Three years ago, Dr. C. Dustin Bechtold and Dr. Bryan Wellman sued Sanford neurosurgeon Wilson Asfora and Sanford Health in the U.S. District Court of South Dakota for defrauding the federal government and us, the taxpayers. The court almost immediately sealed the case to keep individual health information confidential.
On Thursday, after United States Department of Justice notified the court that the feds are intervening and going after Dr. Asfora and Sanford as well, the court unsealed a redacted version of the original 2016 complaint.
The complaint is big—111 pages. Here’s my summary of the main points of concern.
Drs. Bechtold and Wellman allege that Dr. Asfora, Sanford Health, Sanford Clinic, and Asfora’s medical device company Medical Designs, LLC committed “violations of the Federal False Claims Act, 31 U.S.C. §§3729–3733 et. seq. and the Federal Anti-Kickback Statute related to causing improper payments from Medicare, Medicaid, and other federally and state-funded government healthcare programs. The 2016 complaint says Dr. Asfora committed a variety of naughties:
- submitting false claims for services;
- implanting his devices in patients who didn’t need them, just to make a buck;
- fraudulently and improperly billing and coding;
- telling lies (the formal term is “misrepresentations”) to the FDA and others;
- falsifying medical records;
- systematically violating the Federal Anti-Kickback Statute; and
- defrauding Uncle Sam;
…and Sanford Health and Sanford Clinic management “were aware of, permitted, actively encouraged, and financially benefitted from” all of Asfora’s fraud.
The plaintiffs allege that Sanford has made millions of dollars by encouraging the unnecessary use of two of the medial devices Asfora as designed and now sells: Bullet Cages used for spinal fusion procedures and Samba Screws used to fuse the sacroiliac joint in the pelvis.
Asfora’s devices are “physician preference devices,” meaning “there are comparable devices on the market that are similarly indicated and can perform just as well or better….” The complaint alleges that Dr. Asfora, the sole owner of Medical Designs, is the only spine surgeon in America who uses Bullet Cages and Samba Screws. No one else at Sanford or elsewhere uses the Bullet Cages, claim the plaintiffs, because “technology has advanced” and “in large part, has rendered the Bullet Cage obsolete.”
The complaint alleges Asfora has offered other doctors “under the table” fees to use his Samba Screws and uses middle-man Orthofix sales rep Jesse Talcott as a “façade” for his self-interested over-prescription of his devices. Bechtold noted that many patients on whom Asfora performed spinal and sacroiliac surgery subsequently came to him reporting hip pain. The complaint says Asfora performed surgery against conservative guidelines followed by almost all other surgeons and appears to have caused patients’ chronic hip pain. In 2015, Asfora performed “medically unnecessary, not indicated and very dangerous” spinal surgery on a patient who subsequently developed paralysis.
The complaint alleges that Asfora stated that “he makes $3.5 million a year off his various implants.”
The plaintiffs note that they aren’t the first to blow this whistle. In 2013, defendants Sanford, Asfora, and Wellman (!) paid $625,000 to settle a suit over “consulting fees” paid to physicians from May 2010 through April 2011 as kickbacks to induce use of Asfora’s Bullet Cages. That case prompted then U.S. Attorney Brendan Johnson to restructure his office to spend more time pursuing medical fraud cases. Wellman and Bechtold allege that, rather than learning his lesson from that settlement, Dr. Asfora and his company “have expanded their fraudulent conduct greatly and become more brazen, now risking patient injury on a routine basis for their own financial gain.”
The current plaintiffs say they “and others” reported fraud over two years to six top Sanford officers: the presidents of Sanford Clinic and Sanford Medical Center, the executive VP of Sanford Clinic, and Sanford’s chief of staff, chief medical officer, and chief compliance officer. They met “intimidation and threatened discipline” and a “culture of tolerance and encouragement of the fraud.” Plaintiffs thus blew the whistle to the U.S. Attorney on May 2, 2016, and August 4, 2016.
The plaintiffs allege that Sanford has fostered the kind of corruption of which they accuse Asfora with profit-focused changes to its compensation system, creating incentives to “maximize reimbursement” and “pushing its surgeons to bill for their PAs in surgery regardless of whether or not they were present and actively assisted,” in violation of Medicare regs.
The complaint states that numerous internal complaints prompted the peer review committee to ask Wellman and Dr. Geoff Haft to review some of Asfora’s cases. Those two doctors determined that “Dr. Asfora was not correctly performing surgeries as he was performing medically unnecessary procedures and unnecessary multi-level procedures.” The peer review committee recommended an external peer review. Then-Chief Medical Officer Kenneth Aspaas “took charge of collecting the cases and informed the committee that he would send them out for outside peer review” but then never reported any results. In 2013, new Chief Medical Officer Michael Wilde informed Drs. Wellman, Haft, and Gust that the cases Dr. Aspaas had collected “had never been sent out for peer review and could not be sent out now without a formal complaint.”
The complaint alleges numerous subsequent instances of Sanford covering for Asfora in repeated surgical errors. The complaint also reports a September 2015 conversation with Wilde about CEO Kelby Krabbenhoft’s opposition to firing Asfora:
Dr. Wilde stated at this meeting that he thought Dr. Asfora would get fired. However, he also discussed how difficult it might be to terminate him. First, he warned that CEO “Kelby hates firing doctors—hates it,” so the CEO was an initial obstacle according to Dr. Wilde. Second, Dr. Wilde stated to the group, “from what I’ve heard from Farritor and Ken Aspaas, is that Asfora was right in the crosshairs, they were going to pull the trigger [to fire him], and Kelby said no,” Dr. Wilde in this meeting called this a “get out of jail free card” for Dr. Asfora [complaint, United States of America et al. v. Asfora et al., originally filed 2016.08.12, filed redacted 2019.06.27].
In October 2015, the complainants say they were informed that Sanford had moved to fire Asfora, but by the end of the month, Asfora was reinstated and claimed in a phone call to Wellman that “he had personally spoken to Kelby [Krabbenhoft] (CEO) and to massive and very influential Sanford donor, Denny Sanford, and that they helped get him resintated.”
It is worth noting that compliance with the Anti-Kickback Statute is a condition for participating in Medicare, Medicaid, and other federally and state-funded healthcare programs. If Sanford has been violating the Anti-Kickback Statute, it could lose the ability to treat patients covered by Medicare and Medicaid… which could have crushing implications for healthcare access around South Dakota.
This lawsuit is much more than a Medicare/Medicaid fraud allegation against one profiteering doctor. This lawsuit challenges the Sanford behemoth, all the way to top executives and namesake billionaire Denny Sanford himself, saying that one of South Dakota’s two dominant providers has actively encouraged and profited from unnecessary surgical implants that have hurt patients and cost taxpayers millions of dollars.
By the way, paragraph 59 of the complaint explains that the Patient Protection and Affordable Care Act “amended the Medicare Anti-Kickback Statute… to specifically allow violations of its “anti-kickback” provisions to be enforced under the False Claims Act.” So Our Congressional delegation, in its frequent but as yet futile calls to repeal the PPACA have actually been arguing to make it harder to prosecute Medicare fraud.