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Jose Katz, 69, the founder, CEO, and sole owner of a pair of large medical services companies in New Jersey and New York, admitted to a scheme in April that subjected thousands of patients to unnecessary tests and potentially life-threatening, unneeded treatment, as well as treatment by unlicensed or untrained personnel.
He also confessed to a separate scam in which he gave his wife a no-show job to make her eligible for Social Security.
Besides the prison time, U.S. District Judge Jose L. Linares sentenced Katz to three years of supervised release and ordered him to pay restitution of $19 million.
“Katz prized illegal profits over patients to a staggering degree, committing record-breaking fraud and compromising care,” U.S. Attorney Paul J. Fishman said this afternoon. “Prison is an appropriate consequence for ripping off the government and insurance companies through the shocking exposure of patients to unneeded or untrained treatment.
“Ripping off the government and insurance companies is bad enough,” the U.S. Attorney said. “Risking patient health in the bargain is inexcusable.”
Katz — the founder, CEO, and sole equity-holder of Cardio-Med Services and Comprehensive Healthcare & Medical Services — conspired from 2004 through 2012 to bill Medicare Part B, Medicaid, Empire BCBS, Aetna and others for “unnecessary tests and unnecessary procedures based on false diagnoses, and for medical services rendered by unlicensed practitioners,” Fishman said.
At the time, Katz had offices in Union City, Paterson, and West New York, as well as in Manhattan and Queens.
“Between July 2006 and February, 2009, Katz spent more than $6 million for advertising on Spanish-language television and radio stations,” a release issued by Fishman’s office says. “The ads attracted hundreds of patients to Cardio-Med and Comprehensive Healthcare every day.”
Overall, Katz billed Medicare and Medicaid more than $70 million for his services from 2005 through 2012, a complaint on file is U.S. District Court in Newark says.
He “ordered and performed essentially the same battery of diagnostic tests for nearly all the patients he treated, regardless of their symptoms” and “instructed his non-physician employees to order and perform diagnostic tests for patients of other doctors working at his offices, even though he had not examined those patients and the other physicians had not ordered the unnecessary tests,” it says.
Most significantly, Katz “admitted that he falsified patient charts with fictitious and boilerplate symptoms and falsely diagnosed a majority of his Medicare and Medicaid patients with coronary artery disease and debilitating and inoperable angina.
“He also admitted to making the diagnoses to justify prescribing and administering an unnecessary treatment for those patients called enhanced external counter pulsation, or EECP.
“Katz even prescribed EECP treatments for some patients with contraindications for the treatment, therefore subjecting those patients to a substantial risk of serious injury or death.
From 2005 through 2012, Medicare and Medicaid paid Katz more than $15.6 million just for the EECP treatments, most of which he admitted today were bogus.
Federal authorities said Katz also had a conspirator, 62-year-old Mario Roncal of Woodland Park, treat patients even though Roncal’s medical degree was from San Juan Bautista School of Medicine in San Juan, Puerto Rico.
At Katz’s direction, Fishman said, Roncal “held himself out to fellow employees and to patients as ‘Dr. Roncal,’ examined new patients as well as Katz’s follow-up patients, ordered diagnostic tests, diagnosed patients with medical conditions and diseases and recommended and prescribed courses of treatment and surgery – including falsely diagnosing patients with angina and prescribing EECP treatments for those patients.”
He concealed the deceit by forgint Katz’s signature — backed by Katz, who “used his own billing numbers” for the illegal services.
Roncal was indicted on March 2, 2012, for conspiracy to commit health care fraud. He took a plea on Jan. 4 and has awaited sentencing while Katz’s case progressed.
In the Social Security scam, Katz admitted keeping his wife on Cardio-Med’s payroll from 2005 through 2012, sending bogus W-2 forms to the government claiming she’d made $1.25 million in that time — which would have made her eligible for $263,000 in Social Security benefits she wasn’t entitled to.
Katz had remained free on $200,000 bail pending today’s sentencing.
Several federal investigative agencies joined forces to crack the case, Fishman said. They include the FBI, the U.S. Department of Health and Human Services Office of Inspector General, the U.S. Postal Inspection Service, the Social Security Administration Office of the Inspector General and IRS-Criminal Investigation, as well as criminal and civil investigators from his office.
The plea was secured by Assistant U.S. Attorney Scott B. McBride of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
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