NY surgeon pays nearly $400,000 to settle kyphoplasty allegations

by Ben Vernia | August 21st, 2013

On August 21, the Department of Justice announced that a Long Island, New York orthopedic surgeon had agreed to pay $388,000 to settle False Claims Act allegations that he submitted fraudulent claims to Medicare for kyphoplasty procedures:

Richard S. Obedian, a Long Island, N.Y., orthopedic surgeon, will pay the government $388,000 to settle allegations that he violated the False Claims Act by submitting false claims to Medicare for minimally invasive spine procedures, the Justice Department announced today.

Allegedly, throughout 2005, Obedian knowingly submitted improper claims to Medicare for a procedure known as kyphoplasty, a minimally invasive procedure used to treat compression fractures of the spine that often are due to osteoporosis. Prior to 2006, Medicare billing rules required the use of a specific billing code to denote the performance of a kyphoplasty procedure. Those same rules precluded the use of other codes assigned to more invasive and complicated, and therefore more expensive, surgeries. The government alleged that Obedian knowingly circumvented lower payment rates for kyphoplasty procedures performed throughout 2005 by using incorrect billing codes assigned to more complicated surgeries, thereby inflating his Medicare reimbursements.

The settlement is one of dozens reached in a long-running investigation of kyphoplasty claims, which arose from a whistleblower’s case filed in the Western District of New York.

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