NY, NJ area cardiologist admits record $19M fraud

A cardiologist with offices in New York City and New Jersey has admitted taking part in a scheme that subjected thousands of patients to unnecessary tests and treatment and resulted in $19 million in bogus bills, the largest case of healthcare fraud ever by a practitioner in either state, authorities said.

Dr. Jose Katz, of Closter, pleaded guilty Wednesday in federal court to conspiracy to commit healthcare fraud and an unrelated count of Social Security fraud for giving his wife a yearslong no-show job, making her eligible for Social Security.

Katz, 68, was the founder and chief executive of Cardio-Med Services LLC, which had offices in Union City, Paterson and West New York, and Comprehensive Healthcare & Medical Services, which had offices in Manhattan and Queens.

The cardiologist falsely diagnosed a majority of his Medicare and Medicaid patients with coronary artery disease and debilitating and inoperable angina so he could treat them, unnecessarily, with enhanced external counterpulsation, or EECP, prosecutors said. The treatment employs the use of pneumatic cuffs to compress blood vessels in the lower limbs to increase blood flow to the heart.

Katz even prescribed the treatment in cases in which doing so subjected the patients to risk of injury or death, prosecutors said.

From 2005 through 2012, Medicare and Medicaid paid the doctor more than $15.6 million just for his EECP treatments, most of which were fraudulent, the government said.

"After years of prominence in his field, Jose Katz will now be remembered for his record-setting fraud," U.S. Attorney Paul Fishman said.

From 2006 to early 2009, Katz spent more than $6 million for advertising on Spanish-language television and radio stations, attracting hundreds of patients from New York, New Jersey and Connecticut.

Overall, the government said, he billed Medicare and Medicaid more than $70 million from 2005 through 2012.

Prosecutors said he ordered and performed essentially the same diagnostic tests for nearly all his patients. They said he also instructed his non-physician employees to order and perform tests for patients of other doctors working at his offices, even though he had not examined those patients and the other doctors had not ordered them.

Katz also was accused of ordering an unlicensed co-conspirator to treat patients. The co-conspirator, who had a medical degree from Puerto Rico but didn't have a license to practice medicine in any of the 50 states, awaits sentencing.

Katz, who is free on bail, is scheduled to be sentenced July 23. The healthcare fraud charge carries a maximum penalty of 10 years in prison.

Prosecutors said he also faces fines and will be ordered to pay restitution.



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