Some San Antonio doctors participated in a kickback scheme with a chain of vascular clinics, a whistleblower lawsuit alleges.
Phoenix-based Modern Vascular sold small interests to investing doctors and paid them dividends — or “kickbacks” — to get them to refer patients, the suit states.
And last week, the Justice Department intervened in the case by filing its own complaint that accuses Modern Vascular of ripping off Medicare for more than $50 million.
The Justice Department is suing for alleged violations of the False Claims Act, a law used to combat fraud against the federal government, and will seek triple the amount of any damages it’s awarded if it prevails at trial.
Modern Vascular has 16 clinics — including two in San Antonio — in 10 states, its website shows. Its office-based labs treat peripheral artery disease, a narrowing of the arteries in the legs that restricts blood flow.
Chiropractor Yury Gampel, Modern Vascular’s founder and board chairman, exerted “heavy pressure” on the clinics’ doctors to “perform invasive procedures on as many referred patients as possible,” the original complaint alleged.
He ensured the clinics treated patients “according to the procedures that received the highest Medicare reimbursement” without regard to whether they were medically necessary, the suit added. The reimbursement rates ranged from $17,000 to $30,000.
Gampel denied the claims in an interview with the Arizona Republic in September.
“There is zero truth to any of the allegations,” he told the publication, adding that Modern Vascular is focused on salvaging limbs that would otherwise be amputated.
“We do a lot of amazing work,” he said. “We save limbs every single day in all of our clinics.”
A lawyer for Gampel didn’t immediately respond to a request for comment.
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Jed Dwyer, a Miami lawyer for Modern Vascular, said in an email that the company’s “business practices are compliant with the spirit and the letter of the law.”
The government’s case is against Gampel, 15 Modern Vascular clinics and five affiliated entities that he primarily owns for engaging in allegedly illegal transactions. The Justice Department is not pursuing any claims against the doctors who allegedly referred patients to the clinics in return for payments.
The litigation, known as a qui tam proceeding, is pending in federal court in Phoenix.
Footholds
Two doctors, including a radiologist who practices in The Woodlands, initially sued Modern Vascular and related entities in early 2020 on behalf of the government. Two similar lawsuits were later filed and consolidated with it. The action remained under seal until September when the Justice Department announced it would intervene.
The two doctors alleged that Gampel would choose a location to open a clinic and then identify physicians and podiatrists in the area who could refer patients to it.
In 2019, the suit alleges, Gampel solicited via conference call nearly 20 podiatrists with San Antonio Podiatry Associates and the Podiatry Group of South Texas — the two largest podiatry groups in San Antonio. Two surgeons also were on the call, the suit says.
Houston attorney Cory Fein, who filed the original suit on behalf of the two doctors, said they had a recording of the call.
San Antonio podiatrist Richard Pollak, whose surname is misspelled in the complaint, vouched for Gampel on the call, “gushing enthusiastically about what a great ‘no-brainer’ investment” the San Antonio clinic would be, the suit says.
An online bio for Pollak says he has been in private practice with San Antonio Podiatry Associates since 1979, though he’s not among the doctors listed on its website. He serves as president of Endeavor Clinical Trials.
San Antonio Podiatry Associates, the Podiatry Group and Pollak did not respond to requests for comment.
Not ‘passive’
Gampel gave his pitch to the “San Antonio Solicitees,” as the suit describes the prospective investors, explaining that they each stood to reap more than $1 million in less than five years by investing $15,000 for a 2 percent interest in the clinic. The return was based on annual profits and proceeds from the clinic’s eventual sale, the original lawsuit stated.
Gampel, the two doctors allege, told the prospective San Antonio investors that it wasn’t a “passive investment.” Any investor was expected to refer patients and “influence other doctors” to do the same, the suit said.
A doctor who sees 100 to 140 patients a week needed to refer three to five to the clinic “to make the scheme profitable,” the complaint said.
“Most of the San Antonio Solicitees were convinced to invest and the result was the creation of Modern Vascular of San Antonio,” the suit said.
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Fein, the attorney for the two doctors, said in an interview that he didn’t know how many of the San Antonio podiatrists allegedly invested with Gampel.
“I assume if everyone in San Antonio said, ‘We’re not doing it,’ they wouldn’t have opened” a clinic in the city, Fein said.
Those who signed on are defendants — identified only as “Investor Does 1-100” — in the doctors’ action.
The Justice Department did not sue any of the purported investors in its complaint.
The department did identify three San Antonio “physician-investors” by their initials — “Dr. R.P.,” “Dr. R.F.” and “Dr. F.A” — who each referred a patient to Modern Vascular, which allegedly submitted claims for payment to Medicare in violation of the Anti-Kickback Statute. No affiliation for the doctors was given.
Several doctors, also only identified by their initials, allegedly referred patients to clinics in other cities.
‘Pressure’
“Improper financial arrangements between health care providers and referring physicians can lead to overutilization and increase the cost of health care services paid by taxpayers,” Brian M. Boynton, principal deputy assistant attorney general head of the Justice Department’s civil division, said in a statement. “We will continue to ensure that health care decisions are based on the needs of patients and not the financial interests of providers.”
Dwyer, who represents Modern Vascular and Gampel, said the government’s complaint stems from a disagreement with the company’s business structure.
“ There are no allegations of medically unnecessary procedures,” Dwyer said. “There are no allegations of fake documents, illicit payments or false invoices. There are no allegations about patient harm. Instead, the DOJ apparently takes issue with nuances of our corporate structure and limited old communications with investors — something that we have been open and honest about with DOJ and the public from the start.”
The doctors’ lawsuit is essentially on hold now that the government has stepped into the case, Fein said. He added that his clients can still decide whether to pursue their own claims against investors who referred patients and allegedly received payments in return.
The Justice Department also could say it doesn’t want those claims pursued and move to dismiss them, or amend its complaint to add the investors as defendants, Fein said.
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The defendants tried to conceal the alleged kickback scheme by making it look like an investment, Fein said.
“If it’s truly an investment, then the investment should be available to anybody,” he said. “Like, I should be able to buy two shares in this company, and just put in my money and get my returns.
“But, obviously, the allegations are these investments weren’t open to anybody,” he said. “They were open to people who could refer patients. And then the pressure was put on them, ‘Hey, if you want your investment to do well, you need to start referring more patients.’”
Modern Vascular’s corporate staff “closely tracked weekly referral rates and sent physician-investors updates to keep the pressure on them,” the Justice Department alleged. Gampel and corporate associates also “encouraged referrals through aggressive treatment guidance” to drive up profits, the feds said.
One of the two doctors who filed the original suit is Jay Radhakrishnan, a radiologist in The Woodlands who analyzed ultrasound scans that came from Modern Vascular clinics as a contractor for an outside firm.
pdanner@express-news.net