Another Physician Conviction

We live here. Workers' compensation is our community, and we rise each day striving to meets its many challenges. On the best of days, this world is a difficult place. A workplace injury does not enhance our lives, it burdens us. We should never forget that it burdens more than the injured person. If you know of a child of an injured worker, make an anonymous referral to a scholarship program like Kids' Chance.
I am amazed at the many talented and dedicated people in this community. I wonder at how I ever fell into it, met so many of its fellow travelers, and learned so much. I recently spent an engaging evening with some of the best minds in it, and realized they have collectively and individually done a great deal of good over decades of immersion in workers' compensation. We collectively have much for which we should be grateful. See Florida's Hall 2021 (May 2021).
The conversation turned, as it so often does, to those who are not doing right. Workers' compensation, lamentably, also seems to draw a fair few of which we cannot be so proud. We lament it and discuss it, but it persists. That conversation drew me back to an article in late May regarding Pacific Hospital in California. I first wrote about it in Had I Known the Paul Harvey (June 2014). There are other posts, such as Fee Schedules, Reimbursement and Medical Necessity (March 2014), which reminded me this morning of David DePaolo.
The saga over the last seven years has led to some prosecutions and perhaps changes. It illustrates that there is another side of the coin. We are blessed with so many talented, dedicated, and serving people. And then, there is "the rest of the story." Pacific Hospital was involved in a referral for dollars scandal. Patients were referred there for care. Doctors had financial interest, misaligned incentives, and received payments of which their patients were unaware. One physician pled guilty and will spend a little over a year in prison. According to, the physician accepted over $600,000 "in bribes and kickbacks."
In 2020, it reported on another physician, and former hospital owner, also ordered to prison. That story recounted $1,000,000 forfeited, and a fine, in addition to the prison sentence. It characterized the overall scheme as involving "over $30 million in illegal kickback payments" and "more than $900 million in fraudulent bills." The cost of such malfeasance is on us all, but only financially. The waste is in the workers' compensation premiums that funded these people. The waste is in the price we paid for goods and services, which covered those premiums. Such malfeasance affects us all.
But, we did not each have surgery. This malfeasance profoundly affected people who retained physicians for care and treatment. They believed that these doctors would look out for them, nurture them, and guide them back to health and function. They believed, perhaps naively, that all doctors are good, their motivations pure, their intentions honorable.
In 2019 a surgeon was sentenced to 30 months in prison. In 2018 a surgeon was sentenced to 21 months. The scheme generates a story periodically. The prosecutors and legal system continue to plod along dealing with people who seem to have lost sight of the hypocratic oath: "I will remember that I do not treat a fever chart, a cancerous growth, but a sick human being, whose illness may affect the person's family and economic stability." Human beings. People. Troubled people who sought help. Doctors. Doctors who were supposed to put the interests of those patients first. 

The recent article notes that the Pacific Hospital owner engaged in conspiracy to "pay kickbacks" related to "thousands of patients." There were elements of it that were complex, involving subleasing of real estate, purchasing of accounts receivable, and other nuanced transactions. But, the point was apparently patent - "induce (doctors) to bring certain spinal surgery patients" to that hospital. There were reportedly also incentives for surgeons to utilize implant hardware from a distribution company also owned by the owner of the hospital. Allegedly, none of these financial considerations were explained to the patients. 

The scheme went on for years. Allegedly, the care and treatment of "thousands of patients" was impacted. Lives were allegedly impacted. The physician sentenced in May 2021 will spend 15 months in prison. Others have been sentenced to more, but even the hospital owner alleged to be at the center of it all was sentenced to just over 5 years ("more than $900 million in fraudulent bills.") There is no telling how many such conviction stories are still to come. But, the conspiracy reminds us that despite the multitude of great people in this community, there are a few who must be watched. And, in the process, a great many of the good and virtuous will be tainted by the untoward actions of that few. When surgery is recommended in California, do patients wonder about their doctor's financial interests and incentives? They undermine care, faith, and trust in an unfortunately increasingly cynical world.
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    About The Author

    • Judge David Langham

      David Langham is the Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims at the Division of Administrative Hearings. He has been involved in workers’ compensation for over 25 years as an attorney, an adjudicator, and administrator. He has delivered hundreds of professional lectures, published numerous articles on workers’ compensation in a variety of publications, and is a frequent blogger on Florida Workers’ Compensation Adjudication. David is a founding director of the National Association of Workers’ Compensation Judiciary and the Professional Mediation Institute, and is involved in the Southern Association of Workers’ Compensation Administrators (SAWCA) and the International Association of Industrial Accident Boards and Commissions (IAIABC). He is a vocal advocate of leveraging technology and modernizing the dispute resolution processes of workers’ compensation.

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