Ugly American Reality: Doctor-Managed Fraud is Out-of-Control

We thought it might be illuminating to review a handful of fraud cases we have been tracking over the past year. Here are “13 for 2013” that adequately represent how out-of-control U.S. health care scams are, on the large facility level:

1. Health Alliance of Greater Cincinnati/Christ Hospital Physician Scam Case

Health Alliance of Greater Cincinnati and The Christ Hospital in Mount Auburn, Ohio, have been fined $108,000,000 to settle claims they violated the Anti-Kickback Statute and the False Claims Act. Both health care programs were found guilty of illegally paying doctors in exchange for bringing in cardiac patients. Heart doctors were rewarded for their contributions to the hospital’s yearly financial revenues, and these physicians could earn additional income for treating patients at the facility. The government proved their kickback scheme violated the False Claims Act.

Who do YOU trust in a lab coat?

Who do YOU trust in a lab coat?

2. Tuomey Hospital Guilty verdict

In Sumter, South Carolina a federal court has convicted the Tuomey Health System, of violating the Stark Act, by providing kickbacks to 18 different doctors, for sending patients to the hospital in a “money=for-patients” scam. Tuomey was ordered in June to pay the federal government $45,000,000 and still faces a new trial on False Claims violations.

3. Los Angeles’ City of Angels Medicare fraud judgement

Intercare Health Systems, formerly doing business as Los Angeles’ City of Angels Medical Center, is paying a $16,000,000 judgment to resolve a civil lawsuit, by the United States and the state of California, for a Medicare and Medi-Cal fraud scheme, according to a U.S. Department of Justice news release. City of Angels was accused of violating the False Claims Act and Anti-Kickback Statute by paying illegal kickbacks to recruiters employed at Los Angeles homeless shelters to deliver homeless patients by ambulance to the hospital for medical treatment regardless of whether their clients in fact needed or requested such treatment.

City of Angels Hospital

City of Angels Hospital Stole $16m from Medicare & MediCal

City of Angels would then bill the Medicare and MediCal programs for a variety of medical services allegedly rendered to the homeless patients, many of which were not medically necessary.

4. 14 Hospitals found guilty in Kyphoplasty procedure scams

Fourteen hospitals in seven states have been ordered to repay the United States more than $12,000,000 to settle false claims to Medicare related to kyphoplasty procedures, performed between 2000 and 2008, according to a U.S. Department of Justice news release. The hospitals were accused of performing kyphoplasty, a procedure used to treat certain spinal fractures, as an inpatient procedure, in order to increase Medicare billings when many of the cases could have been performed on a less-costly outpatient basis. The top-paying hospitals were Ball Memorial Hospital in Muncie, Ind., which paid $1,900,000; Huntsville (Ala.) Hospital, which paid $1,992,000 and Palmetto Health in Columbia, S.C., which paid $1,860,000. Others are:

The U.S. Department of Justice reports the following hospitals will share in the restitution:

  • Plainview Hospital, Plainview, N.Y.: $2.3 million
  • North Mississippi Medical Center, Tupelo, Miss.: $1.9 million
  • Mission Hospital, Asheville, N.C.: $1.5 million
  • Wenatchee Valley Medical Center, Wenatchee, Wash.: $1.2 million
  • Community Hospital Anderson, Anderson, Ind.: $501,000
  • St. John’s Mercy Hospital, Creve Coeur, Mo.: $365,000
  • North Shore Syosset Hospital, Syosset, N.Y.: $193,000
  • Gulf Coast Hospital, Fort Myers, Fla.: $173,000
  • Lee Memorial Hospital, Fort Myers, Fla.: $160,000
  • Cape Coral Hospital, Cape Coral, Fla.: $73,000Four Florida hospitals affiliated with Adventist Health System/Sunbelt, Inc., will jointly pay $3.9 million:
  • Florida Hospital Orlando
  • Florida Hospital-Oceanside
  • Florida Hospital Fish Memorial
  • Florida Hospital Heartland Medical Center


5. Robert Wood Johnson University Hospital Hamilton Medicare fraud settlement

Robert Wood Johnson University Hospital Hamilton (N.J.) is repaying a $6,350,000  settlement in March to resolve allegations that it inflated charges to Medicare patients to obtain higher reimbursements from the federal program. Medicare provides supplemental outlier payments for cases that involve unusually high costs to providers. Two whistleblower lawsuits against the Hamilton hospital alleged it inflated charges to obtain these supplemental outlier payments for cases that were not overly costly and that should not have been eligible for outlier payments. The federal government intervened in the lawsuits in January, 2008. The whistleblowers received $1,100,000 of the settlement amount.

6. Five California Physicians charges in Medicare fraud scheme

Five doctors and six others were indicted by a grand jury in June for their roles in running an alleged $5,000,000 Medicare fraud scheme. From February. 2006 through August, 2008, doctors and staff at three clinics in Sacramento, Ca. are believed to have billed Medicare more than $5,000,000 in fraudulent claims for treating patients who were not sick. Vardges Egiazarian, MD, the apparent leader of the scam, admitted healthy patients were paid $100 per visit in exchange for allowing the clinic to bill for its services. In some cases, the clinics would bill Medicare for patients who were dead. Doctors Egiazarian and Derrick Johnson, pleaded guilty last year. Dr. Egiazarian was sentenced in November to six years in prison and was ordered to pay $1,500,000 in restitution. A grand jury extended healthcare fraud charges to five additional physicians and six others who knowingly committed healthcare fraud”

