A Florida federal judge has entered a judgement against a dermatologist and his medical practice, ordering them to pay more than $18 million for allegedly pocketing tens of millions of dollars from Medicare by ordering medically unnecessary biopsies, falsely diagnosing patients with cancer, performing unnecessary radiation treatments on patients, and illegally billing the government for those biopsies and radiation treatments.
The allegations were originally made in two separate False Claims Act lawsuits filed in December 2013 and June 2014 by Dr. Theodore Schiff, a dermatologist who is the medical director and managing partner of Water’s Edge Dermatology LLC, a dermatology practice operating more than two dozen clinics throughout Florida.
After examining a number of patients seeking a second opinion after being diagnosed with skin cancer by Dr. Gary Marder, Dr. Schiff uncovered evidence of an illegal kickback arrangement between Dr. Marder and Dr. Robert Kendall, a physician who operates a medical lab in Coral Gables, Florida.
According to Dr. Schiff’s first complaint, Dr. Marder instructed his physician assistants to perform up to 50 biopsies per day on skin disorders for conditions such as acne, dry skin, warts, and freckles, for which biopsies were not necessary.
When those biopsies were complete, Dr. Marder sent the specimens to Dr. Kendall, paying him kickbacks in exchange for allowing him to bill Medicare for the work Dr. Kendall actually performed while misrepresenting that the tests were conducted by Dr. Marder.
The complaint also alleged that Dr. Kendall falsely diagnosed benign skin conditions as cancerous, which gave Dr. Marder the opportunity to recommend that patients undergo radiation therapy, which generated extra billing opportunities.
Not only did this practice defraud taxpayer-funded health care programs, it needlessly exposed patients to considerable risks of cancer and damage to otherwise healthy skin.
After filing his first complaint, Dr. Schiff decided to look into what type of radiation equipment Dr. Marder used in his offices. This probe led him to discover that Dr. Marder did not actually have the radiation devices necessary to bill the government for certain services. This discovery prompted Dr. Schiff to file second False Claims Act complaint in June 2014. In that complaint, he alleged that Dr. Marder’s misrepresentations about the type of equipment he used allowed him to bill Medicare at a rate seven times higher than it should have been.
Both complaints subsequently were combined into one False Claims Act lawsuit.
On Feb. 7, the U.S. Attorney’s Office in Miami announced a consent final judgement that allowed Dr. Marder to pay just $5.2 million of the original $18 million settlement amount if he pays it by Feb. 24.
According to Treasure Coast Newspapers, “The $5.2 million is all the government can reasonably expect Marder to pay … because homestead laws in Florida protect Marder’s 12,700-square-foot home in Palm Beach that is valued near $28 million.”
“The government didn’t recover anywhere near what Marder illegally billed, mostly because most of his assets are in his home, which the government can’t touch,” Dr. Schiff’s attorney told Treasure Coast Newspapers.
Dr. Marder will be forced to pay the U.S. about $41 million if he does not pay the full $5.2 million by Feb. 24, according to court records. Dr. Schiff’s attorney said it is “incomprehensible” that the Florida Board of Medicine has taken no action at all against Dr. Marder.