Fraud accusation ends in apparent murder-suicide

Federal prosecutor said Philip Gabriele, MD, and his wife billed public and private insurers for unnecessary cataract procedures.

In the summer of 2009, a prominent Indiana ophthalmologist and his wife were accused in a U.S. District Court of medical fraud and, days later, died in a reported murder-suicide. The couple was accused of making false and fraudulent cataract diagnoses and performing unnecessary cataract surgeries.

Philip Gabriele, MD, 44, and his wife, Marcella, 43, were indicted in June by a federal grand jury for multiple counts of health care fraud, wire fraud and criminal conspiracy. They were charged with billing Medicare, Medicaid and private insurance carriers for unnecessary cataract procedures.

Dr. Gabriele had offices in the Indiana cities of Elkhart, South Bend and Mishawaka. His wife was employed as the office manager in the practice.

Less than a week after facing charges, the Gabrieles were found dead of gunshot wounds in their Elkhart office. Philip Gabriele reportedly died of a self-inflicted gunshot to the head and his wife died of multiple wounds to the chest.

The Gabrieles adamantly asserted their innocence in the media. However, attorneys acting on behalf of the couple’s practice recently pleaded guilty to making false statements in exchange for other charges being dropped. In addition, five separate lawsuits related to the Gabrieles’ estate have been filed in county courts, the South Bend Tribune reported in December.

The 19-page, 15-count indictment covered alleged business practices that occurred between 2004 and 2009, according to local television outlet WNDU. The report said local police obtained search warrants and seized boxes of records from the Gabrieles’ three offices in May 2007.

The Gabrieles maintained their innocence in a suicide note released by TV outlet WSBT.

OSN Regulatory/Legislative Section Editor Alan E. Reider, JD, of the Washington, D.C. law firm Arnold & Porter, served on the Gabrieles’ initial legal defense team.

Shortly after the Gabrieles’ deaths, Mr. Reider received a handwritten letter from Dr. Gabriele asking him to tell their side of this tragic story.

“Please tell our story,” Dr. Gabriele wrote. “You, J.P. [Hanlon], [James] Freeman and everyone else involved knows the truth.” – by Matt Hasson

Commentary: Why it is time for medicine, and ophthalmology in particular, to stand up against abusive prosecutors

Alan E. Reider

In my 30 years of private practice, I have represented several physicians, mostly ophthalmologists, who were under investigation for allegations of criminal fraud. While many of the prosecutors were professional, fair and respected the rights of those under investigation, sadly there have been some whose zeal for pursuing their case pre-empted any consideration of justice. And because these prosecutors have such remarkable power, it is virtually impossible for the target of an investigation, particularly when that target is an individual, to withstand such an assault.

I thought I had seen the worst in two recent cases in which prosecutors threatened to issue subpoenas to ophthalmologists who agreed to serve as experts for the defense. These subpoenas were designed to intimidate those experts with the threat of prosecution being brought against them. If a defendant had attempted to intimidate a government witness, it would be considered obstruction of justice, subject to criminal prosecution. But when the government does it, apparently it is nothing more than appropriate conduct in the quest for justice. I should add that in neither case did the expert flinch and in both cases the ophthalmologists were exonerated.

But despite my disappointment in the conduct of the prosecutors in those two cases, nothing can compare to the conduct of the prosecutors in the case of Philip Gabriele, MD, an ophthalmologist from Indiana who, along with his wife, was indicted for health care fraud in June 2009. As it has been widely reported in the press, rather than face these charges, Dr. and Mrs. Gabriele chose to end it all with a murder-suicide pact. Their failure to continue their fight in court, combined with the subsequent guilty plea entered by Dr. Gabriele’s medical practice, apparently convinced most that the Gabrieles were guilty as charged. What is not generally known, however, are the details of the government’s allegations against the Gabrieles, the evidence on which the government planned to base its case, the refusal of the government to consider exculpatory evidence on behalf of the Gabrieles, and the government’s actions against the Gabrieles designed to prevent them from mounting an effective defense.

The government’s case

The government’s investigation of Dr. Gabriele and his practice began with the execution of a search warrant, in which a team of federal agents simultaneously descended upon Dr. Gabriele’s office and the Gabrieles’ residence and seized medical, financial and personal records. From the questions asked by the investigators, it was clear that they had been provided information by an insider, likely a practice employee. At the same time, however, from those questions it was apparent that there was little understanding on the part of the government — or on the part of the insider — about appropriate medical practice. Some allegations were absurd: that Dr. Gabriele purposefully delayed performing a YAG procedure beyond the 90-day global period in order to maximize reimbursement or that he selected a particular IOL because it was known to create complications. The government also alleged that Dr. Gabriele performed unnecessary YAG procedures and up-coded E&M services. But through expert review and data analysis, the defense was able to demonstrate that Dr. Gabriele’s use of the YAG was appropriate and, in fact, was below the norm for ophthalmologists. Further, nationally known coding experts reviewed his charts and concluded that Dr. Gabriele had under-coded his E&M services. These facts should have alerted the government that it was being fed misinformation from its sources and should view any other allegations with great skepticism. Instead, the government simply shut down communication, refused to consider any more of the defense arguments and blindly went forward with its indictment.

