As a cancer specialist, Raj Sadasivan did some of his most lucrative work altering medical records with a paper cutter and scissors, some of his former employees contend.
It was those records at the Hope Cancer Institute in Kansas City, Kan., that became the key to an alleged fraud to bilk Medicare and other government programs out of millions of dollars — the largest federal health fraud case in the Kansas City area in recent years.
Sadasivan and his clinic have agreed to pay $2.9 million to settle a federal whistleblower suit alleging that for years he faked claims to inflate the doses of the costly chemotherapy drugs he gave his patients and to make it appear he was spending more time consulting with patients than he actually did.
The Department of Justice announced the settlement this week. The settlement agreement, in which Sadasivan does not admit guilt, indicates that government claims against Sadasivan and the clinic amounted to $31.7 million.
Sadasivan’s attorney, F.A. White Jr., declined to comment on what he called “an ongoing situation.” Kansas records show Sadasivan’s medical license is inactive; Sadasivan, who lives in Sibley in Jackson County, is described in the settlement agreement as now being incapacitated and disabled. The Hope Cancer Institute’s phone has been disconnected.
The alleged fraud at Hope Cancer was discovered by three of the clinic’s office workers after they found medical records for a “phantom patient,” a woman none of the workers recognized.
In 2012, the employees filed a lawsuit against Sadasivan and the clinic through a law that encourages whistleblowers to file fraud claims on behalf of the federal government by giving them a share of whatever the government collects. Under the terms of the law, the employees also gave the Department of Justice the evidence they had collected so that the government could pursue its own investigation and join in the lawsuit.
“In this case, the fraud appeared to be pretty blatant and the government intervened,” said Mark Kistler, the employees’ attorney.
The Justice Department and the Department of Health and Human Services have been stepping up efforts to combat Medicare fraud, recovering $19.2 billion over the past five years, $4.3 billion in 2013 alone.
Recent local health fraud cases include a Kansas City, Kan., personal care attendant indicted this month in connection with $587,000 in false Medicaid claims, including allegedly making home visits to patients who were in the hospital and clocking as much as 39 hours of work in a single day.
Last year, a Mission Hills doctor and her husband who ran a Kansas City clinic for fibromyalgia and other chronic diseases pleaded guilty to fraudulently billing Medicare and commercial insurance plans a total of $359,000 for office visits that occurred when she was out of town and for other bogus claims.
“Health care providers that try to make a quick buck by billing taxpayers for services never provided will instead pay a high price for their greed-fueled fraud,” Gerald T. Roy of the Health and Human Services inspector general’s office said in a written statement.
According to their lawsuit, the three Hope Cancer Institute employees watched Sadasivan use a paper cutter and tape to alter medical records before photocopying and faxing them to Medicare. Their investigation turned up altered documents for 13 patients showing that Sadasivan was billing Medicare for 1,000-milligram infusions of the intravenous chemotherapy drug Rituxan when the clinic’s medical records indicated patients were actually receiving 500 milligrams per treatment, the lawsuit said.
However, the medical record for the phantom patient showed she was receiving 1,000-milligram infusions of Rituxan. The three employees concluded that Sadasivan was cutting and pasting from the phantom patient’s file to actual patient files when Medicare asked him to document his charges, the lawsuit said.
By claiming the larger doses, the lawsuit said, Sadasivan overbilled Medicare by $145,000 for the regimen that each of the 13 patients received.
Sadasivan allegedly overbilled for other chemotherapy drugs as well, court documents said.
In addition, Sadasivan billed Medicare for being present at the clinic during the entire time patients were receiving their chemotherapy infusions, the lawsuit said. But Sadasivan spent many hours away to see patients at a hospital and to work at another Kansas City, Kan., medical practice, and was rarely there through a patient’s entire treatment, the lawsuit said.
Sadasivan also scheduled just four and a half hours per week for office hours; enough time to give the 25 to 30 patients he would see about 10 minutes each. Rather than bill Medicare for 10-minute visits, Sadasivan billed at a higher rate for more involved patient visits that typically take about 25 minutes, the lawsuit said.
Federal whistleblowers are entitled to 15 percent to 25 percent of the amount the government recovers from fraud cases, Kistler said. How much his three clients will get “remains to be determined. It’s common that there’s some negotiation.”