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Salomon Melgen, plus payment data, put ophthalmologists in the hot seat


Last week, a Florida ophthalmologist was convicted of stealing millions from Medicare by submitting claims for misdiagnosing patients and then providing unnecessary services.

No, not that ophthalmologist; another one by the name of David Ming Pon. Prosecutors said that Pon, who practiced in Orlando and lived in a $1.6 million house in the suburbs, intentionally misdiagnosed patients with macular degeneration and then provided unnecessary laser treatments that he billed to Medicare, according to the Orlando Sentinel. In total, Pon collected $7 million in Medicare payments tied to the procedures, although prosecutors admitted that the scheme was probably even larger than the 20 cases they pursued.

If those circumstances sound awfully familiar, it's because another infamous ophthalmologist by the name of Salomon Melgen is currently facing 76 counts of healthcare fraud totaling $105 million for similar practices. Similar to Pon's case, prosecutors have accused Melgen of misdiagnosing patients with age-related macular degeneration (ARMD), which led to unnecessary laser surgeries and eye injections using the drug Lucentis.

Last time we checked in on Melgen, he had been released on bail under a strict set of conditions after prosecutors argued he was a flight risk. Last week, the Palm Beach Post reported that Melgen's trial had been postponed to next September in an effort to coordinate the other federal corruption charges that he paid Sen. Robert Menendez (D-N.J.) to call off the dogs when the feds began investigating him for $9 million in improper payments.

We won't know the verdict of either case anytime soon, since both have been pushed back to next year. However, Melgen's case--and now Pon's--point a rather bright spotlight onto the specialty, which could place other ophthalmologists in the fraud hot seat. 

Previously, ophthalmologists have been targeted for conductingunnecessary tests tied to cataract surgery, but it makes sense that investigators will be looking specifically at ARMD diagnosis and any treatment related to it. The charges against Pon and Melgen represent just two multi-million dollar fraud cases, but their similarities are indicative of a larger eforcement trend, which may have officially opened up a can of worms that the government has been eyeing for some time. (The case against Melgen has been stewing since investigators audited him back in 2009.)

Physician payment data from the Centers for Medicare & Medicaid Services indicates that ophthalmologists are among the highest-paid specialists. According to analysis by the Wall Street Journal, ophthalmologists were second only to hematology/oncology specialists when calculating the top 1 percent of Medicare billers.

The most recent data show that although Melgen was one of the highest-paid physicians by Medicare, bringing in more than $14 million in 2013, a number of other ophthalmologists weren't far behind. Fellow Floridian Alexander Eaton received just more than $12 million in 2013, up from $10 million the year before. More than $7 million of that paid for injections of Lucentis, the same drug Melgen allegedly split into multiple doses and then billed as a single dose. In comparison, Melgen received $6.7 million in payments for Lucentis injections in 2013 and $11.7 million in 2012.

Eight other ophthalmologists pulled in more than $7 million in 2013, including Derek Kunimoto, located in Phoenix, whose payments jumped nearly 250 percent from 2012. In particular, his reimbursements for Lucentis went from $500,000 to $7.3 million.

Adding more fuel to the fire, the Office of Inspector General released a report last month indicating that 4 percent of ophthalmologists demonstrated questionable billing habits linked to $171 million in potentially inappropriate Medicare payments. In the report, investigators pointed specifically to $91 million in questionable billing tied to ARMD procedures.

It's not the first time we've seen this kind of approach from fraud investigators. Cardiology has followed a similar investigative pattern: High billers draw additional scrutiny, investigators identify certain procedures that appear questionable, such as stents, and before you know it, multi-million dollar cases begin infiltrating the headlines.

You can see the same pattern emerging with ophthalmologists as the government targets high-priced procedures within the specialty. Melgen's case might be one of a kind in terms of its political fanfare, it has set a standard within his specialty, and you can be sure federal fraud investigators will be looking for the same billing patterns among other ophthalmologists. - Evan (@HealthPayer)