Last April, Michael Drobot filed a 15 page third-party complaint for equitable indemnity and declaratory relief against 22 doctors, health executives, chiropractors and a lawyer. Equitable indemnity says in theory that Drobot should not have to pay the State Fund, but if it ends up that he does, then he wants others to share the blame with him and pay the damages. Thus Drobot in his indemnity lawsuit is alleging that these 22 defendants are somehow involved in what the State Fund alleges he did. The lawsuit, in essence, says that if he has to pay any money to the State Fund, they should, also. So he has in effect implicated these entities and individuals.
Following Drobot’s implication of his alleged co-conspirators, the Plaintiff in the RICO case against him, the State Compensation Insurance Fund, has now asked to file a 221 page Third Amended Complaint that asserts claims against those who were named by Drobot, and others who are similarly situated. The list of RICO defendants has now expanded to dozens of entities organized by roles such as Individual Defendants (page 21), Surgical, Pharmacy, and Administrative Defendants (page 22), Provider Defendants (page 29), Marketer Defendants (page 58), and just in case someone has been missed DOE Defendants, (page 60).
The 221 page complaint goes on to specify the “fraudulent schemes” allegedly perpetrated by each group of defendants between pages 64 and 115. If one were to write a treatise on methods to perpetrate medical fraud, these pages would be a good guide. Topics include “Lack of Licenses, Corporate Practice of Medicine, and Payment of Illegal Referral Fees” on the part of the Administrative Defendants, Individual Defendants and Provider Defendants, “Overbilling and Pricing Manipulation” on the part of the Pharmacy Defendants and some Provider Defendants, “Billing State Fund for Treatments and Services That Were the Product of Illegal Kickbacks and Referral Fees, Fraudulent Scheme to Overbill Services By Unbundling/Upcoding, Including Unbundling and Overbilling, Fraudulent Scheme re: Nurse Billing; Autologous Transfusion Billing; Duplicate Radiology Billing, Double-Billing of Prescriptions”, and more.
The SCIF alleges that it has entered into settlement agreements with some of these defendants at the WCAB which it now seeks to rescind. In this regard it pleads “State Fund’s investigation also led it to review certain settlement agreements State Fund entered with Defendants related to liens Defendants brought before the WCAB based on their billings to State Fund. State Fund was unaware of Defendants’ pattern of racketeering activity and other misconduct when it entered into the settlement agreements with the Defendants named therein.” Thus the SCIF seeks to unravel global settlement agreements it has made in the past with certain of these defendants, and recover sums that have already been paid in lien resolution agreements.
State Fund’s proposed Third Amended Complaint asserts claims directly against, among others, Dr. Faustino Bernadett, Jeffrey Catanzarite, Dr. Gerald Alexander, Dr. Jack Akmakjian, Dr. Ian Armstrong, Michael Barri, Dr. Mitchell Cohen, Alan Ivar, Edward Komberg, Dr. Randy Rosen, Dr. Lokesh Tantuwaya, Dr. Jacob Tauber, Dr. Assad Moheimani, and Jason Bernard, as well as entities associated with these individuals.
It is difficult for the SCIF to add up what all of the above cost in damages. Essentially it pleads in paragraph 398 that “Defendants have fraudulently received up to hundreds of millions of dollars from State Fund as a direct and proximate result of their unfair and unlawful practices.” RICO statutes allow treble damages and attorney fees in addition to the hundreds of millions of dollars.
If State Fund’s motion for leave to amend its complaint is denied, State Fund says it intends to file a separate complaint against the parties named in its amended complaint. It says this “request has been made with diligence – State Fund moved quickly after being served with the Third-Party Complaint to perform due diligence on the new parties, research, draft, and file its proposed Third Amended Complaint.” The motion is scheduled to be heard on June 15 in Courtroom 10D before federal judge Andrew Guilford.