Federal authorities are investigating whether CCS Oncology, one of the region's largest and most prominent providers of cancer care, defrauded taxpayers out of millions of dollars a year, The Buffalo News has learned.
In addition to the federal investigation, a whistleblower has filed a related civil lawsuit against CCS arguing the practice's physicians and other staffers engaged in widespread fraud and other misconduct, costing the government $10 million to $15 million annually, according to a source familiar with the complaint who spoke on the condition of anonymity.
Dr. W. Sam Yi, a radiation oncologist who serves as the practice's CEO and medical director, confirmed the existence of a federal investigation to The News.
He said he hasn't been interviewed yet but expects that request to come shortly. He also said he hasn't received a subpoena.
"We are 100 percent confident we have done nothing wrong," Yi said in an interview. "We have always conducted ourselves professionally and by the book."
Investigators from the U.S. Department of Justice, the FBI, the Centers for Medicare and Medicaid Services and the Department of Veterans Affairs have interviewed a former CCS employee, that employee told The News.
That employee said the investigators' questions centered on possible billing irregularities at CCS Oncology, which at one time held about 30 percent of the oncology market in the region.
Investigators have scheduled an interview with a second person who was not employed by CCS, the person told The News.
Barbara Burns, a spokeswoman for the United States Attorney's Office in Buffalo, declined to comment.
The whistleblower's complaint accuses CCS of billing for more expensive procedures than were actually performed, billing for procedures that never were performed and performing medically unnecessary procedures on patients, among other violations, according to the source.
The complaint is dated from July and filed under seal in U.S. District Court in Buffalo.
The source did not identify the whistleblower.
Lengthy list of allegations
CCS has grown swiftly over the past decade into a large community cancer provider, competing against Roswell Park Cancer Institute, Kaleida Health and Buffalo Medical Group.
Yi purchased CCS in 2008, at a time when the practice had two treatment facilities and only a handful of employees.
By today, CCS has expanded to five treatment centers, plus a number of practices. Combined, CCS Oncology and CCS Healthcare, its non-oncology practice, have 36 physicians who serve 23 offices and clinics.
CCS Oncology grew through a series of acquisitions and through a steady diet of advertising.
No current or former CCS staffers have been charged with a crime.
But a person who has seen the civil complaint said the lengthy list of allegations against CCS includes:
• Employees knowingly submitted false records to Medicare and Medicaid, in an arrangement that placed profits over patients.
• At times, no physician was present to directly supervise radiation and diagnostic scans, in violation of Medicare guidelines.
• CCS staffers offered numerous unnecessary treatments and services to patients.
• CCS recruited and treated patients who have terminal cancer and are recommended for hospice care, where further radiation treatment is harmful or ineffective. The patients are treated, not because of a diagnosis that the cancer can be treated, but instead to bill Medicare and the other insurance programs.
• CCS staffers re-treat areas on patients that have already been treated with radiation, in excess of prescribed dosage limits, again to make as much money as possible and at the expense of patient safety.
• CCS seeks payment for services it hasn't performed, such as weekly treatment management sessions that require physicians to meet with their patients, examine them and go over their records with them. The whistleblower alleged the reviews often didn't take place. Another treatment that didn't always take place was an imaging guided radiation therapy, or IGRT, scan that was supposed to take place before every treatment.
• Yi and other CCS physicians allowed registered nurses to fill out prescriptions for medications.
• CCS also regularly offered "kickbacks" to patients by waiving their co-pays for the treatments the practice was providing to them.
The civil complaint, according to the person who has seen it, estimated that CCS brought in $100 million in annual patient revenue, and roughly 40 to 50 percent of its patients were insured through government insurance programs. That's primarily Medicare, but also Medicaid and a program that provides civilian health benefits for members of the military, retired military and their families.
Based on those figures, the complaint calculates the CCS billing fraud is costing the federal and state governments at least $10 million to $15 million per year, according to the source who shared its details with The News.
The whistleblower has the potential to benefit financially from filing the complaint, under the terms of the False Claims Act, if the government recovers any damages from CCS and Yi.
Yi denies wrongdoing
Yi broadly defended himself and the practice against allegations of fraud, but he declined to discuss specifics.
