MD-POD Relationships Under Investigation and Focus of Mounting Litigation

pharmaceutical_owned_distrubutors_financial_gainsIn a stunning example of a physician owned distributorship (POD) gone wrong, one physician has been sued nearly 30 times and at least one patient has died.

As we’ve previously written, Dr. Aria Sabit, a Michigan spine surgeon, has been the focus of a broader review of the PODs, according to The Wall Street Journal previously reported that, a “person familiar with the matter” said Sabit continued to use Apex implants despite the apparent conflict of interest; Sabit is a shareholder with Apex Medical Technologies.

Meanwhile, Lillian Kaulback, 68 at the time of her death, was referred to Sabit when he was in Ventura, California, for her severe back pain, according to CBS News. Her son, who was at the appointment with her, told CBS News that the office was only manned by Sabit—no secretary or medical assistant was present; Sabit did not conduct a physical exam; and Sabit told Kaulback she needed surgery within just three-to-five minutes after meeting her, despite her complication issues (diabetes, being overweight). The three-level spine fusion she underwent involved screwing four of her vertebrae.

Within days, she developed a life-threatening infection. “The independent team asked me not once, but twice to pull the plug on her,” her son told “CBS This Morning.” “I said ‘no.'” She never walked again and, ultimately died in May of 2011, just seven months after the procedure. Kaulback’s son is suing the doctor and among the issues are the Apex screws and rods used.

Apex are relatively unknown spinal devices and, in under one year, Sabit’s use of the devices grew to the extent that hospital staffers began to take notice. In fact, in some cases, results associated with Apex and Sabit, were horrific and deadly, according to the Journal. Since, Sabit has found himself at the center of a number of investigations conducted by the California Medical Board, the U.S. Food and Drug Administration (FDA), and the Department of Justice (DOJ) as well as more than two-dozen medical malpractice lawsuits, 12 involving the Apex, according to the Journal. The Justice Department probe began when it learned that Sabit had an ownership interest in the firm that distributed and made money on the Apex, according to those familiar with the matter, the Journal wrote.

According to CBS News, Apex Medical Technologies LLC has no public phone number, website, or owner listing and, according to “CBS This Morning,” Sabit is an owner with a 20 percent stake in the company. From May 2010 to August 2012, Sabit’s share of the profit was about $330,000.

Kaulback’s case is only one of the 28 brought against Sabit in the 17 months he worked at Ventura’s Community Memorial Hospital. In the seven months prior to Sabit becoming an owner in the Apex POD, he conducted 115 spine surgeries; in the seven months following, he conducted 154, CBS News reported.

PODs, which have been created in least 20 states, have garnered the attention of a government watchdog group, which issued an alert over fraud risks associated with the controversial entities. Most recently, the deals surgeons make with these PODs have prompted a DOJ probe. In a PODs arrangement, physicians purchase ownership interests in the medical device distributor and share in the profits PODs make through sales to hospitals.

Drs. Scott Lederhaus and Charles Rosen, both on the board of the Association for Medical Ethics and both spine surgeons, they say they’ve seen many patients harmed by PODs, citing the intense financial incentive to perform unnecessary procedures. “The guys that are being egregious could make, just from putting in the implants … perhaps in excess of a half a million dollars each, per year,” Lederhaus told “CBS This Morning.” Rosen added, “Doctors are not supposed to be salesmen.”

The California Medical Board accused Sabit of committing dishonest, corrupt, and negligent acts tied to five of his patients. The Board charged Sabit of performing unnecessary procedures on three of those patients and of continually documenting procedures that he never performed. The Board will determine if Sabit’s state license will be revoked following a hearing. Sabit is practicing in Lapeer, Michigan, CBS News reported.

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