Updated 12/13/2022: The U.S. Department of Justice filed a complaint against Modern Vascular on December 13, alleging that the company defrauded patients and taxpayers in order to enrich its owners and investors.
Sometimes, it hits Kae Barnes in the most mundane situations, like when she’s taking a shower. She shaves her right leg first, then moves over to her left — and stops. Even just riding in the car where she lives near Phoenix, Arizona, can be disconcerting. “Everything’s normal, it’s fine, and then I happen to look down, and it’s like, oh my gosh, I really don’t have a leg.”
Three years ago, Barnes walked into an outpatient clinic called Modern Vascular, now a national chain whose treatments are supposed to prevent amputations, and complained of weakness in her left leg. Over the course of three months, she underwent multiple inappropriate procedures that damaged her blood vessels, she alleges in a lawsuit.
Early the following year, Barnes developed a blood clot in her left leg. Because of the damage to her blood vessels, the only way to treat the clot was to cut off the leg, above the knee, she alleges.
“I was just a set of legs that they could make some money on,” Barnes said. “It makes me angry to know they had no interest in me at all.”
She remembers another doctor warning her: “Don’t you ever go back to Modern Vascular. They’re nothing but a mill. They’re a mill, in it for the money.”
Modern Vascular, with 14 outpatient endovascular clinics in seven states, including one in Albuquerque, says it is dedicated to treating arterial disease and ending unnecessary amputations. Such procedures are particularly common among people with diabetes, and there’s a desperate need for proper treatment: About 34 million Americans have the disease — in other words, roughly 10 percent of the country. All too often, people with diabetes don’t get enough medical care, and every year, about 130,000 of them get a toe, foot or leg amputated.
Native Americans, African Americans and Hispanics suffer from diabetes at rates above the national average and are particularly at risk for such amputations. Modern Vascular has opened clinics in places with large Native, Black and Hispanic communities, such as Arizona, New Mexico, Texas and Mississippi. Its clinic in Albuquerque opened in 2019.
But at Modern Vascular, the problem isn’t that patients are treated too little. Instead, some are treated too much, according to patients, doctors and current and former employees.
They told Searchlight New Mexico that Modern Vascular pushes unnecessary treatments and puts profits above patients. Modern Vascular’s aggressive business model funnels patients into clinics that operate with little outside scrutiny. Current and former staff members said the priority is not patient care but rather driving up the number of procedures and therefore the amount of money that Modern Vascular clinics can collect from insurance companies.
“People that didn’t need surgery were getting surgery,” said Christopher Busken, a vascular surgeon at a small practice in San Antonio, Texas, where Modern Vascular has two clinics. He said he and his partners treated several patients who received what the doctors concluded were unnecessary procedures at Modern Vascular. “You just can’t do that to people,” Busken said. “That’s just wrong.”
In her lawsuit, Barnes alleges that her treatments were inappropriate. Her left leg didn’t improve after the procedures; instead, she said, the weakness got worse. She even had surgery done on her right leg, even though “there were no issues with [her] right leg at the time,” according to the complaint, which was filed in February in Arizona state court.
Three other lawsuits alleging medical malpractice have been filed by or on behalf of patients treated at Modern Vascular clinics in Arizona and one in New Mexico; one in Arizona was dismissed voluntarily by the plaintiffs.
Some patients end up at Modern Vascular clinics because they are referred by doctors with a financial stake in the clinics’ success. Modern Vascular recruits these doctors to become investors, dangling substantial payouts, and pushes them to refer patients, according to a deposition, interviews with doctors and a recording of a meeting of potential investors.
Through a spokesperson, Yury Gampel, an erstwhile chiropractor turned serial entrepreneur and Modern Vascular’s CEO, declined a phone interview and instead provided a written statement.
“Modern Vascular adheres to widely accepted best practices exercised across the healthcare industry and employs extreme measures to ensure our policies are legal, ethical, and always in the best interest of our patients,” Gampel said in the statement.
