Surgeon Charged With Fraud for Faking Operations

Oct. 16, 2013— -- An orthopedic surgeon accused of botching or faking hundreds of surgeries surrendered today and was charged with one count of healthcare fraud.

Dr. Spyros Panos, who worked in Poughkeepsie, N.Y., was arrested this morning at the federal court in White Plains, N.Y. He pleaded not guilty to the felony charge and was released on $100,000 bail.

It's not clear from court documents how much jail time Panos could face if convicted, if any, but the charge carries a fine up to $5 million.

The charges accuse Panos of making false representations of the services he performed. For example, Panos claimed he performed various techniques and procedures during surgery when in fact he did not, either because they weren't medically necessary or because they would have resulted in reduced payments from insurance providers. He is also charged with trying to cover up his alleged crimes by blaming them on clerical errors.

Paul Hugel, the attorney representing Panos on criminal charges, asked the court to set a date for a future hearing but said he was working on a deal with federal authorities and hoped it would be in place within the next two weeks before Panos' next appearance. Neither Hugel nor any of the federal prosecutors would comment on the details of the potential deal.

Judge Lisa Smith ordered Panos to surrender his passport and submit to at least 30 days of court supervision and mandatory mental health counseling. Panos told the court he was already receiving counseling for depression.

Lee Rezin, the U.S. one of the federal attorneys prosecuting the case, told the court that the charges revolved around Panos' alleged scheme to defraud Medicare, state insurance funds and private insurance companies. He said that Panos filed descriptions of fake surgeries so he could get paid for more work than he performed.

The charges state that from 2007 through 2011 Panos reported performing "thousands of surgical procedures, often as many as 20 or more in a single day," included many which were never really carried out. Panos and the medical group submitted claims in excess of $35 million to health care providers. The federal government claims that as part of his scheme to defraud insurance providers, he routinely saw up to 90 patients in a single office day, charging insurance carriers an additional $3.5 million in claims during that time period.

The charges go on to say that Panos' former employer, the Mid Hudson Medical Group, profited more than $13 million from Panos' activities during that time period and Panos made $7.5 million. He has been ordered to pay back $5 million to the federal government.

Panos surrendered his medical license in September following charges of medical misconduct, a fact Smith kept alluding to in court by referring to him as Mr. Panos rather than Dr. Panos. The former surgeon faced multiple counts brought by the state Office of Professional Medical Conduct involving fraud and negligence between 2007 and 2011, a court order showed.

In his response to the license surrender order, Panos admitted that he failed to render appropriate care, didn't maintain accurate medical records and submitted bills for seven former patients for which he was not entitled to payment.

Doctor Accused of Faking Surgeries

Nancy McGee, a lawyer whose firm represents over 150 of the 261 plaintiffs who have filed civil lawsuits against Panos for either botching surgery, performing unnecessary surgery or pretending to perform surgery, said she is pleased with the criminal charges.

"My clients will feel some satisfaction to see he is being held criminally responsible for something," she said after attending the hearing.

However, McGee said that the criminal charges do nothing to compensate alleged victims for the injuries they sustained due to Panos' actions.

"The criminal charges filed today only address the economic loss sustained by the government and the private insurance carriers. They do not in any way address the pain and suffering Dr. Panos caused hundreds of his patients… These plaintiffs have been suffering for years, and for many, they will continue to suffer for the rest of their lives because of what he did."

JT Wisell, Mcgee's legal partner, noted that Panos still has a license to practice medicine in Virginia. While he is legally obligated to keep the Virginia state medical board up to date about the legal consequences in New York, Wisell said it could take some time before any action was taken and there is no federal mandate that stops Panos from practicing medicine in other states.