Tampa Pathology: A Signature Line for Someone Else’s Work

Tampa Pathology Laboratory and its owner settled for $950,000; the referring Florida dermatologist later agreed to pay $26.1 million to resolve allegations of referral kickbacks and unnecessary Medicare services. The alleged bargain turned a pathology report into a way for the referring physician to collect payment for someone else’s work. Tampa Pathology Laboratory allegedly supplied the diagnosis on a report with a signature line that made the work appear to be the dermatologist’s. A former pathologist at the laboratory brought the whistleblower case.

The Justice Department announced the physician’s settlement on February 11, 2013. The department described the physician’s agreement as the largest settlement with an individual under the False Claims Act in the Middle District of Florida at the time, and one of the largest nationally.

The Report Made the Laboratory’s Work Look Like the Physician’s

The signature line allegedly gave the dermatologist credit for diagnostic work performed at the laboratory. The government said the physician, who practiced in Venice, Florida, arranged the exchange around 1997 with Tampa Pathology Laboratory and its pathologist owner to increase referral business for the Tampa laboratory.

According to the Justice Department, the physician sent biopsy specimens from Medicare patients to the laboratory for testing and diagnosis. In return, the laboratory allegedly supplied a diagnosis on a pathology report with a signature line for the dermatologist. That line was intended to make it appear to Medicare that he had performed the diagnostic work.

The government alleged that the physician then billed Medicare for the laboratory’s work as his own and received more than $6 million in payments.

That distinction matters in pathology because physician work has its own place in payment. As the Medicare Payment Advisory Commission explains, most laboratory services fall under the Clinical Laboratory Fee Schedule, while services involving physician work, such as surgical pathology, fall under the physician fee schedule. The diagnostic work is part of what Medicare is buying.

For a pathologist who knows who made the diagnosis, or a billing employee who knows whose services went onto the claim, the signature line is where those accounts meet.

More Biopsies Meant More Referral Business

The government also alleged that the dermatologist substantially increased the number of skin biopsies he performed on Medicare patients to further the arrangement. More biopsies meant more specimens sent to Tampa Pathology for testing and diagnosis.

This part of the allegation reaches back into the examining room. The physician controlled the biopsies that generated the laboratory’s referrals, while the report arrangement allegedly gave him a financial reason to keep that business coming. Patients supplied the tissue, and Medicare paid for diagnostic work the physician allegedly claimed as his own.

For laboratory staff, the pattern connects the work arriving from a referring practice with the reports going back to it.

The Skin-Surgery Allegations Went Beyond Laboratory Work

The physician’s settlement also addressed allegations that he performed thousands of unnecessary skin surgeries called adjacent tissue transfers. These procedures close a defect left by removing a growth from a patient’s skin. The Justice Department described them as complicated and often time-consuming.

The government alleged that the dermatologist performed many of these surgeries to collect reimbursement, rather than because the patients medically needed them. That was a separate allegation from the exchange of biopsy referrals for pathology reports.

Patients underwent surgeries the government alleged they did not need, while taxpayers paid for them. The alleged harm went beyond whose name appeared on a bill.

Separate Settlements and a Laboratory Whistleblower

Tampa Pathology Laboratory and its owner previously settled the allegations against them for $950,000. The later physician settlement resolved the allegations against the referring dermatologist. The same whistleblower lawsuit reached both sides of the alleged referral arrangement.

The whistleblower was a pathologist who had worked at Tampa Pathology. He brought the case under the False Claims Act’s qui tam provisions, and the United States joined it. The Justice Department’s announcement stated that he would receive approximately $4 million from the physician’s settlement.

The announcement also stated that the physician was excluded from treating patients and receiving payment under Medicare, Medicaid and other federal health care programs.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Do Doctors Get Kickbacks for Ordering Tests?

The government’s healthcare fraud cases have alleged that doctors received laboratory referral kickbacks through direct payments and noncash benefits. Tampa Pathology’s alleged arrangement gave the referring physician a way to bill Medicare for the laboratory’s diagnostic work. Other pathology cases show different ways of rewarding the source of the specimens.

In a separate case involving CorePath Laboratories and Oncology San Antonio, the government alleged that CorePath agreed to pay $115 for each biopsy referred by the oncology practice and its physicians. There, the alleged bargain put a price directly on the referral. Tampa Pathology’s alleged bargain worked through the diagnosis report and the physician’s resulting Medicare billing.

The government’s case against Miraca Life Sciences concerned another form of alleged referral benefit: electronic health record subsidies and free or discounted technology consulting for referring physicians. A benefit can sit in the practice’s software budget as well as in a payment for each specimen.

Across these cases, the useful question is what the referral source received for sending the work.

What Evidence Is Needed to Prove Fraud?

We examine how the diagnostic work, the report and the Medicare claim connect, alongside the referral relationship. The report is especially revealing when someone inside the laboratory can explain why its signature line differs from who actually supplied the diagnosis.

For this case, the comparison joins the physician’s reason for sending a specimen with the laboratory’s diagnostic work and the physician’s subsequent claim. A report can carry a diagnosis and still give Medicare the wrong account of who made it. That is the discrepancy the government alleged here.

Pathology staff and billing employees can bring different knowledge to that comparison. Our work with an insider is to connect that knowledge to the particular reports and claims, and to the arrangement behind them.

You Know Who Did the Diagnostic Work

If you know why a pathology report credits someone who did not do the work, speak to one of our whistleblower experts about the reports you’ve seen. We build the case with you around the reports, the Medicare billing and the referral bargain, and bring in laboratory fraud whistleblower lawyers who understand pathology arrangements. We stay beside you as your knowledge becomes a case for recovering the government’s money.