Physician Got $439K in Kickbacks for $5K 'Investment,' Feds Say

June 18, 2015

Aria Sabit, MD, was a newly minted spinal surgeon in Southern California who got very busy following a business proposition in April 2010.

During the prior 8 months, Dr Sabit had performed 64 instrumented spinal fusion surgeries — installing various screws, plates, rods, and other pieces of hardware — at Community Memorial Hospital, in Ventura, according to the US Department of Justice (DOJ). In the 8 months that followed, he doubled his pace, performing 130 of these procedures at the hospital.

What happened in between, the DOJ said, was a lucrative offer from Apex Medical Technologies, which distributes spinal surgery instrumentation. Invest $5000 in the company, use its hardware, and share in the revenue. They'd be fat enough, potential investors were told, "to put their kids through college."

Dr Sabit, a refugee from Afghanistan, performed his end of the bargain, according to the DOJ. He used Apex products in more than 90% of his subsequent spinal fusion surgeries after having used none before the investment offer.

In turn, Apex made good on its profit sharing promise. From May 2010 to December 2010, when Dr Sabit resigned from the hospital staff under a cloud, the company paid him $264,957, the DOJ said. The payments continued through June 2012, while he was practicing in Michigan. In all, Dr Sabit made $438,570 on his $5000 investment.

What some might call profit sharing, however, amounts to illegal kickbacks in the eyes of the DOJ. Last month, the 41-year-old Dr Sabit pleaded guilty in a federal district court in Detroit, Michigan, to conspiring to receive kickbacks from Apex. The payments "incentivized" him to operate when he didn't have to, according to the plea agreement that he signed (and initialled on every page). Dr Sabit also pleaded guilty to billing Medicare, Medicaid, and private insurers for spinal fusion surgeries that omitted the documented hardware and to illegally prescribing a painkiller.

A triumphant DOJ press release said he had stolen $11 million in insurance proceeds.

The husband and father of three children — and a naturalized US citizen — faces a likely prison term of 9 to 11 years when he is sentenced later this year.

To all of this, the federal government could say, "I told you so."

For years, the Department of Health and Human Services (HHS) has warned about the conflict of interest posed by joint partnerships between physicians and companies that depend on them for referrals or new business in general. Such warnings have extended to physician-owned distributorships (PODs) such as Apex, which the HHS Office of Inspector General (OIG) called "inherently suspect" under the government's antikickback laws in a March 2013 study. Later that year, OIG reported that the number of spinal surgeries grows at a faster clip at hospitals that purchase instrumentation from PODs compared with hospitals that do not buy from PODs.

Dr Sabit's story, however, is about more than a shady business deal. From a clinical perspective, his 18-month tenure at Community Memorial in Ventura gave rise to nearly 30 malpractice suits, according to federal court records.

Marc Anderson, an attorney who represented plaintiffs in seven malpractice cases against Dr Sabit, recalls taking his deposition. The surgeon was cordial, polite, and "very self-confident," Anderson told Medscape Medical News.

"He was a surgeon who was proud of his work," Anderson said. "He didn't think he did anything wrong.

"He had an explanation for everything."

In September 2013, the California medical board went after Dr Sabit's license, which he surrendered the following year. The board cited him with gross negligence in patient care and "dishonest and corrupt acts."

His case also shows the medical profession at its honest and moral best, or so it would seem. Two physicians in Ventura took note of Dr Sabit’s frenetic pace in the operating room, his botched surgeries, and his financial ties to Apex and reported it all to the feds. They later filed a qui tam, or whistle-blower suit, in a federal district court in California accusing Dr Sabit and others of Medicare fraud under the False Claims Act. Such suits allow private citizens to take civil action against alleged fraudsters and share in any monetary recovery.

"Reckless Haste"

Dr Sabit came to the United States in 1984 when he was 10 years old. After earning an MD at Virginia Commonwealth University School of Medicine and completing a neurosurgery residency at the University of Medicine and Dentistry of New Jersey, he joined a practice headed by Moustapha Abou-Samra, MD, in Ventura in early 2009. Community Memorial granted him temporary privileges in June 2009 and then provisional privileges 2 months later. However, Dr Sabit never advanced beyond that status, noted Cary Savitch, MD, and Gary Proffett, MD, the two physicians who filed the whistle- blower suit.

"From the initial procedures he performed at [Community Memorial] operating rooms, it was obvious to the operating room and nursing staff that Sabit was either not qualified or not competent to perform these neurosurgical procedures, or he was reckless in his surgical technique," they said in their lawsuit. Dr Savitch is an infectious disease specialist at Community Memorial, and Dr Proffett treated many of Dr Sabit's patients in nursing homes, tertiary care facilities, and rehabilitation centers.

