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California DIR and Division of Workers’ Compensation Suspend Michael R. Drobot, Steven Howser for Fraud
By Lonce LaMon with the California DIR - May 18, 2017

The California Department of Industrial Relations (DIR) and its Division of Workers’ Compensation (DWC) have suspended two more medical providers from participating in California’s workers’ compensation system. DWC Acting Administrative Director George Parisotto issued Orders of Suspension for the following providers, who had not appealed suspension notices issued in mid-April:

  • Michael R. Drobot operated California Pharmacy Management and Industrial Pharmacy Management, companies that participated in a scheme to illegally refer patients for spinal surgeries, which led to more than $580 million in fraudulent bills. He pled guilty in U.S. District Court last year to conspiracy and illegal kickback charges. He is the son of Michael D. Drobot, the hospital operator who also pled guilty for his part in the kickback scheme. DWC suspended the senior Drobot on April 28th.

California Pharmacy Management (CPM) and its successor, Industrial Pharmacy Management (IPM) were important players in the scheme. Both companies set up and managed what were essentially mini-pharmacies within doctors’ offices.  CPM and IPM bought and dispensed medications that the doctors prescribed to their patients, and these businesses received a portion of the money reimbursed by insurance companies for the medications. Drobot Senior, along with others at CPM and IPM, often agreed to increase the doctors’ shares of the insurance claims in return for those doctors’ referral of patients to Pacific Hospital. In many cases, for doctors who made such referrals, the conspirators “advanced” payments from CPM and IPM before the companies had collected any money for the medications or even prescribed them, and often simply wrote off these payments as losses when collections fell short. Drobot Junior was involved in these companies for over a decade, first as the manager of CPM, and then as co-owner and manager of IPM.

In the Information, it reads:  In furtherance of the conspiracy and in order to effect the objects thereof, Defendant committed or caused the commission of the following overt act in the Southern District of California and elsewhere:  On August 27, 2014, Defendant gave Dr. I $8,000 in payment for the patients Dr. I had referred to Defendant's company, Post Surgical Rehab Specialists, Inc., for durable medical equipment from January through July 2014. All in violation of Title 18, United States Code, Section 371.

AB 1244 (Gray and Daly) requires the DWC Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system in cases in which one or more of the following is true:

  • The provider has been convicted of a crime involving fraud or abuse of the Medi-Cal or Medicare programs or the workers’ compensation system, fraud or abuse of a patient, or related types of misconduct;
  • The provider has been suspended due to fraud or abuse from the Medicare or Medicaid (including Medi-Cal) programs; or
  • The provider’s license or certificate to provide health care has been surrendered or revoked.

There are currently 25 providers suspended from California’s workers’ compensation system.

Dr. Thomas Heric, of Santa Monica, was suspended on May 5th 2017 following the rejection of his arguments from his appeal and the sustaining of his suspension in mid-April.  Michael D. Drobot (Drobot Senior) will be firmly suspended at present month’s end if he does not appeal or if his appeal if rejected and his late April suspension sustained., Lonce LaMon, journalist; and the DWC Newsline of the California Department of Industrial Relations.

Follow Lonce on Twitter at: @loncelamon  


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