Lawsuit alleges fake spinal parts used by doctors and hospitals nationwide

Update (Nov. 23, 2015): The charges against Nevada surgeon Dr. Jaswinder Grover, which included implanting fake parts into unsuspecting patients, were dismissed in October 2015 [PDF]. "These allegations were sensational and disturbing, both professionally and personally. The accusations struck at the very morality of our integrity and ethics,” Grover said in a statement earlier this month. “Understandably, we have always been concerned that such accusations could incite unnecessary anxiety and concern amongst our patients. We have never and would never compromise patient care. I look forward to moving on, focusing on our patients, and Nevada Spine Clinic's mission to provide excellence in care for patients who suffer from disorders of the spine." 

LOS ANGELES – Fifteen surgeons and 17 hospitals nationwide along with more than a dozen other people, are accused of participating in a counterfeit spinal-hardware ring that resulted in patients receiving non-FDA approved implants, according to a civil complaint obtained by America Tonight.

The document, which was filed in February in California on behalf of dozens of insurance companies, was unsealed Thursday and details a massive alleged health care fraud scheme and conspiracy involving the use and billing of fake surgical hardware to hospitals and doctors across the country.

According to the filing, owners and operators of California-based Spinal Solutions, LLC, manufactured faked spinal implants and “insidiously co-mingled fake implantable hardware with genuine” parts. The fake parts were then implanted in patients at hospitals in California, Texas, Maryland, Wisconsin and Nevada, according to the complaint.

Production of the counterfeit rods and cages began in 2007 at a machine and tool shop in Temecula, California, according to the complaint. It’s alleged the defendants – doctors, hospitals and distributors – began a five-year relationship with Spinal Solutions to market the fake parts.

It’s alleged that kickbacks were paid to surgeons who would then use the fake products in surgeries. According to the complaint, Maryland surgeon Dr. Randy Davis entered into a “sham agreement” with Spinal Solutions and was paid $458,962 in kickbacks in exchange for getting the non-FDA approved products used in surgeries at the University of Maryland's Baltimore Washington Medical Center.

Spinal Solutions couriered the counterfeit parts via private jet “to ensure” its parts would be used at the hospital, the complaint alleges. More than $1 million in sales were made to Baltimore Washington Medical Center, according to the filing, although it's unclear over what period of time. Calls to Davis were not returned. Kevin Cservek, a spokesperson for Baltimore Washington Medical Center said they have not heard about the complaint and couldn’t comment.

Nevada surgeons Jaswinder Grover and Patrick McNulty are accused of taking kickbacks in return for implanting the fake parts into unsuspecting patients at the Nevada Orthopedic & Spine Center. A private jet was also used to deliver the parts, according to the complaint. Calls to them were not returned.

Like several other doctors, Wisconsin-based surgeon Cully White is accused of entering into a "sham design and development agreement” with Spinal Solutions, which would then pay the surgeon a kickback in return of using the products. White, who has completed a prison sentence on an unrelated health care fraud conviction, allegedly implanted the hardware into unsuspecting patients at Milwaukee’s St. Francis Hospital and Aurora St. Luke’s Medical Center, before losing his medical license.

Several California surgeons are named in the complaint: Jack Akmakjian, Khalid Ahmed, Darren Bergey, Edward Kolpin, John Joseph Regan, Mitchell Cohen, Justin Paquette, Roger Shortz and Gurvinder Uppal. Dr. Paul McDonough of Texas is also a defendant. Calls to them have not been returned.

Surgeons named in the suit are also accused accepting cash, free airplane rides, meals, vacations and other forms of “entertainment” in exchange for referring patients to certain hospitals where they would get the fake parts implanted. Those hospitals are also defendants in the complaint.

Diagnostic facilities are accused of also taking kickbacks in return for false reports justifying the need for surgeries. The complaint does not name any facility.

Hospitals allegedly “turned a blind eye” to the surgeon, the vendor and products in order to submit false and misleading billings to insurance companies. Those named are located in Nevada, California, Texas, Wisconsin and Maryland.

Thousands of patients could have the non-FDA approved parts inside them, according to California spinal surgeon Scott Lederhaus, who reviewed the complaint.

“Doctors I know do 300 to 500 cases a year,” Lederhaus said. He added: “There could be thousands of screws and parts used in this situation.”

The lawsuit was not a shock to Lederhaus, who, as president of the Association for Medical Ethics, has been a watchdog regarding spinal surgeries.

“It doesn’t surprise me. This has got to end,” Lederhaus said. “The spine industry is corrupt and it needs a washing from top to bottom.”

The industry has seen significant growth in sales, going from $250 million in 1994 to $7 billion in 2009, according to Orthopedic Network News, an industry newsletter.

And there’s big money in the spinal hardware.

In a separate whistleblower lawsuit filed against Spinal Solutions, documents show big markups in its spinal hardware. Six Spinal Solution screw caps cost $2,850 but sold to a hospital for $17,370, which then turned around and charged an insurance carrier $49,260.

The chance to break the rules and tap into this lucrative industry can be tempting, Lederhaus said, adding that he thinks more than just a lawsuit is needed to fight that temptation.

“I think they should all lose their licenses and go to jail and pay heavy fines,” Lederhaus said.

Two California law firms filed the complaint – neither of which had comment. Both firms have previously filed class actions on behalf of spinal patients against Spinal Solutions and several other defendants.

The complaint unsealed Thursday asks for the establishment of a “medical monitoring fund” to cover the cost and expense of treating patients who may have had unnecessary surgeries, and who may have the fake parts implanted inside their bodies.

It may be a challenge for patients to determine if they have the counterfeit parts because of complicated paper trails tracking implants.

“There may be no way of knowing, especially if they altered the documents,” said Lederhaus. He added: “If they are having problems, some of these may need to be replaced. I think only time will tell if there is a problem with the use of these implants.”