Dr. Ostad,
an Iranian-American Jew, also accused Dr. Seyfer of making
anti-Semitic remarks. Seyfer "absolutely" denies the allegations.
To learn more
about the government's efforts to crack down on Medicare
waste, check out www.dhhs.gov/progorg/oei/outreach/outreach.htm.
Dr. David Ostad
is now a plastic surgery resident at the University of
New Mexico in Albuquerque.
The jury determined
that Ostad was fired in retaliation for voicing his
concerns and awarded him more than $380,000. The Ostad
case was first reported by the Oregon Health Forum
in January 1999.
In a verdict that could have far-reaching implications
for the Oregon Health Sciences University, a federal jury
last month awarded $382,000 in damages to a former plastic
surgery resident who was fired for raising questions about
his boss's billing practices--practices that may involve
Medicare fraud.
The former resident, Dr. David Ostad, was terminated
after he accused his boss, Dr. Alan Seyfer, the chief
of the plastic-surgery division, of submitting bills to
insurance companies and the federal government for operations
that were actually performed by someone else--a practice
known as "ghost surgery."
Seyfer, a 54-year-old former Army surgeon who once operated
on President Reagan, denies any wrongdoing, and the question
of whether any ghost surgery took place on the hill remains
unsettled. If true, however, the allegations could prove
to be expensive for OHSU. In 1995, the University of Pennsylvania
paid a fine of $30 million in a similar case, and earlier
this year the University of Chicago paid almost $11 million.
Alwyn Cassil, a spokeswoman for the U.S. Health and Human
Services' Office of Inspector General, which investigates
Medicare fraud along with the U.S. Attorney's Office and
the FBI, would not confirm or deny the existence of a
federal probe into Ostad's allegations. But confidential
sources told WW that federal investigators were
present at the trial, held in the Mark O. Hatfield U.S.
Courthouse downtown, and have scheduled interviews with
witnesses.
The Ostad case is difficult to narrate because key evidence
remains sealed. But according to court documents, Ostad,
now 33, joined OHSU as a resident in plastic and reconstructive
surgery in July 1996. (Residents are doctors who have
graduated from medical school but are still receiving
training in their specialty.)
It seems that Ostad's relationship with Seyfer, who was
both his professor and his boss, soon became strained.
Ostad claimed that Seyfer ordered him to dictate medical
records that were at variance with the facts, and that
when Ostad voiced his concerns, Seyfer threatened him
with dismissal. OHSU claimed that Ostad raised the billing
issue in an effort to derail his termination.
At a disciplinary panel convened in August 1997, Seyfer
argued that Ostad's performance was not up to par. But
Ostad submitted a list of 25 cases where he accused Seyfer
of signing paperwork taking credit for surgeries where
he wasn't present. Cases ranged from an operation to remove
a foreign body from a patient's arm in December 1996,
when Ostad claimed that Seyfer was actually performing
another operation in a different building, to a hand surgery
in February 1997 when Ostad claimed that Seyfer was out
of the country.
Seyfer denies the allegations that he billed for surgeries
at which he was not present. "That is absolutely not true,"
he told WW.
It's not clear whether the patients were aware of any
controversy over their surgeries. Efforts by WW
to reach some of the patients were unsuccessful.
At teaching hospitals such as OHSU, it is common practice
for senior, or attending, surgeons such as Seyfer to hover
over the shoulders of junior or resident surgeons during
operations, dispensing advice or wielding the scalpel
for particularly difficult parts of the procedures. This
arrangement is a crucial element of the training of resident
surgeons.
But complications can develop when it comes to the question
of who foots the bill. Because residents' salaries are
heavily subsidized by the federal government (to offset
the high cost of training them), government programs such
as Medicare forbid hospitals from billing for procedures
performed by residents. Attending surgeons, however, are
allowed to bill Medicare for surgeries, even if they never
touch the tongs--so long as they are "scrubbed in" and
present for the procedure. Private insurance companies
typically follow Medicare requirements.
The jury in the Ostad case was not asked to settle the
question of whether Seyfer performed ghost surgery. Instead,
it merely determined that Ostad was fired in retaliation
for voicing his concerns and awarded him more than $380,000,
including $200,000 in punitive damages against Seyfer.
Ostad's attorney, Richard Busse, declined to comment
on any aspect of the lawsuit. But OHSU says it has taken
steps to appeal the verdict and maintains that billing
irregularities are extremely rare, pointing out that an
internal review turned up only one case of mistaken billing.
Regardless of the ultimate outcome of the Ostad case,
the underlying allegations are sending chills through
the spines of Pill Hill administrators.
Ghost surgery has come under intense scrutiny from the
federal government in the last several years as part of
its ongoing war on Medicare waste. Although precise figures
are by their nature impossible to determine, the General
Accounting Office estimates that somewhere between 3 percent
and 10 percent of all health-care spending is attributable
to waste, fraud and abuse. Translated to a massive government
program like Medicare, that suggests that the federal
government loses somewhere between $6 billion and $22
billion a year.
In 1997, federal auditors began a probe of ghost surgeries
at OHSU as part of a national investigation known as Physicians
At Teaching Hospitals, or PATH. But U.S. Rep. Elizabeth
Furse and U.S. Sen. Ron Wyden went to bat for the university,
which, with roughly 10,000 employees, is one of the largest
employers in the state. Wyden and Furse complained that
the rules were ambiguous, and the investigation was ultimately
called off.
But just because the feds dropped the PATH case against
the university, it doesn't mean they can't reopen an investigation,
especially now that the rules regarding attending surgeons
have been made crystal-clear. "If they weren't there,
they can't bill," says Cassil of the Inspector General's
Office. "It's not rocket science."
Seyfer denies any pattern of mistakes but concedes that
he made one billing error, which was later rectified.
Seyfer is planning to step down as chief of the plastic
surgery division later this month and go into private
practice. He told WW that his retirement has nothing
to do with the Ostad case.
- - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Willamette Week | originally
published April 26,
2000
