Medicare millions flowed to doctors charged with fraud

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Doctors who have been charged with Medicare fraud over the last 16 months were paid $17 million of taxpayer money in 2012, according to an analysis by The Hill.

A majority of the Medicare reimbursements went to Detroit-area Dr. Farid Fata, who took home more than $10 million from Medicare in 2012. 

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Fata is accused of submitting false claims and giving chemotherapy and other cancer treatments to patients who did not need them. He is currently in jail and has pleaded not guilty to charges against him, according to reports. 

Seventeen of the 28 doctors The Hill looked at practiced in Michigan and took home almost $13.3 million in 2012. The Justice Department has conducted a number of Medicare fraud stings in Michigan in recent years, charging 24 doctors in the state since January 2013.

The Hill analyzed data made available Wednesday by the Centers for Medicare and Medicaid Services (CMS) in a landmark release that for the first time showed exactly how much is being paid to specific physicians in the program.

The CMS provided a detailed account of how $77 billion was spent in Medicare in 2012, and several news outlets converted the findings into user-friendly databases where physicians were searchable by name. 

Consumer groups had pushed for the release of information and expressed hope that regulators will work their way backward from alleged fraud cases to develop better strategies to fight improper payments.

Physician advocates had fought the data release, arguing the numbers would mislead consumers and bring criticism on innocent doctors. 

Records analyzed by The Hill show that alleged cases of Medicare fraud can involve relatively small margins. 

For example, a surgeon in New York, Syed Ahmed, was reimbursed $2.4 million by Medicare in 2012. He billed Medicare for nearly $27 million that year and stands accused of $85 million in fraudulent billing over a three-year period. Ahmed, who is currently in jail, has pleaded not guilty, according to his lawyer. 

The Justice and Health and Human Services departments have trumpeted their recent healthcare fraud prevention and enforcement efforts. In a joint report released earlier this year, the agencies said the U.S. recovered $4 billion due to those efforts in 2013 and more than $8 for every $1 it spent on healthcare fraud investigations over the last three years.

But Dan Mendelson, CEO of consulting firm Avalere Health, said the CMS is way behind the private sector when it comes to preventing bad payments. He gave the example of banks calling customers when their credit cards are used in another state. 

“Those tools are completely accessible to the federal government in the case of Medicare,” Mendelson said. “CMS just hasn’t adopted them … This release underscores the importance of preventative analytic programs for Medicare payments.”

The Department of Justice charged 38 doctors with Medicare fraud between January 2013 and March 2014, but there was no record of 10 of them receiving Medicare reimbursements in 2012.

Miami Beach’s notorious “Rock Doc,” Christopher Gregory Wayne, was charged late last year for billings submitted in 2008, but he left that practice shortly thereafter.

The bid for greater transparency in Medicare billing is part of the Affordable Care Act and a move to heighten awareness among consumers and insurers about what the program pays doctors.

Most of the initial analysis of the CMS data focused on providers who earned substantially more than their peers, indicating the potential for waste, fraud or abuse in the eyes of critics. 

One Florida ophthalmologist, Salomon Melgen, was paid $21 million in 2012, or 64 times the average for doctors in his field, records show. The reimbursements primarily compensated Melgen for Lucentis, a $2,000 per dose drug that treats macular degeneration in the elderly. 

A representative for Melgen, who is under federal investigation and has made headlines for his cozy relationship with Sen. Robert Menendez (D-N.J.), said the data amounted to the doctor seeing 15 patients a day, or the average for a busy practice that spans four locations. 

“At all times, Dr. Melgen billed in conformity with Medicare rules,” said Melgen attorney and former Medicare fraud prosecutor Kirk Ogrosky in a statement. Ogrosky is a Washington-based partner at Arnold & Porter. 

“While the amounts in the CMS data release appear large, the vast majority reflects the cost of drugs. The facts are that doctors receive six percent above what they pay for drugs, the amount billed by physicians is set by law, and drug companies set the price of drugs, not doctors,” Ogrosky said. 

Attorneys for several others accused of fraud echoed the same sentiment. 

Ahmed’s lawyer, Douglas Nadjari of Ruskin Moscou Faltischek in Uniondale, N.Y., said no one should assume wrongdoing because of the difference between what his client billed Medicare and what his client received.

“The government pays what the fee schedule allows,” Nadjari said. “You can bill $27 million for one procedure, but Medicare is still going to pay you what it’s allowed to.” 

A lawyer for Fata did not answer a request for comment. 

Families USA Executive Director Ron Pollack said the data will be helpful for both consumers and policymakers as they confront rising healthcare costs.

“The first step in thinking about waste, as well as more serious problems like fraud and abuse, is to have good data. So this is a first and important step toward transparency,” Pollack said.

Mendelson urged anyone looking at the data to understand the caveats involved. There are “all sorts of reasons” a healthcare provider might receive markedly high payments, he said. 

“If they treat very sick patients or have very large offices,” he said. “It’s important not to jump to conclusions.”

— Updated at 8:33 p.m.

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