Melissa L. Jampol, Member of the Firm in the Health Care & Life Sciences and Litigation practices, in the firm’s New York office, was quoted in COSMOS Report on Medicare Compliance, in “Hospital in Virginia Is Charged with Crimes Stemming from Doctor’s Unnecessary Surgeries,” by Nina Youngstrom.
Following is an excerpt:
Four years after obstetrician/gynecologist (OB/GYN) Javaid Perwaiz was convicted of crimes in connection with his medically unnecessary hysterectomies and other procedures, the hospital that provided him a venue is facing criminal charges of its own.
A federal grand jury Jan. 8 charged Chesapeake Regional Medical Center (CRMC) in Virginia with billing Medicare, Medicaid, TRICARE and other payers for unnecessary or noncompliant surgeries performed by Perwaiz, who is serving a 59-year prison term, the U.S. Attorney’s Office for the Eastern District of Virginia said.
Despite a previous felony conviction and complaints to hospital management from clinicians and managers about his surgical and documentation practices, Perwaiz was allowed to continue operating on patients until his April 2019 arrest, the indictment alleges. He had support from a previous CEO and a “close personal relationship” with a labor and delivery (L&D) nurse supervisor. The hospital was charged with health care fraud and conspiracy to defraud the United States and interfere with government functions.
“This whole thing is really unusual,” said former federal prosecutor Melissa Jampol. “The picture painted by the government in its allegations is that there was a close friendship between the [former] CEO and the physician and profitability that clouded the compliance function.”
The allegations show the tug-of-war between revenue and compliance. “There’s always a tension between high performers at any company—it’s not unique to health care—and compliance issues when they’re raised,” said Jampol, with Epstein Becker and Green. It reinforces why the compliance function must be independent, with its own hotline and dotted-line reporting to the board.
CRMC calls the allegations “unfounded” in a statement.
According to the indictment, CRMC accommodated Perwaiz, an independent physician, because his surgeries yielded $18.5 million for the hospital between 2010 and 2019. About 38 of the 52 counts he was convicted of in 2020 pertain to billing for services provided at CRMC, including unnecessary hysterectomies, elective inductions before 39 weeks of gestation without medical justification, and sterilizing Medicaid patients without their signing consent forms 30 days in advance. The hospital allegedly made exceptions for Perwaiz, such as allowing him to bill inpatient-only procedures as outpatients and forego the use of electronic medical records.
Hospital Grants Privileges Despite Conviction
There were always red flags. When Perwaiz applied for CRMC privileges in 1983, the then-CEO of the hospital (until 2005) was informed by Maryview Hospital that it had terminated Perwaiz’s privileges for performing unnecessary surgeries, including hysterectomies on about 12 patients, the indictment alleges. CRMC granted Perwaiz privileges anyway, but there was more bad news to come. The Virginia Board of Medicine censured Perwaiz for his “lack of documentation and for having a sexual relationship with a patient” while at Maryview, according to the indictment.
About a decade later, Perwaiz pleaded guilty to two felony counts of tax fraud. CRMC’s then-CEO “submitted a letter of support for Perwaiz’s 1996 sentencing, calling Perwaiz his ‘personal friend,’” the indictment alleges. Perwaiz was sentenced to four months of home confinement. The state board subsequently revoked Perwaiz’s license but reinstated it two months later. At a hearing about the license, CRMC’s then-CEO again filed a letter of support for Perwaiz and included a physician profitability analysis.
Another M.D. Is Allegedly Reprimanded for Complaint
An uglier picture of Perwaiz was painted for the state board by a CRMC OB/GYN who was identified as W.R. in the indictment. W.R. estimated two-thirds of Perwaiz’s surgeries were medically unnecessary. But speaking his mind didn’t go well for W.R. The medical staff executive committee recommended a letter of reprimand and warned W.R. to “refrain from making such unsupportable statements,” the indictment alleged. The executive committee then began a peer review of W.R. and demanded his apology. Although he wrote an apology letter, W.R. complained again about Perwaiz the following year—and CRMC formally reprimanded W.R. for not participating in the peer review.
CRMC re-credentialed Perwaiz about every two years between 1984 and 2019, with credentialing recommendations allegedly approved by CRMC’s CEO.
