What data reveals about the Farid Fata health care fraud case

Stephen Lee
8 min readNov 24, 2020

--

The case of Farid Fata has gotten a lot of new attention recently with season 2 of the popular Dr. Death podcast, and it is a useful example of what data can reveal about health care fraud. Data probably could have caught Fata even earlier, and data helps suggest an answer to one of the most troubling questions that the Fata case raises — are or were there other doctors out there like him?

For background, Farid Fata was a hematologist/oncologist in Michigan who was arrested in August 2013. A year later, he pled guilty to health care fraud, conspiring to receive kickbacks, and money laundering. In 2015, Fata was sentenced to 45 years in prison.

According to the government’s sentencing memorandum, Fata was “the most egregious fraudster in the history of this country, measured not by the millions of dollars he stole but by the harm inflicted on his victims, over 550 identified so far.” According to the government, Fata “deliberately misdiagnosed” patients so he could administer and bill unnecessary chemotherapy, lied to patients about their chances of recovery, and gave patients unnecessary treatments.

At sentencing, the government had to establish a “loss” amount associated with Fata’s fraud. The government did an extensive workup, including having two experts review more than 125 patient files. This detailed review was the basis for the largest component of loss — about $7 million in payments.

The second-largest component of loss related to Fata’s use of Rituximab, an antibody infusion. According to the government, Fata told patients who were in remission from cancer that they needed “maintenance” treatments of Rituximab so they would not relapse. He claimed that this was supported by a made-up “European” or “French protocol,” and falsified documents to support this fake study. Fata also gave Rituximab to treat a condition (ITP) that some patients did not have. Fata’s use of Rituximab caused a loss of about $6.2 million in payments.

These two categories make up the vast majority of the $17 million “plus change” in loss that a federal judge found to have been caused by Fata.

I was a federal prosecutor in Chicago from 2008 to 2019, and I analyzed data extensively to investigate and prosecute multiple health-care fraud cases against doctors, companies, and others. To me, data was a witness who could provide great insights into what a defendant was doing and how the defendant was doing it, and I spent lots of time “debriefing” that witness, corroborating what I learned, and testing theories. That work led to several successful prosecutions, and I’m probably one of the few attorneys who has taught multiple juries how to use Microsoft Excel so they could analyze the data themselves.

I understandably no longer have access to the detailed data that I did when I worked for the government. But Medicare has made publicly available a lot of aggregate data for medical professionals and companies that bill to Medicare, and that data can still reveal a lot about what Medicare providers are doing and how they are doing it.

A look at Fata’s Medicare data for 2012 reveals multiple red flags that tie to his fraud as laid out in the government’s sentencing memorandum. 2012 is the earliest year for which Medicare aggregate data is available online, and it happens to be the last full year before Fata was arrested.

First, Fata was one of the top 10 doctors in the United States in terms of Medicare payments, with about $10 million in payments in 2012. That’s not a crime in and of itself. But as I often say, if you’re one of the top-paid doctors in the country or for a high-cost procedure, you should have a good explanation why. Notably, of those top 10 doctors, at least four of them have been investigated by the federal government — Fata pled guilty, a second was convicted at a jury trial, a third agreed to pay millions and be excluded from Medicare for unnecessary procedures, and a fourth was charged in 2019.

Second, Fata was one of the top hematologists/oncologists in the United States in terms of Rituximab injections (billing code J9310), which was a large part of Fata’s criminal conduct. According to the publicly available data, Fata billed about 4,256 Rituximab injections to Medicare in 2012, ranking #2 in the country. Again, that’s not a crime in and of itself, but he was one of only three doctors in the country who billed this kind of volume (we’ll come back to those other two, whom I will call Doctor X and Doctor Y).

Third, Fata was the top hematologist/oncologist in the United States in terms of the number of services that he was billing to Medicare. He did not have the largest patient population (about 1,343 unique beneficiaries, ranking him about #154 in the country) and he did not have the highest ratio of payments per beneficiary, but he was billing a lot more services than other hematologists/oncologists. In 2012, Fata billed 908,406 services to Medicare, ranking him #1 among hematologists/oncologists in the country. The #2 hematologist/oncologist in the country billed about a third less than Fata, billing “only” 571,723 services.

Fourth, Fata was the top hematologist/oncologist in the United States for another procedure that was revealed to be part of his fraud — injecting ferumoxytol for the treatment of iron deficiency anemia. He billed 304,980 such procedures, much more than the #2 hematologist/oncologist, who billed “only” 199,410 of such services.

These are all red flags that can be seen in the publicly available data. More probably can be seen in the full data set that I do not have access to.

