Derma Fraud with a Side of Greed

South Florida represents a hotbed of health care fraud and abuse and is often referenced as “ground zero” for Medicare fraud. Indeed, South Florida has garnered national attention for the pervasiveness of health care fraud schemes. Recently, the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force involved charging seventy-seven defendants in the Southern District of Florida. Unfortunately, this is a mere snapshot of the long-term consequences for health care fraud in the South Florida Community.

Since 2003, Gary L. Marder, D.O., has enrolled his clinic in Medicare, a federal health care program. Dr. Marder, the owner and operator of the Allergy, Dermatology & Skin Cancer Centers in Port St. Lucie and Okeechobee, treated Medicare beneficiaries via radiation oncology and other clinical laboratory services. Notably, Marder was the sole physician to render services to patients in both offices. During Marder’s absences, no other physician was present.

On December 13, 2013, Theodore A. Schiff, M.D., brought a qui tam action under the False Claims Act (FCA) on behalf of the government. 31 U.S.C. § 3730(b)(1). In the whistleblower suit, Marder allegedly violated the FCA by knowingly creating and submitting false claims to Medicare for reimbursement of dermatology and pathology services. Dr. Schiff noticed an alarming trend in patients that came to him after seeing Marder at one of his offices because many lacked a serious dermatological condition. On October 14, 2014, the United States intervened in the Civil Action.

More recently, on October 18, 2017, Dr. Marder was charged with obstruction of a federal criminal investigation of a health care fraud scheme by delivering falsified and altered patient files subpoenaed by a federal grand jury. Prosecutors claim that Marder submitted false and fraudulent claims to insurance companies for the services of a medical physicist to advise on dosages for radiation treatments from about January 2011 through January 2016. However, at no time did Marder actually have a medical physicist working in his offices. A Qualified Medical Physicist is an individual who is competent to practice independently in one or more of the subfields in medical physics. Instead, Marder instructed his employees to create false patient files with fabricated radiation dosages and calculations with the forged signature of a medical physicist in attempts to hide the alleged fraud.

According to statements made by Marder’s lawyer, the dermatologist will give up his medical license as part of a plea deal that is expected to be finalized later this month. As part of the plea deal, Marder agreed to post a $1 million bond using his $28 million oceanfront property in Palm Beach, Florida as collateral.

In September 2016, the Court granted summary judgment in favor of the United States finding that Dr. Marder knowingly submitted false claims to Medicare by requesting reimbursement for services that he never actually performed or directly supervised. Marder’s frequent absence, including expansive periods of foreign travel, amounted to days corresponding to over fifty percent of the payments he received from Medicare. United States ex rel. Schiff v. Marder, 208 F. Supp. 3d 1296 (S.D. Fla. 2016). According to the qui tam action, Medicare was billed over $69 million and $15.8 million was paid from January 2008 through September 2014. The United States have stipulated to a consent final judgment of over $18 million to settle False Claims Act allegations against Dr. Marder. Prosecutors noted at the time that “outright fraud of the scope and magnitude seen in this case is rarely seen, especially when supported by such irrefutable evidence,” and that “the pervasiveness of Marder’s practices resulted in virtually every reviewed claim being false.”