Who should determine what medical treatment you should get? Your doctor or the insurance company?
A recent survey of 600 doctors revealed that 89% said they no longer feel they have “adequate influence” over healthcare decisions for their patients. 87% said that insurance companies often interfere with their ability to prescribe individualized treatments.
At the same time, 92% of doctors agreed that the people employed by the insurance providers are not competent to make medical decisions.
It sets up a frustrating paradigm for doctors and patients.
“On most occasions, the ‘peer reviewer’ (at the insurance provider) is unqualified to make an assessment,” said William E. Bennett Jr, Associate Professor at Indiana University School of Medicine writing in an OpEd in the Washington Post.
It makes you wonder who is really making decisions about medical care.
For uninsured patients, it’s even worse. Many patients are unable to get the medical treatment they need because of the cost. In many cases, patients may be involved in a protracted legal action — say in the case of an auto accident — but unable to get the care they need right now. Doctors and hospital administrators may be empathetic with the situation, but most of them are unable or unwilling to take the risk of providing medical care services now and waiting to get paid pending a settlement.
This leaves many patients with no recourse and forces them to deal with unnecessary pain and suffering.
Shifting the Health Paradigm
When insurance doesn’t cover the treatment that patients need to relieve the acute or chronic pain and they are unable to afford the surgery they need, it can be devastating. Suicide in patients with chronic pain is not uncommon. Those dealing with chronic pain are twice as likely to have suicidal thoughts or take their own lives, according to the National Library of Medicine.
That was the case for two patients cited in court documents during the strange case of Dr. Jeffrey Gross, a California Neurosurgeon. According to pleadings, two of his patients desperately needed spine surgery and had their worker’s comp claims denied despite repeated pleas from their doctor. Sadly, both patients took their own lives, saying they could no longer live with the pain.
After this occurred, Dr. Gross made a significant change in his practice. He opted out of workers’ comp to focus on treating patients based upon their actual medical needs, instead of fighting with insurance companies. He implemented an innovative strategy to care for patients that lacked insurance or those being denied treatment by insurance companies.
He started taking cases and sometimes performing surgery without the promise of being paid.
It was a risk. When a patient is injured in an auto accident, for example, it may take years for legal action to be completed. Even when cases are resolved, they often don’t settle with enough money to pay lawyers, hospitals, and doctors what they are owed. To make it work, everyone must often agree to a significant reduction in fees.
It’s a noble goal, but challenging for both doctors and hospitals because there’s no guarantee of payment. Even when payments do come, they are often at a significantly reduced rate. However, it allows patients to get the treatment they need now and puts doctors back in control of treatment rather than insurance companies.
One challenge that arose was that a small number of patients stuck in this situation found that even with a willing doctor, hospitals were unwilling to care for patients in the same manner. After finding that no other healthcare facility would accept these patients because of the risk and protracted collections process, many surgeons, including Dr. Gross, turned to Pacific Hospital in Long Beach.
According to court documents, Dr. Gross entered into a contract with this hospital in order to perform the necessary spine injury surgeries there, so these patients would not be turned away.
Early on, in some cases when the hospital refused to take a discount on medical procedures, Dr. Gross had to agree to further discount his professional fees to make up the difference.
Everything seemed fine. Patients got the care they desperately needed.
But then came trouble at Pacific Hospital.
Trouble at Pacific Hospital
More than 20 surgeons connected to Pacific Hospital were charged in what state officials called the state’s largest-ever worker’s comp scheme. Pacific Hospital’s former owner, Michael Drobot, was charged with conspiracy in 2014.
The US Attorney’s Office charged Drobot with paying illegal kickbacks to doctors that referred patients to his hospital for spinal surgery under worker’s comp. According to the US Attorney, $40 million was paid in illegal kickbacks, and taxpayers were cheated out of more than $500 million over a five-year period.
Most of the doctors charged as part of the worker’s comp case took plea deals.
Drobot agreed to a guilty plea in connection with the worker’s comp scheme and was sentenced to 62 months in prison. Several others also pled guilty, including former owner Dr. Faustino Bernadett who was sentenced to 15 months in federal prison.