In February 2010, Dr Sabit began talking to Apex Medical Technologies about an investment stake, according to the DOJ. Apex was one of a dozen-odd PODs formed and controlled by the owners of a spinal instrumentation company called Reliance Medical Systems. Dr Sabit started to install Apex screws, rods, and other hardware in spinal fusion patients that April during an evaluation period that let the company monitor his surgical volume and use of its products. In May 2010, Dr Sabit gave Apex $5000 for a 20% share of the company.

Although physicians investing in device companies makes the HHS suspicious, the practice is allowed provided certain "safe harbor" requirements are met. One requirement is that payments to investors must be "directly proportional to the amount of capital investment." In a civil lawsuit filed in California against Reliance, Apex, a sister POD, Dr Sabit, and several others Apex investors, the DOJ said Dr Sabit's relationship with Apex flunked the proportionality test, given a minimal investment with a fantastic return of 8614% in roughly 2 years.

Reliance expected physician-investors such as Dr Sabit to convince the hospitals where they operated to buy spinal implant devices from Apex and other affiliated PODs, said federal prosecutors. Should a hospital balk, physicians were supposed to threaten to take their surgery patients elsewhere. At the same time, their investment stake in PODs was on the hush-hush, said prosecutors. In his guilty plea in the criminal case in the federal district court in Detroit, Dr Sabit admitted to concealing his relationship with Apex from the hospitals where he operated.

Dr Savitch and Dr Proffett said that they found out the truth about the kickbacks, however, as well as Dr Sabit's quality of care, which they characterized over and over again as "poor."

"His surgeries were plagued with high infection rates, high return-to-surgery rates, violations of operating room protocols, failures in instrumentation, surgical mishaps, inappropriate case selection, high complication rates, poor medical record documentation and poor patient management,” they said in their lawsuit. They faulted him for "poor surgical site preparation" and said he lacked "the appropriate skill regarding wound care and...was not able to recognize and treat complications when they arose."

The kickback arrangement with Apex, Dr Savitch and Dr Proffett further alleged, had clinical implications because it motivated Dr Sabit to recommend spinal fusion surgery when it wasn’t necessary and to install more instrumentation than required.

And then there was the matter of Dr. Sabit's blistering surgical pace. The whistle-blower suit described his operative rate as "extraordinarily high," and the speed of each procedure as "very rapid" considering its nature and complexity.

"Sabit's reckless haste and overinstrumentation was employed for the purpose of profit," said Dr Savitch and Dr Proffett.

In September 2014, the DOJ intervened as a plaintiff in the whistle-blower suit, as was its prerogative, and made more specific allegations about Dr Sabit's track record as a surgeon. It said that a peer review committee at Community Memorial Hospital found that Dr Sabit was responsible for roughly 71% of the hospital’s unplanned returns to surgery since his arrival. His surgical infection rate was about twice the national average.

Meanwhile, back in 2010, the two whistle-blowing physicians said they repeatedly shared their concerns with Community Memorial but that the hospital took no meaningful action for 15 months, "during which patients were seriously injured and a number...died from complications." They then took their story to the FBI and other federal agencies.

"Meaningful action" finally came on December 3, 2010, when Community Memorial and its medical staff suspended Dr Sabit "to protect the life or well-being of patients," according to court records. Dr Abou-Samra fired him the same day. The hospital's executive committee lifted the suspension several days later, but Dr Sabit nevertheless resigned from the medical staff on December 21 of that year.

While he was there, however, Dr Sabit was a financial rainmaker. The surgeries he performed between April 1, 2010, and December 31, 2010 — while he was using Apex instrumentation — produced $8.4 million in Medicare revenue for Community Memorial Hospital, according to the DOJ in its civil litigation against Dr Sabit. Apex, meanwhile, received $1.4 million from the hospital for the hardware that Dr Sabit used.

Dr Sabit's take also was considerable. In addition to profit-sharing payments of $264,957 from Apex in 2010, he received roughly $809,000 from Medicare for spinal surgeries performed between April 1 and December 31 of that year, the DOJ said.

Where Were the Screws?

In March 2011, Dr Sabit moved to suburban Detroit, obtained staff privileges at local hospitals, and resumed his surgical practice. His plea agreement stated that he curtailed his use of Apex instrumentation while in Michigan, with hospitals and surgery centers there either slow — or refusing — to pay for the products.

The federal civil suit against Reliance and its POD owners charts this decline. In the last 8 months of 2010, while he was practicing in California, Dr Sabit received on average about $33,000 per month from Apex. In Michigan, from April 2011 through June 2012, his monthly payments averaged only about $10,700.

The owners of Apex and Reliance had a way to deal with a physician-investor who was slack about using their products. They would exercise their contractual right to repurchase the physician's investment stake, according to the DOJ. When Dr Sabit stopped using Apex hardware altogether in August 2012, the Apex co-conspirators "expelled" him.

