California Doctor & Ex-Hospital Owner Sentenced to 15 Months for Workers’ Comp Fraud

A doctor and former owner of the now-shuttered Long Beach Pacific Hospital was sentenced to 15 months in prison on January 17 for partaking in massive healthcare fraud. The conspiracy, which went on for 15 years, resulted in more than $900 million in fraudulent medical bills being submitted in a kickback scheme, primarily to California's workers’ compensation system. The scheme is being referred to as the largest in California’s history.

What Happened?

Dr. Faustino Bernadett, 65, was sentenced to 15 months in jail and ordered to pay a $60,000 fine—on top of the $1 million he had already forfeited to the United States—for his involvement in a medical kickback scheme. A kickback is a type of negotiated bribery in which a commission is paid to the bribe-taker in exchange for services rendered.

The kickback scheme in question took place at Long Beach Pacific Hospital, which is now College Medical Center. The hospital specialized in surgeries, particularly orthopedic and spinal procedures. The owner of the hospital prior to Bernadett, Michael Drobot, began making illegal kickback payments to physicians in order to encourage them to send spinal surgery patients to Long Beach Pacific Hospital back in the 1990s.

In 2005, Bernadett purchased the hospital from Drobot—in January 2008, he discovered Drobot’s scheme. When Bernadett learned Drobot was hiding the illegal kickback payments by entering into different types of sham contracts—such as management agreements, collection agreements, and option agreements—he allowed it to continue. Between 2008 and 2010, Bernadett authorized fake contracts that concealed over $30 million in illegal kickback payments to physicians who sent spinal surgeries to his hospital.

“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.” Some of the former spinal surgery patients who were encouraged to have procedures done at Long Beach Pacific Hospital have said their surgeries may have been unnecessary.

Bernadett, an anesthesiologist and pain management physician who retired his license in 2019, pleaded guilty last August. Drobot is currently serving a five-year-long prison sentence.

If you or a loved one would like to file a workers’ compensation claim, contact Ufkes & Bright. Our trusted team of Santa Ana workers’ compensation attorneys can fight to help you receive fair compensation for your injuries and pain and suffering. Contact us today to set up your free case evaluation.