According to a
Department of Justice statement issued yesterday, a dermatologist from Venice, Florida, has agreed to
reimburse the Government $26.1 million to resolve accusations that he
made false claims to Medicare. The Government noted that the case had
set a new record as the largest ever False Claims Act recovery from a
single individual. But to me as a whistleblower lawyer, the case was especially
noteworthy and shocking because the Government was claiming that the doctor
was doing much more than overbilling and cheating; he actually was choosing
the medical care he gave to his patients – even to the extent of
surgery — solely in order to gain financially.
The DOJ accused Dr. Steven J. Wasserman, M.D., of taking kickbacks and
also performing thousands of unnecessary skin surgeries called “adjacent
tissue transfers” or “local flaps.” The breadth of that
accusation is absolutely astonishing. The doctor operated on thousands
of people who never needed surgery at all!!?? Apparently this fraud had
been going on since 1997, and obviously it had grown to absolutely astonishing
levels – both in terms of the number of patients affected and the
number of dollars fraudulently collected – with the passage of time.
The case was originally filed by a whistleblower, Alan Freedman, M.D.,
as a qui tam lawsuit under the False Claims Act. As a whistleblower, Freedman
is entitled to a percentage of what the Government got, and the Government
has announced Freedman will get $4,046,000 because he filed the suit.
Freedman had worked for a Florida clinical laboratory called Tampa Pathology
Laboratory (TPL). In his qui tam lawsuit, he told the Government and a
court in the Middle District of Florida that TPL and Wasserman had struck
a deal to increase their profits – at Medicare’s expense.
TPL wanted to increase its lab work, and Wasserman agreed to send the
lab biopsy specimens for his patients. In return, TPL allowed Dr. Wasserman
to sign the pathology report, in order to make it look as if Dr. Wasserman
had actually performed the diagnostic work of reading the report. Dr.
Wasserman then submitted claims to Medicare for pathology work that he
himself had not actually done.
DOJ also made the very creepy allegation that Dr. Wasserman had performed
unnecessary adjacent skin transfers on his patients. According to DOJ,
the surgeries were not medically necessary, and the only reason Dr. Wasserman
performed them was to make money. In an adjacent skin transfer, a doctor
cuts a flap of skin from the area right next to a skin defect (for example,
where a growth has been removed from the skin). The physician then folds
the flap of skin over and across the skin defect, and attaches it so that
it covers the defect. Doctors sometimes refer to the procedure as a “local
Seriously? That’s just gross. How could a doctor do that to his own patient?
DOJ explained that the United States had “intervened” in the
case back in 2010. Under the False Claims Act, the whistleblower –
also known as a “relator” – files the suit on behalf
of the Government. The Government has the right to “intervene”,
which essentially means to take over the case.
I guess one thing we can be glad for is that the doctor was either a great
saver or a great investor. Thank goodness the doctor still had some of
the money so that the Justice Department was able to get it back for U.S.