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Eye Doctor Files Unusual Lawsuit Against Former Scripps Clinic Doctor

September 9, 1987

LOS ANGELES (AP) _ An eye doctor has filed a multimillion-dollar lawsuit accusing a former colleague of defrauding Medicare by billing for unnecessary or unperformed surgery at the Scripps Clinic and Research Foundation here.

An unusual feature of the lawsuit, unsealed in federal court Tuesday, is that the plaintiff stands to receive up to $1.5 million under a new law that gives whistle-blowers financial incentives for reporting overcharges in federal government programs.

Lawyers at the Center for Law in the Public Interest, who filed the lawsuit on behalf of Dr. Paul E. Michelson, said the suit was one of the first actions filed under the federal False Claims Amendments Act of 1986.

After reviewing the allegations, U.S. Attorney Robert Bonner announced Tuesday that his office will prosecute the case.

Ophthalmologist Raymond Y. Chan, who left Scripps several months ago and is in private practice, is accused of defrauding the federal Medicare program between 1984 and 1986. The suit alleges he billed for eye surgery that he did not perform on his elderly patients or billed for unnecessary operations.

The lawsuit estimates that Chan overcharged Medicare by $300,000 during a two-year period, with both the doctor and the Scripps Foundation sharing in the profits.

Michelson, who used to work with Chan at the Scripps Clinic Medical Group in La Jolla, said he examined records for 37 of Chan’s hundreds of patients and documented $47,000 in alleged Medicare overcharges, said attorney John Phillips of the law center.

Chan said he had never defrauded Medicare and that he did not want to comment on the lawsuit.

Chan’s bills have recently been examined by administrators, but Scripps spokesman David Gollaher said, ″We’re not saying whether there were or there weren’t irregularities.″

Scripps spokesman Andrew Jowers refused to specify a reason for Chan’s departure.

According to the lawsuit, Michelson was terminated from Scripps in 1986 for ″incompatibility.″ He is now in private practice in San Diego.

The complaint says Chan allegedly used lasers to treat patients suffering from glaucoma or cataracts and then defrauded Medicare by billing as if he had performed surgery with a scalpel, which is almost three times as expensive.

Chan is also accused of performing unnecessary laser procedures on patients who either did not suffer from glaucoma or who were not first treated with safer and less expensive medication mandated by the American Association of Ophthalmology.

″This is one of the most clear-cut cases of unnecessary treatment. There is no dispute,″ said David Huebner, an attorney for the center. ″The patient charts show that a person would come into the office one day and two days later be zapped with a laser.″

Under the new law, Michelson is entitled to receive between 15 percent and 25 percent of any judgment. The lawsuit seeks between $3.7 million and $6.3 million in civil damages and penalties.

However, Michelson said the financial aspect of the law was not a consideration.

″My own concerns were strictly the ethics involved here,″ he said.

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