Ortho Surgeon Sentenced to 15 Months in Prison

Jeffrey D. Gross, M.D., a neurosurgeon who resides in Dana Point, California and Las Vegas, Nevada, has been sentenced to 15 months in federal prison for conspiracy to commit honest services mail and wire fraud.

Dr. Gross pleaded guilty to the felony which stems from him taking $622,936 in bribes and kickbacks, an amount the judge ordered Dr. Gross to forfeit. The money was paid in exchange for “referring his patients to receive spinal surgeries at a corrupt Long Beach hospital.”

The corrupt Long Beach hospital is Pacific Hospital, owned by Michael Drobot. This conviction is part of a scheme involving Drobot. Per the Department of Justice press release, Drobot “conspired with doctors, chiropractors and marketers to pay kickbacks in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system.” The kickback scheme has resulted in the conviction of 15 defendants to date.

For readers unfamiliar with the scheme that, in its last five years, resulted in the submission of hundreds of millions of dollars of fraudulent medical bills, see “The Taxman Cometh for Spinal Cap Crooks.”

Dr. Gross, while operating Laguna Niguel, California-based Oasis Medical Providers Inc., participated in the scheme from 2008 to 2013. Dr. Gross and Drobot first entered into a sublease agreement for the Oasis medical space. Then, Dr. Gross entered into an option contract involving Oasis’s accounts receivable and other tangible assets. According to the Department of Justice press release, Dr. Gross “knew and understood that one purpose of the agreements was to induce him to bring certain spinal surgery patients to Pacific Hospital.”

In 2009, Dr. Gross and Pacific Hospital entered into an outsourced collections agreement. The agreement entitled Dr. Gross to receive 15% of any amounts collected related to spinal surgeries he performed at the hospital. An amendment to the agreement allowed him to be paid 10% “of the collected amount on other outpatient surgeries.” Additionally, Dr. Gross was paid $5,000 if he used hardware from a “Drobot-formed hardware distribution company” during surgeries.

In its press release, the Department of Justice reported that from 2008 to 2013, Drobot paid Dr. Gross $622,936 pursuant to these agreements. During that same time period, Dr. Gross “referred dozens of patients to Pacific Hospital for spinal surgeries based in part on payments made to him under those agreements.”