Medicare Fraud – If You Really Don’t Need it, We Really Don’t Want to Pay For It

06/25/2013 // Justice News Flash: Featured Column // Kathleen Scanlan // (press release)

Healthcare has come a long way in the last one hundred years. We look back at treatments for soldiers wounded in World War I a century ago and it seems downright crude. Anyone watching Downton Abbey cringed all through Season 2. We’ve obviously come a long way. However, in at least one way healthcare remains largely unchanged since then – the deference given to doctors in making the ultimate decision about the care and treatment of their patients. Generally speaking, this is a good thing. As healthcare consumers, we all want the doctors who care for us to be the ones to make the ultimate decision about what is in our best interests. However, some have used the deference to the doctor-client relationship as a blind behind which they engage in Medicare fraud. One way that doctors and other health care practitioners exploit the patient relationship and game the Medicare system is by performing procedures on patients that are not medically necessary. Exploiting the patients’ trust and risking their health, these fraudsters fleece Medicare and other government programs by billing them for illegitimate costs.

The good news is that the U.S. Department of Justice, the Department of Health and Human Services, and the FBI—often with the crucial assistance of whistleblowers —are cracking down on the unnecessary procedure racket.

A prime example is the case of Dr. Steven J. Wasserman, a dermatologist in Venice, Florida. Wasserman agreed to pay $26.1 million to settle allegations that, among other misdeeds, he performed medically unnecessary skin biopsies and conducted unnecessary skin surgeries—on thousands of patients. Over and over, when it was not required, Wasserman performed a complex and time-consuming procedure on patients called adjacent tissue transfer. The dermatologist targeted Medicare beneficiaries so that he could be reimbursed by the government. Wasserman’s settlement is the largest ever against an individual practitioner under the federal False Claims Act. The lawsuit was initiated by a pathologist who worked at a lab that was paying Wasserman kickbacks for improper referrals. As contemplated by the False Claims Act, the pathologist received a percentage of the settlement, more than $4 million, for having stepped forward with the information.

In another case, in April of this year, a renowned cardiologist and CEO of a pair of medical services companies in New Jersey agreed to pay $19 million to settle allegations that he performed unnecessary procedures stemming from false diagnoses. The doctor, Jose Katz, advertised heavily to the Spanish-speaking community and drew in a lot of Medicare and Medicaid beneficiaries that he could exploit. Katz falsely diagnosed numerous patients with coronary artery disease and subjected many of them to a procedure called external counter pulsation. This procedure put many patients at risk of injury or death.

While all fraud cases are complex and difficult to prove, these unnecessary procedure cases are particularly challenging because they require the government to, in effect, override whatever the doctor (or other professional) gave as the medical reason for the procedure that occurred and for which Medicare paid. The government obviously doesn’t want to be in the business of second-guessing health professionals’ medical decisions. But, at the same time, it can’t allow a known pattern of fraud to continue unchecked behind the curtain of “doctor decision-making.” This is yet another instance where a whistleblower is invaluable. Someone with material information about an unnecessary procedure scheme can provide evidence to the government to show this is not about medical decision-making at all; it’s about systematic efforts to use patients as a means for billing Medicare.

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