Eye Doc’s Fraud Trial Focuses on Unnecessary Treatments

WEST PALM BEACH, Fla. (CN) – Charged with billing Medicare more than $190 million in a long-running health care fraud, a South Florida eye doctor faced new testimony accusing him of using obsolete laser treatments that were medically unnecessary and known to damage patients’ eyes.

Julia Haller, an expert witness for federal prosecutors in the criminal case, offered the jury a glimpse into ophthalmologist Salomon Melgen’s alleged renegade medical practice, where he falsely diagnosed patients with wet macular degeneration and then billed for outdated, harmful laser treatments, according to Haller’s testimony.

The focal laser treatments were commonly used twenty years ago but have been largely replaced by newer, less destructive alternatives to treat macular degeneration, Haller said.

“The laser puts permanent scars on the [retina],” Haller said in her testimony at the West Palm Beach federal courthouse. “It’s not like cutting a fingernail. This is serious stuff.”

Haller testified that medical notes listed in Melgen’s patient charts were “pure fantasy,” and the diagnostic basis for administering the laser treatments was fabricated in the files she reviewed.

According to Haller’s testimony, Melgen’s medical records suggest that he improperly administered laser treatment to an elderly patient in her late 90s. Haller said the records also indicate Melgen employed a focal laser regimen on a patient who had only one working eye, a decision which Haller described as “unconscionable” in light of a lack of evidence to support the underlying diagnosis.

“It’s  contraindicated. It’s damaging. It’s his only eye,” said Haller, a Harvard med school graduate and Ophthalmologist-in-Chief at Wills Eye Hospital in Philadelphia.

Federal prosecutors claim Melgen falsely diagnosed patients with wet macular degeneration so he could administer focal laser treatment as well as pricey Lucentis drug injections. Lucentis is the pharmacological remedy which has essentially replaced lasers in the treatment of wet macular degeneration, Haller said.

Haller testified that while Melgen’s allegedly unnecessary Lucentis injections were outside the standard of care, the laser regimens listed in his medical charts were particularly egregious given that they would scar ocular tissue.

In a separate criminal case, Melgen is charged with bribing Sen. Robert Menendez to help him sidestep Medicare’s attempted clawback of exorbitant sums Melgen had allegedly billed for Lucentis injections. Sen. Menendez, who is charged alongside Melgen, communicated with the Centers for Medicare and Medicaid Services and pushed its top officials to ease up on the clawback order, prosecutors say.

Of the more than $190 million that Melgen and his South Florida medical practice Vitreo-Retinal Consultants billed Medicare between 2008 and the end of 2013, they received at least $105 million, according to the health care fraud indictment. For one patient in particular, the indictment states, Vitreo-Retinal managed to bill the government $615,000 for examinations, tests and procedures, including 133 Lucentis injections and 44 focal laser treatments.

A linchpin in the prosecution’s case has been Melgen’s purported fraudulent billing for diagnostic tests and procedures on patients’ prosthetic or blind eyes. He allegedly billed for pointless workups on the prosthetic eyes of three patients listed in the indictment.

In one instance in which Melgen supposedly billed for imaging tests on a patient’s blind eye, Haller called his actions “terrible and disgraceful,” and embarrassing for their profession.

Haller and retinal expert Stuart Fine, a fellow witness for the prosecution, have testified that medical notes in Melgen’s charts were concocted, often bearing no relation to the actual condition of his patients’ eyes.

Throughout the trial, Melgen’s defense team countered that Melgen’s diagnoses may not be line with academic experts like Fine and Haller,  but that he did not intentionally mislead Medicare. Courthouse News previously reported that Melgen’s defense team characterized Fine as an ivory-tower professor whose interpretation of the patients’ past angiographies would naturally be different than that of a typical clinician such as Melgen.

The defense has also challenged prosecutors’ focus on a small patient group plucked from a massive number of Medicare patients treated by Melgen.

The Palm Beach Post reported that during cross-examination last week, Melgen’s defense attorney Matthew Menchel presented a 2010 physician survey  that showed focal laser treatments were still widely used by ophthalmologists to treat macular degeneration.

A National Eye Institute’s fact-sheet (not presented in the trial) asserts that “in the recent past, the standard treatment for macula edema,” a symptom of macular degeneration, “was focal laser photocoagulation, which uses the heat from a laser to seal leaking blood vessels in the retina.” However, “recent clinical trials, many of them supported by NEI, have led doctors to move away from laser therapy to drug treatments injected directly into the eye,” the NEI document reads.

In testimony late Thursday, prosecutors’ witnesses made statements that did not fall neatly in line with the narrative that Melgen was hurting his patients. One 79-year-old former patient, called to the stand by the prosecution, testified that he believes his vision improved after Melgen treated him for visual artifacts called “floaters.” Prosecutors maintain that Melgen fraudulently billed Medicare for treatments administered to the patient, whom Melgen diagnosed with macular degeneration.

The patient said he believes Melgen applied laser treatments to his eyes to treat leaking blood vessels. His vision is “20/20,” he said, noting that he has undergone cataract surgery by another doctor.

Another witness called by the prosecution said that Melgen gave him hope that his vision could be restored, though he never ended up recovering his sight and remains blind.

“If he was still in business … I still would go to him,” the patient testified.

In addition to the health care fraud and bribery cases, Melgen faces a barrage of lawsuits in Palm Beach County state court, filed by patients claiming his medical practice administered contaminated Lucentis and Avastin injections into their eyes in 2013 and 2014, causing them to develop eye infections that blinded them or impaired their vision.

The lawsuits allege Melgen arranged for single-use Lucentis vials to be recombined, so he could milk multiple doses from them. He did so in defiance of manufacturer guidelines and the Centers for Disease Control’s warnings to the medical community that compounding the drug could cause it to become tainted with microbes prior to injection, the lawsuits claim.

Those allegations are echoed in the yet-to-be-tried bribery case against Melgen and Sen. Menendez.

Melgen and his medical malpractice insurer have blamed the purported bacterial contamination on a compounding pharmacy that recombined the Lucentis vial contents for him. The pharmacy, a co-defendant in several patients’ lawsuits against Melgen, shut down its sterile drug production per a 2014 agreement with the Florida Department of Health, after tainted batches of the eye medication were traced back to its facilities.

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