If Dr. Stacey M. Johnson of Mountain Home had not died
earlier this year at 63, he likely
would have been charged with overbilling
Medicare by $14.7 million, according to a criminal
investigator’s affidavit
that was recently made public.
Johnson’s medical career ended in 2009 when the Arkansas
State Medical Board pulled his
license for recklessly running too many tests on
patients. Now the U.S. Attorney’s Office for
the Western District of Arkansas
is in the process of recovering money from what may be the
largest Medicare
fraud in the state’s history.
On Sept. 20, the U.S. Attorney’s Office filed a civil
forfeiture lawsuit in an attempt to seize
Johnson’s ex-wife’s Mountain Home
mansion, which prosecutors said was paid for with
proceeds from the Medicare fraud.
Johnson’s ex-wife, Cynthia Johnson, paid $600,000 to
settle the lawsuit and
keep the property. The case was closed Oct. 4.
Cynthia Johnson told Arkansas Business last week that she had
been given immunity from
criminal prosecution and was scheduled to meet with
federal investigators on Oct. 10.
She said she didn’t believe her former husband committed
Medicare fraud.
“I worked in the office for 28 years with him, and he did not
overbill Medicare,” she said.
“He didn’t even pay attention to what was being
billed. He was simply the physician and he
did what he felt was right for the
patients.”
Others disagree.
Conner Eldridge, U.S. attorney for the Western District of
Arkansas, told Arkansas Business
last week that recovering more assets is “an
ongoing effort.”
“We are serious about trying to do all we can to locate those
funds or assets,” he said. “There
are a number of assets that we’re taking a
look at.”
He wouldn’t say whether anyone would be charged. “It’s an
ongoing investigation,” he said.
Dr. Johnson was allowed to continue practicing despite signs
and allegations of over-testing
dating back for years.
“It’s a serious Medicare fraud case,” said Eldridge, who was
appointed U.S. attorney at the
end of 2010. “So when you look at the amounts of
overbilling and the amounts of money that
was sought and obtained for Medicare
for tests that were not medically necessary, it’s pretty
astounding.”
While fraud against government insurance programs can come at
any level, the fraud that is
prosecuted tends to be by providers rather than
beneficiaries. For instance, of the seven cases
of fraud against Medicaid, the
joint federal and state insurance program for the poor, that
Arkansas Attorney
General Dustin McDaniel has announced since May, only one alleges fraud
by a beneficiary.
‘Lifelong Dream’
Born Oct. 20, 1949, in Alma, Ga., Stacey Johnson’s “lifelong
dream was to become a physician,”
according to the obituary posted online by
Roller Funeral Home in Mountain Home.
After receiving his medical degree from Tulane University in
New Orleans in 1975, Johnson
completed a residency program in internal medicine
and then a fellowship in cardiology in
Dallas. Stacey and Cynthia Johnson met in Texas and were married in
1976. After he
completed his training, they started looking for a place to
practice. He wanted to live in a
small town and she wanted to live on a
lake. They found the right combination in Mountain
Home, Cynthia Johnson said.
In 1980, Dr. Johnson started his private practice in internal
medicine and cardiology and
opened the Physicians’ Medical Center of the Ozarks
in 1982.
The first signs of trouble surfaced between 1985 and 1990,
when Dr. Johnson was counseled
by Medicare “for conducting excessive tests on
patients,” Cynthia Johnson told investigators
in 2010, according to an
affidavit filed in the forfeiture case by Thomas Kowalski, a special
agent with
the Department of Defense’s Office of Inspector General.
She told Arkansas Business that questions about over-testing
dogged Dr. Johnson for years.
“There were times when I would say to him, ‘Stacey, can you
just not order quite so many
follow-up tests,’” Cynthia Johnson said last week.
“And he would look at me and say, ‘Are
you the doctor?’”
She said he didn’t order the tests for the money. Instead,
Cynthia Johnson told Kowalski in
2010, Dr. Johnson had an undiagnosed disorder
that caused him to attempt to find anything
that could be wrong with a patient.
The early 1990s was a rough time for Dr. Johnson. The first
of what would be more than two
dozen complaints involving over-testing was
filed against him at the state Medical Board,
though no action was taken
against him for many years.
He also struggled with alcoholism. In 1991, he spent four to
five months in an alcohol and drug rehabilitation program. (Johnson revealed
the treatment in a statement filed with the Medical
Board, but it is unclear
whether he was forced into the program or went voluntarily.)
Doctors’ Concerns
Cynthia Johnson told Arkansas Business that other
cardiologists who worked for the hospital
in Mountain Home, Baxter Regional
Medical Center, didn’t like her husband because he was
competition.
She said that in the early 2000s, the doctors tried to have
his privileges revoked at the
hospital and conducted a scathing review of his
work.
In 2003, Cynthia Johnson hired Dr. J. David Talley of
Paducah, Ky., to review Dr. Johnson’s
files that the other hospital doctors had
inspected. Talley’s report, which Cynthia Johnson
provided to Arkansas
Business, found no fault with Dr. Johnson’s work.
“It appears that Dr. Johnson is a caring cardiologist who
pays attention to patients’ symptoms
and wants to make a diagnosis and an
appropriate treatment plan,” Talley wrote. “I personally
find this refreshing.”
A Baxter Regional Medical Center spokeswoman said last week
that Johnson was a member
of the hospital’s medical staff in good standing
until he lost his license in 2009.
