U.S. Attorney Announces $2.2 Million Settlement With Urologists For Submitting False Claims To Medicare

United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General ("HHS-OIG"), Naomi Gruchacz, announced that the United States has settled a civil healthcare fraud lawsuit against DR. ROBERT SIMON, a New Jersey-based urologist, and DR. NICOLE FLEISCHMANN, a New York-based urologist. The settlement resolves claims that SIMON and FLEISCHMANN violated the False Claims Act by repeatedly subjecting their patients to medically unnecessary surgical procedures in connection with an implantable neurostimulation medical device and then improperly obtaining payments from Medicare for these same unnecessary procedures.

Under the settlement, which was approved yesterday by U.S. District Judge Paul G. Gardephe, SIMON will pay a total sum of $1,112,695.88 plus interest, and FLEISCHMANN will pay a total sum of $1,101,044.80 plus interest. As a part of the settlement, SIMON and FLEISCHMANN also made extensive factual admissions regarding their conduct. Among other things, SIMON and FLEISCHMANN admitted that they each caused Medicare to pay claims for implantations of a neurostimulation medical device that were not medically reasonable and necessary and did not comply with Medicare's billing rules and guidance.

"Dr. Simon and Dr. Fleischmann performed unnecessary surgical procedures on their patients who suffered from urinary incontinence and then billed a taxpayer-funded program for these procedures," said U.S. Attorney Jay Clayton. "This illegal scheme violated the trust at the heart of doctor-patient relationships and our healthcare system. This Office is committed to holding medical providers accountable, protecting patient care, and safeguarding the integrity of taxpayer-funded programs."

"Health care providers who perform medically unnecessary services can pose a significant risk to patients, especially when pre-operative tests are not completed appropriately and follow-up procedures are performed without sufficient justification," said HHS-OIG Special Agent in Charge Naomi Gruchacz. "HHS-OIG continuously works with key law enforcement partners to seek resolutions that hold accountable individuals who exploit federal health care programs."

As alleged in the Complaint:

The InterStim device is designed to treat urinary incontinence by sending electrical stimulation to a patient's sacral nerve. InterStim's implantable components include a neurostimulator, a battery, and a thin wire-known as a lead-that connects to the sacral nerve, as well as other components that facilitate transmission of electrical impulses to the sacral nerve. Relevant Medicare rules require that before a doctor may permanently implant an InterStim device, the patient must have had a successful test stimulation that met specific defined criteria. The test stimulation is designed to determine whether the InterStim device is likely to be successful in improving the patient's urinary incontinence.

From January 1, 2011, through December 31, 2022, FLEISCHMANN violated the False Claims Act by submitting, or causing the submission of, false claims to Medicare for medically unreasonable and unnecessary InterStim surgical procedures by failing to perform the required preoperative testing before implanting the InterStim device into patients and unnecessarily implanting two InterStim devices into a patient during the same surgical procedure.

Similarly, from January 1, 2011, through October 18, 2021 (the "Simon Covered Period"), SIMON violated the False Claims Act by submitting, or causing the submission of, false claims to Medicare for medically unreasonable and unnecessary InterStim surgical procedures by: failing to perform the required preoperative testing before implanting the InterStim device into a patient; unnecessarily implanting two InterStim devices into a patient during the same surgical procedure; performing medically unreasonable and unnecessary battery and InterStim device replacement and revision surgeries; and improperly billing Medicare twice for removing the lead used to stimulate a patient's sacral nerve during preoperative testing.

SIMON frequently performed unnecessary procedures on patients to replace the InterStim batteries after the InterStim device had been implanted into his patients, despite the fact that there was often no indication that these batteries needed to be replaced.

SIMON and FLEISCHMANN also frequently implanted two InterStim devices into a patient during the same surgical procedure, in a procedure known as bilateral implantation. They did this without conducting the required preoperative test to determine that one InterStim device would effectively treat the patient's urinary incontinence, much less that two InterStim devices would be more effective than one.

As part of the settlement, SIMON and FLEISCHMANN admitted and accepted responsibility for certain of their own respective conduct alleged by the United States, including the following:

• SIMON and FLEISCHMANN were aware that the Centers for Medicare and Medicaid Services ("CMS") had issued a National Coverage Determination ("NCD")-which is a binding statement by CMS setting a national policy granting, limiting, or excluding Medicare coverage for a specific medical item or service-concerning the implantation of sacral nerve stimulators, such as InterStim, to treat urinary incontinence.
• Specifically, SIMON and FLEISCHMANN were aware that in 2002 CMS issued NCD 230.18, which stated that in order to establish that a permanent InterStim implantation is medical necessary, a patient must first undergo a successful test stimulation during which the patient demonstrates a 50% or greater improvement. This improvement is measured through voiding diaries, which are used by the patient to record their symptoms of urinary incontinence.
• SIMON and FLEISCHMANN primarily performed a percutaneous nerve evaluation test ("PNE") before permanently implanting the InterStim device into patients. The PNE is supposed to take place over at least three, and up to seven, days. SIMON and FLEISCHMANN repeatedly billed Medicare for permanent InterStim implantations despite failing to first complete a successful PNE. Instead of completing a full PNE, SIMON and FLEISCHMANN frequently conducted an abbreviated test. Further, SIMON and FLEISCHMANN also failed to collect and keep the voiding diaries required by NCD 230.18.
• SIMON also admitted and accepted responsibility for additional conduct alleged by the United States, including the following:
• During the Simon Covered Period, SIMON rarely concluded that a PNE did not support a permanent implantation-doing so for approximately 3% of his patients who received a PNE. In these instances, SIMON contemporaneously recorded in his office notes that the PNE did not support a permanent InterStim implantation. Nevertheless, in each of these cases, SIMON still performed a permanent implantation of the InterStim device and falsely documented in his surgical notes that the PNE had been successful.
• During the Simon Covered Period, SIMON frequently performed medically unreasonable and unnecessary InterStim device revision and replacement surgeries on his patients and then billed Medicare for these procedures. Specifically, SIMON often surgically removed and replaced InterStim batteries within three years or less of the implantation, despite the fact that InterStim batteries were supposed to last for approximately five years.
• SIMON also frequently replaced InterStim neurostimulators and added a second InterStim device for patients who started with one InterStim device, without any objective evidence that the neurostimulator needed to be replaced or that the patient would benefit from the implantation of a second InterStim device.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.

* * *

Mr. Clayton praised the outstanding investigative work of HHS-OIG.

The case is being handled by the Office's Civil Frauds Unit. Assistant U.S. Attorney Allison M. Rovner is in charge of the case.