The indictment alleged five areas of misconduct: (1) Dr. Gabriele falsely diagnosed cataracts in patients and performed unnecessary cataract surgery; (2) Dr. Gabriele falsely diagnosed ptosis in patients, altering patient charts to support the ptosis diagnosis, and performed improper ptosis surgeries; (3) Dr. Gabriele performed unnecessary recession and resection surgeries; (4) Dr. Gabriele up-coded intermediate visual field exams as complete visual field exams; and (5) Dr. Gabriele falsely advertised the success rate of patients who had undergone LASIK procedures. These claims, however, were no more valid than the others that had been abandoned by the government.

What the government did not make public

As noted above, the government abandoned several theories of liability as the result of documentation and expert support presented on behalf of Dr. Gabriele. While the defense for Dr. Gabriele was prepared to address each of these additional issues and pleaded with the government for the opportunity to do so, the government refused, perhaps believing that the more information it had, the less likely it would be able to justify the prosecution. Had he been given the opportunity, Dr. Gabriele would have responded with documentation to each of the five allegations as follows:

1. Dr. Gabriele’s cataract surgeries were reviewed by a panel of highly respected, expert ophthalmologists with impeccable credentials. One expert reviewed each of the claims identified by the government as problematic. The experts found Dr. Gabriele’s decisions to be reasonable and appropriate.

2. The ptosis procedures had been reviewed by an ocular plastics expert who supported Dr. Gabriele in each of the cases alleged by the government to have been improper and rejected the government’s allegations that the records had been fabricated.

3. The recession and resection procedures had been reviewed by an expert who supported the propriety of Dr. Gabriele performing each of the services at issue.

4. With respect to billing for visual fields, the government failed to recognize that it was Dr. Gabriele who had found the billing error and that it was Dr. Gabriele who made a voluntary disclosure and repaid the overpayment amount.

5. With respect to the alleged false adverting, Dr. Gabriele maintained meticulous records of the results of the surgeries he performed and was able to document the accuracy of his statements. I will add that the government’s attempt to criminalize false advertising under this theory is without precedent and, in my view, without any legal foundation.

All of this information was available to the government. The defense offered to bring the experts to meet with the prosecutors from the U.S. Attorney’s office; in fact, during a meeting with the U.S. Attorney himself, an expert was standing by and available to speak by phone or to meet with the U.S. Attorney directly. Rather than accept this offer and obtain as much information as possible, the government chose to close its eyes to the facts and blindly proceed with the indictment.

The smoking gun

During the final meetings with defense counsel, in an effort to convince Dr. Gabriele that he should accept a plea, the U.S. Attorney’s office decided to present one case designed to demonstrate to Dr. Gabriele and its counsel why there was no question that Dr. Gabriele was guilty. The government identified one patient who had been examined by Dr. Gabriele after complaining of blurry vision and whom Dr. Gabriele had diagnosed as having cataracts. The government advised that this was not a patient but, instead, an undercover agent who previously had been examined by an independent ophthalmologist and found to be cataract free. In the government’s view, this proved beyond a reasonable doubt that Dr. Gabriele falsely diagnosed cataracts for the purpose of performing unnecessary surgery. This was the government’s “smoking gun.”

The facts, however, are not as the government portrayed them. While this patient did, indeed, come to Dr. Gabriele’s practice, he was seen initially by an optometrist who examined him and diagnosed incipient cataracts and noted this diagnosis on the medical record. The patient was then seen by Dr. Gabriele, who confirmed the diagnosis of the optometrist. Further, one of Dr. Gabriele’s experts reviewed this agent’s medical chart. While acknowledging that without examining the patient directly he could not be certain, the expert believed strongly from the results of other ancillary tests performed that the agent was, indeed, suffering from incipient cataracts. Most importantly, however, and what the government chose to ignore, was that instead of rushing him into surgery, Dr. Gabriele told the agent that nothing needed to be done and that he, the “patient,” should return in 12 months.

How the government could consider this case to be its smoking gun demonstration of fraud on the part of Dr. Gabriele is incomprehensible to me. Dr. Gabriele did not steer this patient into the OR; he told him to return in 12 months. Further, Dr. Gabriele’s expert offered to present his analysis to the U.S. Attorney’s office to support the reasonableness of Dr. Gabriele’s conduct. The government declined. Why the government would refuse an offer to obtain additional information relating to its case also is incomprehensible. The government had everything to gain and nothing to lose, other than confidence in the validity of its case.

Why Dr. Gabriele did not continue his fight

Given all the information above, one has to wonder why Dr. Gabriele chose to end his life, rather than fight these unfounded allegations. In an open letter sent by Dr. Gabriele before his death, he anticipated this question and answered for his wife and himself as follows:

“1. Once a criminal indictment is filed against a physician, his/her medical career is, in all practical sense, finished. Once exonerated the physician will find it practically impossible to obtain hospital privileges, enroll on insurance panels, or expect to gain the trust of patients. If we can’t provide care, our purpose is gone.

