Two doctors charged with fraud

UNION COUNTY, NJ — A pair of doctors with roots in Elizabeth and Westfield were charged with fraud last week, as federal and state prosecutors allege that they have been repeatedly submitting false claims to Medicare and Medicaid in violation of the False Claims Act.

A neurologist with a practice in Elizabeth, Gautam Sehgal was charged by a state grand jury with seven counts of health care claims fraud, while the U.S. Attorney’s Office brought a civil suit against Westfield resident Labib Riachi — who works as a urogynecologist, or a specialized OB/GYN, in Westfield and Elizabeth. — for receiving “millions of dollars” in falsely claimed reimbursements.

“The integrity of physicians is the lynchpin of the health care claims process,” said John Hoffman, the state’s Acting Attorney General, in a release. ”Doctors who file false claims undermine that system and drive up health care costs for honest participants.”

Of the two cases, the one with more significant implications has revolved around Riachi, who was charged with knowingly submitting false claims “hundreds of times” to the tune of “millions of dollars,” according to the federal complaint filed against him.

But Riachi agreed to pay $5.25 million to the government in a settlement on Friday, Feb. 12, just days after the complaint was made, bringing the case of United States v. Riachi to an an anticlimactic end. As soon as Riachi was told that he was benefitting from incorrect billing, he offered to return “every penny” he was paid in connection with the claims, his lawyer announced in a statement. No criminal charges were ever filed.

Riachi settled just days after being indicted, in part in order to avoid the expenses of a court case, which would have been the result of an investigation that began four years ago. After interviewing dozens of his patients and employees as early as 2012, federal investigators said they found Riachi was being well-compensated for diagnostic tests which were allegedly not performed, and that physical therapy services for his patients were allegedly conducted by untrained personnel.

One of the reasons the federal government began looking into Riachi, according to the complaint, was because patients were allegedly receiving a specialized diagnostic procedure multiple times per year, even though these procedures “are generally not performed on the same patient multiple times over the course of a year,” since they don’t have a therapeutic purpose.

At his Westfield and Elizabeth offices, Riachi recommended non-surgical exercises which effectively dealt with the pelvic issues of his patients, who were mostly elderly women, investigators believe. These exercises were allegedly often handled by unqualified personnel, according to the complaint, and Riachi then filed for surgical claims with Medicare and Medicaid, billing the health care providers for operations that never took place.

“For many years, Dr. Labib Riachi was one of the nation’s most prolific Medicare billers of anorectal manometry, an invasive diagnostic test,” states the complaint. “He was also among the top Medicare billers for a certain type of electromyography, another diagnostic test. Most of these tests, however, were never performed.”

The complaint goes on to allege that “Riachi knowingly engaged in a fraudulent scheme and knew that the Select False Claims were false and should not have been submitted to Medicare or Medicaid.” Even if Riachi did not have knowledge of the claims’ falsity, though, he should have known that the claims were false, and if not, he was acting “with deliberate ignorance or reckless disregard of the truth or falsity of the claims at issue.”

Another local doctor indicted for making false claims, Sehgal, lives in Livingston and has offices in Newark, Perth Amboy and other towns in the area, in addition to his Elizabeth location. Last week, Sehgal was charged with misrepresenting his diagnostic procedures to government agencies, including in seven instances of needle Electromyographies, or EMGs.

In six cases of the procedure, an unlicensed technician — not Sehgal — allegedly performed the surgery, according to state investigators, and in the seventh, no EMG was performed at all. Between July 2008 and October 2013, the New Jersey Attorney General’s office has alleged that Sehgal filed fraudulent claims to nine carriers.

“The allegations against Dr. Sehgal, if proven, show an utter lack respect for his patients, his profession, and the law,” said acting Insurance Fraud Prosecutor Christopher Iu. ”Our office will not tolerate any doctor who blatantly cheats the system to satisfy his own greed.”