The former owner of a California hospital has pleaded guilty to participating in an illegal medical kickbacks conspiracy, and a medical equipment manufacturer has recalled of all of its spinal fusion hardware due to “performance failures that could cause patient harm.” The case is linked to more than two dozen lawsuits filed alleging that counterfeit screws and spinal repair hardware were implanted in unsuspecting patients undergoing spinal fusion surgery.
In February, the Department of Justice reported that Michael Drobot, a former Pacific Hospital executive, pleaded guilty to charges that he ran “a long-running health care fraud scheme that involved tens of millions of dollars in illegal kickbacks in exchange for referrals of thousands of patients who received spinal surgeries. The referrals to the hospital led to more than $500 million in bills being fraudulently submitted during last five years of the scheme, much of which was paid by the California worker’s compensation system.”
Drobot was allegedly involved in the sale of counterfeit spinal surgery hardware by Spinal Solutions, a Murrietta, California based company. In October 2014 KPCC reported that more than two dozen lawsuits have been filed against Drobot, Pacific Hospital, Riverside Community Hospital, Spinal Solutions, the Orthopedic Alliance, Crowder Machine & Tool Shop and three doctors: Jack Akmakjian, Sunny Uppal and Khalid Ahmed.
Spinal Solutions is also at the center of a 2012 lawsuit brought by patients who received spinal fusion surgery implants. The suit alleges that Spinal Solutions, the hospitals where they were treated and other doctors and medical equipment suppliers provided “counterfeit screws and rods that Defendants have knowingly implanted in hundreds, likely thousands of California workers. Plaintiffs have verified with bona fide manufacturers of the spinal hardware that the hardware used by the defendants…is counterfeit.” The lawsuit also alleges that “several of the Defendants named herein manufacture and/or knowingly utilize counterfeit screws and rods in the spinal implants sold to hospitals.”
A product liability lawsuit was also brought against Spinal Solutions in September 2012; it alleges that that the company knowingly supplied faulty spinal repair hardware.
CBS Los Angeles reports that in total, there are 32 pending lawsuits against the perpetrators of the health care fraud scheme.
According to the Center for Investigative Reporting (CIR), the mastermind behind Spinal Solutions’ counterfeiting schemes was Roger Williams, who founded the company and built it into an $18 million a year business. It isn’t clear when Spinal Solutions began selling counterfeit hardware with their other stock, but authorities have identified at least one machinist, 85-year-old William Crowder, who allegeldy manufactured screws for the company and an engraver, Ryan Zavilenski, who allegedly forged company markings on the screws. Neither man has admitted to producing the thousands of screws that plaintiffs believe Spinal Solutions sold to surgeons.
CIR reports that Williams spent money flamboyantly, following the Los Angeles Lakers all over the country, and maintaining a BMW, a Mercedes-Benz, a yacht, a private jet and a 6,300-square-foot home. Associates claim that he attracted clients with “private plane rides, generous consulting contracts and even cash,” and reported to a pilot who worked for him, “‘These doctors are greedy. They’re so greedy, you can’t believe it. All I do … I take advantage of their greed.”
At the same time, CIR found that the company’s finances and operations were in disarray. The IRS claimed that the Williamses underreported their income in 2009 and 2010, and by 2013 the business shut down because it was unable to pay $35,000 a month in debt.
Doctors who were Williams’ clients deny using substandard hardware, but CIR quotes an anonymous sale representative who claimed that he saw inferior screws: “You couldn’t ignore that they were counterfeit. It was so blatantly obvious to even the untrained eye.” The FDA began investigating Spinal Solutions in 2011, when the sales representative reported that the company was counterfeiting hardware. After an inspection, the FDA warned the company that the spinal fusion hardware that they were offering for sale was “adulterated,” and that “the methods used in, or the facilities or controls used for, their manufacture, packing, storage, or installation are not in conformity with the current good manufacturing practice requirements of the Quality System regulation found at Title 21, Code of Federal Regulations (CFR) Part 820.”
In 2013, the agency staged a Class 2 Recall of Spinal Solutions APLIF spinal hardware “because it is not supported by adequate testing and documentation to demonstrate that it meets performance or safety standards. These inadequacies might result in product performance failures that could cause patient harm due to implant breakage, movement, or inadequate sterilization.” According to the FDA’s recall database, Spinal Solutions responded by issuing a letter that patients who had undergone spinal repair surgeries using the Spinal Solutions hardware to “to discontinue use of the affected product and return [it] to the firm.” Such an action on the part of a patient would of course require at least one more spinal surgery to remove/replace the spinal hardware.
The counterfeit screws present real risks for spinal surgery patients. KQED reported that according to Richard Walker, the owner of a surgical supply firm in South Africa, they were not made of medical-grade titanium; “uneven threads showed potential for backing out or breaking” and “the laser-etched markings intended to make them look authentic could be toxic to patients.”
CBS Los Angeles spoke with one of the plaintiffs, Derika Moses, who claims she has undergone 23 surgeries on her back since 2008 as a result of the faulty hardware. Ms. Moses told them “This has been terrible, worst thing that’s ever happened to me…not knowing if the stuff still in me they couldn’t get out will one day kill me. I was left in extreme physical and mental pain as well as left with permanent disabilities and disfigurements.”