N.J. cardiologist pleads guilty to $19M scheme

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 - Fraud

A New Jersey cardiologist has pleaded guilty to healthcare fraud in a scheme that allegedly bilked insurers $19 million, exposed patients to unneeded tests and treatments and involved unlicensed or untrained personnel.

Jose Katz, MD, founder, CEO and owner of two medical services in New Jersey and New York, also admitted to one charge that he gave his wife a ghost job to make her eligible for Social Security benefits.

Katz, of Closter, N.J., pleaded guilty before U.S. District Judge Jose L. Linares in New Jersey federal court to one count of conspiracy to commit healthcare fraud and one count of Social Security fraud. As part of his plea agreement, Katz agreed that the loss amount by Medicare, Medicaid and other insurers was $19 million.

The loss is the largest recorded in New Jersey, New York and Connecticut for an individual practitioner convicted of healthcare fraud, according to U.S. Department of Health and Human Services, Office of Inspector General and FBI records.

U.S. Attorney Paul J. Fishman said that Katz instructed unlicensed and unqualified providers to treat patients, ordered unnecessary tests and provided potentially harmful treatments.

The events involved Katz’s companies, Cardio-Med Services and Comprehensive Healthcare & Medical Services, which provide cardiology, internal medicine and other medical services to patients. According to court documents, Katz conspired between 2004 and 2012 to bill Medicare Part B, Medicaid, Empire Blue Cross Blue Shield, Aetna and others for unnecessary tests and unnecessary procedures based on false diagnoses and for medical services by unlicensed practitioners. He allegedly billed Medicare and Medicaid more than $70 million for services from 2005 through 2012.

Court documents claim that Katz ordered and performed the same diagnostic tests for most patients he treated, regardless of their symptoms. Katz also instructed 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.

He also admitted to falsifying patient charts, falsely diagnosing Medicare and Medicaid patients with coronary artery disease and angina and making diagnoses to justify prescribing and administering unnecessary treatments.

From 2005 through 2012, Medicare and Medicaid paid Katz more than $15.6 million for what court documents declare were fraudulent treatments.

Mario Roncal, of Woodland Park, N.J., previously was charged as a conspirator in the scheme with treating patients, knowing he was not licensed. He entered a guilty plea on January 4, and awaits sentencing.

In the Social Security fraud scheme, Katz allegedly sent false W-2 forms for calendar years 2005 through 2011 to the U.S. Social Security Administration for his wife, who was on Cardio-Med’s payroll despite performing little or no work. The filings made her eligible for $263,000 in Social Security benefits.

Katz faces a maximum potential prison term of 10 years for the conspiracy charge and five years for Social Security fraud. Each count also carries a maximum $250,000 fine or twice the gross gain or loss from the offense.

Sentencing is scheduled for July 23.