By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
The Thursday after Labor Day, state Attorney General Dan Morales flew into Hobby Airport to personally announce a health care fraud case so seemingly flagrant and outlandish that CBS Evening News dispatched its Dallas correspondent for a network exclusive. In a press release accompanying the announcement, Morales said his office was filing suit against 18 defendants "who dangerously and recklessly risked the health and safety of sick patients by posing as licensed physicians, assisting with surgeries, then fraudulently charging insurance companies and patients for doctors' services."
Those "bogus" doctors, Morales said, were little more than "criminals behind surgical masks" who practiced a form of "quackery." As many as ten patients had died in ten months at one hospital where the supposedly fake doctors had assisted in operations, Morales told reporters, and his office was investigating to see if the deaths were connected to their work. It was, as CBS anchor Dan Rather told his audience, "an incredible story."
Rather had no idea how right he was -- for all the wrong reasons.
For the next two weeks, assisted by a mostly compliant and unquestioning media, Morales' office continued to portray hundreds of surgeries in several hospitals as a gigantic fraud practiced by renegade unlicensed doctors with foreign medical degrees (or no medical degrees at all) that had netted a Houston firm millions of dollars.
"Is it big?" said Morales' local consumer fraud attorney, Pat Tulinski. "You betcha. Is it a gigantic fraud? You betcha. Is this the tip of the iceberg? You betcha."
But when Tulinski showed up in court last week for a hearing on the state's case against Assistant Surgeons of Texas, the dangers to public health seemed to have miraculously abated. Instead of putting on a promised parade of witnesses, the state's attorneys withdrew into conference rooms with the defendants' lawyers, where they hammered out an agreed temporary injunction that allows the defendants back into operating rooms to do exactly what they have been doing for the last ten years: assisting licensed surgeons by holding instruments, making sutures and otherwise acting as an extra pair of hands in the operating room.
If the headline-hungry Morales has any evidence that those operating room technicians have actually harmed anyone, he's still keeping it to himself. What the attorney general heralded as a case of dangerous medical malpractice devolved into a more prosaic dispute about insurance billing and whether people with foreign medical degrees and no state license should be addressed as "doctor."
And Jaime Olmo, the Puerto Rican graduate of a Caribbean medical school who created Assistant Surgeons of Texas at the request of a Houston hospital, must work under a cloud of suspicion until his case comes to trial in January. Meanwhile, his education and character and those of his colleagues and employees have been ridiculed by the state and CBS, which did three reports on Morales' case. Hospitals have suspended their contracts while their lawyers investigate, and Olmo and the doctors who worked with him for years are asking: why did it all happen?
In thousands of hospitals across the country, not just in Houston and Texas, surgical assistants have been invited into operating rooms by hospitals and physicians, giving rise to a new class of health technicians that has been haphazardly regulated. Only New York licenses surgical assistants; in Texas, they work under the supervision of licensed physicians.
Texas law says that a licensed surgeon can designate anyone to work in surgery, as long as that person is directly under the surgeon's supervision. Some surgical assistants have no college degrees at all, but are trained in hospitals to do such highly specialized work as holding retractors, tying off blood vessels, handing instruments or making sutures. They are required to have extensive knowledge of anatomy and physiology. A great many surgical assistants hold medical degrees from other countries, but have not undergone the five years of study in this country required to obtain a Texas license. There is a national certification, in which the experience and credentials of surgical assistants are reviewed by the National Surgical Assistant Association in Champaign, Illinois. To be certified, a surgical assistant must have done 750 hours of supervised operating room work for three years and pass a written examination.
Several physicians interviewed by the Press say that they have worked with Olmo and many of the other defendants for years, and praised their accomplishments and help in surgery. They want them back. Obstetrician Alan Molson, who's worked with Olmo at West Houston Medical Center since 1986 and has performed thousands of surgeries with surgical assistants, says he would rather scrub with a surgical assistant than a resident or a family practitioner any day.
"Residents lack the hands-on experience of surgical assistants," said Molson. "In my experience, family physicians tend to try to control an operation." Few family physicians are available to help out in surgery anyway, another physician says, because the cost of surgical malpractice insurance is so high, and because insurance companies are reluctant to pay for a second licensed physician in a surgery.
The real source of controversy has been whether insurance companies should pay for the services of surgical assistants and whether Assistant Surgeons of Texas has misrepresented its employees as physicians.
That question is rooted in how Olmo's business evolved. The son of a Puerto Rican physician, Olmo graduated from medical school at Cetec University in the Dominican Republic in 1980. That school later collapsed after a scandal involving the sale of medical degrees unfolded. CBS made much of that fact in a report last week, but offered no evidence that Olmo was involved in the scandal or bought his degree. Olmo says he was asked to come to this country in 1982 by Raul Garcia Renaldi, a respected cardiovascular surgeon who was then practicing at Memorial Hospital Southwest and who now practices in Puerto Rico. Renaldi trained Olmo as a surgical assistant, and Olmo was tested and certified by the National Surgical Assistant Association in 1984.
