(Bloomberg) — The first time cardiologist Robert Graor lost his Ohio license to practice medicine was in 1995, after he was convicted of 10 felony theft counts for embezzling more than $1 million from the Cleveland Clinic and sentenced to three years in jail.
The second time was in 2003, after he'd won back the license following his release from prison. This time, the Ohio Board of Medicine found he repeatedly misrepresented his credentials over a two-decade period and permanently barred him from practicing medicine.
That didn't stop Graor from participating in Medicare, the government's health insurance program for the elderly and disabled. In 2012, Medicare paid $660,005 for him to treat patients in New Mexico, which gave him a license to practice in 1998. Graor declined to comment.
At least seven doctors who'd lost a medical license because of misconduct collected a total of $6.5 million from Medicare in 2012, according to federal data. The list includes doctors accused of gross malpractice, a brutal sexual assault and violating prescription drug laws. Their continued participation in the $604 billion program reflects what some members of Congress and others call a permissive approach that lets providers with questionable backgrounds keep billing taxpayers. All the doctors notified Medicare of the loss of their licenses, records show.
"That's ridiculous," says Sidney Wolfe, a physician who founded Public Citizen, a Washington consumer-advocacy group. "If a doctor is thrown out of one state, that should be enough to exclude them from Medicare."
The federal Centers for Medicare & Medicaid Services (CMS), which administers Medicare, released details of its payments to doctors earlier this month for the first time in more than 30 years. So far, only 2012 payment data has been released. Officials said they hope that making the information available will enable private researchers and the public to help ferret out fraud in the system.
The system needs such help, according to a 2012 report by the U.S. Government Accountability Office (GAO). In it, CMS reported improper payments of at least $44 billion, an estimate that may include both fraud and simple billing errors. Medicare has been on GAO's "high risk list" since 1990, when the list was created to identify serious weaknesses in federal agencies.
"Part of it is the sheer size of the program and its complexity," said Kathleen King, GAO director of health care, in a telephone interview. The program needs lots of providers to make sure patients have adequate access to health care, she said. "They can't be like a private insurance company and exclude people because they don't like their practices."
'Permissive area'
CMS has "discretionary authority" to ban a doctor from the Medicare provider list if his license to practice has been revoked by a state, spokesman Aaron Albright said in an e-mail. The agency would not reveal if it has taken any action against the providers identified by Bloomberg as having lost their licenses to practice, saying such a disclosure would be a violation of the doctors' privacy.
The U.S. Department of Health and Human Services Inspector General (HHS OIG) also can ban a doctor from Medicare if a state has revoked a medical license. Like CMS, it isn't required to do so. Donald White, an agency spokesman, says the revocation of a license falls into a "permissive area where they will not necessarily be excluded" from Medicare. He said doctors are "generally not excluded" in cases where one state has pulled a license but another allows that doctor to continue practicing, with the knowledge of the first state's action.
In all seven cases identified by Bloomberg, the doctors stripped of a license in one state were allowed to practice in another state and continued to bill Medicare.
The state of California revoked the license of internist Sean Steele in February 2012 following his guilty plea to misdemeanor battery against a woman who accused him of a sexual assault in the back seat of his chauffeured car in Las Vegas. He was ordered to pay a $1,000 fine and complete impulse-control counseling, according to records from the Medical Board of California.
The administrative law judge who heard the board's case against Steele in California said the doctor "savagely" attacked the woman and called his actions "extremely egregious." The judge said Steele lied throughout the case.
The woman, an attorney who met Steele through an online dating service, suffered severe injury, according to the California board decision.
Assault denied
L. Kristopher Rath, a Las Vegas attorney representing Steele, said the doctor denies assaulting the woman. He said the California medical board hearing was conducted even though Steele's attorney was sick and unable to attend. Medicare hasn't taken any action against Steele, Rath said.
In Nevada, where Steele is also licensed, his ability to practice has been uninterrupted by his guilty plea in the assault case. In 2012, Medicare paid $394,660 for his services. Douglas Cooper, the director of the Nevada State Board of Medical Examiners, said the state took a "nonpublic action" against Steele that he was not allowed to disclose. He said his office reviewed the allegations of sexual assault and determined "the evidence boiled down more in favor of Dr. Steele than the alleged victim."
Surgeon Swaroop Nyshadham lost his license in Alabama and surrendered his New York license following charges of shoddy patient care in a case in which a woman died. He continues to practice in Georgia, and Medicare paid $22,134 for his work in 2012.
In the order stripping him of his Alabama license, the state medical licensure commission found Nyshadham guilty of "gross malpractice or gross negligence." He performed an operation in 2004 on a 36-year-old patient with acid reflux and an inflamed esophagus that was "not an accepted anti-reflux operation," according to the state medical board's complaint. The surgeon was "struggling during the surgery, which was reportedly accompanied by copious bleeding," the complaint said.
The day after the operation, the patient's temperature increased to 101.4, and days later, her white blood-cell count had risen to a level that indicated a possible infection.
Nyshadham was notified by telephone and "dismissed the high white blood count as a 'lab error,' and did not request further tests," according to the commission. The patient chart also showed an above-normal heart rate, but Nyshadham ordered her release anyway. The next morning, the patient was found dead at home.
