Spine Surgeon Convicted of Accepting $300K in Large Calif. Kickback Case

10 Mar, 2023 F.J. Thomas


Sarasota, FL (WorkersCompensation.com) – A California spine surgeon has just been convicted of federal charges stemming from one of the largest fraud cases in California history involving the owner of the decommissioned Pacific Hospital and a former Democratic California State Senator, according to a press release last week by the U.S. Attorney’s Office. 

David Payne, MD of Irvine was found guilty of one count of conspiracy, two counts of honest services wire fraud, and one count of use of an interstate facility in aid of bribery. The verdict was the result of a six-day federal jury trial in which jurors concluded that Payne accepted more than $315,000 in bribes and kickbacks in exchange for performing surgeries at Pacific Hospital, formerly located in Long Beach.

The case was part of a much larger investigation involving at least twenty-four defendants, most of whom are surgeons, and all of whom accepted money and kickbacks from Michael Drobot, owner of the now transitioned facility. Payne received $15,000 for each spine surgery her performed at the facility using implants from Drobot’s company. Payne could face up to 50 years in prison. 

Starting his career in the Navy with eventual management of the Naval Hospital in Oakland, Drobot went on to manage 28 hospitals on the east coast, including Mount Sinai Roosevelt in New York, between 1978 and 2013. He later purchased Pacific Hospital, and owned two healthcare maintenance organizations that thrived under his leadership. Under Drobot’s ownership from 1997 to 2013, Pacific Hospital was nationally recognized for their infection control protocol, earning the Certificate of Special Congressional Recognition in 2009. In 2013, the facility sold to Molina Healthcare and became College Medical Center.

It was in 2014 that investigators charged Drobot with conspiracy and paying out over $40 million in illegal kickbacks in a case totaling over $1 billion. In 2018, Drobot was found guilty and sentenced to more than 5 years in prison. According to the case, Drobot typically paid surgeons $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery, most of which were for workers compensation patients. 

Additionally investigators discovered Drobot paid out around $88,000 in bribes to former California State Senator Ronald Calderon in exchange for Calderon ensuring that the pass-through law stayed in effect. The pass-through law required the State to pay for full invoice price on implants, for which Drobot added $250 to the cost of his implants that sold through his company International Implants out of Newport Beach. 

In 2019, Drobot was again in legal trouble for violating the court’s forfeiture order when he sold his high-end luxury cars and kept the proceeds. In one case, he consigned his Aston Martin to an auction company and requested $1 million in advance proceeds be wired to his bank account, instead of paying towards the $1 billion owed for his scheme. 

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    About The Author

    • F.J. Thomas

      F.J. Thomas has worked in healthcare business for more than fifteen years in Tennessee. Her experience as a contract appeals analyst has given her an intimate grasp of the inner workings of both the provider and insurance world. Knowing first hand that the industry is constantly changing, she strives to find resources and information you can use.

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