Monday, February 10, 2020

California Doctor Who Bought Pacific Hospital in Long Beach Sentenced to 15 Months in Prison for Allowing Continuance of Kickback Arrangements


On January 17, 2020, Dr. Faustino Bernadett, a physician who is also the former owner of Pacific Hospital in Long Beach hospital was sentenced to 15 months in federal prison for "misprision of a felony." That is a fancy word for saying that he knew of an illegal act and did not stop it.

Dr. Bernadett's case arose out of him continuing the kickback arrangements in existence when he bought Pacific Hospital. He was ordered him to pay a $60,000 fine on top of $1 million he has already forfeited to the United States.

Dr. Bernadett, a board-certified anesthesiologist and pain management physician who retired his license last year, pleaded guilty last year to a one-count criminal information charging him with misprision of a felony.

In 2005, Dr. Bernadett purchased Pacific Hospital from Michael D. Drobot. Under the terms of the sale, Mr. Drobot guaranteed to Dr. Bernadett that 75 spinal surgeries per month would be performed at Pacific Hospital or else Mr. Drobot’s payout would be reduced by $25,000 for each surgery below that requirement.

Pacific Hospital specialized in surgeries, especially spinal and orthopedic procedures. Pacific Hospital’s owner, Michael D. Drobot, who is already serving a sentence for conspiring with doctors, chiropractors and marketers to pay kickbacks in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system.

Dr. Bernadett, who became directly involved with the hospital’s day-to-day operations by late 2007, later learned that Mr. Drobot was making illegal kickback payments to physicians in order to cause those physicians to steer spinal surgeries to Pacific Hospital. By January 2008, Mr. Bernadett had learned that Mr. Drobot concealed the illegal kickback payments by entering into various types of sham contracts – such as management agreements, collection agreements and option agreements to disguise the kickbacks.

The government alleged that instead of putting a halt to Drobot’s kickback scheme, Dr. Bernadett authorized the continued use of these sham contracts to incentivize surgical referrals to his hospital. Between January 2008 and October 2010 (when Dr. Bernadett sold his interest in Pacific Hospital back to Drobot), Pacific Hospital and related entities made more than $30 million in illicit payments to kickback recipients and performed approximately 1,400 kickback-induced spinal fusion surgeries.

Out of Pacific Hospital, 24 defendants have been charged in connection with the scheme, and 15 of them have been convicted, including Drobot and his son.

Posted by Tracy Green, Esq.



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