“We feel it is imperative to be as transparent as possible, correct inaccurate statements, and defend ourselves against anonymous accusations from competitors and disgruntled former employees,” he said in the statement. He did not address specific allegations made by patients or employees.
Scott Brannan, Modern Vascular’s chief of endovascular surgery, flatly denied the claims. “We don’t do unnecessary procedures, and there’s no inappropriate relationships” with referring physicians, he told Searchlight during an extensive interview and tour of his clinic in Mesa, Arizona.
The U.S. Department of Justice is also investigating, according to records obtained by Searchlight, although the records do not specify the subject or scope of the investigation. On May 25, 2021, some investors in Modern Vascular clinics received an email from the business informing them of the investigation. An individual who had previously seen the email confirmed its authenticity. Modern Vascular did not respond to requests for comment on the investigation, and the Department of Justice declined to comment.
It’s a particularly egregious case study in the perils of the commercialized American medical system, which doles out dollars based on the number of physical tasks and items — surgeries, examinations, medications — instead of how beneficial those services are for patients. That can encourage medical businesses to do a lot of things rather than the right things.
“It’s not clinically driven,” said one former employee, who requested anonymity out of fear of retaliation. “It’s definitely monetary driven.
“I had a lot of sleepless nights the last six weeks I worked for the company, because I just wanted out,” the former employee said. “It was snowballing out of control. I thought, There’s no way they can hang on to this. I hope somebody just finally puts this to rest.”
The floodgates open
The first Modern Vascular clinic opened in Arizona in 2017, amid a sea change in how patients were being treated for clogged arteries. If severe and not properly addressed, the condition can lead to amputations, especially in the foot and leg. People with diabetes are particularly at risk because of how the disease damages blood vessels and nerves.
To unclog the arteries and keep the blood flowing, a doctor, much like a plumber, can snake tools down the “pipes” to try to get rid of the blockages.
Traditionally, these procedures were done in hospitals and surgery centers. But advances in medical technology and practice made some of the procedures safe enough to do in a doctor’s office, where they are cheaper overall and more convenient for patients. Between 2005 and 2011, federal health care programs, like Medicare, increased how much they’d reimburse for such procedures in the office.
“Then the floodgates opened,” said Krishna Jain, a longtime vascular surgeon in Kalamazoo, Michigan, who retired from clinical practice in 2016 and now runs companies that help doctors set up offices where they can do these procedures. “A lot of people who weren’t doing as much vascular care realized that they could make money from this.”
Over the past four years, Modern Vascular set up a network of high-tech doctor’s offices around the country. In a filing in a trademark lawsuit in January 2020, Modern Vascular claimed to have done more than 3,000 procedures and described itself as “the leading provider in the nation in caring for arterial disease.”
Many doctor’s offices that treat arterial disease are not problematic. They “can do great work, and patients can be really happy, and, frankly, in the COVID era, when hospitals were shut down and overwhelmed with COVID, these [offices] provided a great escape valve,” said Kim Hodgson, a vascular surgeon who served as president of the Society for Vascular Surgery from 2019 to 2020. “The problem is that there really isn’t, at this point in time, an oversight mechanism.”
Indeed, facilities like Modern Vascular receive much less scrutiny than hospitals or surgery centers. To take care of patients in a hospital, a doctor must be reviewed and certified by that institution. Hospitals have to follow extensive regulations, and the federal government publishes comprehensive data on how patients fare. And hospitals are filled with other doctors, who could blow the whistle if they see something untoward.
Not so in an individual office.
“Who’s going to see what you do out there?” said Dipankar Mukherjee, chief of vascular surgery at Inova Fairfax Hospital in Falls Church, Virginia, speaking about the field generally. “Maybe your partners will, but if your partners are also gaining from the monies, then, you know, it’s the fox guarding the chicken coop, isn’t it?”
‘They were lying to me’
Searchlight spoke with several patients who said that staff at Modern Vascular clinics insisted they needed surgery urgently — and later found out from other doctors that the procedures were not actually necessary.
Wanda Zunda, a 69-year-old in Tucson, Arizona, said she was one of them.
