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FBI raid of CCS Oncology locations in Western New York is part of ongoing probe

The early-morning raid that saw FBI agents gather records at every CCS Oncology office was the first visible sign of the government's three-year investigation into possible billing fraud at the practice.

The raid left some cancer patients anxious despite assurances from CCS Oncology that normal business operations will resume.

"It seems like a mess. I'm not sure what's going on," said Cynthia DeMarco, a Town of Tonawanda woman in remission from breast cancer who has a checkup scheduled next month.

The raid comes nine months after The Buffalo News reported the existence of a federal investigation into CCS and one week after a federal district court judge allowed Bank of America to seize the practice's assets over debt.

Tuesday brought the first confirmation from the federal government of the probe's existence and new details on the investigation from the lawyer for CCS.

"It doesn't involve anything concerning quality of care. It doesn't concern anything concerning medically unnecessary, invasive treatment. It's a billing dispute," said Robert Trusiak, the practice's attorney and a former assistant U.S. attorney who prosecuted fraud cases.

The News reported last June that federal authorities are investigating whether CCS Oncology defrauded taxpayers out of millions of dollars. CCS officials have denied wrongdoing and no charges have been filed against CCS or its executives.

CCS was once one of the region's largest providers of community-based cancer care. Combined, CCS Oncology and CCS Healthcare, its non-oncology practice, as of last summer had 36 physicians who served 23 offices and clinics.

But CCS Oncology has been losing physicians and patients ever since Independent Health, the Amherst-based insurer, removed CCS Oncology from its network at the end of 2016.

The practice owes millions of dollars in unpaid taxes to the federal and state governments and hundreds of thousands of dollars to vendors, according to public documents.

A federal district court judge last week allowed Bank of America to seize the practice's assets because its owners defaulted on more than $16 million in debt to the bank, though CCS remained open.

Bank of America gets OK to seize CCS Oncology assets; practice remains open

The FBI obtained search warrants to seize records Tuesday at CCS' active locations in Amherst, the Town of Tonawanda, Orchard Park, Lockport and Niagara Falls.

"We are conducting court-authorized activity at CCS Oncology," Maureen Dempsey, a spokeswoman for the local FBI office, said in an email Tuesday morning. She declined further comment.

Agents did not remove records but, instead, made copies of records that are on the practice's computer servers, he said. Agents still were on the scene as of mid-afternoon Tuesday.

A CCS employee, who spoke on condition of anonymity, said agents already were at the Orchard Park Road location Tuesday when employees arrived for work around 6:30 a.m.

"The FBI greeted us at the door and told us to walk out," the employee said.

Trusiak said the action by the FBI was unfortunate because CCS physicians and employees could not provide care to patients while the investigators were collecting records.

He said CCS already has provided more than half a million documents to the federal government and he had assured the government on Friday that all records in the matter would be preserved.

"It's important for the government to recognize that CCS provides outstanding patient care and this was disruptive of that patient care," Trusiak said.

He said patients who had an appointment Tuesday were told to show up as scheduled and CCS staffers were directing them to the appropriate place for treatment. He said he expected care to resume once the FBI had completed its work.

The raid, on top of months of scrutiny of the medical practice, caused patients to wonder what to make of the situation.

DeMarco, the Town of Tonawanda resident, sees an oncologist at CCS, as well as an internal medicine specialist for her primary care. She's come to trust her doctors there, following months of radiation and chemotherapy that put her in remission in 2016. She now goes for follow-up visits.

Still, everything has not gone smoothly. DeMarco said she owes CCS $1,200 for her radiation treatment, but CCS stopped billing her last summer, and she doesn't know why.

"I don't know the status of things," she said.

For patients in active therapy, the concerns are more acute.

Radiation treatment, for instance, requires careful planning. The machine must be accurately aligned with the area of the body through which the external beam of radiation is directed to reach cancer cells.

In chemotherapy, experts say the urgency of limiting delays varies by type of cancer, the drugs involved, and the goal of treatment – helping a patient reach remission, or palliation in a terminal case to prolong survival and ease symptoms.

It's important that new physicians taking over a regiment have accurate and up to date information about a patient's dosing and treatment schedule, said Dr. Marc Ernstoff, chairman of the department of medicine at Roswell Park Comprehensive Cancer Center.