In 2003, Dr. Johnson decided to expand his medical office to
include a blood lab, nuclear
cardiology, imaging and outpatient surgery.
“I was aiming for better care for my patients in an
environment that I could have more
control,” he wrote in a 2011 application to
recover his medical license. “I wanted to break
even and make a living, but we
gave out a lot of free care.”
The 19,000-SF, three-story building opened in 2004 and cost
about $11 million. The building
was attached by a covered walkway to his
medical clinic. He also used the third floor of the
building as an apartment. The expansion helped Johnson’s billings balloon from $2.6
million in
2003 to $8.6 million in 2006. But the increased billing raised red flags.
An ‘Aberrant’ Biller
In 2006, in an attempt to root out fraud, the Centers for
Medicare & Medicaid Services hired
AdvanceMed Corp. to analyze Medicare
billings by providers in Arkansas, Louisiana and
Oklahoma for 2003-05.
The analysis ranked Johnson as the most “aberrant” biller
among cardiologists in Arkansas.
That sparked a full investigation, which was
launched on July 25, 2006.
AdvanceMed’s year-long review found problems with more than
90 percent of his billing.
It said Johnson performed 115 unnecessary heart
catheterizations between 2004 and
June 30, 2006. Nearly 80 percent of the 822
claims he submitted during that period were
denied because the documentation
didn’t support the medical need for the procedure billed.
AdvanceMed wasn’t alone in its analysis. In 2007, Pinnacle
Business Solutions Inc., which is
contracted by CMS to pay Medicare claims,
became alarmed by Dr. Johnson’s claims, finding
that between April and
September 2006, he was the No. 1 biller in the country for two
procedures
involving catheter placements.
Those findings were forwarded to the Office of the Inspector
General for the U.S. Department
of Health & Human Services, which started
an investigation in August 2008 and found even
more questionable billings,
Kowalski’s affidavit said. After looking at the periods between
Jan. 1, 2004,
and June 30, 2006, and Jan. 1, 2007, through June 26, 2009, “an established
Medicare overpayment to Johnson was calculated as” $14.7 million, Kowalski’s
affidavit said.
A U.S. attorney — Kowalski’s affidavit didn’t say which one —
hired Dr. Maan Jokhadar of
Atlanta to look over the medical records of six of
Johnson’s patients.
Jokhadar found “Dr. Johnson’s documentation was voluminous,
repetitious and overall poor
in quality,” Kowalski wrote. “Documentation
focused on patients’ social and family situations,
and rarely elaborated on
symptoms or complaints presented by the patients.”
Jokhadar also found that Johnson ordered a number of tests
that weren’t medically
necessary, while other tests were just duplicates of
previous tests.
Meanwhile, patient complaints were stacking up against
Johnson at the state Medical Board.
And his marriage to Cynthia was falling
apart. She told Arkansas Business that he left her for
a younger woman. He
fired Cynthia from her job at his practice and filed for divorce on the
same
day, Jan. 13, 2009.
‘Potentially Dangerous’
On March 31, 2009, Principal Life Insurance Co. of Des
Moines, Iowa, which had policyholders
who were treated by Johnson, filed a
complaint with the Arkansas State Medical Board. It said
Dr. Johnson’s
“excessive testing both invasive and noninvasive is not within the standard of
care and potentially dangerous to the patient.”It also said that after reviewing 10 medical records of
Johnson’s patients, it “identified, what we feel, are serious concerns
regarding the outcome of those reviews.”
The concerns were that the tests performed “are far in excess
of what is justified by the patient’s problems,” the letter said. And many of
the tests posed “significant unnecessary risks to the
patients,” the letter
said.
In 2009, the Medical Board had other doctors review Johnson’s
patient files. What they found
troubled them. Dr. Donald Meacham of Little Rock
told the board that a 39-year-old patient had 92
tests, of which only six were
appropriate.
“I believe this does rise to the level of gross negligence or
ignorant malpractice,” Meacham wrote.
The board found that Johnson’s behavior “is a danger to the
public health, safety, and welfare”
and issued an emergency order of suspension
on Aug. 17, 2009. He would try but would never
get his license back.
‘I Greatly Miss Medicine’
While investigators continued to look into Johnson’s
overbilling, he was devastated by the loss
of his practice.
“I greatly miss Medicine,” Johnson wrote in an April 2012
letter to Dr. Bob Cogburn of
Mountain Home, a member of the Medical Board.
“Medicine is the only thing I know how to do. …
I hate to see 13 years [of]
training and 29 years [of] experience go down the drain.”
Apparently, the more than $8 million Johnson received in the
form of salary, dividends and other
income between April 1999 and January 2009
was gone.
In his letter to Cogburn, Johnson blamed his financial
troubles on his ex-wife, who he said
used his money “to build her ostentatious
lake house, and left me and my Practice in heavy
debt. I will soon need to go
on public relief or get a job at McDonalds; is this something you
want to see
happen to a fellow physician?”Cynthia Johnson said that after he lost his license,
her
ex-husband didn’t take care of himself, smoking and eating too much.And investigators
were closing in.
Federal agents were pursuing criminal charges for wire and
health care fraud and a civil
forfeiture of assets, Special Agent Kowalski said
in his affidavit.One person close to the case
who asked not to be named said a
federal grand jury had been called and Dr. Johnson
was likely to be indicted.
But that didn’t happen. On March 5, he died of natural
causes.
