A New York City physician – known infamously for asking Beatles member George Harrison to sign a guitar on his deathbed – has recently agreed to settle a Medicare fraud lawsuit. Dr. Gil Lederman, who agreed to pay $2.35 million to settle the False Claims Act allegations, has categorized the allegations as a “legal nightmare,” and has vowed to continue the practice of medicine despite almost losing Medicare privileges as a result of the fraud investigation. The lawsuit, which was filed ten years ago by the widow of a patient treated by Dr. Lederman, alleges Dr. Lederman used his experimental cancer treatments on the decedent and thereafter sought reimbursement in violation of the Medicare guidelines at the time. As a result of her willingness to come forward, the whistleblower is expected to receive $326,250 and $175,000 toward her legal bills.
Background of case against Dr. Gil Lederman
A staple on the New York City airwaves, Dr. Lederman has been a prominent fixture in the New York oncology field for decades. From the 1990’s to the early 2000’s, Dr. Lederman worked as the director of the oncology department for Staten Island University Hospital, and often used experimental medications and treatment options for patients whose cancer did not respond to traditional treatment approaches. In fact, Dr. Lederman was integral in publicizing the hospital’s Stereotactic Body Radiosurgery program, touting its “95 percent success rate.”
According to the whistleblower’s complaint, Dr. Lederman and the hospital used deceptive and inflated advertising techniques to lure “desperate cancer patients and their loved ones in order to unjustly enrich themselves” when less expensive treatments may have been available.
Under applicable Medicare rules at the time, doctors could only invoice the government for experimental or investigative treatments – such as stereotactic body radiosurgery – in cancers occurring above the neck (e.g., brain tumors). Billing for such treatments for cancer occurring in other areas of the body was considered a violation of Medicare guidelines, thereby triggering the False Claims Act. Dr. Lederman is also accused of upcoding or miscoding certain treatments in order to maximize profits obtained from federal healthcare programs. The allegations stem from treatment of at least 300 cancer patients during the period in question.
In 2008, the hospital agreed to pay $25 million toward the overall $88.9 million settlement entered in response to claims of overbilling Medicare, Medicaid, and TRICARE patients.
Other legal troubles
The False Claims Act settlement is not the only instance of legal misfeasance faced by Dr. Lederman. He settled a $10 million legal dispute with the Harrison family regarding the aforementioned deathbed signature request in January 2004, followed by a May 2004 finding by a New York City jury that he was at least partially responsible for the death of another patient due to medical malpractice. In 2010, Dr. Lederman was again embroiled in a malpractice lawsuit filed by the estates of 20 Italian nationals claiming the decedents were lured to Staten Island University Hospital under false promises of a cure for their cancer. All 20 patients succumbed to the illness.
United States attorney Loretta Lynch remarked on the issue, stating “Providers who misrepresent their services — whether for the purpose of obtaining greater reimbursement or in an effort to conceal the fact that a treatment was deemed investigational — continue to pose a threat to Medicare, our nation’s largest insurer. In response, we will continue to vigorously pursue those providers who place their own self-interest above their obligation to accurately report the nature of the services they provide to their Medicare patients.”
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