A Michigan doctor already embroiled in a federal lawsuit over his involvement in a physician-owned device distributorship was accused of performing lumbar spinal fusion surgeries on patients without actually implanting medical devices.
Prosecutors outlined the allegations against Dr. Aria O. Sabit in a criminal complaint unsealed this week in U.S. District Court in Detroit. Sabit was arrested Monday for alleged healthcare fraud and unlawful procurement of naturalization.
Tim Lessing, a lawyer for Sabit, declined to comment Wednesday.
In some cases, patients learned that no medical devices had been implanted when seeking second opinions because they were still in pain after their surgery, according to the complaint. Sabit, meanwhile, allegedly billed Medicare, Medicaid, Blue Cross Blue Shield of Michigan and auto insurance companies for the devices.
Sabit also didn't reveal that he had been involved in healthcare fraud when he obtained U.S. citizenship in May 2013, the complaint alleges. Such a felony would make him ineligible for naturalization.
This is not Sabit's first tussle with the law over medical issues. He's also a subject of two lawsuits being pursued by the government, and he lost his medical license in California, where he used to practice, in August, according to the complaint filed this week.
One of the civil suits, originally brought by a whistle-blower, also alleges he performed unnecessary surgeries. The other involves his financial interest in a physician-owned distributorship, or POD, Apex Medical Technologies, which distributed spinal implants sold by Reliance Medical Systems.
That second lawsuit, filed by the Justice Department in September, alleges that Sabit and two other surgeons performed unnecessary surgeries because of payments Reliance made to them as investors of Apex and another distributor. The complaint also alleges Medicare claims the doctors submitted for spinal fusion surgeries using Reliance implants were tainted by kickbacks Reliance paid to the doctors through the distributors.
That case is the first publicly filed over PODs by the Justice Department under the False Claims Act. Patric Hooper, a lawyer for Reliance, argued in a court document filed in October that the case is driven by “government enforcement agencies' most recent effort to try to criminalize legitimate joint ventures involving doctors in the health care industry.”
Thomas Bulleit, a Washington, D.C.-based partner with Ropes & Gray who advises clients on PODs, said he believes the criminal complaint filed against Sabit this week could have broader implications for PODs in general. He noted the criminal complaint, like the complaint in the PODs-related case against Sabit, alleges he performed unnecessary medical procedures.
“I would say what this is likely to do is bring more scrutiny on the so called POD ownership relationships doctors have,” Bulleit said. “It will be hard to see how people don't put that together and decide, gee whiz, there's an opportunity to not only go after doctors civilly but also criminally if they are performing medically unnecessary procedures and are POD investors.”
Proponents of PODs say they lower costs by eliminating some of the expenses of device sales and also allow doctors who invest in them to collaborate with manufacturers, increasing innovation. Detractors, however, say some PODs are increasing healthcare costs by charging above-average rates for implants, and PODs may be encouraging physician-investors to perform more surgeries, including medically unnecessary ones.
HHS' Office of the Inspector General issued a fraud alert in 2013 saying that PODs create “a strong potential for improper inducements” between PODs, physician-investors, and the healthcare providers that purchase medical devices. It also published a report later that year showing that hospitals that bought devices from PODs reported that rates of spinal surgeries grew faster than at hospitals that did not contract with PODs.
Sabit is scheduled to appear in court in Detroit for a detention hearing on Monday.
Follow Lisa Schencker on Twitter: @lschencker