Dermatologist Steven Wasserman will pay $26.1 million to settle False Claims Act allegations that he accepted kickbacks from a pathology laboratory and billed Medicare for medically unnecessary services, according to the Justice Department’s Feb. 11 announcement.

The settlement is the largest ever with an individual under the False Claims Act.

Wasserman, who practiced in Venice, Fla., allegedly entered into an illegal kickback arrangement in 1997 with Tampa Pathology Laboratory to increase the lab’s business, the Justice Department stated. When the doctor sent biopsy specimens for Medicare beneficiaries to the lab, the lab would return a report that made it look as if the doctor had completed the diagnostic work. He allegedly received $6 million in Medicare payments by billing the federal program for that work.

Wasserman also allegedly performed unnecessary skin surgeries called adjacent tissue transfers to obtain the reimbursement, the Justice Department stated.

The allegations resolved by the settlement were brought by a Florida pathologist who filed a whistleblower lawsuit, the Justice Department stated.

In other fraud news:

  • New Jersey doctor sentenced in kickback case. A New Jersey doctor charged with allegedly taking cash payments in exchange for his referral of Medicare and Medicaid patients to a diagnostic facility was sentenced to five months in prison Feb. 13. Dov Rand of Franklin Lakes, N.J., had pleaded guilty to one count of violating the anti-kickback statute, according to the U.S. Attorney’s Office in New Jersey. Rand was one of 13 doctors and a nurse practitioner charged with taking cash payments from Orange (N.J.) Community MRI. Rand and others took envelopes of cash in exchange for patient referrals. Orange Community MRI’s executive director also was charged in the scheme. Rand also was sentenced to five months of home confinement and fined $30,000, the U.S. Attorney’s Office stated.
  • Virginia skilled nursing facility to pay $700,000 to resolve False Claims Act allegations. Fairfax Nursing Center and its owners allegedly submitted false claims for non-reimbursable rehabilitation therapy services, the Justice Department announced Feb. 13. The center provided excessive, medically unnecessary or non-reimbursable physical, occupational and speech therapy to 37 Medicare patients between January 2007 and December 2010. In some instances, the services were performed “primarily to capture higher reimbursement rates,” the Justice Department stated.

In recovery auditor (RAC) news, RACs in regions A and C posted issues last week. See the charts below for more information.


About the Author

Karen Long is the editor of Physician Solutions for DecisionHealth and oversees products that relate to fraud and abuse and HIPAA compliance for physician offices and home health agencies, and accreditation compliance for hospitals. In her almost four years at DecisionHealth, Karen also has been the compliance editor and a reporter for Home Health Line, nation’s leading independent authority on home healthcare business, regulation and reimbursement.

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