Florida doctors challenge Medicare fraud convictions

Tampa-area physicians are believed the first in the nation to face criminal charges for laboratory arrangements.

By Tanya Albert, amednews staff. Nov. 19, 2001.

Two Florida physicians who believe that they were wrongly prosecuted for Medicare fraud are fighting back, challenging the evidence the government used against them in federal court.

St. Petersburg, Fla., family physician Michael Spuza, MD, and internist Ira Harvey Liss, MD, in late October filed papers in U.S. District Court for the Middle District of Florida asking the judge to set aside guilty verdicts reached against them in an April 2000 jury trial. The request comes in a motion filed in the trial court.

Case at a glance

The motion asks the judge to "vacate, set aside or correct" the sentence. It is separate from an earlier appeal the physicians filed with the 11th U.S. Circuit Court of Appeals.

In their court filing, the physicians say that the government held back information from them before trial.

They also charge that the government deliberately misused data during the trial to prove that they were referring patients. The doctors say the data did not accurately represent patient referrals.

At press time, the judge had not yet set a date to hear the allegations. But Dr. Spuza said he was optimistic that this precedent-setting case can be reversed.

"I hoped the truth would come out at the beginning of the case," Dr. Spuza said. "Unfortunately, we have had to wait for the truth to become available."

Drs. Spuza and Liss were each charged with and convicted of one count of conspiracy to defraud the United States and five counts each of receiving kickbacks for Medicare referrals. They both could face jail time.

What makes this Medicare fraud case unique is that experts say Tampa is the only area in the country where the government has gone after physicians associated with a laboratory that was overbilling Medicare.

Feeling their pain

The case has devastated the medical community there, said Kenneth E. Webster, executive director of the Pinellas County (Fla.) Osteopathic Medical Society. The group has publicly supported the physicians who faced criminal charges.

In all, more than a dozen Tampa, Fla., area physicians who were associated with the lab were indicted on Medicare fraud charges. After a jury convicted Drs. Spuza and Liss, the other physicians who faced similar charges accepted plea agreements rather than take their chances in court.

Some physicians ultimately closed their practices, others filed for bankruptcy.

"They [government officials] are putting fear into doctors who are trying to be good," Webster said.

He said it was upsetting for Florida physicians to see colleagues charged with crimes for business practices that appear to be legitimate.

Dr. Spuza is hoping he can change the precedent that this case sets as it currently stands.

According to court documents from the 11th U.S. Circuit Court of Appeals, Community Clinical Laboratory Inc. and its employees defrauded Medicare by paying physicians to refer their Medicare patients to the lab in return for kickbacks.

CCL created consulting agreements with physicians who served as testing review officers. These agreements allowed the doctors to authorize lab work for an individual if his or her own physician wasn't available to authorize lab work, according to court documents. Other physicians would send patients to testing review officers for lab work.

The doctors said lawyers for CCL assured them that the contract was legal and didn't violate anti-kickback laws.

Dr. Liss entered a consulting agreement where he received $1,000 a month for his services. Between November 1995 and April 1998, he received $29,000 from CCL, according to court documents. He didn't receive any other money from the company, and at trial, the government said all of the referrals made were done for legitimate medical reasons. CCL received nearly $184,000 from Medicare based on those referrals.

Dr. Spuza entered into an agreement with CCL for $600 a month, receiving $12,000 from CCL between August 1996 and April 1998. He also received more than $40,000 for office rental payments and equipment sublease payments, according to court documents.

All referrals were made for legitimate medical reasons. Medicare reimbursed CCL about $269,000 for the referrals.

The 11th U.S. Circuit Court of Appeals -- the highest court that has reviewed the case -- in September upheld the doctors' convictions of fraud and receiving Medicare kickbacks and upheld Dr. Liss' sentences. They vacated Dr. Spuza's sentences and sent his case back to the district court for resentencing because the court said Dr. Spuza wasn't guilty of billing fraud. He is scheduled to reappear in court in December.

"Fast and loose"

But with the court papers filed in October in the U.S. District Court for the Middle District of Florida, Drs. Liss and Spuza are hoping their convictions and sentences will be overturned.

"The government played very fast and loose," said Breckinridge L. Willcox, the Washington, D.C., attorney who is representing Drs. Liss and Spuza in their attempt to get the convictions set aside. "They used an exhibit that is blatantly false."

According to the court documents filed by the two men, Dr. Spuza or another physician who sent a patient to Dr. Spuza's lab station would order a standard chemistry panel that should have been billed globally as one service, but the laboratory would unbundle it and add on tests never ordered. Medicare would be billed for about a half dozen tests instead of just one, according to court documents.

When the government presented the data at the trial, they manipulated it so it looked like the doctors ordered the extra tests, court documents say.

"The numbers ... were reflective of CCL's fraudulent billing and had nothing to do with any order or referral pattern by the physicians," according to the court documents.

At press time, the United States Attorney's Office for the Middle District of Florida had not filed a court response to the physicians' accusations.

Assistant U.S. Attorney David Rhodes said it was not uncommon for defendants to try to get their convictions set aside through these types of motions. He did not have any comments on the specifics of the court papers that were filed.

The government prosecutor who originally filed the charges and tried the case is no longer with the Middle District of Florida office and did not return phone calls.

ADDITIONAL INFORMATION:

Case at a glance

United States of America v. Michael Spuza, MD, and Ira Harvey Liss, MD

Venue: United States District Court for the Middle District of Florida
At issue: Two physicians convicted of taking Medicare kickbacks are asking the court to throw out the jury verdict. The physicians say the government unfairly prosecuted them and skewed numbers to convict them. They say a laboratory they were using unbundled tests and falsely billed Medicare without their knowledge.
Potential impact: In addition to trying to clear their own names, Drs. Spuza and Liss are trying to stop their case from setting a precedent that would allow doctors to be criminally charged in cases where laboratories they were tied to overbill Medicare.