Michigan Dermatologist Pathology Fraud: Cancer Treatment Claims Contradicted by Benign Pathology

A Michigan dermatologist told patients they had cancer when laboratory results showed benign tissue and performed unnecessary procedures. The pathology fraud case went to a criminal jury, which convicted the physician of health care fraud, according to the HHS Office of Inspector General’s Semiannual Report for October 2007 through March 2008.

What the Pathology Showed

The laboratory’s finding is the evidence against the cancer-treatment story. The conduct in this criminal case belongs to the treating dermatologist.

The government’s account of the criminal case also says the physician upcoded surgical procedures and billed follow-up visits for postoperative infections such as impetigo, which it called a disease rarely seen in adults.

For an insider looking at similar conduct, the question extends beyond whether a test was performed. What did the result say, and what did the practice do with it? A file containing the report and a file describing the subsequent treatment need to be understood together.

Who Bills for Pathology Work

Anatomic pathology includes a technical component, such as processing, sectioning and staining the specimen, and a professional component, the pathologist’s interpretation. Those components can be purchased and billed separately.

That structure helps explain why the name on a bill does not, by itself, tell the whole story about who did the work. The person preparing the specimen, the pathologist interpreting it and the physician deciding what to tell the patient perform different jobs.

The Medicare Payment Advisory Commission’s explanation of laboratory payment draws the payment boundary around physician work. Most clinical laboratory services fall under the Clinical Laboratory Fee Schedule, while surgical pathology falls under the physician fee schedule.

The documentation also sits in different hands. The treating clinician maintains the medical reason for ordering a test. The laboratory keeps the information it received and the support for its claim. Medicare’s documentation rule reflects that division. Understanding the case means connecting the clinical account with the laboratory’s work and the payment request.

What Evidence Is Needed to Prove Fraud?

For conduct like this, the important evidence connects the pathology finding to the physician’s statements, the procedures and the resulting claims. Our work with an insider is to understand where those accounts diverge and who made the decisions behind them.

A pathologist may recognize that a later treatment account conflicts with the interpretation. Someone in the practice may know what patients were told or what procedures followed. Someone in billing may recognize the services submitted for payment. We connect those perspectives so the account of the care can be tested against the charges.

The laboratory’s relationship with the ordering physician has long been a focus of fraud prevention. The Laboratory Medicine article Model Plan Helps Laboratories Fight Fraud, published in 1997, describes the Department of Health and Human Services inspector general’s recommendation that requisition forms include space for the physician to record the diagnosis supporting each test. It also describes laboratories’ role in advising physicians about medical necessity.

That recommendation makes the reason for a test part of the written exchange between the practice and the laboratory. Applied to the problem here, the useful comparison reaches beyond that initial reason: it includes the finding and the treatment story that followed.

An insider does not have to translate that entire sequence into legal language before speaking with us. We work through the clinical facts and the billing with you, including how your knowledge connects records that otherwise appear to tell separate stories.

When the Problem Begins Inside the Test

In its civil settlement announcement, the Justice Department alleged that Nichols Institute Diagnostics sold parathyroid hormone assay kits it knew produced materially inaccurate and unreliable results, causing false claims for testing and unnecessary treatments.

The Michigan dermatologist’s case turns on a different point in the sequence: benign findings contradicted the cancer statements made to patients. Comparing the cases helps locate the conduct. A defective assay and a physician’s false account of a pathology finding call for different knowledge from the people who saw the work.

Pathology Whistleblowers Have Challenged Different Parts of the Work

In the Piedmont Pathology case, a pathologist’s theory concerned reviewing a specimen with a routine H&E stain before using a special stain.

A physician whistleblower alleged in his complaint against Princeton Pathology Services that his insurer was billed for tests he had not undergone.

In the Michigan criminal case, the benign finding contradicted the cancer-treatment account. Each comparison puts the clinical work beside the story used to justify what came next.

The person who understands the clinical sequence may be the person who can explain why the paperwork does not fit it. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Report Said

If you have seen a benign pathology finding turned into a cancer-treatment story, speak to one of our Whistleblower Experts about what the report really said. We build the case with you around the clinical contradiction and the claims it produced, and bring in healthcare fraud whistleblower lawyers who understand pathology and unnecessary treatment. We stay beside you throughout the case.