Olmo was first employed by Memorial City Hospital and then later by several other hospitals where he worked as a surgical assistant. For several years he worked at West Houston Medical Center. In 1993, West Houston decided it could no longer sustain the overhead of surgical assistants, and asked Olmo to create a firm to provide surgical assistants on contract. The firm would bill the insurance companies and patients directly for its services. Olmo says he recruited colleagues who had worked at the hospital with him and contacted other Houston workers who had been certified by the National Surgical Assistant Association.
Olmo's first mistake may have been to call his company "Assistant Surgeons" instead of "Surgical Assistants." (Since Morales' lawsuit, he has changed the name of his company to International Surgical Assistants of Texas.) Both the terms "surgeon" and "physician" are protected by state law. The term "doctor" is more legally ambiguous. When he was an employee at West Houston, Olmo was issued an employee badge with the title of M.D. His colleagues who were licensed physicians addressed Olmo as "doctor" and introduced him to patients as "doctor." Olmo also sent follow-up letters on billing, sometimes signed using "Dr." and sometimes using "M.D." So the impression may well have been created with patients that Olmo was indeed a licensed physician when he was not.
But the important thing, say the physicians who worked with Olmo and others like him, was that the assistants did not practice medicine. They did not diagnose or advise patients, nor did they act independently of a physician's supervision. Olmo contends that none of his bills indicate any other appellation than "CSA" for certified surgical assistant. Olmo's policy is to bill at 20 percent of the primary surgeon's rate, which Olmo and his supporters contend is below the 30 percent a licensed physician, if one were available, would typically charge.
Olmo submitted his bills on a standard insurance form called a HCFA 1500, using numerical codes for medical procedures from Physicians Current Procedural Terminology, a manual published by the American Medical Association. Surgical assistants all over the country have been counseled by billing experts in training seminars to use two codes from this manual for their bills: numbers 80 and 81. The entries in the manual are ambiguously worded; number 80 is captioned as "assistant surgeon" and then states that "surgical assistant services may be identified" by that numerical code. Number 81 contains a similar ambiguity.
Assistant attorney general Tulinski insists that codes from the guide apply only to licensed physicians, and for surgical assistants to use the numbers constitutes fraud. Asked if there was some other category Olmo should have used, Tulinski said, "No, there is no other numerical descriptor available. That doesn't mean they can't just write a description of what they provide. There is no code. Now if the AMA wants to expand on the code, fine."
Last week Tulinski was prepared to call as a witness a man named Jim Green to testify about billing procedures. He might not have done much to advance the state's cause.
Green is owner of Houston Medical Records, a firm that has been handling medical billings for 24 years. Green does the billing for physicians as well as for another Houston firm of surgical assistants. He says the state asked him what code he uses for surgical assistants, and he said 80 or 81. "If you don't put down the 80," Green says, "you are implying you are the surgeon." As for writing a description of the services, "there is no room on the form for boilerplate," Green said.
Olmo's troubles actually began when a Fort Worth claims adjuster questioned a bill from Olmo's firm and called the State Board of Medical Examiners to see if Olmo's surgical assistant was a licensed physician. Since he was not, the board opened an inquiry, but closed it, according to documents supplied by the state, after the licensed physician who supervised the work of the surgical assistant complained to the director of the state board.
A board investigator named Donna Schulze reopened the case and talked to Olmo, who said that while he was not a licensed physician, he was entitled to use the term doctor. The board closed the case again, this time over Schulze's protests, and subsequently fired her. At the end of August, Schulze filed a whistle blower suit against the Board of Medical Examiners. Her two-page petition is generally worded, and Schulze's lawyer, Charles Herring, refused to elaborate on it. But it seems to indicate that Schulze is blowing her whistle over the failure of the medical board to press its investigation of the surgical assistants. The medical board has not filed a response to the suit, and a lawyer for the board would not comment.
Schulze's concerns had earlier come to the attention of Ken Davis, an investigator for the State Department of Insurance, who opened an investigation in February. Olmo got word of the probe in May, when hospital administrators told him that the state had been making inquiries. His attorney, Douglas Perry Jr., then called the Insurance Department to find out what the investigation was about. "They said, 'State law says we don't have to tell you,' " Perry said.
Finally, Perry arranged a July meeting with Davis, and brought in a trial lawyer named Anthony Icenogle of Austin to assist. Icenogle says that Davis began the interview by reading a lengthy prepared statement and "when we asked for a copy of it, they refused." Icenogle says he and his clients were not allowed to take notes or have a transcription of their interview, although the state had a court reporter in the room.
Icenogle did not come away from the interview feeling that his client was under primary suspicion. When the state asked for all of Olmo's billing records, Olmo complied. He says he spent two weeks and burned up three copying machines producing seven boxes of records that he sent to Austin.