Unfortunately, none of these red flags, individually or collectively, apparently led to the case against Farid Fata. On August 6, 2013, the government filed an affidavit in support of an arrest warrant against Fata. The government does not have to reveal everything that it knows at that point, but affidavits like these help show what the government knew and had done by that point.

The affidavit is heavily based on interviews of some of Fata’s employees, the first of which occurred just four days earlier, on August 2, 2013. According to the affidavit, the government did look at Fata’s data and did determine that Fata had billed for more drug infusions than any other hematologist/oncologist in Michigan during the prior two years, but discusses none of the specific red flags that I discussed above.

The Fata case apparently came to light because of employees who talked to the government in August 2013, and the government acted quickly based on that information.

It is not clear whether the government should have caught onto Fata earlier. But the government probably could have.

Data reveals a lot about a provider’s practice. The government is checking data for red flags, and hopefully the government is refining its methodologies as it learns more about how people like Fata have gamed the system.

In fact, what I’ve seen in looking at the Fata case and his data may help provide a partial answer to a troubling question that I think is raised by his case: Are or were there other doctors like him out there?

In terms of hematologists/oncologists, there were at least two others whose publicly available data in 2012 looks similar to Fata’s. These doctors, whom I referred to above as Doctor X and Doctor Y, are hematologists/oncologists like Fata and they are not based in Illinois (where I was a federal prosecutor). As far as I can tell, Doctor X and Doctor Y have not been charged with a crime, have not had any kind of public settlement with the government, and have not had any disciplinary actions taken against their medical licenses.

In 2012, Doctor X was one of the top Medicare providers in the United States, based on total payments. Doctor X was even paid more by Medicare than Fata was, according to Medicare data.

In 2012, Doctor X even billed more Rituximab injections in 2012 than Fata did, according to Medicare data.

These facts should raise some red flags, but they are not in and of themselves signs of crimes. But there’s another big red flag that I’ve seen in the data.

Since Medicare data became publicly available and since Fata was charged, Doctor X has stopped billing for Rituximab injections entirely, at least for Medicare patients. Doctor X billed about 4,384 Rituximab injections in 2012, about 3,526 injections in 2013, about 1,562 in 2014, and zero in 2015, according to publicly available Medicare data.

According to Doctor X’s data, he was billing a large amount of injections and infusions in 2012. But in 2015, he billed no injections and infusions at all. According to the publicly available data, in 2015, Doctor X was largely seeing patients for office visits that were somewhat complicated and occasionally providing hospital inpatient care, conducting a largely typical doctors’ practice.

Doctor X was one of the top-paid Medicare providers in the country in 2012, but he fell massively off the charts just three years later.

Those changes are a massive red flag.

We see similar red flags for Doctor Y. According to Medicare data, Doctor Y also was one of the top-paid Medicare providers in the country in 2012 (in the top 20) and billed the third-highest number of Rituximab injections in the country, just under Fata. And like Doctor X, by 2015, his payments dropped significantly and he billed no injections of any kind.

I do not know what happened there. Maybe Doctor X and Doctor Y got tired of doing large numbers of injections and decided to make massive career changes. Or maybe Doctor X and Doctor Y were investigated by someone and decided to lay low. Whatever happened, I hope someone did take a look at these doctors, and I really hope that their patients (or former patients) are okay.

Putting aside Doctor X and Doctor Y, the data does provide some indication that there are no other hematologists/oncologists quite like Fata, at least in terms of Rituximab injections, at least any more. There were no hematologists/oncologists billing the same volume of Rituximab injections in 2013, 2014, 2015, 2016, or 2017 (the last year for which Medicare data is publicly available).

For those readers who are doctors, I strongly encourage you to take a look at your data. That’s what the government is looking at to see if you are an outlier or if there are red flags, and you should know how the government might view you. If you need help doing so, please consult a medical biller or an attorney. I’ll also write more about this in the future.

And for those readers who are attorneys, I encourage you to think of data as a witness. Witnesses generally do not walk into your office and give you everything that you want to know. You would and should take your time debriefing witnesses. You should think of data the same way.

Thanks for reading. Hope you enjoyed.

Stephen Lee was an Assistant United States Attorney in Chicago from 2008 through 2019 and served as senior counsel to the healthcare fraud unit in the U.S. Attorney’s Office for the Northern District of Illinois. He is now in private practice in Chicago. In his first year in private practice, he was counsel to a doctor in a seven-week Medicare Strike Force trial in the Southern District of Texas, in which he helped win the acquittal and dismissal of multiple charges, including all charges against three co-defendants.

--

--

Stephen Lee

Lawyer, former federal prosecutor in Chicago (2008–January 2019), former newspaper reporter. Work site at stephenleelaw.com