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Providers guilty of comp fraud face lien proceedings

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The California Department of Industrial Relations’ Division of Workers’ Compensation has scheduled lien consolidation proceedings in August for three suspended providers who pleaded guilty to charges in a comp scheme.

The scheme illegally referred thousands of patients for spinal surgeries and generated $580 million in fraudulent billings over a 15-year period, according to the California Department of Insurance.

Michael D. Drobot, Michael R. Drobot and Dr. Philip A. Sobol have about 13,000 liens combined, which have been consolidated in the workers compensation system pending further determination, according to a press release issued by the comp division on Thursday.

Michael D. Drobot, former CEO and owner of Pacific Hospital of Long Beach, pleaded guilty for his role in a scheme to illegally refer patients for spinal surgeries and was suspended from participating in the California workers comp system by the division on April 28.

His son, Michael R. Drobot, who operated the California Pharmacy Management and Industrial Pharmacy Management companies that also participated in the kickback scheme, pleaded guilty last year to conspiracy and illegal kickback charges and was suspended May 15.

Dr. Sobol, an orthopedic surgeon in Los Angeles, was suspended in May based on a criminal conviction involving fraud and abuse of the workers comp system. He pleaded guilty for participating in the kickback scheme at Pacific Hospital, illegally referring thousands of his patients for spinal surgeries. 

When suspension is due to conviction of a covered crime, California’s A.B. 1244 law provides there is a presumption that all the provider’s liens to be adjudicated in the special lien proceeding arise from the conduct subjecting the provider to suspension and that payment is not due and should not be made on those liens. Lien claimants do not have the right to payment unless they rebut that presumption by a preponderance of the evidence.