Doctor accused of taking kickbacks
Fri, July 20 2007
A Canadian neurosurgeon of Malaysian origin is at the centre of an FBI probe into doctors taking kickbacks for medical equipment paid for by American healthcare programs like Medicare and Medicaid.
Dr Patrick Chan, 42, was planning to join his wife and children in Canada, when FBI agents from the “Medicare Fraud Strike Force” arrested him at the White County Medical Center in Searcy, Little Rock, Arkansas.
About C$32,000 was found in his car when he was arrested. Chan carries a Canadian passport and is from Malaysia, the FBI said.
The “Medicare Fraud Strike Force” hopes to save as much as C$2.6 billion by eliminating fraud reported Orthopedics This Week, an online magazine.
Chan, who has been under house arrest wearing an ankle bracelet since his arrest Sept. 13, 2006 , goes to trial on August 6 in Little Rock.
He can not practice medicine in Arkansas after voluntarily surrendering his medical license last December.
It could not be determined if Chan has a licence to practice in Canada.
Chan told court officials he was worth C$10.4 million and made C$210,000 a month while the only neurosurgeon at White County Medical Center.
In posting bond, Chan wrote a check for C$4.2 million and pledged C$313,000 in personal property.
The whistleblower in the case was John Thomas, a salesman for NuMed Tech., Inc., who said Chan asked him, split his commissions on medical products. On July 31, wearing audio and video recording equipment, Thomas made a US$15,000 payment to Chan using FBI money marked with an ultra-violet light.
If convicted on the criminal charges, Chan faces up to five years in prison and/or a $25,000 fine for each transaction.
Local media reports said that doctors who knew Chan in Canada thought he was an excellent neurosurgeon.
“Patrick is a very energetic, hard working, loyal [and] moral” surgeon, Dr. J. Max Findlay, head of the division of neurosurgery at the London Health Science Centre in Ontario, wrote in a January 2000 letter to the Arkansas State Medical Board.
“He is committed to [the] best medical practice and to excellent patient care.”
The centre is a teaching hospital affiliated with the University of Western Ontario, offering a wide range of medical services.
After Chan received his Arkansas medical license in 2000, though, complaints started pouring in to the medical board about Chan, who specialized in neck and back surgeries at the two Searcy hospitals that have since merged, Central Arkansas Hospital and White County Medical Center.
By 2003, lawsuits started appearing in White County Circuit Court accusing Chan of malpractice and performing surgeries when they weren’t medically necessary in an attempt to increase revenue.
But the biggest blow against Chan came when he was charged in U.S. District Court with four counts of taking kickbacks from medical suppliers to use their products for Medicare and Medicaid patients.
According to the arrest warrant, he pressured a salesperson that supplies implants and bone allografts used in spinal surgery to pay him half of the commissions received on products Chan prescribed. Prosecutors say this kind of arrangement is not uncommon in the medical world, but it’s still illegal. U.S. Attorney Bud Cummins says, “You can take a very successful career and ruin it very quickly if a physician gets involved in this activity and it’s equally serious on the other end. The companies that are offering to pay this money to try and get business illegally, it’s very serious and they’re going to be held accountable too.”
Chan is also being sued by Scotty Foster of Searcy.
Foster claims Chan performed unnecessary surgery on him and is now crippled for life. According to the court documents filed by attorneys’ John Ogles of Jacksonville and Robert McHenry of Little Rock, Dr. Chan performed multi-level fusion surgeries on Scotty Foster’s upper spine that were medically unnecessary leaving him totally disabled.
Writing for the American Association of Neurological Surgeons (AANS), Dr. Patrick W. McCormick said the Chan case raises several interesting issues. “Such behavior represents fraud because the physician is leveraging public assets (government purchasing power) for personal gain,” he said.
Others contend that Chan is not the only surgeon who can be accused of taking money as an inducement for purchasing a particular company’s products.
The U.S. government won or negotiated approximately US$1.53 billion in judgments and settlements of healthcare fraud cases in 2005, according to the FBI Web site. Last year U.S. Attorneys opened 935 new criminal healthcare fraud investigations in addition to 1,689 criminal investigations that were pending and convicted 523 people.
The Department of Justice also opened 778 new civil healthcare fraud investigations in addition to the 1,334 civil cases that were pending and filed complaints or intervened in 266 cases. Since the Health Care Fraud and Abuse Control Program began in 1997, it has turned over $9.2 billion to the Medicare trust fund.
McCormick said based on a review of recent information, illegal kickback behavior does not seem to be widespread among physicians. Public reports by the FBI demonstrate that fraud is prevalent in Medicare and Medicaid programs, which account for some 44 percent of all healthcare fraud. Losses total more than $105 billion annually. A review of FBI press releases reveals that the majority of cases involving trials of doctors for criminal activity are cases of fraudulent claims (typically billing for services not rendered).
