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Florida Pathology Lab and Dermatologist Caught in a Medicare Fraud and Kickback Scheme



May 20

Florida Pathology Lab and Dermatologist Caught in a Medicare Fraud and Kickback Scheme

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On March 18, 2011, the judge for the US District Court in Tampa, Florida denied the motions to dismiss the charges against the Defendants Jose SuarezHoyos, M.D. (“Suarez”), the owner of Tampa Pathology Laboratory ("TPL"), and Steven Jay Wasserman, M.D, ("Wasserman") a dermatologist.


The judge stated that “Since the Relator was an employee of Suarez and TPL during part of the relevant time period, the Government's allegations are based on the Relator's first-hand knowledge regarding TPL's conduct.”


After reviewing the CPT codes within Defendants' billings to Medicare, the Government contends that around 1997, Wasserman and Suarez entered into a kickback arrangement pursuant to which they submitted tens of thousands of false claims to the Medicare Program.


According to the allegations in Plaintiff's Complaint (Freedman vs. Jose Suarez-Hoyos, MD, et al.), Wasserman would send TPL a biopsy specimen he had excised from a patient for testing. TPL would prepare a slide and a TPL pathologist would interpret the slide and prepare a pathology report with a diagnosis. This work entitled TPL to bill Medicare using the global 88305 code. 


Global billing includes both the technical component (TC), which can be billed separately as 88305–TC for preparing the slide and the professional component (PC), which can be billed separately as a 88305-26 for the pathologist’s interpretation.


However, in an effort to increase the number of Medicare referrals Wasserman made to TPL, Suarez would provide the pathology report to Wasserman and allowed Wasserman to bill Medicare for the professional component (PC) for the specimen, even though he did not do the work. Furthermore, Defendants took steps to hide the fraud by redacting the pathology reports sent to Medicare to mislead them into believing that Wasserman was performing the PC work.


Defendants' kickback scheme resulted in a substantial financial benefit to Wasserman. From 2000 through 2005, Wasserman submitted more than 35,700 claims using CPT code 88305-26 and received more than $3.5 million in reimbursement from Medicare. In addition, over that same time period, TPL submitted the same number of claims using CPT code 88305-TC, amounting to more than $3.9 million of reimbursement by Medicare. If found liable in this civil action, the Defendants could face stiff fines that total in the millions of dollars, as well as the possible loss of professional licenses.


Lesson Learned

  • The Government is actively reviewing claims submitted by clinical pathology laboratories (large or small) and physician practitioners, looking for signs of practices that violate the AKS and FCA statutes.
  • The Government will take aggressive action to pursue laboratories and practitioners for present and past wrongful practices and levy heavy fines and penalties.



In today’s highly competitive environment, many clinical pathology laboratories are under intense pressure to enter into unique service arrangements with referring physicians to grow their businesses. Unfortunately, la boratories often enter into these agreements or develop questionable billing practices without being fully knowledgeable or aware of the compliance risks. According to Robert E. Mazer, Esq. of Ober, Kaler, Grimes & Shriver, "Financial arrangements between labs and referral sources often raise complex regulatory issues, and should not be undertaken without competent compliance advice". 

Working with a qualified compliance advisor to establish an effective compliance program can provide the laboratory with the protection needed to avoid questionable practices and the painful penalties associated with wrongdoing.


For questions concerning this LabPath News Alert and or the services available to assist laboratories in implementing and maintaining an “effective” compliance program, please email us at or call us at 727-244-1150.