Pathology Inc. Consensus Conference
October 30, 2007

Topic of the Day-Michigan Dermatologist Convicted of Fraudulent Laboratory Billing Practices

A recent legal judgment against a Michigan dermatologist is getting a great deal of attention from dermatologists and pathologists alike.

Robert Stokes, D.O., is a board certified dermatologist practicing in Grand Rapids, Michigan. A jury convicted him on 31 counts of fraudulent billing practices. Included among the violations:

Upcoding on billing
Billing for professional services not performed
Submitting fraudulent claims for laboratory tests not performed nor rendered.

In all cases, the FBI utilized the original pathology reports as its primary source of information.

This case is significant because the federal prosecutors pursued an indictment and conviction of laboratory billing violations that did not involve the Medicare program. These fraudulent billing practices were claims filed against Blue Cross Blue Shield of Michigan, Aetna, and TriCare. It serves notice to all speciality physicians that may be involved in this type of practice. However, it also serves notice to pathology laboratories who may engaged in discounted client billing. While there are no definitive guidelines, several legal consultants suggest client bill pricing close to the level of Medicare fees. Interestingly, the dermatopathology laboratory that was being utilized by Dr. Stokes, Hillbrich Dermatopathology Laboratory Inc, agreed to stop its deep discounts on client bill accounts, adjusting upward its fees closer to the Medicare fee schedule. By their own admission, this would result in a 30% decline in business.

The FBI Press release is reproduced here.

United States Attorney’s Office
Western District of Michigan

FOR IMMEDIATE RELEASE

Grand Rapids, Michigan – April 26, 2007 – United States Attorney Charles R. Gross announced that this evening, after a full day of deliberation, Dr. Robert W. Stokes, D.O., age 55, a licensed, board certified dermatologist who practices in Grand Rapids, Michigan, was convicted by a jury of 31 counts of health care fraud, in violation of Title 18, United States Code, Section 1347. Dr. Stokes faces a maximum penalty of ten years’ imprisonment and a $250,000 fine for each count. A sentencing date has not yet been set.

The investigation began when federal agents obtained information from patient complaints and audits by Blue Cross Blue Shield of Michigan (BCBSM) and Medicare concerning the billing practices of Dr. Stokes. A federal grand jury investigation revealed that Dr. Stokes was “up-coding,” that is, billing for procedures that netted a higher level of reimbursement than the procedures he was actually performing. Specifically, Dr. Stokes was “up-coding” surgical procedures and billing for follow-up office visits for which he was not entitled to reimbursement. He justified these unnecessary office visits by falsely claiming that the patients had developed post-operative infections. A conservative estimate of the fraud indicated that Dr. Stokes over-billed insurance providers by more than $500,000.

The prosecution of this case resulted from a joint investigation conducted by the Federal Bureau of Investigation (FBI) and the Office of Inspector General for the Department of Health and Human Services (HHS). The investigation team included FBI Special Agent Dave Kleinpaste and HHS Special Agent Mark Squeteri.

Mr. Gross praised the work of his staff and the investigators, noting the complex nature of health care fraud investigations. “I am proud of the dedication, professionalism, and hard work of the entire prosecution team,” he said. Mr. Gross added: “Protecting the integrity of the Medicare and health care insurance system is of paramount importance to the United States Attorney’s Office. Not only does health care fraud waste taxpayers’ dollars; it can also jeopardize patient safety.”

Dr. Stokes remains on bond, but has agreed to cease the practice of medicine.

This case was prosecuted by Assistant United States Attorneys Ray Beckering and Ron Stella.

Contact:
Ray Beckering
Assistant United States Attorney
(616) 456-2404

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