The case of the United States of America v. Rafil A. Dhafir Et al., concluded today after six years of investigation and 14 weeks of hearing. The only witness the defense called was Dr. Edward Cox, Director of Health Now, for Medicare. Dr. Cox was on the stand for approximately 15 minutes. The defense called Dr. Cox to testify on their behalf about the Medicare “incident to” rule. The government charges that under the “incident to” rule, if Dr. Dhafir was not physically present in the office suite, his practice was disqualified from making a legitimate claim to Medicare for medication or services rendered by a lab technician or a nurse practitioner who does not have a Medicare ID number. Much of the government’s Medicare fraud case rests on this rule, and many days of the proceedings have been spent with the government arguing that under this rule, a physician needs to be physically present in the office suite for any payment to be paid by Medicare. Or, they contend, if the physician is not in the office, a nurse practitioner with a Medicare ID number can render treatment and service and bill Medicare at 85% of “allowable amount” for physicians.

Using a letter to refresh his recollection, defense witness Dr. Cox’s testimony stated that under the “incident to” rule, from a Medicare point of view, there were occasions when it was possible to legitimately bill Medicare for service provided by a lab technician, despite a physician not being physically present in the office suite. In an instance like this Dr. Cox stated, the physician and not the lab technician would bill for service. Referring to the NY State Medicine Handbook, Dr. Cox confirmed that this possibility for a lab technician or nurse practitioner without a Medicare ID number to provide service in the absence of a physician also existed under State rules. Reading from item 25 in the Medicine Handbook, Dr. Cox showed that it was possible for a physician to delegate responsibility to a qualified non-physician practitioner whom he knew to have the capability to offer service because of training, experience, or licensure. Dr. Cox also stated that whatever rule was most stringent between Medicare and the State, would be the one that would apply. Therefore, the defense contends, it is possible for treatment and services rendered under these conditions to be billed to Medicare, regardless of whether the physician is present in the office suite.

The government does not dispute that patients did receive care from Dr. Dhafir’s office. As noted above, they are disputing the legitimacy of the claims Dr. Dhafir submitted to Medicare for those treatments and services where he was not physically present in the office suite. They contend that Medicare overpaid him by 100% on some occasions, because his absence in the office disqualified him from making a valid claim to Medicare. They also allege that Medicare overpaid him 15% on other occasions, due to his absence in the office suite and service being rendered by a nurse practitioner with a Medicare ID number. The alleged Medicare fraud charge amount of $278,000.00 is based on these calculations.

The defense have argued that there were no occasions when Dr. Dhafir’s practice did not meet the Medicare “incident to” requirements and Dr. Cox’s testimony confirmed this position. The defense argued that if indeed Dr. Dhafir was overpaid, the overpayment would only be15% of office visits due to the fact that medications and lab work are always paid at100% under the “incident to” rule. In order to illustrate this, Mr. Cannick had previously had Nina Carosella, fraud investigator for Medicare; calculate an example while on the witness stand on Tuesday, January 25th. A patient and day of service were Dr. Dhafir was alleged not to be in the office were selected, January 16th, 2002. Treatment on this day was provided by a nurse practitioner who did have a Medicare ID number therefore, the government contends, the office would be entitled to bill medicare at 85% of the “allowable amount” for a physician.

Mr. Cannick asked Ms. Carosella to calculate this day’s claim using the prosecution assertion that these claims would be billed at 85% of the “allowable amount” for a physician. He instructed Ms. Carosella to begin with the “allowable amount” which Medicare would pay to a physician, $1,244.41. He then instructed her to calculate payment based on 85% of the “allowable amount”, this gave her a figure of $1,057.75. He then instructed her to subtract that figure from the “allowable amount” figure, in order to give the figure that the government alleged was overpaid, $186.66.

He then asked Ms. Carosella to calculate the cost of medication for that day. Using the Medicare “J “codes, Ms. Carosella calculated that $914.91 of the bill was for medications. Mr. Cannick then instructed Ms. Carosella to recalculate payment by taking the figure, $914.91 from the total “allowable amount” of $1,244.41. This left her with $329.50, and as Medicare did not discount lab work, another $10.67 was taken from the total producing a total of $318.83. Mr. Cannick contended that if any overpayment was indeed made, it was for 15% of $318.83 which is $47.83 and not, as the government claims, 15% of $1,244.41, which is $186.66. Rather than taking each day that the government alleged overpayment and laboriously going over claims, Mr. Cannick instructed the jury to extrapolate for the rest of the alleged days of overpayments.

This concluded the proceedings.

Court will resume on Monday, January 31st when summation speeches will begin. Dr. Dhafir is charged on 60 counts including, Medicare fraud, money laundering, tax evasion and breaking the sanctions on Iraq. The court will be in session from 8.30am until 4pm, beginning Monday of next week.