Former Owner of Pacific Hospital of Long Beach Sued Over Workers’ Compensation Scam

A law firm has filed two lawsuits against the former owner of Pacific Hospital of Long Beach, who was implicated in a multi-million dollar workers’ compensation scam affecting some 300 people.

AgnewBrusavich, based in Torrance, filed two suits on behalf of former patients Abraham Pena and Frank Gomez, against former hospital owner Michael Drobot Sr., his son Michael Drobot Jr., Dr. Simon Lavi and Dr. Edward Kolpin.

The civil lawsuits allege Drobot worked a scheme to steer workers’ compensation patients to Pacific Hospital for spinal fusion surgeries performed using defective screws and other surgical hardware. In total, nearly 300 patients were involved in the scandal, said Bruce Brusavich, lead attorney for Pena and Gomez.

“I filed these two lawsuits to help my clients get answers as to what was done to them and how dangerous is the hardware that was implanted in their bodies,” Brusavich said in an email.

Brusavich said his two clients were injured at work through no fault of their own and had to seek medical care through the worker’s compensation system.

“Having been used by this group of doctors and Drobot’s hospital to take advantage of the WC system, my clients are now fighting within the utilization review process to get appropriate medical care to try and undo the damage done to them, if possible,” he said. “These suits will give them some control over their medical care and bring accountability for two victims of what has been called the largest WC fraud in the history of California.”

Drobot was charged in February by the U.S. Attorney’s Office with orchestrating a multi-million dollar conspiracy from 1997 to 2013.

“The spinal pass-through, the provision of California law that allowed Pacific Hospital to fraudulently inflate the cost of the medical hardware used during spinal surgeries, was a vital component of defendant Drobot’s ability to pay kickbacks to the doctors, chiropractors, marketers, and others who had referred patients to Pacific Hospital for surgeries and other medical services,” according to the charging document filed in February by the U.S. Attorney’s Office.

Drobot also paid $28K in bribes to then-State Senator Ron Calderon to support legislation limiting changes in workers’ compensations laws, prosecutors said.

Calderon was indicted on federal charges in February for allegedly accepting bribes from Drobot, according to the U.S. Attorney’s Office.

According to the case, the hospital submitted more than $500M in fraudulent bills between 2008 and 2013, and most of that total was paid by the California workers’ compensation system.

Drobot pleaded guilty to the allegations in April to counts of conspiracy and payments of kickbacks. He faces 10 years in prison and is scheduled to be sentenced in October 2015.

“Insurance fraud is a multi-billion dollar drain on California’s economy, which results in higher insurance premiums for California businesses and consumers,” said California Insurance Commissioner Dave Jones in a statement. “The co-conspirators lined their pockets by ripping off insurance companies to the tune of hundreds of millions of dollars. This is one of the largest workers’ compensation fraud cases in the history of the Department of Insurance—our successful investigation of this complex criminal scheme underscores our commitment to bring law breakers to justice regardless of who they are.”

Drobot’s attorneys could not be reached for comment Tuesday.

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