Modesto doctors accused in major fraud case plead not guilty; patients react

April 22--Rita Ozimek of Modesto said she noticed something unusual when she was a patient at Stanislaus Orthopaedic and Sports Medicine Clinic on East Orangeburg Avenue.

She and other patients were put through the same physical therapies despite their different injuries, she said. "I did eventually go somewhere else and it was totally different and better therapy," said Ozimek, a former Gottschalks employee who suffered from tendinitis. She was once a workers compensation patient of Dr. William Pistel at Stanislaus Orthopaedic.

"Whatever they were doing was doing me no good, but workers comp was getting billed," Ozimek said.

The six local doctors charged in a $40 million fraudulent medical billing and kickback scheme were arraigned in a Southern California court Wednesday and Thursday. Each of them pleaded not guilty and were released on bail amounts that ranged from $65,000 to $200,000.

Four of the doctors -- Jonathan Louis Cohen, John Casey Jr., Mohamed Ibrahim and Pistel -- are among the physicians at Stanislaus Orthopaedic and Sports Medicine and will be prosecuted in a case set for a pretrial hearing June 30. Another Modesto physician, Robert Caton, also has a June 30 court date, and Dr. Jerome Robson is due in court July 7.

More than two dozen physicians, pharmacists, business owners and a physician assistant across California are charged with taking part in an insurance fraud scheme masterminded by a Beverly Hills couple, Christopher and Tanya Moreland King, who own medical billing and management companies Monarch Medical Group, King Medical Management and One Source Laboratories.

According to the state Insurance Commissioner and the Orange County district attorney, the scheme involved recruiting doctors and pharmacists to prescribe unnecessary treatment for workers compensation insurance patients.

The criminal allegations against some well-known doctors in Modesto have shaken patients and members of the local medical community.

Cohen, 57, is the son of the late Leonard Cohen, one of the founders of National Medical Enterprises, a leading hospital chain in the United States that later was renamed Tenet Healthcare Corp. Leonard Cohen and his wife donated $1.1 million to the Alexander Cohen Hospice House in Hughson, which is named after Leonard Cohen's father.

Jonathan Cohen and three fellow doctors at Stanislaus Orthopaedic are charged with 23 felony counts of insurance fraud, conspiracy to commit medical insurance fraud, false and fraudulent claims and kickbacks for patient referrals.

After the allegations were announced Thursday, plenty of local patients defended the physicians in comments on Facebook and remarks to The Modesto Bee.

Kathy Wright of Turlock said Cohen accepted her Obamacare insurance and performed two knee replacements for her. "I cannot say a single negative thing about them," Wright said. "Those guys are so professional. I am stunned."

Stanislaus Orthopaedic clinic on Orangeburg continued to serve patients Friday. The physicians and administrative director have not responded to requests for comment on the allegations. There are no charges against other doctors and surgeons connected with that clinic.

Cassandra Hockenson, spokeswoman for the Medical Board of California, said the agency responsible for physician licensing will look into the allegations. The board could consider a court order for the doctors to stop practicing medicine immediately, but it's too early to know if the board will pursue that action.

Hockenson said a court order to suspend their practices would require clear and certain evidence they are an immediate danger to the public. The court order, called a "PC23," carries a heavy burden of proof.

The state medical board will let the criminal case take its course and then conduct its own investigation of the fraud allegations and take appropriate action with regard to the physicians' licenses, Hockenson said.

Pistel, an osteopathic physician, has a license through the Osteopathic Medical Board of California.

The Modesto doctors are accused of illegal oral and written agreements with the Kings to prescribe a compound cream that was not FDA approved and had no known medical benefit, and for their part in prescribing and billings for unnecessary oral medication and urine drug tests.

A news release said the Kings purchased the creams from a Southern California pharmacy for $15 to $40 per tube, but workers compensation insurance carriers were billed $250 to $700 for each tube.

The Kings also are accused of a scam involving the purchase and repackaging of oral pain medication and sharing the profits with the physicians.

Authorities allege that Caton and Robson each received $175,000 in kickbacks and the four Stanislaus Orthopaedic and Sports Medicine Clinic physicians received a combined $248,000 in kickbacks.

An Orange County district attorney staff member said the six Modesto doctors received arraignment letters telling them to appear in court this week before the allegations were announced Thursday.

"This is really disturbing," said Ozimek, who had no personal knowledge of wrongdoing at the Modesto clinic, just suspicions. She said her doctor there "was arrogant and didn't want you to be challenging his orders. He didn't look you in the eye when you talked with him."

Ken Carlson: 209-578-2321, @KenCarlson16

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