A prominent New Jersey cardiologist pled guilty to conspiracy to commit healthcare fraud this week, admitting he scammed the government for $19 million in false claims and ran up a $6 million Spanish advertising campaign bill in the process. Officials are calling it “the largest health care scam in New Jersey or New York.’’
Dr. Jose Katz, co-founder and CEO of Cardio-Med Services LLC and Comprehensive Healthcare & Medical Services, operated a cardiology and internal medicine empire. Katz had clinics in Union City, Paterson, West New York, Manhattan and Queens according to official court documents.
In addition to the $19 million Medicare fraud, Katz spent an amazing $6 million on an all-Spanish radio and TV advertising campaign in an effort to usher more patients into his Cardio-Med and Comprehensive Healthcare offices. Unfortunately for Katz, his direct marketing campaign to the Spanish community backfired, creating more business than he could effectively manage. Once the ads began running, they reportedly, “attracted hundreds of patients to the Katz companies every day,” according to court documents.
Is there a Doctor in the House?
With the Spanish ad campaign bringing in so many new patients, Katz was forced to take on some additional help for his practice. He hired Mario Roncal, a graduate of Puerto Rico’s San Juan Bautista School of Medicine. While hiring another doctor may seem like a good idea, the problem was that Roncal is not a licensed physician in New Jersey or New York, as the San Juan Bautista School of Medicine is not an accredited medical institution.
Roncal was a willing participant in Katz’s Medicare fraud scheme, pretending to be a legitimate physician at each of the Katz clinics. He allegedly went so far as to forge Dr. Katz’s signature on hundreds of patient records and insurance forms, in addition to ordering medically unnecessary tests and procedures. For his participation in the fraudulent activity, Roncal pleaded guilty to Conspiracy to Bill Medicare for Unlicensed Physician’s Services earlier this year.
The Medicare Fraud Details
Dr. Katz allegedly took advantage of his new Spanish clientele by falsely diagnosing most of his Medicare and Medicaid patients with coronary artery disease or debilitating angina. Once given a phony medical diagnosis, Katz then ordered thousands of unnecessary blood tests and compression treatments for his patients.
The reason for Katz purposely misdiagnosing his patients with coronary artery disease or debilitating and inoperable angina? Patients who receive this type of diagnosis can be treated with expensive enhanced external counterpulsation (EECP) therapy. EECP therapy is a costly procedure that is Medicare approved for treating patients with “disabling stable angina that was inoperable or for which surgery would be highly risky.” One EECP treatment usually takes about an hour to complete and an entire course of EECP therapy typically requires the patient to receive no less than 35 treatments.
When performed on those who are properly diagnosed, EECP therapy can decrease symptoms of inadequate blood flow to the heart and improve the heart’s ability to pump blood. EECP therapy uses pneumatic cuffs to constrict the blood vessels of lower extremities, which, in turn, increases the blood flow to the heart.
According to the official court documents, “Katz prescribed EECP treatments for patients even though some of those patients had contraindications for the treatment. From in or about 2005, through in or about 2012, Medicare and Medicaid paid the Katz Companies more than approximately $15.6 million for EECP treatments.”
Additional Fraudulent Activity
Dr. Katz allegedly furthered his Medicare fraud scheme by ordering a “basic profile blood panel” test for each and every patient who attended the five Katz clinics. The panel is essentially a package of 30 individual tests designed to evaluate all of the major organs in the body. According to prosecutors, Katz ordered these panels “irrespective of the reason the patient had sought medical care, whether the examining physician had ordered the panel, or whether the tests on the panel were reasonable and necessary for the treatment or diagnosis of the patient.” Katz also forced his non-physician employees to order and perform tests on the patients of various other doctors working within his clinics.
In federal court, Dr. Katz plead guilty to conspiracy to commit health care fraud and one unrelated count of Social Security fraud. Katz apparently created a fake job for his wife, Anke Katz, at one of his clinics. By inventing this one year no-show position, Anke effectively became eligible to receive Social Security benefits. She obtained almost $1.3 million in fake salary earnings from the Katz clinics.
Katz faces up to 10 years in prison for the Medicare fraud charge and an additional 5 years for the Social Security fraud. He also faces a maximum $250,000 fine for each count of fraud. Katz will be required to pay back all of the proceeds that he received as a result of the Medicare fraud. Dr. Katz and his wife will also have to forfeit a New Jersey home and any property linked to the Medicare fraud scheme, according to court documents.