Federal agents recently raided Industrial Pharmacy Management LLC in Newport Beach and Pacific Hospital of Long Beach, which are companies owned by Michael D. Drobot, who is suspected of workers compensation fraud.
A sealed grand jury affidavit cleared the way for last week's searches by FBI, IRS and other government agents, according to the Los Angeles-based U.S. Attorney, who declined to discuss specifics.
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"We look forward to working with the authorities to resolve the misunderstandings that led to" the raid, Laura Salas Reyes, a hospital spokeswoman, reportedly told the Wall Street Journal. The paper reviewed court documents last year that alleged Drobot's former business partner, Paul Randall, inflated the costs of spinal implants billed to workers comp and paid kickbacks to surgeons and chiropractors.
Drobot, 68, acquired 184-bed Pacific Hospital in 1997 and shifted its focus to spine surgeries for workers comp patients. A front-page Journal article from last year identified the hospital as one of the most prolific spine-surgery facilities in California, performing 5,138 spinal fusions on workers' compensation patients and billing $533 million for them from 2001-2010--three times as much as any other hospital in the state.
Industrial Pharmacy Management dispenses medications to patients in doctors' offices.