Bernadett however, was given a reprieve. Just hours before leaving office, President Donald Trump pardoned Bernadett.
Pacific Hospital closed its doors permanently in 2013.
Years later, there are still charges being pursued. Neurosurgeon Serge Obukhoff and orthopedic surgeon Jacob Tauber are the latest doctors charged with receiving allegedly illicit payments from Pacific Hospital. The case against Obukhoff is only coming to trial this July despite charges stemming from as far back as 2008.
Neither Obukhoff nor Tauber’s attorneys commented publicly on their pending cases.
Cases Can Drag on for Years and Collect Collateral Damage
Court actions and legal filings can drag on for years. Worker’s comp insurance companies sued Drobot and nearly every doctor doing surgeries at the hospital.
This brings us back to Dr. Gross. Gross was excluded from the civil action at that time since he wasn’t performing worker’s comp surgeries. Still, the hospital countersued all of its surgeons, including Dr. Gross, to share legal costs. The lawsuit against Dr. Gross was subsequently dismissed.
Despite having no connection to this worker’s comp scheme, in January 2018 — on the eve of the five-year statute of limitations — Dr. Gross was indicted under seal.
In most other jurisdictions, health care billing allegations are handled in the civil arena. Aggressive prosecutors in the U.S. Attorney’s office took a different route by bringing allegations in the criminal realm.
Dr. Gross was charged with honest service fraud.
Honest service fraud is defined in the federal statute as “a scheme or artifice to deprive another of the intangible right of honest services.” The law’s intent was to prevent government corruption but has been increasingly applied by prosecutors across a wide range of professional service providers.
The law itself is open to interpretation. There is no legal definition of what constitutes honest services. There is no limit placed on the scope of the statute and no due process provision within the statute.
Courts have typically interpreted this statute to require three specific actions between three participants:
- Someone pays a bribe or kickback
- Someone accepts a bribe or kickback
- Someone that is harmed by the transaction
Obukhoff and Gross were accused of depriving information to patients that there was a relationship between his company and the hospital that could have affected a patient’s decision — even though patients were unable to get the needed surgery at any other hospital and often received discounted rates due to the doctors’ efforts.
In this case, prosecutors did not prove actual harm. In fact, patients benefited from surgeries and pain relief they otherwise would not have been able to receive. Prosecutors pursued an unusual loophole in the law, claiming in court filings that patients might have made different decisions about healthcare if they had known about the relationship between the doctor and the hospital.
This loophole allowed prosecutors to use a much lower burden than reasonable doubt. The claim was based on a patient potentially not knowing about an agreement between the doctor and hospital and that the patient may have made a different decision about where the surgery was to be performed. Yet, no other hospital would accept them as surgical patients.
Prosecutors, however, alleged that the contract was, in essence, a kickback.
Fighting a Federal Indictment
Fighting back against a federal indictment is all-consuming.
Prosecutors have nearly unlimited resources to pursue cases. When you’re in their sights, it’s frightening, to say the least. And, expensive.
Daniel Capen, Timothy Hunt, George William Hammer, and Lauren Papa all agreed to plead guilty to conspiracy and illegal kickback charges for their role in the worker’s compensation case.
For Dr. Gross, despite having no connection to the worker’s comp fraud, he may have felt he had no choice but to take a plea. 8 years after Pacific Hospital closed, Gross was sentenced to 15 months in prison and ordered to forfeit $622,000.
Gross and his attorney have not talked publicly about the proceedings to date. Calls to the doctor’s office were unsuccessful in reaching Gross. His attorney had no comment.
Who’s Calling the Shots in Healthcare?
The case against Pacific Hospital casted a wide net. It included hospital owners, administrators, and doctors involved in worker’s compensation fraud. It also left collateral damage for future patients that aren’t pursuing worker’s comp claims, but still need medical care.
For patients without health insurance or financial ability, they are left with less access to the medical care they need. When claims are denied, it leaves patients with little recourse except to continue to suffer.
“People think the doctor is in charge of treatment decisions, but really the insurance companies really call the shots,” said William Shernoff, an insurance bad faith litigator at Shernoff Bidart Echeverria in Beverly Hills, CA.
In some cases, it appears the government is, too.