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Dr. Khashayar Salartash charged with $8.5 Million Fraud Against Medicare, Medicaid & Private Insurers July 14, 2009

Posted by tsclaw2209 in News.
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This is the type of case that requires so much attention from an attorney in such a short amount of time, that it would literally shut down a small practice for a while.  I represent doctors, but $8.5 million in fraud doesn’t come around every day.  To do this right, you need at least two attorneys putting in at least 30 hours per week into this case.  Of course, in some weeks, it will be more like 40 hours plus each week.  As a result, there is no room for new cases unless you have a third attorney.  But even then, you would have little room to take anything that big for a while.

An edited version of the press release is below:

Attorney General Anne Milgram and Criminal Justice Director Deborah L. Gramiccioni announced that an Atlantic County surgeon, his office manager, and the treatment center he owned were indicted on charges they defrauded Medicare, Medicaid and private insurance carriers of more than $8.5 million.

According to Acting Insurance Fraud Prosecutor Riza Dagli, Dr. Khashayar Salartash, 42, of Linwood; his office manager, Farah Iranipour Houtan, 51, of Egg Harbor Township; and the treatment center owned by Salartash, The Center for Lymphatic Disorders LLC, were variously charged in a state grand jury indictment returned yesterday with second-degree conspiracy, three counts of second-degree health care claims fraud, and two counts of third-degree Medicaid fraud. Salartash and Houtan were also charged with second-degree misconduct by a corporate official.

According to Gramiccioni, the indictment alleges that between August 2002 and June 2007, Salartash and Houtan billed Medicare, Medicaid and private insurers for services that were not provided as claimed.

“We charge that these defendants collected $8.5 million through false billing, including nearly $5 million from Medicare and half a million dollars from Medicaid,” said Attorney General Milgram. “It’s outrageous that a doctor would fraudulently take millions of dollars from programs that pay for medical care for the elderly and those who can’t afford health insurance. In addition, by defrauding private insurers, he contributed to the high cost of health insurance.”

The Center for Lymphatic Disorders was opened by Salartash on Central Avenue in Egg Harbor Township in August 2002 to treat patients with lymphedema, which is blockage of the lymph vessels that causes accumulation of fluid and swelling of the arms or legs, and occasionally other parts of the body. Before it closed in 2006, the center opened four additional offices in Atlantic City, Manahawkin, Haddon Heights, and Galloway Township.

As a result of alleged fraudulent billing, the Center for Lymphatic Disorders was paid approximately $8,564,622, including $593,363 by Medicaid, $4,703,935 by Medicare, and $3,267,324 by private carriers.

The defendants allegedly submitted claims as though Salartash had either personally provided services or directly supervised licensed personnel who rendered services. In fact, services were performed by a physical therapist, a licenced practical nurse or a massage therapist, with essentially no supervision.

In addition, Salartash and Houtan allegedly billed for surgery when only physical therapy services were rendered. Salartash allegedly represented in some claims that services were performed in an outpatient hospital facility, when the procedures were performed in a doctor’s office.

In order to support the claims, Salartash certified that the services provided were medically necessary, even though the services were provided for a time period far in excess of what is normal and customary for lymphedema therapy. A normal course of treatment for lymphedema is four weeks, or in very complex cases, eight to 12 weeks. However, an auditor for the Medicaid program determined that most patients of the Center for Lymphatic Disorders were treated for between 1 ½ years and nearly 3 years.

Salartash and Houtan allegedly used inappropriate modifiers to billing codes to bill for multiple procedures within a short amount of time, and made written and verbal misrepresentations to Medicare, Medicaid and private insurance carriers in order to support claims for payment.

The joint investigation into this matter was conducted by the Medicaid Fraud Control Unit of the Office of Insurance Fraud Prosecutor, the Office of Inspector General of the U.S. Department of Health and Human Services, and the Federal Bureau of Investigation. The investigation started after analysts contracted by Medicare to monitor billing identified unusual billing by Salartash.

“When doctors commit fraud it is particularly disturbing, because the integrity of the health care claims process depends on the trustworthiness of the licensed professionals involved,” said Acting Insurance Fraud Prosecutor Dagli. “The Office of Insurance Fraud Prosecutor will continue to vigorously investigate and prosecute this type of criminal activity.”

Second-degree crimes carry a maximum sentence of 10 years in state prison and a $150,000 fine, while third-degree crimes carry a maximum sentence of five years in prison and a $15,000 fine. Third-degree Medicaid fraud carries a sentence of up to three years in prison and a $10,000 fine.

The indictment is merely an accusation and the defendants are presumed innocent until proven guilty.  The indictment was handed up to Superior Court Judge Maria Marinari Sypek in Mercer County, who assigned the case to Atlantic County, where the defendants will be ordered to appear in court at a later date to answer the charges.

The Medicaid Program is funded by the state and federal governments. The State of New Jersey administers the Medicaid Program through the Division of Medical Assistance and Health Services and through the Office of Insurance Fraud Prosecutor’s Medicaid Fraud Control Unit, which investigates both criminal and civil Medicaid fraud and abuse in that program.


1. Lisanne - September 24, 2009

This doctor, barely, no did not examine me for a ery swollen leg, until I had to actually ask him to. He dismissed me since the leg was not as fluid filled as usual that day. However, this did not stp him from charging my insurance company several hundred dollars. FOR NOTHING> he did not even have me get in a gown. I had to pull up my pant leg to get him to take a glance. Several weeks later, I went back because I was still having a problem, guess what? More of the same except he fitted me for a compression stocking at my request. I had to pay cash for it and pick it up two weeks later. In the meantime he hit my insurance company again for another several hundred dolars. I was appalled but said nothing since he is so prominent in the area. I figured I’d be laughed out of his office.This charge on him comes as no surprise to me. If you can rip off an insurance company for 1100.00 for literally nothing, 2 visits that total less than 10 minutes after a two hour wait than certainly your robbing everyone for anything you can get. He should be jailed.

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