While Dr Sabit used more hardware than needed with some of his spinal fusion patients, he left out the hardware altogether with other patients, even though his medical charts and billing indicated otherwise, according to his criminal guilty plea. Instead, he implanted dowels that were fashioned from human bone. These patients continued to experience back pain, and subsequent diagnostic imaging found no metal screws and the like, only bone dowels. This hocus-pocus continued through November 2014, Dr Sabit's guilty plea stated.

It was that November when his medical career collapsed. Federal agents arrested him the day before Thanksgiving. He appeared in court later that day in leg shackles and handcuffs, the Detroit News reported. It described him as dishevelled, unshaven, and wearing jeans and a white T-shirt.

Dr Sabit was initially charged in the federal district court in Detroit with faking instrumented spinal fusion surgeries and defrauding Medicare, Medicaid, and private insurers in the process. In a complicated move, a criminal case charging him with the kickback conspiracy was filed in a federal district court in Los Angeles on May 22, 2015, and immediately combined that case with the case in Michigan. That same day, Dr Sabit signed his guilty plea. He is scheduled to be sentenced on September 15.

He has been behind bars since his arrest in November 2014. A federal judge in Detroit deemed Dr Sabit a flight risk, in part because he had entertained ambitions of going into the oil and mining business in his native Afghanistan, where he claimed to be politically well connected.

"My first cousin is the Minister of Finance," he once emailed a business associate, according to court records. "My other cousin is the head of the central bank. My uncle is the Speaker of the Lower House. My

father is a very influential politician.

"My point is that we have very significant pull in the government."

Once-in-a-Lifetime String of Malpractice Suits

Dr Sabit's legal battles aren't quite over yet.

According to the plea agreement, the DOJ and Dr Sabit intend to settle the two federal civil suits that involve him. One of those represents the government's intervention in the whistle-blower case filed by Dr Proffett and Dr Savitch. The two physicians named Community Memorial Health System, the parent company of Dr Sabit's old hospital, and his former employer, Dr Abou-Samra, as defendants along with Dr Sabit. However, the DOJ's intervention lawsuit named Dr Sabit as the sole defendant and omitted the other parties. A DOJ spokesperson told Medscape Medical News that the government could intervene against the other original defendants later on "for good cause."

Neither Community Memorial Health System nor Dr Abou-Samra responded to repeated requests for an interview.

Meanwhile, the whistle-blower suit filed by Dr Proffett and Dr Savitch remains in limbo, by all accounts. The two physicians would have a right to seek a share of a civil settlement "if and when" one is reached, the DOJ spokesperson said.

David Campbell, an attorney for Dr Proffett and Dr Savitch, told Medscape Medical News that his clients won't know what to expect until Dr Sabit is sentenced.

"It's out of our control," said Campbell. "Until the judge drops the gavel, it's not final."

Then there is the federal civil case against Reliance, Apex, Dr Sabit, and three other Apex owners, two of whom are listed as Reliance owners as well. In a court filing last September, these defendants called the federal fraud charges "meritless" and "reckless." There was no scheme, they said, for Apex to pay kickbacks to physician-investors such as Dr Sabit in exchange for their use of company hardware.

"Obviously DOJ is asking the court to presume that doctors are motivated primarily by money and that their integrity may be purchased for the right price," the defendants' brief stated.

Back in April, a federal district judge in California put this civil case on hold to allow the DOJ to complete its criminal investigation of the so-called Reliance defendants. The companies unsuccessfully argued for the civil case to proceed so that they could clear their name.

"We have yet to have a forum where we can tell our side of the story," Patric Hooper, an attorney for the Reliance defendants, told Medscape Medical News.

Hooper said Dr Sabit's guilty plea in May came as a complete surprise to his clients. As a defendant who has "flipped," Dr Sabit is now cooperating with prosecutors to build a criminal case against his clients, Hooper said. Such cooperation could mean a lighter sentence.

"He told some tales about Apex," Hooper said, referring to the statements in Dr Sabit's guilty plea about a kickback conspiracy. "We believe none of that is true, and we have documentation that would refute those allegations.

"We intend to fight them either civilly or criminally."

On another legal front, almost all of the nearly 30 malpractice cases against Dr Sabit in California have been resolved without going to trial, lawyers involved in the litigation told Medscape Medical News. Many of the patients who needed a second surgery or extensive antibiotic treatment for infections after Dr Sabit operated on them "never were the same," said Marc Anderson, a plaintiffs' attorney in seven of the cases.

Anderson marvels at how many times Dr Sabit was sued in California after practicing there for less than 2 years.

"An obstetrician-gynecologist might get sued three times in his career," Anderson said. "That’s not an unusual number, especially for a high-risk field.

To have more than 20 cases in a county the size of Ventura in 18 months is incredible.

"It's something I’ll never see in my career again."

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