Very few are related to monetary kickbacks for use of medical devices. Many of the indictments for illegal kickbacks in the healthcare industry actually do not involve physicians, but rather involve business people, hospital administrators and politicians.
Dr Patrick Chan, 42, was planning to join his wife and children in Canada, when FBI agents from the “Medicare Fraud Strike Force” arrested him at the White County Medical Center in Searcy, Little Rock, Arkansas.
About C$32,000 was found in his car when he was arrested. Chan carries a Canadian passport and is from Malaysia, the FBI said.
The “Medicare Fraud Strike Force” hopes to save as much as C$2.6 billion by eliminating fraud reported Orthopedics This Week, an online magazine.
Chan, who has been under house arrest wearing an ankle bracelet since his arrest Sept. 13, 2006 , goes to trial on August 6 in Little Rock.
He can not practice medicine in Arkansas after voluntarily surrendering his medical license last December.
It could not be determined if Chan has a licence to practice in Canada.
Chan told court officials he was worth C$10.4 million and made C$210,000 a month while the only neurosurgeon at White County Medical Center.
In posting bond, Chan wrote a check for C$4.2 million and pledged C$313,000 in personal property.
The whistleblower in the case was John Thomas, a salesman for NuMed Tech., Inc., who said Chan asked him, split his commissions on medical products. On July 31, wearing audio and video recording equipment, Thomas made a US$15,000 payment to Chan using FBI money marked with an ultra-violet light.
If convicted on the criminal charges, Chan faces up to five years in prison and/or a $25,000 fine for each transaction.
Local media reports said that doctors who knew Chan in Canada thought he was an excellent neurosurgeon.
“Patrick is a very energetic, hard working, loyal [and] moral” surgeon, Dr. J. Max Findlay, head of the division of neurosurgery at the London Health Science Centre in Ontario, wrote in a January 2000 letter to the Arkansas State Medical Board.
“He is committed to [the] best medical practice and to excellent patient care.”
The centre is a teaching hospital affiliated with the University of Western Ontario, offering a wide range of medical services.
After Chan received his Arkansas medical license in 2000, though, complaints started pouring in to the medical board about Chan, who specialized in neck and back surgeries at the two Searcy hospitals that have since merged, Central Arkansas Hospital and White County Medical Center.
By 2003, lawsuits started appearing in White County Circuit Court accusing Chan of malpractice and performing surgeries when they weren’t medically necessary in an attempt to increase revenue.
But the biggest blow against Chan came when he was charged in U.S. District Court with four counts of taking kickbacks from medical suppliers to use their products for Medicare and Medicaid patients.
According to the arrest warrant, he pressured a salesperson that supplies implants and bone allografts used in spinal surgery to pay him half of the commissions received on products Chan prescribed. Prosecutors say this kind of arrangement is not uncommon in the medical world, but it’s still illegal. U.S. Attorney Bud Cummins says, “You can take a very successful career and ruin it very quickly if a physician gets involved in this activity and it’s equally serious on the other end. The companies that are offering to pay this money to try and get business illegally, it’s very serious and they’re going to be held accountable too.”
Chan is also being sued by Scotty Foster of Searcy.
Foster claims Chan performed unnecessary surgery on him and is now crippled for life. According to the court documents filed by attorneys’ John Ogles of Jacksonville and Robert McHenry of Little Rock, Dr. Chan performed multi-level fusion surgeries on Scotty Foster’s upper spine that were medically unnecessary leaving him totally disabled.
Writing for the American Association of Neurological Surgeons (AANS), Dr. Patrick W. McCormick said the Chan case raises several interesting issues. “Such behavior represents fraud because the physician is leveraging public assets (government purchasing power) for personal gain,” he said.
Others contend that Chan is not the only surgeon who can be accused of taking money as an inducement for purchasing a particular company’s products.
The U.S. government won or negotiated approximately US$1.53 billion in judgments and settlements of healthcare fraud cases in 2005, according to the FBI Web site. Last year U.S. Attorneys opened 935 new criminal healthcare fraud investigations in addition to 1,689 criminal investigations that were pending and convicted 523 people.
The Department of Justice also opened 778 new civil healthcare fraud investigations in addition to the 1,334 civil cases that were pending and filed complaints or intervened in 266 cases. Since the Health Care Fraud and Abuse Control Program began in 1997, it has turned over $9.2 billion to the Medicare trust fund.
McCormick said based on a review of recent information, illegal kickback behavior does not seem to be widespread among physicians. Public reports by the FBI demonstrate that fraud is prevalent in Medicare and Medicaid programs, which account for some 44 percent of all healthcare fraud. Losses total more than $105 billion annually. A review of FBI press releases reveals that the majority of cases involving trials of doctors for criminal activity are cases of fraudulent claims (typically billing for services not rendered).
Very few are related to monetary kickbacks for use of medical devices. Many of the indictments for illegal kickbacks in the healthcare industry actually do not involve physicians, but rather involve business people, hospital administrators and politicians.
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