A New York City cardiologist with offices on Fifth Avenue and in New Jersey admits he intentionally misdiagnosed up to 80 percent of his patients with heart problems so he could collect millions in extra Medicare money. 

 Dr. Jose Katz, 68, pleaded guilty to falsifying charts diagnosing patients with angina and other heart ailments so he could prescribe extra tests and treatments when hundreds of patients did not need them.

See original story at NBCNewYork.com

Prosecutors said it was the largest fraud ever executed by a single doctor in New York or New Jersey. 

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

In court Wednesday he agreed his actions could have caused "serious bodily harm" to his patients. He and his lawyer disagreed when prosecutors said some patients were at risk of death due to his actions.

In all, Katz admitted his scheme took in over $19 million. 

Katz's crimes went on from at least 2004 through 2012. His resume said he is affiliated with NewYork-Presbyterian Hospital, but a spokeswoman said he has not been linked there since 2003.

Fishman said many patients who were exploited went to Katz's clinics, called Cardio-Med Services in Union City, Paterson and West New York.  He also ran clinics called Comprehensive Healthcare in Manhattan and Queens. 

Katz said he performed many so-called EECP procedures based on false diagnoses to overbill Medicare and private insurers like Blue Cross and Aetna.   

In court, Katz told the judge as a doctor he had "done everything he could to help patients."  The judge told him he would have time to speak at sentencing set for July 23. After the court hearing, Katz and his attorney, Blair Zwillman, left the courthouse admitting mistakes were made but insisting Katz always cared for his patients.    

See court document on the case in PDF

Katz faces up to 10 years in prison on the conspiracy to commit health care fraud charges. He also admitted creating a no-show job in his office in order to rip off more than $250,000 in Social Security benefits. 

Katz was born in Cuba but is a U.S. citizen. Prosecutors said he spent $6 million advertising on Spanish-language television and radio to try to lure in patients. 

Fishman said investigators are attempting to contact all the patients affected by the fraud, who can also reach out to the New Jersey FBI or U.S. attorney's offices for additional information. 

Related story at NBCNewYork.com: 4 charged in alleged medical billing scam

This story was originally published on Wed Apr 10, 2013 3:47 PM EDT

AP

A scene from a Hoveround commercial. Ads for motorized scooters are coming under increased scrutiny for creating the false impression that they're a convenient way to get around, not a medical necessity.

TV ads show smiling seniors enjoying an "active" lifestyle on a motorized scooter, taking in the sights at the Grand Canyon, fishing on a pier and high-fiving their grandchildren at a baseball game.

The commercials, which promise freedom and independence to people with limited mobility, have driven the nearly $1 billion U.S. market for power wheelchairs and scooters. But the spots by the industry's two leading companies, The Scooter Store and Hoveround, also have drawn scrutiny from doctors and lawmakers, who say they create the false impression that scooters are a convenient means of transportation rather than a medical necessity.

Members of Congress say the ads lead to hundreds of millions of dollars in unnecessary spending by Medicare, which is only supposed to pay for scooters when seniors are unable to use a cane, walker or regular wheelchair. Government inspectors say up to 80 percent of the scooters and power wheelchairs Medicare buys go to people who don't meet the requirements. And doctors say more than money is at stake: Seniors who use scooters unnecessarily can become sedentary, which can exacerbate obesity and other disorders.

"Patients have been brainwashed by The Scooter Store," says Dr. Barbara Messinger-Rapport, director of geriatric medicine at the Cleveland Clinic. "What they're implying is that you can use these scooters to leave the house, to socialize, to get to bingo."

The scooter controversy, which has escalated with a government raid on The Scooter's Store's New Braunfels, Texas, headquarters last month, underscores the influence TV ads can have on medical decisions. Like their peers in the drug industry, scooter companies say direct-to-consumer advertising educates patients about their medical options. But critics argue that the scooter spots are little more than sales pitches that cause patients to pressure doctors to prescribe unnecessary equipment.

