- Jane Musgrave Palm Beach Post Staff Writer
A Palm Beach dermatologist, who in February paid the U.S. government $5.2 million to settle its claims that he “massively overbilled” Medicare, has been charged with health care fraud by federal prosecutors.
Dr. Gary Marder, who lives in Palm Beach and operates Allergy Dermatology and Skin Cancer Center in Port St. Lucie and Okeechobee, is to appear in U.S. District Court on Oct. 18 to answer that criminal charge and a separate count of obstruction of a criminal health care investigation. If convicted, he faces a maximum 10-year prison sentence for health care fraud and a five-year prison sentence for the obstruction charge. Both counts carry a maximum $250,000 fine.
West Palm Beach attorney Richard Lubin, who is representing the 60-year-old osteopathic physician certified in dermatology, who lives in an estimated $27 million oceanfront mansion, declined to comment Thursday.
In court papers filed Sept. 29, Assistant U.S. Attorney Ellen Cohen accuses Marder of bilking Medicare and TriCare, a federal insurer that serves the military and their families, out of $369,000 from January 2011 through January 2016. Although Marder told the insurers he paid a medical physicist, which is a radiation specialist, to determine how much radiation patients should receive when they were treated for skin cancer, he did not have a medical physicist at Allergy and the medical files were fraudulent, she claims.
“Gary L. Marder directed his employees to respond to all requests for medical records from the insurance companies by creating false and fraudulent patient files, referred to by the Allergy staff as ‘make it ready files,’” Cohen wrote in a six-page charging document.
Further, she claims that to persuade the insurers to reimburse him, these patient files included the forged signature of a physicist, identified only as F.S.K, to make it appear the physicist had reviewed and signed patient files. “In fact,” she wrote, “F.S.K. had not.”
In addition, she claims, from July 28, 2015 to Aug. 12, 2015, Marder obstructed an FBI investigation by “falsifying and altering” patient files that had been subpoenaed by a federal grand jury.
Allegations that Marder falsely claimed he used a medical physicist were raised in the civil lawsuit federal attorneys filed against him that was settled this year. As part of that lawsuit, radiation physicist Farhad Kader submitted an affidavit, saying that from August 2010 to March 2016 he had never reviewed Marder’s patient files.
“The only services I rendered to Dr. Marder or Allergy Dermatology and Skin Cancer Center were related to the annual calibration of equipment and professional advice,” he wrote in the sworn document. “No other medical physicist services have been provided with respect to any patient, nor have I signed or authorized my signature to be utilized on any patient file for any reason at either of Dr. Marder’s office locations.”
But the thrust of the U.S. government’s civil case, which began as a whistleblower’s lawsuit, was much larger. Marder, who billed Medicare $49 million from 2008 to 2014, “massively overbilled for radiation related services claimed to have been rendered to Medicare and TriCare patients,” Assistant U.S. Attorney Mark Lavine claimed in the lawsuit filed by the federal government in 2013.
The federal suit came after Dr. Ted Schiff, a Palm Beach County dermatologist who operates Water’s Edge Dermatology clinics throughout the state, sued Marder. Schiff said he filed the whistleblower’s lawsuit after noticing a disturbing trend among patients who came to him after seeing Marder.
Many of the patients had been diagnosed by Marder with squamous cell cancer and received radiation treatments, Schiff said. But, he said, when he examined the same patients, he discovered the so-called cancerous skin lesions were as benign as freckles or warts.
The federal government took over Schiff’s whistleblower suit, but it focused on Marder’s billing practices rather than his treatment of patients. In the federal lawsuit, which was intensely litigated for four years, Lavine claimed Marder billed Medicare and TriCare for sophisticated radiation equipment he didn’t own. Lavine also claimed Marder billed for treating patients on days when his office calenders showed he was out of the country. While physician assistants treated the patients, he billed the insurers a much higher rate, as if he had provided the treatment.
The lawsuit ended in February when Marder agreed to reimburse the federal programs $18 million. But, because he paid quickly, he was only forced to pay $5.2 million plus hand over the deed to a vacant lot, valued at $688,000, he owns on Hutchinson Island in Martin County. Had he failed to pay, the cost of the settlement would have skyrocketed to $41 million, according to the agreement.
As part of the settlement, neither side compromised their positions. The settlement included this line: “This Agreement is neither an admission of liability by the Marder Defendants nor a concession by the United States that its claims are not well founded.”
Weeks after the settlement, with famed Stuart attorney Willie Gary at his side, Marder stood outside the Palm Beach County Courthouse, pledging to file a half-billion-dollar defamation lawsuit against various media outlets, including The Palm Beach Post, ABC news, NBC, USA Today, New York Post and Perez Hilton. He also promised to sue Schiff, who got a 22 percent share of the federal settlement because he initiated the litigation.
As of Thursday, no suit has been filed by Marder.
At the press conference, Gary echoed Marder’s claim that he had never harmed a patient and said the settlement didn’t include any findings that Marder had misdiagnosed cancer. But the Stuart lawyer, saying he gave Marder “credit for stepping up to the plate” with the settlement, acknowleded that the dermatologist’s billing practices “left much to be desired.”