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Press Release

Ashland Cardiologist Convicted Of Health Care Fraud

For Immediate Release
U.S. Attorney's Office, Eastern District of Kentucky

COVINGTON, Ky. — A federal jury has found a cardiologist from Ashland, Ky., guilty of charges that he fraudulently billed Medicare, Medicaid, and private insurers for invasive heart procedures that were medically unnecessary.

On Thursday afternoon, Richard E. Paulus was found guilty of health care fraud and making false statements relating to health care matters, following a seven-week trial.  According to evidence presented at trial, from 2008 to 2013, Paulus performed numerous invasive heart procedures on patients who did not need them.  In order to justify these unnecessary procedures, Paulus falsified patients’ medical records, to exaggerate their medical condition and to make it appear that the heart procedures were necessary and qualified for payment.

Specifically, Paulus was convicted of placing unnecessary coronary stents and performing unnecessary diagnostic catheterizations in patients.  Medicare, Medicaid, and private insurers will only reimburse for medically necessary procedures.  Under medical standards of care, government and private insurers generally reimburse medical providers who place coronary stents in patients whose arteries are at least 70 percent blocked plus symptoms.  According to the evidence, Paulus placed stents in over seventy patients whose blockages were significantly less than 70 percent – in some cases very little blockage at all; but Paulus recorded them at or near 70 percent in the records, in order to get paid for the procedures.  Ten cardiologists testified on behalf of the United States.  These medically unnecessary procedures were performed during his tenure at King’s Daughters Medical Center in Ashland.

“All of us rely on our healthcare providers to make treatment decisions based solely on medical considerations, untainted by financial considerations,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky.  The jury determined that Dr. Paulus dishonored this fundamental duty to many of his patients in order to defraud federal healthcare programs.  This is entirely unacceptable conduct, particularly in relation to invasive medical procedures, and justice has been served in this case.  The overwhelming majority of healthcare providers put the best interest of their patients first; the failure to do so in this matter demands accountability.  This victory is a milestone in an investigation spanning several years – the citizens of the United States have been well-served by our extraordinary trial team, law enforcement partners, and all of our staff who contributed to this result.”

From 2006 to 2012, Paulus billed Medicare for more heart procedures than any other cardiologist in Kentucky and was number 5 in the nation in terms of amount paid by Medicare for stent procedures.

In May of 2014, King’s Daughters Medical Center agreed to pay the U.S. Government $40.9 million to resolve civil allegations that it made millions of dollars by falsely billing federal health care programs for performing medically unnecessary heart procedures on patients.

Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Jennifer Moore, Acting Special Agent in Charge, FBI; and Derrick Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Region; and Andy Beshear, Kentucky Attorney General, jointly announced the verdict.

The investigation was conducted by FBI and the Department of Health and Human Services, and the Kentucky Office of Attorney General-Medicaid Fraud and Abuse Control Unit. Assistant United States Attorneys Andrew Sparks and Kate Smith prosecuted the case on behalf of the federal government.  Paulus is scheduled to be sentenced on April 25, 2017.  He faces a maximum of 20 years for health care fraud and up to five years for making false statements.

Updated October 28, 2016

Health Care Fraud