Ortho Surgeon Convicted in ‘Spinal Cap’ Scheme

Another conviction has been handed down in California’s infamous “Spinal Cap” kickback scheme. A federal jury has found orthopedic surgeon David Hobart Payne, M.D. guilty for accepting over $315,000 in bribes and kickbacks.

According to the Department of Justice (DOJ) press release, after a six-day jury trial Dr. Payne was found guilty of “one count of conspiracy, two counts of honest services wire fraud, and one count of use of an interstate facility in aid of bribery.” The convictions related to his role in performing spinal surgeries at Long Beach, California-based Pacific Hospital which was owned by Michael Drobot. The hospital was sold in 2013, the same year it was searched by law enforcement.

If the name Drobot sounds familiar it means that you have been following Spinal Cap legacy, which involves immense workers’ compensation insurance fraud. Drobot, per the DOJ press release, “conspired with doctors, chiropractors, and marketers to pay kickbacks and bribes in return for the referral of patients to Pacific Hospital for spinal surgeries and other medical services.” The California workers’ compensation system was the primary payor of the services and spinal surgeries. During the last five years of the scheme, over “$500 million in medical bills for spinal surgeries involving kickbacks” were submitted.

According to the DOJ press release, Drobot paid Dr. Payne bribes of “up to $15,000 for each spinal surgery that he performed at Pacific Hospital.” The highest bribe payments were for surgeries that Dr. Payne performed with implants from one of Drobot’s companies. Drobot and Dr. Payne attempted to mask the bribes as “payments for marketing services and fees based on a sham contract.”

Dr. Payne’s sentencing is scheduled for June 2, 2023. He faces a statutory maximum sentence of 50 years in federal prison.

To this date, 24 people have been convicted for their roles in the Spinal Cap scheme. For OTW’s previous coverage of the Spinal Cap scheme, see “Accountant Sentenced in Spine Surgery Kickback Scheme,” “Ortho Surgeon Sentenced To 15 Months in Prison,” “The Taxman Cometh for Spinal Cap Crooks,” “Spine Surgeons Pleading Guilty in Spinal Cap Investigation,” and “More Cases Emerge From FBI’s California ‘Spinal Cap’ Investigation.”