United States Attorney Benjamin B. Wagner announced today that on May 20, 2010, a federal grand jury returned a 20-count superseding indictment charging five doctors and six others with conspiracy to commit health care fraud. The defendants are as follows:

Dr. Alexander Popov, 44, of Los Angeles
Dr. Ramanathan Prakash, 63, of Northridge
Dr. Emilio Cruz III, 57, of Los Angeles
Dr. Lana Le Chabrier, 62, of Santa Barbara
Dr. Sol Teitelbaum, 82, of Los Angeles

7. Christiana Care whistleblower  claims settlement

Christiana Care Health System in Wilmington, Delaware has been ordered to pay $3,000,000 to settle claims made by a whistleblower that they paid kickbacks to nerve doctors, for sending patients to its Wilmington hospital. According to the prosecution, Christiana Care overpaid physicians at Neurology Associates for in-hospital readings of EEGs allegedly as a “reward” for referring patients to the hospital.

8. Brookhaven Memorial Hospital Medical Center Medicare fraud case

Brookhaven Memorial Hospital Medical Center, on Long Island, New York, was ordered to pay $2,900,000 to settle allegations that the hospital inflated charges to obtain supplemental payments. The U.S. Justice Department intervened in the suit and discovered the hospital defrauded Medicare by inflating its charges to Medicare patients.

New York’s Oswego Hospital Stark violations

Oswego (N.Y.) Hospital was ordered to pay $2,000,000 to the Office of Inspector General, United States Department of Health and Human Services, and the New York State Office of the Medicaid Inspector General, to settle violations of the Stark Law. Oswego Hospital voluntarily contacted HHS and the state Medicaid program in March 2008 when it was discovered that a number of the hospital’s business transactions from 2002 to 2007 may not have complied with Stark Law. The hospital has since implemented policies and procedures to ensure that all hospital transactions comply with Stark Law.

10. Former Massachusetts Hospital executive $500,000 kickback scheme

Former Beverly Hospital vice president Paul Galzerano was indicted in July in a bribery and kickback scheme that brought him nearly $500,000 in profits. Prosecutors said that Galzerano solicited and received kickbacks and bribes from contractors on a $50,000,000 expansion project.

11. Texas state representative’s Medicaid fraud scam

Texas State Representative Doctor Tara R. Rios Ybarra; Doctor Diana Woo Paparelli; and Doctor Colbert J. Glenn, were indicted in June on charges that they illegally referred Medicaid beneficiaries to a Gary Morgan Schwarz, DDS, MSD, a McAllen, Texas dentist. The three dentists were charged together on a 22-count indictment. State Sen. Rios Ybarra was charged with three of the counts, which allege that she referred Medicaid beneficiaries to Dr. Schwarz in return for 15 percent of all Medicaid payments made to him for the referred beneficiaries. Dr. Paparelli and Dr. Glenn were charged similarly with three counts of the indictment. All three defendants surrendered themselves to U.S. Marshals and each currently faces prison time and a fine of up to $25,000 for each count if convicted. In late June, Sen. Ybarra was in federal custody awaiting an initial court hearing.

Sometimes, the best care, is NO care. Use common sense

Sometimes, the best care, is NO care. Use common sense

12. Michigan Neurologist false diagnosis scam

Yasser Awaad MD, a Dearborn Michigan child neurologist, was accused in June of diagnosing patients with epilepsy, when in fact the patients were healthy, in order to increase the volume of tests he performed at Oakwood Hospital & Medical Center in Dearborn. A lawsuit by seven patients against Dr. Awaad and Oakwood accused Dr. Awaad of misdiagnosing patients because his earnings were tied to procedure volume. Patients diagnosed with epilepsy undergo regular testing to monitor their condition. The hospital denied tying Dr. Awaad’s compensation to volume.,,20446975,00.html

13. Federal intervention in lawsuit against Georgia’s Satialla Regional Medical Center

The U.S. Attorney General’s office intervened in a False Claims Act lawsuit in April after discovering that Satilla Regional Medical Center in Waycross, Georgia, and Najam Azmat, MD, were routinely submitting bills for medically substandard and unnecessary services to Medicare and Medicaid. Specifically, the complaint alleges, among other things, that the defendants submitted claims for medical procedures performed by Dr. Azmat in Satilla’s Heart Center that the doctor was not qualified to perform.

Dr Najam Azmat

Dr Najam Azmat

As a result, at least one patient died, and others were seriously injured. The complaint states that Satilla hired Najam Azmat even after learning that the hospital where he previously worked had restricted his privileges because of a high-surgical complication rate. The complaint also states that after Dr. Azmat joined the Satilla staff, the hospital management allowed him to perform endovascular procedures in the hospital’s Heart Center, even though he lacked experience in performing such procedures and did not have privileges to perform them.

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Sad to say, these 13 outrageous cases are merely 1% of the total of ongoing fraud cases continuing into the new year. They are an ugly reflection of the jaw-dropping volume of physician-generated, medical fraud in America.

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3 thoughts on “Ugly American Reality: Doctor-Managed Fraud is Out-of-Control

  1. Very good web site! Effectively written. I am wondering how I could be notified whenever you write new posts. I’ve subscribed to your feed which ought to do the trick! Have a good day!

  2. Lyn doe says:

    I was a patient of Frank Santangelo. It seemed every time I went there he would order bloodwork. Several times I told him I was not fasting and not to run a lipid panel. he still ran it. Also he always ran an h. pylori which came back negative. Well, shortly after that, I had a GI bleed with a perforated ulcer and was positive for h. pylori. I wonder if the test were even ran. Maybe they just chose any result they wanted to. I wonder.

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