Ex-owner of Long Beach Pacific Hospital gets 15 months for healthcare fraud
A doctor from Rolling Hills who formerly owned Long Beach Pacific Hospital was sentenced Friday to 15 months in prison for his part in a years-long healthcare scheme that has been referred to as the largest in state history.
Faustino Bernadett, 65, authorized false contracts concealing more than $30 million in illegal kickback payments to physicians who directed spinal surgeries to the Long Beach hospital, the Department of Justice said Friday. The scheme ended in more than $900 million in fake bills being submitted, officials said, mostly bilking the state’s workers’ compensation system.
Bernadett bought the now-defunct Pacific Hospital in 2005 from Michael Drobot, who conspired with physicians and marketers to pay kickbacks in return for thousands of surgery referrals. The hospital was bought by a healthcare chain in 2013 and renamed.
“Under the terms of the sale,” officials said, “Drobot guaranteed to Bernadett that 75 spinal surgeries per month would be performed at Pacific Hospital or else Drobot’s payout would be reduced by $25,000 for each surgery below that requirement.”
When Bernadett learned of the scheme in January 2008, officials said, instead of ending it he went ahead and authorized Drobot to continue with the sham contracts to incentivize surgical referrals to the hospital. Between then and October 2010 – when Bernadett sold his interest in Pacific Hospital back to Drobot – the hospital and those involved made “more than $30 million in illicit payments to kickback recipients and performed approximately 1,400 kickback-induced spinal fusion surgeries.”
Drobot, 75, of Corona Del Mar oversaw the scheme for 15 years. He’s serving five years in prison after pleading guilty in 2014 for conspiracy and paying illegal kickbacks.
In August, Bernadett pleaded guilty to one count of concealing a felony. He was an anesthesiologist and pain-management physician who retired his license last year. Bernadett is among 15 who have been convicted for the scheme.
“Kickbacks corrupt the doctor-patient relationship and … incentivize doctors to put their financial interests before patients’ best interests,” prosecutors said. “More so than other Pacific Hospital executives, (Bernadett) understands the sacred nature of the doctor-patient relationship, because he is a physician himself.”
In addition to 15 months of prison time, a federal judge in Santa Ana ordered Bernadett to pay a $60,000 fine on top of the $1 million he’s already paid to the United States.
Some patients have said their surgeries might not have been needed, with others saying the hardware used for their surgeries may have been counterfeit.