The day before Morales held his press conference, Perry says, he got a call from a reporter saying his client was about to be sued. Perry called Pat Tulinski, who told him that the reporter was "confused." The next day, Morales made his announcement, and by the time Perry learned about it, he had an hour to prepare for court. State District Judge Katie Kennedy slapped a temporary restraining order on Olmo's firm, allowing it to continue working but prohibiting it from doing any billing. The next day, Olmo was linked to the deaths of ten people in the news media and his face was on national television.
A few days later, investigators from the State Department of Health investigated the ten deaths at West Houston Medical Center and cleared the hospital and the surgical assistants of any wrongdoing.
Steve Thomas, a general surgeon for the past five years at West Houston, denounced the linkage of the assistants with the deaths.
"I have never seen or heard of an instance where they affected the outcome of the surgery," he said. "As far as poor outcomes, it's usually based on the patient's disease. It was ridiculous about these ten deaths. None of them died in the operating room, and anybody that dies within 30 days of surgery is counted as a postoperative death, regardless of the cause of death. I had a patient who was extremely ill and there was a last-ditch effort. There was a surgical assistant there, but he had nothing to do with that death. We had a man with hip surgery who died of a stroke two weeks later. I'm sure there was an assistant there, too."
Peter Curtis, a vascular surgeon at West Houston, was offended by what Morales said about his hospital, which recently scored 99 points out of 100 in its national accreditation. "We are the cream of the crop, and this man tore a lot of that down," he said.
With managed care and shrinking revenue, Curtis explained, "surgical assistants are an essential part of our system. The problem we face in Texas is there are no regulations as to the status of these folks." Curtis added that Olmo and his staff have regularly shown up for Medicare surgeries, sometimes in the middle of the night, for which they were not reimbursed at all.
"As far as I can tell," Curtis said, "the controversy all has to do with the billing, the 'dash 80' that is attached to the procedure. I don't see any reason why they shouldn't be able to use that code."
Republican state Representative Kyle Janek, an anesthesiologist at Memorial Hospital Southwest, which also had a contract with Olmo's firm, now plans to introduce legislation in January that will recognize the work of surgical assistants.
Janek said he thinks that insurance companies don't want to pay for surgical assistants, "but if they don't, getting surgeries done will be more difficult."
Pat Tulinski, who has been with the attorney general for a year and a half, makes no apologies for her tactics or her rhetoric.
"I feel like we're prosecuting Al Capone for tax evasion," she said. "This is basically an insurance fraud case, and these are the only means we have to stop it. The consumer protection department does not regulate what goes on in an operating room."
Under the terms of the agreement Tulinski negotiated with the defendants' lawyers, Olmo and his associates will not use the terms doctor or M.D. to refer to themselves unless they specify where they got their degrees and that they are not licensed by the state. They will not bill insurance companies using the 80 and 81 codes unless they have an up-front agreement with them. They will be able to use the designation "certified surgical assistant," as long as they make it clear they are not licensed by the state.
Tulinski also refuses to back down on the state's suspicion that the surgical assistants may be implicated in deaths, despite the clearance of the State Health Department.
"Once we sort through what the scam is," she said, "we'll be going out and getting this out of the state of Texas."
If that is so, dozens of firms and hundreds of hospitals had better brace themselves. Two years ago, Morales drew heated criticism when he fired three of his toughest and most experienced consumer protection assistants -- lawyers who were reducing utility rates, making nonprofit hospitals provide charitable care and investigating outrages at psychiatric hospitals. If Tulinski can find some bodies to lay at the feet of the surgical assistants, perhaps she can revive Morales' lagging reputation as a protector of the public.
Until that happens, it's much easier to experiment with incendiary and unproven accusations in the media. And it's certainly not the first time Morales has shot first and asked questions later: just three months ago he was forced to publicly apologize to an El Campo man whose "Republic of Texas" memorabilia business mistakenly landed him on the attorney general's list of people associated with the Republic of Texas, a loose-knit group of "constitutional courts" cranks that Morales claims is a dire threat to the state.
Of course, the apology made far fewer headlines than Morales' highly publicized issuance of the list, and it's likely the final resolution of his suit against Olmo's firm will get considerably less attention than its initiation. The night after the state negotiated its temporary truce with the surgical assistants, CBS again ignored the fact that physicians and hospitals have welcomed and supported their work. The network's report made no mention of the fact that the attorney general had negotiated a compromise that allows the assistants to work again, and it has never mentioned the fact that another state office has cleared the surgical assistants of involvement in the deaths of ten patients.
Instead of describing the actual compromise, Dan Rather had a pithy description of an "order" by the state: "They were told to quit calling themselves M.D.s or they will be wearing prison I.D.s." The report also said that the state ordered the assistants to work only under the supervision of a licensed physician -- something they and the physicians they work with insist has always been the case.
CBS even had the nerve to call its stories an "investigation." But there's a better word for what Dan Morales and CBS teamed up to do in the last few weeks: smear.