"This happens more frequently than you might think, especially with snowbirds traveling back and forth to Florida," he said.

Richard Zulewski of Clarence said CCS told him that the appointments for the last four chemotherapy treatments scheduled next month for his wife, Delphine, would be kept.

"It's a tough spot for people to be in," he said. Zulewski said he and his wife are pleased with CCS and the care they have received.

Dean Kirkwood offers a different perspective. The former patient is a Cheektowaga resident who worked as a truck driver and jack of all trades before his diagnosis in 2007 with Stage 2 chronic lymphocytic leukemia. He said he became a patient of CCS’ in 2012 and began radiation treatments that forced him to go to a hospital emergency room for mild radiation poisoning.

His experience led him to complain about CCS to numerous public agencies. Asked about Kirkwood's complaints in a past News interview, a CCS official said privacy regulations bar the practice from discussing the patient's care or his medical records.

"I was crying. It's been such a long, hard battle," Kirkwood said about hearing the news of the FBI raid.

Trusiak said radiation oncology, which makes up a large portion of CCS' practice, provides vital care to seriously ill or terminally ill patients as guided by an experienced physician.

"It is regrettable when the federal government believes that it can dictate the terms and conditions of when someone lives and when someone dies," Trusiak said.

CCS is waiting for Bank of America to execute the seizure order it received in federal district court last week. The bank has assured Dr. W. Sam Yi, CCS' medical director, that it will coordinate with him to ensure that patient care is not disrupted, Trusiak said. Yi told The News he couldn't comment.

The Justice Department, the FBI and the U.S. Department of Health and Human Services said in a letter to CCS patients that they moved to secure information in the ongoing investigation after the ruling last week in the Bank of America lawsuit.

"The government's actions will result in the copying of certain information in the custody of CCS Oncology. Your medical information will remain with CCS Oncology," the agencies said in the letter.

The letter urges patients to contact their primary care physicians to discuss care they've been receiving through CCS.

Barbara Burns, a spokeswoman for the U.S. Attorney's Office in Buffalo, said the office would have no further comment.

Mark J. Mahoney, a defense attorney with extensive experience practicing in federal court, said he doesn't know specifics of the CCS case but he wonders why the FBI conducted a raid instead of obtaining the information authorities sought through a subpoena. Usually, agents will conduct a raid to seize records in cases where they fear those records could be destroyed, he said.

"It seems a little heavy-handed to me. It's almost like doing the perp walk instead of somebody surrendering," Mahoney said.

Mahoney said investigations of this kind typically involve comparing billing data for practice physicians to data for other physicians in that specialty to look for unusual activity.

"They look for outliers, essentially," Mahoney said.

Health insurers and other cancer care providers have been discussing CCS Oncology since Independent Health dropped the practice from its network and forced the insurers members to find new physicians. At that time, a CCS official said Independent Health's roughly 560 active members represented 30 percent to 40 percent of the practice’s oncology patients.

BlueCross BlueShield of Western New York continues to include CCS in its network. If care at CCS is interrupted for an extended period, or if the practice closes, BlueCross BlueShield will help its members find treatment at Roswell Park, Kaleida Health, ECMC or the Catholic Health system, said Julie Snyder, vice president of corporate relations for parent company HealthNow New York.

"Our focus is on our members, ensuring that they have continuity of care," she said.

Roswell Park and Great Lakes Health, the parent organization of Kaleida Health and ECMC, have recruited physicians in the past year or so from CCS, bringing with them some of their patients.

CCS was a major player in the outpatient market at its peak before the Independent Health action, with a hospital official saying the practice once held one-third of that part of the oncology business.

Snyder and others in the medical community said there is sufficient capacity to handle patients in case of further disruptions.

Great Lakes, for instance, had already started an initiative to expand oncology services when the CCS break with Independent Health occurred, creating an opportunity to recruit six CCS physicians who were open to listening to offers to practice elsewhere.

Donald Boyd, executive vice president of business development and affiliations at Kaleida Health, said the organization received telephone calls from CCS patients after news of the FBI raid, and was well positioned to meet their medical needs, if necessary.

"We've been getting calls steadily, and there was an increase (Tuesday)," Boyd said.

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