“2. We have exhausted our resources. Seeing that there was not even a sound civil case, let alone a criminal one based upon the opinion of nationally renowned ophthalmologists, compliance lawyers, and legal experts, we cooperated fully with the government’s investigation and spent the past two years providing [the Assistant United States Attorney] with copious evidence negating his constantly shifting, ill-conceived and unsupported theories. We simply cannot afford to fight anymore.

“3. We both have been blessed with the knowledge of why God put us here. That is to help people see. Seeing that our medical work in this regard is done, our last act hopefully will open the eyes of the country to a federal legal system that entails far too much power to local officials without appropriate oversight. Exonerations of doctors has done nothing to change this, hopefully investigation into this case may. Regardless we have chosen not to participate in this travesty any longer.”

Why did the practice plead guilty?

Before addressing why the practice entered a guilty plea, however, perhaps the better question to ask is why did the government continue to pursue a criminal case against a medical practice whose sole owner was dead, which was no longer operating and would have to be dissolved, and which certainly could not defend itself? After all, you cannot send a corporation to prison, and if recovery of money were the objective, it is far more efficient and simple to pursue a civil case. In fact, the practice offered to resolve the case with a monetary settlement, but the government refused. In my view, the government continued to pursue its case in order to justify its position, as if a criminal conviction would somehow justify its actions in the case.

In fact, the decision for the practice to plead guilty was a decision of convenience. Following Dr. Gabriele’s death, a Special Administrator of his estate was appointed. The Special Administrator was threatened by the government that it must either accept a plea on behalf of the practice or the case would go to trial. Apparently, in an effort to preserve the assets of the estate and avoid the time and expense of a trial, the Special Administrator agreed to have the practice accept a plea. Thus, the agreement by the practice to plead guilty proved nothing, as the government’s heavy-handed actions left the Special Administrator with no choice.

Where does this leave us?

For many years I have written and spoken about the increasing risks of government enforcement actions against physicians. While my concerns have become realized and Dr. Gabriele’s case is but one example, I fear that this trend will continue, and along with it the threat of more aggressive enforcement activity in the future. The federal government continues to pour more and more resources into investigators and enforcers, fighting against health care fraud. Recently, states have begun to realize that a dollar invested in a health care fraud investigation results in a multiple return and they, too, are taking action.

No one denies that there are individuals, including physicians, who abuse and defraud government programs and who should be punished for those actions. But the Gabriele case makes painfully clear that there must be a balance to ensure that until those individuals have been found to have violated the law “beyond a reasonable doubt,” the goal of those investigators and prosecutors should be to determine the truth, not to convict at all costs.

The government demands that the health care community — including physicians — is held accountable to assure that appropriate services are provided and appropriate claims for payment are made. This demand is reasonable. But it is now time for medicine to demand from the government that its enforcers and prosecutors understand that before they take actions that may destroy a reputation, a career or, in this case, a life, they have the responsibility to learn and consider all of the facts. And when they fail to fulfill their responsibility and they abuse their position of trust, they, too, must be held accountable.

• Alan E. Reider, JD, can be reached at Arnold & Porter LLP, 555 12th St. NW, Washington, DC 20004-1206; 202-942-6496; e-mail: alan.reider@aporter.com.

Alan’s observations about the Gabriele case mirror my own.

As an expert witness, I was asked to review a number of charts that the government had considered problematic.

The charts were mostly unremarkable cataract patients, the majority of whom had been referred specifically for surgical evaluations.

When I discussed the allegations with the attorneys, I felt that this was mostly a misunderstanding, and careful explanation of the medical reasoning would be enough to defuse the situation. In the worst case, these were issues that would be straightforward to explain to a jury, although I was confident it wouldn’t get that far.

What eventually unfolded was far worse than anything I could have envisioned. The prosecutor appeared determined to obtain a conviction while relatively uninterested in exculpatory facts.

Alan’s larger point about the lack of accountability for prosecutors is very important. I can personally attest to the chilling effect that threats can have on a witness. In a different case, I was openly threatened by a prosecutor with a criminal investigation for agreeing to testify as a defense witness. Although the subpoenas were ultimately quashed by the trial judge in that case, I spent some sleepless nights knowing that my personal and professional lives were at risk.

As physicians and surgeons, we have a great deal of power and responsibility. Criminal penalties for those of us who would abuse that trust are reasonable and necessary.

Prosecutors, likewise, have the power to destroy lives and careers, and the responsibility to wield that power honestly and responsibly. When there is reward only for convictions and not for seeking truth, we are likely to see capricious misuse of that power. Without substantive penalties for abuse, experience is showing us that we cannot rely merely on the honesty and goodwill of prosecutors, who, ultimately, are as human as physicians.

– James Freeman, MD
Memphis, Tenn.