The Scooter Store and Hoveround, both privately held companies that together make up about 70 percent of the U.S. market for scooters, spent more than $180 million on TV, radio and print advertising in 2011, up 20 percent since 2008, according to advertising tracker Kantar Media. Their ads often include language that the scooters can be paid for by Medicare or other insurance: "Nine out of ten people got them for little or no cost," states one Hoveround ad.

Hoveround did not respond to a half-dozen requests for comment. The Scooter Store, the nation's biggest seller of scooters, said that most people who contact the company after seeing the ads do not ultimately receive a scooter.

"The fact that 87 percent of the persons who seek power mobility products from The Scooter Store under their Medicare benefits are disqualified by the company's screening process is powerful evidence of the company's commitment to ensuring that only legitimate claims are submitted to Medicare," the company said in a statement. The Scooter Store has been operating with a streamlined staff in recent days, following massive layoffs in the wake of the raid by federal agents.

Insurance executives say doctors who don't understand when Medicare is supposed to pay for scooters are partly to blame for unnecessary purchases.

Scooters — which are larger than power wheelchairs and often include a handlebar for steering — are covered by Medicare if they are prescribed by a doctor who has completed an evaluation showing that their patient is unable to function at home without a device.

The doctor fills out a lengthy prescription form and sends it to a scooter supplier that delivers the device to the patient and then submits the paperwork to Medicare for payment. Medicare pays about 80 percent of that cost, which can range from $1,500 to $3,500. The remainder is often picked up by supplemental insurance or the government-funded Medicaid program for low-income and disabled Americans.

The process can help immobile seniors get equipment that improves their lives. Ernest Tornabell of Boynton Beach, Fla., received a scooter from Pride, a smaller manufacturer, through Medicare about six years ago. The 73-year-old suffers from obesity, diabetes and lung disease and says he used to never leave his house. Now, using the scooter he can walk his dog, go to the grocery store and run other errands.

"I couldn't really get out and do anything before. Now I have a lot more mobility," said Tornabell, whose doctor recommended that he get the device.

But Dr. Stephen Peake, medical director for the insurer Blue Cross Blue Shield in Tennessee, says doctors can often be as uninformed about the appropriate role of scooters as patients.

"I talk to a lot of physicians about this subject ... and after our discussions, they don't understand that you can't get a power mobility device so mom can go to the park with the family," Peake said in testimony before the Senate Committee on Aging last year.

One reason for the confusion? Doctors say scooter companies are just as aggressive with health professionals as they are in marketing to their patients.

Dr. Jerome Epplin of Litchfield, Ill., who also testified before the Senate, estimates that only about one out of every 10 patients who ask him for a scooter actually needs one. But he said that sales representatives from some scooter companies put pressure on him by accompanying patients to his office. The effect is coercive, he says.

"It can be intimidating," Epplin says. "I see it as an inappropriate attempt to influence my clinical judgment when I'm evaluating a patient."

Allegations of Medicare fraud within the industry go back nearly a decade.

In 2005 the U.S. Justice Department sued The Scooter Store, alleging that its advertising enticed seniors to obtain power scooters paid for by Medicare, and then sold patients more expensive scooters that they did not want or need. The Scooter Store settled that case in 2007 for $4 million.

As part of the settlement, The Scooter Store was operating under an agreement that made the company subject to periodic government reviews between 2007 and last year. In 2011, the latest review available, government auditors estimated that The Scooter Store received between $47 million and $88 million in improper payments for scooters.

The Scooter Store took no action to repay the money until February 2012, when the Health and Human Services' inspector general threatened to bar the company from doing business with Medicare, which accounts for about 75 percent of its income, according to its congressional testimony.

The company said the government's estimate was flawed and that it was willing to repay $19.5 million in overpayments. The company has paid about $5.7 million, with the rest scheduled for repayment over a 5-year period to be completed in 2017.

Medicare said in a January letter that it accepted the fee based on The Scooter Store's own assessment of what it owed, but that the agreement "does not absolve The Scooter Store from any further liability."