About a year ago, Zunda remembers getting a call out of the blue: The woman on the other end of the line was from Modern Vascular and was reaching out to people who were experiencing leg pain. As it happened, Zunda’s left foot and ankle had been hurting for years, she said.
On August 31, 2020, she went into the Tucson clinic, according to her medical records. After a few diagnostic tests, she said, a nurse told her that they needed to clear out a clogged artery in her left leg.
“They said, If you don’t get this done, you could lose your leg,” Zunda recalled.
But something didn’t feel right to her. How did they know to reach out to her in the first place? Why were they so pushy about scheduling the procedure? She decided to get a second opinion from another doctor who had cared for family members.
That doctor, Scott Berman, came to the opposite conclusion.
“Everything about her examination was pretty normal,” Berman, a vascular surgeon, told Searchlight. Her arteries were not clogged and Berman saw no need for surgery.
At Searchlight’s request, Berman reviewed Zunda’s results from Modern Vascular and said that even those records didn’t show any significant problem. The pain, he said, was likely caused by an ankle injury and scarring from subsequent surgery many years prior.
“I was so furious, because they were lying to me,” Zunda said. “I was thinking to myself, ‛How many people have they done this to and maybe caused damage to them?’”
Ruth Hardy, 67, said she had a similar experience in Tucson. She went to a podiatrist in March of this year because her right big toe was hurting — there were black spots the size of pencil points, and she thought it might be infected. The podiatrist couldn’t feel a pulse on her foot, and worried that her foot might not be getting enough blood to heal the infection, so he referred her to Modern Vascular, she recalled. A nurse practitioner at Modern Vascular told her there was indeed a problem with her blood vessels, and she urgently needed a procedure, or she might risk losing the toe, Hardy said.
Scared about the prospect of amputation, she went to the emergency room, and the doctor there did find a pulse on her foot, she said. Hardy took some antibiotics and tended to her wound — and the toe got better, she remembered. Two weeks after the Modern Vascular visit, she said, she saw a vascular surgeon who told her that the procedure Modern Vascular recommended was unnecessary. The vascular surgeon, she recalled, said that Modern Vascular had “messed up a lot of people.”
In San Antonio, Lynne Lee, 64, said that she went to Modern Vascular in May 2020 at the recommendation of her podiatrist. The diagnosis was dire, she remembered: She had peripheral arterial disease in both of her legs, and if she didn’t get procedures done soon, “it would be dangerous,” Lee recalls being told. “They implied I could lose my life.”
Worried that something more serious might be going on, she scheduled an appointment with a cardiologist instead. He warned her to stay away from Modern Vascular, she remembered, and advised her to see a vascular surgeon to get a second opinion about her legs. The vascular surgeon determined she had arterial disease that was only “asymptomatic mild-moderate” and that there was no need for an operation, according to Lee’s medical records. “There is NO indication for any invasive intervention at this time,” the doctor wrote.
Incensed, Lee posted a scathing review on the clinic’s social-media pages.
“Modern Vascular scheduled two UNNECESSARY PROCEDURES,” she wrote. “Thank God I was scared and confused and got other Doctors involved in my treatment before I let this group touch me!!!”
Gampel declined to answer questions about these cases or Kae Barnes’ lawsuit, saying in a written statement that “Federal law prohibits us from providing information about patient care.”
Patients for profit
Typically, patients end up at vascular specialists after being referred by other doctors, like podiatrists. That’s how Lee and Hardy said they found their way to Modern Vascular. But for some patients at Modern Vascular, there’s a twist: Their referring doctor stands to benefit financially from the clinic’s profits.
Gampel, Modern Vascular’s CEO, laid it all out in a phone call with Texas doctors. He was seeking investors among their ranks. Searchlight obtained a recording of the call, which appeared to have occurred in 2019, as Gampel was looking into opening a Modern Vascular clinic in San Antonio.
For a mere $15,000 investment, Gampel explained, the doctors could expect about $80,000 in payments the first year and up to $144,000 the year after that. And it didn’t stop there — Gampel planned to sell the entire Modern Vascular enterprise in three to five years, and at that time, each investor might take away an extra $700,000 to $900,000. Gampel explained that each physician’s share of the sale would be directly related to the amount of money the clinics were making. “It’s going to be a significant revenue stream for your retirement,” Gampel said.
