropractors and physicians kickbacks of approximately $15,000 to $20,000 per spinal surgery to refer workers’ comp patients for surgeries at another Long Beach area hospital—Tri-City Regional Medical Center. It alleged that he paid the kickbacks from the profits from the inflated fees for the spinal hardware.
It would not be unreasonable to conjecture that in the FBI search of last Friday, the agents were looking for possible evidence of monetary kick-backs from Pacific Hospital to M.D. physicians and chiropractors for referring workers’ compensation spinal surgery patients.
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