A well-known cardiologist in New Jersey pleaded guilty today to charges that he bilked the Medicare and Social Security systems of more than $19 million, racking up a $6 million advertising bill in the process.
Dr. Jose Katz, 68, was co-founder and CEO of a pair of cardiology and internal medicine businesses in New Jersey and New York, according to court documents.
Katz admitted to drumming up more business than he could personally handle via a more than $6 million Spanish-language advertising campaign, "which attracted hundreds of patients to the Katz companies every day," according to the documents. He used the influx of patients to order unnecessary blood tests and compression treatments for faked diagnoses of angina. Katz also created a no-show job for Katz’s wife that generated nearly $1.3 million in faked earnings.
To satisfy demand generated by the ad campaign, Katz hired Mario Roncal, a graduate of Puerto Rico’s San Juan Bautista School of Medicine but not a licensed physician in either New Jersey or New York because the school is not accredited. Roncal, who pleaded guilty earlier this year, masqueraded as a physician at the Katz clinics, going to far as to forge Katz’s signature in patient records and insurance forms and ordering unneeded tests and procedures.
Katz created a 30-test "basic profile blood panel" and ordered it for every patient in his 5 clinics "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," according to the documents. Katz admitted to falsifying patients’ records "with fictitious and boilerplate symptoms" to "falsely diagnose a majority of his Medicare and Medicaid patients with angina to justify prescribing unnecessary [enhanced external counterpulsation] treatments for those patients," according to the documents.
EECP treatments involve cyclical compression of the lower trunk and legs, typically via 35 1-hour treatments. But Medicare will cover the treatments only for diagnoses of "disabling stable angina that was inoperable or for which surgery would be highly risky."
"In fact, defendant Katz prescribed EECP treatments for patients even though some of those patients had contraindications for the treatment," according to the documents. "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.
The government insurance programs alone paid out $70 million to the Katz clinics from 2005 to 2012, including $15.6 million for medically unnecessary EECP treatments. Katz admitted to $19.3 million worth of fraudulent Medicare and Medicaid income.
Katz faces 10 years in prison on the Medicare fraud charge and another 5 years on the Social Security fraud charge, plus a maximum $250,000 fine for each count. He must also pay back any proceeds from the fraud and he and his wife, Anke Katz, will forfeit their Closter, N.J., home and any other property that can be traced to income from the fraud scheme, according to court documents. Katz is scheduled for sentencing July 23 in the U.S. District Court for New Jersey and is free on $200,000 bail.