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A prominent Boca Raton, Fla., radiologist has been accused of large-scale Medicare fraud in a whistleblower suit filed by a physician he once employed. The lawsuit, filed in federal court in West Palm Beach, Fla., accuses Dr. Fred L. Steinberg of bilking Medicare using a complex billing scheme that overcharged the government on a variety of imaging procedures. The lawsuit, which was unsealed last month, does not specify the amount of the alleged fraud. Dr. David A. Clayman claims in the 2002 lawsuit that Steinberg, his former boss, fired him when he complained about Steinberg’s billing practices. Steinberg’s lawyer, Peter Prieto, a partner at Holland & Knight’s Miami office, said Clayman’s claims are “without merit.” The lawsuit brought under the federal False Claims Act was filed, as the law requires, on behalf of the federal government and was sealed while investigators looked into the allegations. U.S. District Judge Donald M. Middlebrooks lifted the seal June 1 after the government notified the court that it had not yet decided whether to join the action. The False Claims Act, known as the Lincoln Law, was enacted during the Civil War when Union army suppliers were routinely cheating the federal government by supplying shoddy war materials. Its purpose was to encourage people with knowledge of fraud to come forward and share in the government’s recovery of damages. Updated in 1986, the law allows treble damages plus civil penalties that can range from $5,000 to $11,000 per incident, with the whistle-blower eligible to receive as much as 30 percent. That puts Clayman in line for almost one-third of any recovery The suit covers the period from October 1999 to July 2002 when Clayman worked for Steinberg, who operates an array of imaging businesses in southern Palm Beach County. The Northwestern University-trained doctor is medical director of University MRI & Diagnostic Imaging Centers. The suit claims Steinberg’s businesses grossed about $33 million in that time. About 40 percent of Steinberg’s billings were Medicare claims, said Clayman’s attorney, Peter W. Chatfield, a partner at Washington-based Phillips and Cohen. The law firm specializes in false-claims suits. The federal government is looking into Clayman’s allegations, according to Chatfield, but has refrained from formally entering the case, Chatfield said. The government retains the option of joining the suit at any time, Chatfield said. The government would become the lead plaintiff if it intervened. “We’ve been interested that neither Dr. Steinberg nor his companies are targets of any investigation,” Prieto said. Steinberg “systematically defrauded Medicare by claiming reimbursement for many thousands of radiology procedures that were not performed as ordered, were not medically necessary as performed, provided little if any diagnostic information or for which the billing codes were manipulated,” the suit says. Clayman also alleges Steinberg paid illegal kickbacks to referring physicians and that Clayman’s firing in July 2002 “constitutes unlawful retaliation and discrimination against him for lawful acts he took in furtherance of an action under the False Claims Act.” The suit alleges three forms of fraud: � Upcoding, or billing for services more complex and expensive than the services actually performed. � Billing for unnecessary services. � Creating a complicated system of improper payments to referring physicians, which the suit called “unlawful kickback arrangements.” The suit alleges that Steinberg entered into below-market leases with other doctors as a method of paying for patient referrals. The suit cites incidents in which Steinberg paid other physicians and their businesses in what the suit alleges were violations of the Medicare and Medicaid Fraud and Abuse Act enacted in 1977. That law bans payment for patient referrals in any form, including “the transfer of anything of value, in cash or in-kind, directly or indirectly, covertly or overtly.” The suit alleges Steinberg also violated a provision of the Social Security Act known as the Stark Statute. It bars doctors from making or taking referrals when the physicians or their immediate family members have a financial relationship. Clayman’s suit alleges Steinberg took referrals from physicians who received direct payment from Steinberg’s businesses as compensation for medical directorships paying them as much as $6,000 per month. The heart of the fraud accusations deal with the practice of upcoding, or inflated claims. Using patients’ initials rather their names, the suit claims Steinberg’s businesses routinely billed for radiological scans of the hips and pelvis when only a scan of the pelvis was requested or required. The suit alleged that brain scans were improperly divided into scans of several sections of the brain that had “no clinical validity” and were billed separately to inflate Medicare reimbursement. Initially, a number of referring physicians and their corporations were named in the suit. Those defendants were dropped when Steinberg agreed to drop a dismissal motion and Clayman was allowed to amend the complaint. A trial date is to be set in January by U.S. Magistrate Judge Linnea R. Johnson.

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