Former NJ doctor sentenced for $19M billing fraud

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NEWARK, N.J. (AP) - The patients, most of whom were on Medicaid and Medicare, came into the medical offices of Jose Katz for checkups and consultations. The vast majority would leave with false diagnoses of coronary artery disease and debilitating angina and orders to undergo unnecessary tests.

Katz was sentenced Wednesday to 6 1/2 years in federal prison for fraudulently diagnosing patients with heart ailments and ordering them to undergo tests, defrauding Medicare, Medicaid and private insurers of $19 million.

Katz, once a prominent medical doctor with offices in northern New Jersey and New York City, pleaded guilty in April. He perpetrated a medical fraud so vast that "it boggles the mind," said Judge Jose L. Linares of U.S. District Court in Newark. Officials said it was the largest case of health care fraud ever by a practitioner in either state. Katz has lost his medical license.

Katz, 69, of Closter, N.J., spent more than two decades as a professor at Columbia University. Prosecutors said he would diagnose patients with heart conditions and order them to undergo a battery of tests, all of which he billed to the government or insurance companies.

Most patients were unnecessarily treated with enhanced external counterpulsation, or EECP, where electrodes are applied to a patient's chest and cuffs are wrapped around the lower limbs. The cuffs compress blood vessels to increase blood flow to the heart. Prosecutors said people with the potential for injury or death were subject to the tests, but lawyers said no one had any adverse reactions and no patients were harmed.

Prosecutors said Katz was able to bill Medicare and Medicaid more than $75 million from 2005 to 2012. He was paid $15.6 million for the mostly false EECP tests.

Katz, who also has a Ph.D. in physics, said he set up his practice after retiring from Columbia to help the underserved Hispanic population of New York and New Jersey. Prosecutors said he spent nearly $6 million in advertising, bringing in thousands of patients.

Patients were "herded in like cattle and subjected to an astonishing number of diagnostic tests, regardless of why they came to the doctor," said Assistant U.S. Attorney Scott B. McBride. "It was a mill."

A tearful Katz, slight and bespectacled, read a lengthy statement to Linares apologizing for what he did. Katz said he didn't accumulate any wealth and put all the money back into the practice. All he wanted, he said, was to help patients. Hundreds of colleagues and friends wrote letters on Katz's behalf, his attorney said. Dozens of supporters packed the courtroom.

"I didn't do it for money for myself," he said. "I wasn't thinking properly."

Katz said he was in over his head when it came to billing and running the sprawling businesses, Cardio-Med Services LLC, which had three offices in New Jersey, and Comprehensive Healthcare and Medical Services, which had two offices in New York City.

Though meek, Katz's statement was at times defiant, chastising prosecutors for relying on testimony from disgruntled employees and defending the medical use of EECP tests.

Katz was also accused of using a co-conspirator who had a medical degree but not a valid licenses to diagnose patients, forge Katz's signature and use his billing codes.

Katz also acknowledged defrauding social security from 2005 to 2012, when he kept his wife on the company's payroll, submitting false W-2 forms showing she made more than $1.2 million. The false forms made her eligible for $263,000 in fraudulent social security funds.

Katz was not ordered held. He must report to prison Jan. 13.

"It's very difficult for him to accept," said Katz's lawyer, Blair R. Zwillman. "And he's sorry."

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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