Friday, February 27, 2009

AIDS Doctor Pleads Guilty To Healthcare Fraud

On February 24, 2009, AIDS doctor Dr. George Steven Kooshian pleaded guilty to two federal counts of health care fraud and two counts of making false statements. The charges related to allegations that he "subdosed" patients by administering doses of medicine that contained less than the prescribed amount of medication that the patients were supposed to receive.

Dr. Kooshian operated Valley View Internal Medicine Group and Ocean View Internal Medicine Group at four locations in Los Angeles and Orange Counties. Problems came to light in 2001 after a medical malpractice case was filed. The case turned criminal when a former medical technician, Virgil Opinion -- who was Dr. Kooshian's assistant for more than 10 years -- also sued him in a civil case and described diluted dosages in an article in OC Weekly. The statements triggered an investigation by the FBI and the U.S. Department of Health and Human Services.

Four years later in 2005, the U.S. Attorney's office charged Dr. Kooshian with 29 counts of healthcare fraud, conspiracy and making false statements to insurance companies. In addition, the technician Virgil Opinion was charged and he has already pleaded guilty to participating in the scheme.

By pleading guilty, Dr. Kooshian specifically admitted that he and Opinion improperly billed patients' health insurance providers for medications used to treat problems relating to AIDS, HIV and hepatitis. The medications involved included Epogen, which is used to treat anemia; Interferon, which is used to treat Kaposi's sarcoma; and Immunogammaglobulin, which is used to treat peripheral neuropathy or numbness of the extremities.

The false billings in this case included: (1) bills submitted for a full dose of the medication when the patient was subdosed,(2) continuing to bill for administering the medication when the patient was no longer taking it, and (3) billing as if the medication had been administered in the office by medical personnel when the patient had been self-injecting the medication at home.

Dr. Kooshian admitted that health insurance providers, including Medicare, suffered losses of at least $350,000 in fraudulent claims relating to these medications, and the government has alleged that the losses could be as high as $660,955. There was also an agreement in the plea that a failure to provide a full dose of these medications would not necessarily shorten the life or cause the death of a patient.

Virgil Opinion is scheduled to be sentenced by United States District Judge Alicemarie H. Stotler in Santa Ana on May 4. Dr. Kooshian is scheduled to be sentenced by Judge Stotler on May 11.

See article in the Los Angeles Times:,0,1645216.story

Related court documents and information may be found on the website of the District Court for the Central District of California or on Pacer at (where you will need to set up an account).

Commentary: This case shows that even a physician who is well known and successful can be subject to these claims. This case had a number of facts present that we see in many of our cases.

First, the genesis of this criminal case can be traced to a civil medical malpractice suit. That 2001 civil suit snowballed and landed Dr. Kooshian in criminal court. Bryan Noble, an AIDS activist and former Dr. Kooshian patient, filed a malpractice claim alleging, among other things, that the doctor committed fraud by repeatedly lying about the contents of IVs. It is too common for a doctor to go into total defense and fight mode on a malpractice case even where there is some exposure not considering how it can grow. Many of these cases do not get better with time -- they get worse. Damage control at an early stage is important.
One issue we see is that the physician's attorney for malpractice cases is the attorney chosen by the malpractice carrier. That attorney has a dual representation: he or she represents the carrier and the physician. Often the attorney fears telling the attorney of any wrong doing or "bad" facts since it will get reported to the carrier. We suggest in sensitive cases that physicians hire us (or their own attorney) to independently represent them and help craft the strategy since we have only one loyalty: the physician.

Second, there was an apparent failure to assess the potential criminal charges in the civil case. In April 2002, Dr. Kooshian was deposed and admitted criminal conduct rather than asserting the 5th Amendment. In his deposition, Dr. Kooshian admitted that he secretly ordered his nurse to inject an AIDS patient with liquid vitamins rather than an expensive and medically critical drug.

Riddle me this: Why did not the doctor either assert the 5th Amendment or settle this case before making such an admission? Often professionals fear asserting the 5th Amendment even when it is necessary -- however we persuade them (often after much heated discussion) of the perils of admitting criminal conduct or lying about it. We have had numerous cases where we have asserted the 5th Amendment and obtains stays of civil cases where criminal allegations are alleged. This has often been a necessary strategy.

Third, a former employee, the technician Virgil Opinion, had complained about the illegal practices while he was employed. After he quit, guess what? He hired the attorney representing the patient in the malpractice case to sue for emotional distress. Then Opinion went to the press and became a cooperating witness and co-defendant in the federal criminal case. As an aside, I doubt that Opinion thought he would also be charged criminally after he was a whistleblower -- but he made all these statements without any immunity agreement. His civil lawyer may have not seen that coming either. One of the signs that Opinion cooperated against Dr. Kooshian criminally is that his sentence is scheduled after Dr. Kooshian's.

Fourth, it appears that Dr. Kooshian was in denial and thought he could simply aggressively defend the civil cases. Dr. Kooshian even went to the press in 2001 and accused the patient and Opinion of blackmail. Often we understand that professionals do not want to admit wrongful conduct for a variety of reasons. But they need to understand the need for being completely honest with their attorney (especially when all communications are covered by the attorney-client privilege).

Conclusion. The only logical way a global strategy can be formed which considers the civil lawsuit, the professional board and criminal liability is to know all the facts. Sometimes people naively assume attorneys will not fight as hard if they know there was wrongdoing. Our saying is: "There is no such thing as a bad fact. Only a fact we don't know."

We do our best to be somewhat Zen about it -- we are California attorneys after all -- and persuade our client: "it is what it is." Clients are not in the best position to figure out what's a bad fact and what's a good fact. Over the years it is very difficult to keep out all the negative facts especially when witnesses are deposed or interviewed. But if your attorneys don't know about these facts at an early stage -- or they have not seen a civil case turn into a trainwreck like we have -- you will get bushwacked at some point. Early and honest assessment is key to helping professionals make intelligent, well-informed and strategic decisions that consider every angle.

Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California.  They focus their practice on the representation of individuals, businesses, licensed professionals, including health care professionals and providers including individual physicians, corporate providers and group practices.


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