The U.S. Department of Justice on Tuesday filed a complaint against Modern Vascular, an Arizona-based chain of endovascular clinics, alleging that the company defrauded patients and taxpayers in order to enrich its owners and investors.
The 52-page complaint cited a six-month investigation by Searchlight New Mexico that exposed the company’s conflicting financial interests, as well as its practice of pushing unnecessary treatments on patients in multiple states, including New Mexico and Arizona.
One patient, Kae Barnes, described how she went to the company’s Phoenix clinic complaining of weakness in her left leg. Over the course of three months, she underwent multiple inappropriate procedures that damaged her blood vessels, according to a lawsuit. The following year, she developed a blood clot and ultimately had to have her left leg amputated above the knee.
“I was just a set of legs that they could make some money on,” she told Searchlight, adding that she subsequently received this warning from a doctor: “Don’t you ever go back to Modern Vascular. They’re nothing but a mill.”
The government’s complaint alleged that Modern Vascular submitted and received $50 million in claims that violated the False Claims Act. It specifically named the company’s founder and former CEO, Yury Gampel, a chiropractor it identified as Modern Vascular’s majority owner.
“Gampel and Modern Vascular Corporate designed and implemented a fraud scheme at Modern Vascular [office-based labs] at the expense of patients and federal payors,” the DOJ complaint read.
It additionally stated that Gampel and Modern Vascular leadership pressured staff to perform invasive procedures. The scheme, according to the complaint, included paying kickbacks to doctors, who were also investors, for referring patients back to Modern Vascular for treatments.
“Kickbacks and other illegal financial incentives, like those paid and received by the defendants in this case, have long been prohibited because of their potential to corrupt the clinical judgment of medical professionals,” the complaint said.
According to the complaint, Gampel sought out physician investors — usually podiatrists and pain management doctors who traditionally refer to vascular surgeons — and offered them as much as a two percent share of the profits of the subsidiary. This ownership stake was intended to incentivize doctors to refer to Modern Vascular, rather than to a traditional vascular surgeon, the complaint stated.
A Searchlight partner, The Arizona Republic, also published investigations into these practices.
Modern Vascular has not yet filed a response as of publication time.
Read our investigation
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