In recent months Sen. Richard Blumenthal, D-Conn. and other members of the Senate Aging Committee have pushed Medicare to recover the millions of dollars spent on unnecessary scooters each year. Those purchases totaled about $500 million in 2011, the latest year available, according to a report by the Department of Health and Human Services' inspector general.

Medicare, which says that it does not have control over how companies market chairs, launched a pilot program designed to reduce wasteful spending on scooters.

Under the program, government contractors in seven states review patients' medical documentation to make sure they need a wheelchair or scooter before approving payments for a device. The program is being tested in a small number of states — including Florida, California and New York — because the government must pay contractors extra to review additional paperwork.

The program has been criticized by The Scooter Store's executives, who say that contractors are too strict in their reviews, rejecting payments for power chairs that are genuinely needed.

The reduced payments are taking a toll on the company, which was founded in 1991. The Scooter Store has spent nearly $1 million lobbying Congress over the last two years, almost exclusively focused on the Medicare review program. And the company laid off about 370 employees in the past year, blaming the reduced payments it's been getting from Medicare.

Then, last week, The Scooter Store notified most of its remaining 1,800 employees that their jobs were being eliminated. The company said in a statement to the Associated Press that it is operating with a workforce of 300 employees — down from the 2,500 workforce it had at its peak — while trying to restructure its operations.

The mass layoffs followed a raid in February by about 150 agents from the FBI, the Department of Justice and the Texas attorney general's Medicaid fraud unit at the company's headquarters.

Federal authorities have declined to speak about the raid, but scooter industry critics in Congress praised the action.

"This raid is a welcome step toward cracking down on waste and fraud in Medicare," said Blumenthal, the Connecticut senator. "I have urged action to stop abusive overpayments for such devices — costing taxpayers hundreds of millions of dollars and preying on seniors with deceptive sales pitches."

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This single file contains the court's decision, delivered by Chief Justice John Roberts, and the several dissenting opinions.

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Kaiser Health News

Higher prices charged by hospitals, outpatient centers and other providers drove up health care spending at double the rate of inflation amid the weak economy -- even as patients consumed less medical care overall, according to a new study.

Prices rose at least five times faster than overall inflation for emergency room visits, outpatient surgery and facility-based mental health and substance abuse care from 2009 to 2010, says the report by the Health Care Cost Institute, a nonpartisan research group funded by insurers.  Prices declined in only one category: Nursing home care, which saw a 3.2 percent drop in the cost per admission.

One of the areas with the fastest growing spending, meanwhile, was children's medical care.

"The story really does seem to be prices," said Martin Gaynor, chair of the institute's governing board and a health care economist at Carnegie Mellon University.

Representing one of the broadest looks at actual claim payments made by insurers, the study's findings raise questions that go to the heart of the nation's $2.6 trillion annual bill for health care: Why are prices for medical services rising far faster than inflation? Is a rapid increase in spending on children an anomaly, or a long-term trend with major implications for future costs?

"If you don't know what the cause is, you don't know what the right policy lever is (for a solution)," Gaynor says

He says the Institute, founded last year to make insurance industry payment data available to the public, will address some of those questions in subsequent research.

The findings are based on about 3 billion claims paid by Aetna, Humana and UnitedHealthcare on behalf of 33 million people with job-based insurance nationwide.  The data represent about 20 percent of the people with insurance nationally, but do not include spending for people who are on Medicare, Medicaid or those who buy their own policies.

The report shows that people with job-based insurance "are paying more and getting less," says Chapin White, a senior researcher at the Center for Studying Health System Change, a nonpartisan think tank in Washington. He did not work on the report.

Hospitals and other medical providers "just seem to be able to raise prices faster than general inflation," he says.

Workers' copayments and deductibles, which they pay on top of their share of premium costs, also rose, according to the study. Such "out-of-pocket costs" jumped 7.1 percent between 2009 and 2010 to an average of $689 per person.

Prices and overall use of medical care are major factors driving the cost of health insurance. While the study does not analyze premium increases, those have risen steadily, with one national employer survey by the Kaiser Family Foundation showing a cumulative 138 percent increase in job-based insurance premiums between 1999 and 2010. (KHN is an editorially independent program of the foundation.)