Gampel didn’t mince his words. He wanted those doctors’ patients.
“The only way this works is if you have 15 to 20 like-minded doctors who refer,” Gampel told them. The doctors didn’t need to send all their patients. “All you’re referring is three, four, five vascular consults a week, each one of you. If you can do that, then this works really well, OK?”
Several of these practices, he said, were typical of Modern Vascular clinics.
In his written statement, Gampel said, “As a privately-owned company, Modern Vascular does not disclose information about its financial data, business practices, or corporate structure. Doing so would provide our competitors with proprietary information.”
Generally, federal law prohibits entities that accept government health plans, like Modern Vascular, from paying doctors to refer patients. But the law contains many exceptions, and attorneys told Searchlight it wasn’t clear that Modern Vascular was doing anything illegal.
Joan Krause, a professor at the University of North Carolina School of Law who specializes in health care fraud, said that the arrangement certainly raises red flags. “There’s enough here that I think it would make an investigator be very curious to dig deeper and see what was really going on,” she said.
If Modern Vascular clinics required physician investors to refer patients, as opposed to just encouraging them, that would be more concerning from a legal perspective, attorneys told Searchlight.
Gampel told the potential investors on the call that they were not required to refer patients. But two podiatrists who have experience with Modern Vascular said just the opposite.
If you’re going to be a part of this, you need to be referring: That’s the directive Lewis Freed, an Arizona podiatrist, said he got from Gampel, according to a deposition in an unrelated lawsuit over competitive practices.
Freed had invested in a Modern Vascular clinic but stopped sending patients because he was dissatisfied with their treatment. Soon after, he received a letter saying his relationship with Modern Vascular was over, he testified. Later, he was told that he could get back in on the deal if he started referring patients again.
A podiatrist in Texas, who asked to remain anonymous because he still works with physicians who did invest in the clinics, also said that he was told of a referral requirement. He heard it from a doctor who tried to recruit him to invest in a Modern Vascular clinic. “There was a requirement that you refer patients, but I never got a number,” he said.
The setup worried him. “It really seemed like an opportunity to increase unneeded procedures,” he said.
After a Modern Vascular clinic opened nearby, the podiatrist started seeing patients who had received unnecessary procedures there — he estimates about 15 to 20 so far.
Doctoring the records
Former and current employees of Modern Vascular, at various levels of the business, described an organization that, at times, put financial interests above patient care. Some spoke of an intense pressure to schedule as many procedures as possible and said that certain staff were directed to alter medical records to justify more interventions.
All requested anonymity, fearing retaliation from Modern Vascular or damage to their careers. They worked in multiple clinics across the country and said that the worrisome practices may not be universal.
One current employee said that their clinic was strictly ethical and professional. “[We’re] definitely not bowing down to any type of pressure,” the employee said. “We do the right thing.”
Still, two former employees said the problems started at the top with pressure to schedule lots of procedures. If staff weren’t scheduling enough, they might get an angry call from Gampel, one of the former employees said.
“It was legit him calling, verbally abusing half the staff when it came to the schedule,” the former employee said. Multiple times, Gampel told employees that “they weren’t going to have a job if they couldn’t figure out how to get the numbers up,” the former employee said.
One way to meet that requirement was to lie, former staff told Searchlight.
“They were pushing physician assistants and nurse practitioners to document falsities in their records, to say that this patient had a symptom that they didn’t, in order to get them on the table to do an intervention on a patient that potentially did not need it,” a former employee said.
A different former employee said a doctor at their clinic instructed the employee to leave information out of the medical record, which would make the patient appear sicker and more appropriate for surgery. “You’re asking me to commit fraud by omission,” the employee recalled saying. “I’m not going to do that.”
Sometimes, if the medical records didn’t justify an intervention, the insurance company would refuse to pay for the procedure, and it would get cancelled, one current employee told Searchlight.
