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Financial Fraud Law

Cardiologist Without a Heart: To Prison for Exposing Thousands of Patients to Unneeded Treatment

 A well-known cardiologist and the founder, chief executive officer, and sole owner of two large medical services companies in New Jersey and New York has been sentenced to 78 months in prison and ordered to pay $19 million in restitution for conspiring in a multi-million-dollar health care fraud scheme that, prosecutors said, subjected thousands of patients to unnecessary tests and potentially life-threatening, unneeded treatment, as well as treatment by unlicensed or untrained personnel.

Dr. Jose Katz, of Closter, New Jersey, previously pleaded guilty to an information charging him with one count of conspiracy to commit health care fraud and one count of Social Security fraud arising from a separate scheme to give his wife a “no show” job and make her eligible for Social Security benefits.

As part of his plea agreement with the government, Katz agreed that the loss amount sustained by Medicare, Medicaid, and other insurers victimized by the fraudulent billings was $19 million. U.S. Department of Health and Human Services-Office of the Inspector General and FBI records indicated that the loss amount suffered by the victims was the largest recorded in New Jersey, New York, and Connecticut for an individual practitioner convicted of health care fraud.

According to documents filed in this case and statements made in court:

Katz was the founder, CEO, and sole equity-holder of Cardio-Med Services LLC (Cardio-Med) and Comprehensive Healthcare & Medical Services LLC (Comprehensive Healthcare). From 2004 through 2012, Cardio-Med had offices in Union City, Paterson, and West New York, New Jersey, and Comprehensive Healthcare had offices in Manhattan and Queens, New York. Both Cardio-Med and Comprehensive Healthcare provided cardiology, internal medicine, and other medical services to individual patients. During that time period, Katz conspired to bill Medicare Part B, Medicaid, Empire BCBS, Aetna, and others for unnecessary tests and unnecessary procedures based on false diagnoses and for medical services rendered by unlicensed practitioners.

Between July 2006 and February 2009, Katz spent more than $6 million for advertising on Spanish-language television and radio stations. The ads attracted hundreds of patients to Cardio-Med and Comprehensive Healthcare every day. Overall, Katz was able to bill Medicare and Medicaid more than $75 million for his services from 2005 through 2012.

Over the course of the conspiracy, Katz ordered and performed essentially the same battery of diagnostic tests for nearly all the patients he treated, regardless of their symptoms. Katz also instructed his non-physician employees to order and perform diagnostic tests for patients of other doctors working at his offices, even though he had not examined those patients and the other physicians had not ordered the tests.

Most significantly, Katz admitted that he falsified patient charts with fictitious and boilerplate symptoms and falsely diagnosed a majority of his Medicare and Medicaid patients with coronary artery disease and debilitating and inoperable angina. He also admitted to making the diagnoses to justify prescribing and administering an unnecessary treatment for those patients called enhanced external counter pulsation, or EECP. Katz even prescribed EECP treatments for some patients with contraindications for the treatment, therefore subjecting those patients to a substantial risk of serious injury or death.

From 2005 through 2012, Medicare and Medicaid paid Katz more than $15.6 million just for his EECP treatments, most of which were fraudulent.

In addition, Katz ordered conspirator Mario Roncal, of Woodland Park, New Jersey—who had a medical degree from San Juan Bautista School of Medicine in San Juan, Puerto Rico, but did not have a license to practice medicine in any of the 50 states—to treat patients, knowing he was not licensed. At Katz’s direction, Roncal held himself out to fellow employees and to patients as “Dr. Roncal,” examined new patients as well as Katz’s follow-up patients, ordered diagnostic tests, diagnosed patients with medical conditions and diseases, and recommended and prescribed courses of treatment and surgery—including falsely diagnosing patients with angina and prescribing EECP treatments for those patients.

To conceal this illegal and unlicensed practice of medicine, Roncal forged Katz’s signature on paperwork associated with Roncal’s unlawful medical services, including on patient charts. During the conspiracy, Katz used his own billing numbers to bill Medicare Part B and Medicaid for the illegal services Roncal provided as though they were provided by Katz.

Roncal was indicted on March 2, 2012, for conspiracy to commit health care fraud. He entered a guilty plea on January 4, 2013, and awaits sentencing.

Katz also admitted to a Social Security fraud scheme in which, from 2005 through 2012, he kept his wife on Cardio-Med’s payroll though she performed little or no work. During the course of the scheme, Katz sent false W-2 forms for calendar years 2005 through 2011 to the U.S. Social Security Administration purportedly reflecting $1,251,604 in earnings for his wife, making her eligible for an estimated $263,000 in Social Security benefits to which she was not entitled.

In addition to the prison term and restitution, Judge Linares sentenced Katz to serve three years of supervised release.

Contact the author at smeyerow@optonline.net

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