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The United States has filed civil complaints in a federal district court in Los Angeles, under the False Claims Act against Michigan neurosurgeon Dr. Aria Sabit, spinal implant company Reliance Medical Systems, a Utah company, two Reliance distributorships – Apex Medical Technologies and Kronos Spinal Technologies, both , Florida companies – and the companies’ owners, Brett Berry, John Hoffman and Adam Pike. Reliance Medical Systems allegedly sold spinal implants in Southern California through distributorships that it controlled, including Apex Medical Technologies and Kronos Spinal Technologies. Drs. Aria Sabit and Sean Xie were physician-investors in Apex, and Drs. Gowriharan Thaiyananthan who practices neurosurgery in Orange California and Ali Mesiwala who practices in Pomona California were allegedly physician-investors in Krons. The complaints allege that Apex Medical and Kronos Spinal paid physicians, including Sabit, to induce them to use Reliance spinal implants in the surgeries they performed. The litigation also involves Ventura County neurosurgeon Moustapha Abou-Samra, M.D. and Community Memorial Health System hospital in Oxnard.

The complaints allege that Berry and Pike founded Reliance in 2006, and subsequently created more than 12 physician-owned distributorships that sold Reliance devices. Each of Reliance’s distributorships sold spinal implants ordered by their physician-owners for use in procedures the physician-owners performed on their own patients. The complaints allege that Reliance used one of its distributorships, Apex Medical, to funnel improper payments to Sabit for using Reliance spinal implants in his surgeries. According to the complaints, Sabit began using Reliance implants on his patients only after he acquired an ownership interest in Apex and started receiving payments from the sale of Reliance’s spinal implants. Apex allegedly paid Sabit $438,570 between May 2010 and July 2012, during which time Sabit used Reliance implants in approximately 90 percent of his spinal fusion surgeries. The government also alleges that these payments caused Sabit to perform medically unnecessary or excessive surgeries on certain patients who did not need the spinal implants.

The government further alleges that Reliance operated a second distributor, Kronos, in southern California, which made improper payments to two other physicians, Drs. Ali Mesiwala and Gowriharan Thaiyananthan. Allegedly, Reliance’s owners were recorded telling a potential Kronos investor that Reliance was formed as part of a plan to “get around” the federal Anti-Kickback Statute, which prohibits such improper payments, and that Reliance pays its physician-investors enough in the first month or two to “put their kids through college.”

The allegations that Sabit performed medically unnecessary or excessive surgeries were raised in a separate lawsuit filed by Dr. Cary Savitch and Dr. Gary Proffett under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The act also permits the government to intervene in the whistleblowers’ lawsuit. In this case, the government has both intervened in the whistleblowers’ medical necessity claims and filed a separate lawsuit containing kickback claims against both Sabit and the Reliance defendants.

With respect to involved Ventura County defendants, the private complaint alleges that in the spring of 2009, defendant Moustapha Abou-Samra, M.D. a Board Certified neurosurgeon and president of Ventura County Neurosurgical Associates with full privileges at Community Memorial Health System (CMH), recruited Aria Omar Sabit, M.D., a non-board certified neurosurgeon, to relocate from New Jersey to Ventura County, California to be employed by Abou-Samra’s corporation. Sabit was allegedly allowed to perform highly specialized neurosurgical operative procedures including spinal surgeries with open reduction and internal fixation, spinal fusions, laminectomies and pedicle screw implantation at CMH despite demonstrations that his surgeries were allegedly plagued with high infection rates, high return-to-surgery rates, violations of operating room protocols, failures in instrumentation, surgical mishaps, inappropriate case selection and high complication rates. Sabit had allegedly performed over 375 procedures from June 2009 to December 2010 while under provisional privileges at CMH. Some 27 patients who were injured by Sabit’s procedures brought individual lawsuits in the Superior Court of the State of California for the County of Ventura against Sabit and some of the other defendants for medical malpractice. Not all of these plaintiffs are Medicare beneficiaries. Sabit was using Apex manufactured instrumentation in many of the surgeries at CMH and that Sabit had a financial interest in Apex. Sean Xie, M.D., a neurosurgeon in Los Angeles to whom Sabit referred some of his patients with complications from Sabit’s surgeries, also had an interest in Apex.

This investigation was a coordinated effort among the Commercial Litigation Branch of the department’s Civil Division and the U.S. Department of Health and Human Services-Office of the Inspector General. The lawsuits were filed in the Central District of California (Los Angeles), and are captioned United States ex rel. Carey Savitch, M.D., and Gary Proffett, M.D. v. Aria Sabit, M.D., Moustapha Abou-Samra, M.D., and Community Memorial Health System, Case No. 13-3363, and United States v. Reliance Medical Systems, Apex Medical Technologies, Kronos Spinal Technologies, Bret Berry, John Hoffman, Adam Pike, and Aria Sabit, M.D. Case No 14-6979