When procedures did happen, there was more room for fudging, another former employee said. During procedures, the doctor used a tool called an intravascular ultrasound, or IVUS, which takes pictures of the inside of the blood vessel to measure the amount of blockage. Just about every day, the employee, who worked at a clinic in San Antonio, was instructed by the doctor to document higher values than what the machine recorded, making the patients seem sicker.
That clinic was doing so many procedures that the staff didn’t even have time to properly sanitize the operating room, the former employee said.
“It was so rushed in between patients that they would leave blood splatters” on the floor, the former employee said. “That’s a pretty big no-no.”
The men in charge
Yury Gampel, Modern Vascular’s owner, is a curious man to be running a national endovascular surgery business. His former ventures have included a fast-casual salad restaurant, mobile home parks and various medical clinics.
In 2017, Arizona’s Medicaid program suspended payments to one of Gampel’s companies, Rehab Arizona, because of allegations of fraud. Rehab Arizona sued the state Medicaid agency, alleging that it didn’t have the authority to stop payments, and lost in the state’s appellate court. An Arizona Medicaid spokesperson said the department’s Office of Inspector General is still investigating.
Modern Vascular, launched four years ago, focuses on people who have historically been mistreated by the medical system. The business’s stated mission is, “To eradicate lower leg and foot amputation in the general public and specifically among the poor and underserved.” And Scott Brannan, its chief of endovascular surgery, pushed the enterprise to pay particular attention to Native American patients.
Brannan joined Modern Vascular in its early days. He said it was in part because Gampel let him take care of Native American patients who couldn’t pay for procedures. Brannan encouraged the owners to set up clinics on tribal lands, in New Mexico, and in Oklahoma, where large numbers of Native people live. Modern Vascular did open clinics in some of those places, and at one point had a location, since closed, just outside the borders of the Navajo Nation, in Tse Bonito, New Mexico.
Brannan said he’s put everything into treating his patients. Several times, he drove hours to pick up people who might not otherwise be able to get to the clinic. He said he even worked out a deal with the medical-device company Boston Scientific to get free supplies for patients who don’t have insurance.
Boston Scientific contests that. A spokesperson said in an email that the company does “not have an agreement or program in place to supply Modern Vascular with free medical devices.” Boston Scientific did donate some devices to Modern Vascular clinics, but only did so “a handful” of times, the spokesperson said.
One former Modern Vascular employee said that Brannan tried to insulate his Native American patients from the business’s aggressive push for surgeries. There was a hard line with Native American patients, the former employee said, which came from Brannan himself: “Don’t do it if it doesn’t need to be done.”
Brannan performed two procedures on Kae Barnes, according to her lawsuit, which names him as a defendant. He is also a defendant in one of the Arizona medical malpractice lawsuits filed against Modern Vascular in 2020, and he was also fired from two previous companies for alleged misconduct, which he and Modern Vascular denied.
Jeromy Brink, a vascular surgeon in Phoenix, Arizona, said that Brannan can do great work — but that Modern Vascular also puts patients in harm’s way.
“I’ve seen Scott [Brannan] do some amazing stuff,” Brink said. “They’ve saved patients’ legs, for sure.”
The problem is when patients receive operations they don’t need — and take on the risk that any procedure, necessary or not, carries.
“Patients lose legs because of unindicated procedures, there’s no question,” Brink said.
People like Kae Barnes are left struggling with the aftereffects. Before the amputation, Barnes, now 62, spent time hunting and fishing. “We were outdoors people,” her husband James said. They would go out in a boat for bass tournaments; they never placed, but it was still a good time.
“Yeah,” Kae said in a low whisper. “I can’t do that stuff now.”
She has a prosthetic, but it digs into her hip and prevents her from bending over. She’s still learning how to use it. When she falls, it’s hard to stand back up.
“That’s the worst,” she said, her voice trembling. “If no one’s with me, it’s almost impossible.”
She’s working on it in physical therapy.
“What I want to learn is how to get up from a fall,” Barnes said. “I need to know how to get up.”
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