Doctors warned of billing methods.

Byline: Tim Christie The Register-Guard

On April 1, 2003, the junior member of Cardiovascular Surgical Associates wrote a letter to the heart surgeons who owned the Eugene medical practice, warning them in remarkably blunt terms about the perils of the way they did business.

Dr. Rob Burnett wrote that he was so concerned about the way the practice billed Medicare and Medicaid that he had hired a lawyer, who advised him that the doctors were breaking state and federal law and at risk for "staggering" civil and criminal penalties, including possible prison terms.

Two months after Burnett wrote the letter, he left Cardiovascular Surgical Associates and moved his practice to Coeur d'Alene, Idaho. Two months after that, state and federal investigators opened an inquiry into Cardiovascular Surgical Associates for allegedly submitting false billing claims to Medicare and Medicaid.

The investigation is now in its fourth year. No charges have been filed against the doctors, who each have retained white-collar criminal defense attorneys. Neither the government nor the doctors - David Duke, Stanley Baldwin, Warren Glover and Richard Hicks, now retired - has spoken publicly about the investigation.

But details of the probe have trickled out in a series of court filings in the past year in connection with a fight between the doctors and the government over access to a legal file created on the doctors' behalf.

In a statement filed with the court last year, a federal investigator, John Masters, outlined the government's central allegation: That a doctor serving as primary surgeon on one case also would submit a bill claiming to have served as assistant surgeon on a second case going on at the same time in a different operating room, or that a single doctor would bill for assisting multiple surgeries that were going at the same time. Medicare regulations requires that assistant surgeons "actively assist" surgeries, and specifically prohibit doctors from billing for assisting more than one surgery at a time.

The Burnett letter, released with other documents that been sealed by U.S. District Judge Anna Brown, shows the doctors were warned as early as 2003 that the billing practices were suspect. The judge made the documents public in response to a request for lawyers representing The Register-Guard.

Burnett did not respond to messages left with his practice in Idaho seeking comment; a staff member at his clinic said he had no comment. Assistant U.S. Attorney Robert Nesler, as well as Lawrence Matasar, an attorney for one of the doctors, also declined to comment for this story.

Cardiovascular Surgical Associates is now part of PeaceHealth, the corporate parent of Sacred Heart Medical Center in Eugene, which bought the practice in November 2004.

PeaceHealth representatives have said both the hospital corporation and the doctors were unaware the doctors were under investigation at the time the practice was sold, and that both first learned of the probe when federal agents raided their offices in March 2005.

In July 2000, Cardiovascular Surgical Associates hired Burnett, who had just completed a fellowship at University of Washington Hospital, according to the Idaho Board of Medicine. And. according to his letter, he immediately had concerns with the business's billing practices.

In the letter, addressed to Hicks, Burnett said that from the start of his employment he had been "uncomfortable" with the way Cardiovascular Surgical Associates billed Medicare and Medicaid for doctors serving as assistants on heart surgeries.

Burnett said he had questioned the policy, "both formally and informally, on several occasions," to no avail.

The partner doctors had told him that no change in the billing policy was warranted, and as an employee, Burnett should continue to participate in the practice despite his objections, he wrote.

Burnett said that, as a result, he had concerns about whether he wanted to become a partner in the practice, and whether the billing policy would "adversely affect me" if he did become a partner.

That's why, he said, he decided to hire a lawyer, whom he did not name, to research the legitimacy of the partnership's billing practices. Specifically, he was concerned with billing for an assistant surgeon when the doctor was serving as primary surgeon on a different procedure during the same time period; billing for the same assistant on multiple surgeries during the same time period; and billing for an assistant surgeon for providing "token" assistance, such as briefly putting on a gown and gloves "without actually assisting the operating surgeon or participating in the operation."

The lawyer confirmed his suspicions, Burnett wrote.

"These CVSA billing practices are illegal, and subject the partnership to both civil and criminal liability," he wrote, including five years in prison and $25,000 for each false claim, and getting kicked out of the Medicare/Medicaid program.

"Obviously, the cumulative effect of these penalties would be staggering," he wrote.

For good measure, Burnett provided a copy of a settlement agreement that another medical practice had reached with the government after submitting false billing claims for assistant surgeons.

The partnership's billing practices, he said, "place me at great risk, without personal benefit, and without an avenue to change these practices, therefore jeopardizing the validity of my employment contract with CVSA," including the noncompetition clause.

"I would not have signed the agreement if I had known at the time your billing practices were illegal," he wrote.

Burnett concludes by formally requesting "an expeditious resolution," without specifying what that might be. Two months later, he left for Idaho.