"They have focused their investigation into billing," Yi said. "But once again, as far as I know, [as the person] who is in charge of the whole organization, we have not done anything intentionally or unintentionally that is fraudulent."
He presented a federal investigation as a common occurrence for a business.
"All I can say is a lot of larger organizations go through times of investigations," he said. "So we don't view CCS Oncology going through this kind of investigation being something unique to CCS Oncology as an organization."
Further, Yi said, if CCS had engaged in widespread fraud over a period of years, such as providing additional, unneeded treatments to patients, why hadn't other, private insurers noticed anything?
"If we are engaged in shady things, like fraudulent billing to over-treating, CCS could not have succeeded the way it has succeeded the last few years," Yi said.
Feds conduct interviews
A former CCS employee who spoke on condition of anonymity said representatives of several federal agencies interviewed the employee.
The federal agents asked questions about the employee's understanding of fraud, about any improper financial incentives that existed within the practice and about whether Yi promised superior cancer treatment to patients that he couldn't deliver, among other topics, the former employee said.
The former employee said a Justice Department representative warned against discussing the interview with anyone.
FBI agents also arranged to interview another person about the topic of possible billing irregularities, the person told The News. This person, who spoke on the condition of anonymity, is not a CCS employee.
Ex-patient decries care
One person who is eagerly waiting for the conclusion of the federal investigation is Dean Kirkwood, a former CCS patient.
Kirkwood, 51, is a Cheektowaga resident who has worked as a truck driver and jack-of-all-trades before his cancer diagnosis left him unable to work full time.
Kirkwood said he was diagnosed with Stage 2 chronic lymphocytic leukemia, or CLL, in 2007 while he was still living in California. He said he became a patient of Yi's and CCS' in 2012.
Kirkwood said, at Yi's direction, he began radiation treatment, first on his head and neck in 2012, and then on his groin area in 2013.
He said the radiation treatment on his head and neck caused swelling inside his neck and throat, and the radiation treatments to his pelvic area forced him to go to the emergency room at Sisters Hospital, St. Joseph Campus for mild radiation poisoning.
"I've never been hurt like that before," Kirkwood said in an interview.
He also said his patient records show that CCS has improperly billed Medicare for services that he did not receive.
For example, he said, on April 25, 2013, he saw Yi at CCS' offices on Spindrift Drive in Amherst. CCS billed Medicare $1,250 and received $624.29 for the services provided to Kirkwood, according to the paperwork provided to The News.
Kirkwood said he stayed in CCS' offices the entire time and he did not go to the neighboring offices of Windsong Radiology Group, which is a CCS partner. Yet Windsong billed Medicare $765 that day for a procedure they said was performed on Kirkwood, and received $92.55, according to a bill Kirkwood received later.
He has reached out to numerous public agencies to try to interest anyone he can think of in investigating what he considers wrongdoing at CCS Oncology.
According to records Kirkwood shared with The News, he has raised his concerns with Medicare, the Erie County District Attorney's Office and the state Health Department's Office of Professional Medical Conduct.
The Health Department, in a letter from 2013, told Kirkwood the issues he raised in his complaint do fall under its jurisdiction and would be investigated. Kirkwood said the case remains under investigation but he has heard nothing from the department since September. The Health Department declined to confirm or deny the existence of the investigation.
Yi said patient privacy regulations bar him from discussing Kirkwood's care or his medical records.
CCS Oncology serves thousands of patients and few have raised the same level of concern as Kirkwood, who has complained on Twitter about his treatment.
Yi remains confident
News of the investigation and whistleblower lawsuit come as CCS Oncology still is feeling the effects of the decision by Independent Health last year to remove the practice from its network.
About 30 percent of its active patients, or 2,600 patients, received insurance through Independent Health and were forced to either change cancer doctors or change insurance carriers. About half stayed with CCS, and about half left the practice, Yi said.
The continuing bad news could overwhelm some CEOs, but Yi has retained his confidence.
"Yes, it is a negative cloud, especially when we are going through a tough time with Independent Health," Yi said. "But it is one of those things where you have to go through this, and we're going to overcome whatever negativity there might be. And CCS will eventually come out clear of any false accusations to rebuild our services, and we'll come out stronger."