As part of the federal health law, all states last year began reviewing premium increases of 10 percent or more, requiring insurers to justify the increases.  There are no similar national efforts to examine price increases by hospitals or other medical providers.

Insurers argue they are just passing along rising costs to consumers, keeping only a narrow profit margin and are often outgunned in contract negotiations by hospitals, many of which are "must-have" facilities in an insurer's network.

"This is an important study that clearly demonstrates that rising prices for medical services are driving health care cost growth," said Karen Ignagni, president and CEO of America's Health Insurance Plans, the industry lobby. "Reducing medical costs is essential to making health care coverage more affordable for individuals, families, and employers."

Researcher White says insurers must take a more active role. "If insurers are incapable of reining in growth of prices they pay providers, that’s a problem," he says.

Struggling with rising costs, some states and insurers are looking at new approaches. In Massachusetts, for example, supporters and opponents are sparring over a proposal that would impose financial penalties on hospitals or other providers who exceed by 20 percent or more a specified state median for a medical service.

In North Carolina, one major insurer aims to negotiate contracts with hospitals and other medical providers that limit increases to no more than the medical inflation rate.

"We have met that goal for the past two years," says Brad Wilson, CEO of Blue Cross Blue Shield of North Carolina. That effort, along with lower use of medical services, translated into zero to 5 percent premium increases for policies sold to individuals -- the smallest rise in five years.

The report found the biggest spending increases in the Northeast, up 4.3 percent and – surprisingly -- among children under 18, up 4.5 percent nationally. That compares with a 3.1 percent jump in spending on 55 to 64 year olds.  While spending grew fastest among pediatric patients, the report found medical care  for older patients costs more in total dollars – averaging $8,327 a year – than for those under 18, at $2,123.

A future report will probe the reasons for the growth in pediatric spending. Possibilities could include big expenses for premature babies, the rising incidence of obesity and related diseases or an increasing demand for mental health and behavioral services.

It could also reflect families’ increasing struggle to pay their share of medical costs by foregoing or delaying medical visits for their children, says Irwin Redlener, a professor at Columbia University’s Mailman School of Public Health and president of the Children’s Health Fund, a nonprofit that provides medical care to underserved children.

"Even families with employer-based insurance are seeing their costs going up , but not their salaries," says Redlener. So they may be "saving where they can" and foregoing preventive care, such as vaccinations, and treatments for chronic illnesses, such as asthma or diabetes.

Overall, during the period analyzed, prices charged nationally grew the most for emergency room visits, up 11 percent, surgery that did not involve a hospital stay, up 8.9 percent, and mental health and substance abuse services, up 8.6 percent.

The price per hospital admission rose an average of 5.1 percent, hitting $14,662. Surgical admissions had the highest overall price tag, at an average of $27,100,  representing a 6.4 percent increase from 2010.

Spending by insurers and policyholders on medical care rose 3.3 percent per person from 2009 to 2010, about twice the 1.6 percent increase in the Consumer Price Index.

Mary Agnes Carey contributed to this story.

Kaiser Health News, an editorially independent news service, is a program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente. Our stories appear in media outlets nationwide and on our website, www.kaiserhealthnews.org.

By Bill Dedman
msnbc.com

In light of today's shooting of Rep. Gabrielle Giffords (D-Ariz.), it's remarkable to watch this NBC video from March 2010 of her discussing vandalism and harassment during the health care debate, when the front door of her office was "kicked out or shot out." She says she is not fearful, though "the rhetoric is incredibly heated."

She is asked, are the threats real, or are Democrats using the violent incidents as a political opportunity to characterize Republicans as violent or extreme?

"Chances are, you're going to have a couple of people, extremes on both sides, frankly, not just the Republican side. We have Democratic extreme activists as well," Giffords said. "Most of our country is in the middle, but we do have these polarized parts of our parties that get really excited. And that's where again community leaders, not just the political leaders, all of us need to come together and say, there's a fine line here."

Do you have information about this shooting or previous harassment of a member of Congress. Drop us a line: