Medical insurance fraud is one of America’s leading growth industries. And doctors are prominent among those getting fat and rich. Looking on the bright side, some of them also get caught and punished. Last August 28, Dr. Robert Kolbusz, a Chicago-area dermatologist, was sentenced in U.S. District Court for the Northern District of Illinois to seven years in prison and ordered to pay more than $3.7 million in restitution for falsely billing Medicare and private health insurers for phony skin cancer treatments. Among fleeced entities were area union health plans. A jury had convicted Kolbusz in October 2014 on three counts each of wire fraud and mail fraud following a seven-count indictment in the early fall of 2012. The actions follow a probe by the FBI and the Inspector General’s Offices of the Labor and Health & Human Services Departments.
Robert Kolbusz, now in his late 50s, was a licensed physician who owned and operated a clinic in suburban Downers Grove (DuPage County), Ill., the Center for Dermatology and Skin Care, Ltd. It was a lucrative business. And that heavily owed to a scam he ran during 2003-10 to falsely obtain public and private insurance reimbursements. Dr. Kolbusz would diagnose patients and tell them they had pre-cancerous skin lesions, when in fact their condition was benign. In other instances, he would log cases as cancer-related in patient medical records knowing they were not cancer-related. To increase the payouts, he often billed insurers for services other than, or in addition to, those actually performed. “Treatments” generally consisted of cosmetic procedures such as Erbium “lunchtime laser peels” performed by non-medical professionals. The purpose was to collect reimbursements for ineligible claims.
All this added up to substantial money. Many of his patients were repeat customers, often paying at least 10 visits. Dr. Kolbusz received insurance reimbursements of up to $352.40 per visit. Overall, he falsely claimed to have removed more than 150 pre-cancerous lesions from each of about 350 Medicare patients, 450 Blue Cross/Blue Shield patients, plus patients covered by Aetna and Humana. In one case, a female teenaged patient testified at trial that Kolbusz’s staff performed routine laser procedures ostensibly to lighten her freckles. Yet Kolbusz indicated in medical records that he had destroyed nearly 500 pre-cancerous lesions on her skin, in turn causing Blue Cross and Blue Shield of Illinois to reimburse his office for $4,597. Dr. Kolbusz continued his filing fraudulent claims even after a representative of the American Academy of Dermatology informed him in 2007 that he likely was committing fraud. A guilty verdict was virtually inevitable.
According to the most recent Semiannual Report of the U.S. Labor Department’s Office of Inspector General, several of the insurers who were burnt in Dr. Kolbusz’s scheme were Chicago-area union-sponsored Employee Retirement and Income Security Act (ERISA) health plans. Though the office did not specify the unions, and a subsequent Web search could not identify them, it is fair to say that private and public insurers should apply more due diligence in selecting participating doctors. In handing down the sentence and issuing a restitution order of $3,764,381.69, Judge John Z. Lee said Dr. Kolbusz’ behavior was “serious for a number of reasons” and “warranted a significant term of imprisonment.” It would be hard to disagree.