The indictment also drills down into Perwaiz’s abuses and the hospital’s alleged tolerance of them. In one case, CRMC staff allegedly “became alarmed” after finding out one of Perwaiz’s pregnant patients was scheduled for procedures, including sterilization, and that the patient hadn’t spoken with Perwaiz about the surgery. “Perwaiz later advised the CRMC nurse that the patient had an ectopic pregnancy, but he failed to provide updated records and documentation justifying the surgery prior to operating on the patient, despite the nurse’s request,” the indictment alleged. “CRMC failed to conduct contemporaneous risk reporting or peer review for this incident.”
In November 2014, a patient informed CRMC that Perwaiz had performed a hysterectomy because of a supposedly pre-cancerous lesion, but she found out the lesion was still there during a post-op emergency room visit. “Her complaint was forwarded to the CMO [chief medical officer] and other employees; however, no action was taken,” the indictment alleged.
The indictment also alleged that “Perwaiz repeatedly performed sterilizations on Medicaid patients at CRMC without valid consent forms and CRMC knowingly allowed him to continue the same.” Medicaid requires patients to sign a consent form within 30 days of the procedure. Long after the OB/GYN was arrested, CRMC self-disclosed the lack of consent forms to the North Carolina Department of Health and Human Services and included a $22,921 refund check.
Perwaiz also electively induced labor in some patients before 39 weeks, which the indictment alleged “is contrary to the medical standard of care.” He routinely scheduled his CRMC patients for elective inductions and Cesarean sections on Saturdays before they were 39 weeks pregnant for no medical reason. The only rationale was “to ensure he was there to perform the delivery (and to bill insurance for it),” the indictment alleged.
CRMC in 2011 adopted a written policy prohibiting elective inductions before 39 weeks of gestation and requiring physicians to produce an updated prenatal record when scheduling them. But Perwaiz and other physicians were allegedly permitted to continue to perform medically unnecessary early inductions. When he scheduled the elective inductions, Perwaiz prepared an OB flow sheet. For many of his patients, the indictment alleged, the flow sheet had “two different due dates in two different styles of handwriting.” One entry, which was written by staff, indicated the patient was pre-39 weeks, while the other entry, written by Perwaiz, “made it appear the induction was at or after 39 weeks.”
XOXO: Relationship Revealed in Jailhouse Messages
After an L&D nurse reported the different dates to an L&D nurse supervisor, the nurse supervisor told the L&D nurse manager, and the nurse was allegedly reprimanded for saying “‘a negative thing about one of our best doctors’ in front of other nurses.”
It turned out the L&D nurse supervisor was in a relationship with Perwaiz as revealed by “jail messaging” between the two, the indictment alleges. The nurse supervisor wrote to Perwaiz about wine: “‘I try to drink nothing less than 90 points but I can't justify drinking such expensive wine like you bought me. You spoiled me. I miss you. XOXOX.’” Perwaiz wrote back that “‘Hopefully one day soon I will have a chance to spoil you again. That gave me so much joy. Miss you far more. XO XO and much more.’” The nurse supervisor replied, “‘Just when I feel nothing positive will happen today ... I get your so genuine and heart felt text. Now I feel much needed love and I can feel your warm embrace.’”
Perwaiz also performed procedures on the inpatient-only list on outpatients, partly because they faced less scrutiny, the indictment alleges. This was a source of complaints. For example, in 2014 the hospital’s finance manager notified the director of care management that some payers wouldn’t pay the hospital for procedures improperly billed as outpatient.
Against this backdrop, the CMO sent a letter to surgeons saying IPO procedures require an inpatient order and authorization, but Perwaiz flouted the policy. “In one instance, the Director of Care Management addressed Perwaiz about these issues while accompanied by the then-CEO. In response, Perwaiz spat on the Director of Care Management,” the indictment alleges.
When a payer denied payment because an IPO procedure was performed inpatient, CRMC typically sought payment from the patient, even after Perwaiz was arrested, the indictment alleges.
Jampol is interested to see whether the government has evidence of the allegations. It’s an uphill climb to prove the hospital committed a crime. “For institutional liability, you speak through your senior leadership,” she said. A conviction requires the government to show the institution allowed the doctor to break the rules and “that by doing so they were knowingly and willfully enacting a scheme to defraud a health care program.”
She noted it’s rare to see the credentialing process implicated in a criminal case. “They also used the hospital’s self-disclosure against it,” Jampol said. “There’s often unintended consequences when you make a self-disclosure.”
People
- Board of Directors / Member of the Firm