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My doctor is a crook

U.S. Attorney for New Jersey Paul J. Fishman (C) speaks during a news conference in Newark, New Jersey August 11, 2015. REUTERS/Eduardo Munoz

It seemed like an odd comment during a medical exam.

“I’m sorry, I have to take this call.”

Former office of Dr. DeSimone in Secaucus, N.J. (source: Bill McColl)

Our doctor, Eugene DeSimone, was doing a routine checkup of my wife last summer at Hudson Primary Care in Secaucus, N.J., when his cellphone rang. But instead of ignoring it, he left the examining room to talk.

A few minutes later he returned, again apologizing, and finished the exam.

Later, my wife pointed out that wasn’t the first time the doctor was interrupted recently. She also noticed him looking at text messages during her visits. He seemed distracted. We soon learned why.

On Sept. 25, we were reading our local paper, The Record of Hackensack, when my wife said, “Uh-oh,” and showed me an article. It read:

“Two doctors with practices in Hawthorne and Secaucus admitted accepting bribes in exchange for test referrals as part of a scheme operated by Biodiagnostic Laboratory Services LLC, U.S. Attorney Paul J. Fishman said in a statement. Douglas Bienstock, 48, of Wayne, who practiced in Hawthorne and Eugene DeSimone, 60, of Eatontown, who practices in Secaucus, admitted to accepting bribes as part of a 'long-running and elaborate scheme' operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, its president and numerous associates.”

Our doctor was a crook.

Huge insurance fraud scheme

After getting over the initial shock, I began doing some research on the case. It turned out Dr. DeSimone was part of an elaborate insurance fraud scheme that the U.S. Attorney’s Office in Newark says led to the arrest of 38 people, including 26 doctors. Officials say the scam involved millions of dollars in bribes that doctors got to refer laboratory tests to BLS, which brought in more than $100 million in Medicare and insurance payments to the lab. The primary owner and president of BLS, David Nicoll, along with several others connected with the firm, had earlier pleaded guilty in federal court for their roles in the scheme. Now my doctor was caught in the net.

Fishman charged DeSimone with receiving $1,500 a month in cash each month for two-and-a-half years from BLS to funnel blood specimens to the lab. The prosecutor added that BLS made $980,000 from those referrals.

The hammer came down on DeSimone on May 5, when Newark Federal District Court Judge Stanley Chesler sentenced him to 37 months in prison, with an additional year of supervised release. He was also fined $5,000 and had to pay $260,500 in restitution.

Dr. DeSimone's home in Eatontown, N.J. (photo: Jamie Pavlis Real Estate)

Nothing to raise suspicions

It all seemed hard to believe our doctor was involved in this kind of fraud. There were no obvious signs he was spending his new-found money on bling or other toys typical of the rich and famous. According to tax records, he and his wife owned their five-bedroom, three-bath, 3,563-square-foot home in Eatontown, N.J., since 1988. Zillow appraised it at $669,000 -- hardly a mansion. But the DeSimones will apparently own it no longer. It went on the market in July for $769,900 and was under contract a few weeks later.

Patients surprised

Along with us, other patients of DeSimone were also left scratching their heads over what happened.

“This all came as a complete surprise to me,” says Dave DeFerrari. "I had been going to Dr. DeSimone for years as he was my parents’ and grandparents’ doctor.  I thought Dr. DeSimone was a very good doctor.  Part of a good practice, he was professional, insightful and caring. He was accurate in his evaluations and always gave good advice. It's a shame." 

But like my wife, another former patient who wishes to remain anonymous saw a difference with DeSimone as he was dealing with his legal issues. “Once this all started, I noticed a change in him,” according to the patient. “He was distracted and not himself, which is understandable.  Before that though, nothing seemed amiss and I never suspected any illegal activity.”

And like DeFerrari, this patient finds the whole affair disappointing. “It's too bad, because he was a good and respected doctor.”

There was at least one indication things were amiss. In our visits to the office after he confessed, we noticed a sign on the desk informing patients DeSimone no longer accepted Medicare. The federal government's health program apparently had already cut him off.

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In practice more than 30 years

According to doctor referral websites, DeSimone received his medical degree from Universidad Autonoma de Guadalajara in Mexico in 1981, and did his residency in New Jersey. I first met him back in the early 1990s when I began going to Hudson Primary Care, where he was a partner.

Federal prison in Fort Dix, N.J. (photo: Bureau of Prisons)

Now, instead of treating patients at his old office, DeSimone will be spending the next three years with about 4,600 other inmates at the low-security federal correctional institution in Fort Dix, N.J. His sentence was scheduled to begin Aug. 1.

In the prison handbook, the warden provides a hint about those with whom he is living…and how he should behave.

“The population at FCI Fort Dix is culturally, geographically, and racially diverse. When people are living together in this type of setting, it becomes necessary to establish rules which preserve the rights and safety of everyone, maintain a clean environment, and enforce regulations for the well-being of all. Having respect for those around you, as well as for yourself, will help to maintain amicable relations and a tranquil environment…Your cooperation in making your stay at FCI Fort Dix a peaceful and productive experience is appreciated.”

Easy money?

So why did DeSimone do it?

James Quiggle of the Coalition Against Insurance Fraud, a non-profit alliance of consumer groups, insurers and government agencies, says his group finds doctors who take part in this type of fraud simply believe they won’t get caught.

“Doctors feel a sense of empowerment that allows them to get away with it,” he says. “They think it’s an easy way to make money.”

Quiggle adds that the easy money aspect is what oftentimes allows the fraudsters to get caught. “They start getting greedy and sloppy. That starts the downfall of their scheme.”

Plus, Quiggle notes the government has really ratcheted up its enforcement efforts against insurance cheats in recent years. “Insurance programs for years underestimated many of the scammers, now they’re beginning to catch up,” he notes. “The heat is on more than it has been in decades.”

That was brought to light in a report by the Health and Human Services Department in March, which said the government's increased pursuit of cheats recovered $3.3 billion from individuals and companies that attempted to defraud federal health programs last year.  Health Secretary Sylvia Burwell noted that nailing the crooks is a top priority of her department, and officials are using new and more sophisticated tools to get the job done. In June Burwell and Attorney General Loretta Lynch announced the arrest of 243 people charged with a $712 million false billing scheme, the largest sting since the creation of a special strike force aimed at stamping out medical fraud.

In addition -- and unlucky for DeSimone -- judges now are taking these cases more seriously, handing down harsher sentences to send a message that healthcare fraud comes with significant risks.

Along with being sentenced and fined, the state of New Jersey revoked DeSimone's medical license.

When reached by Yahoo Finance, DeSimone’s attorney declined comment, and our other attempts to talk with him were unsuccessful. So while we can speculate, we really don’t know what motivated a successful physician to risk his career and freedom for a $1,500-a-month payout.

And I need a new doctor.