Kentucky doctor gets five years for healthcare fraud

CNHI Kentucky Photo

Former Ashland Dr. Richard Paulus leaves the federal courthouse in Covington. Paulus was sentenced to five years in prison as part of a healthcare fraud case. He has maintained his innocence.

Former Ashland cardiologist Richard Paulus was sentenced to five years in prison Thursday and ordered to pay more than $1 million in restitution for convictions stemming from charges he performed unnecessary heart procedures as part of a healthcare fraud scheme in Eastern Kentucky.

Paulus appeared in front of U.S. District U.S. District Judge David Bunning for sentencing in the latest chapter of a prolonged, tangled legal case. He continued to maintain his innocence during the sentencing hearing, saying he would not agree to admit to something he, to this day, maintains he did not do even if a plea deal would have made it easier on him.

“I acted in what I thought was the best interests of my patients,” Paulus, 71, said.

Paulus was a practicing cardiologist at King’s Daughters Medical Center in Ashland, when in 2008 authorities received an anonymous complaint alleging that Paulus was committing fraud by performing unnecessary heart procedures, causing Medicare and Medicaid and private insurance companies to pay for them. He was indicted, went to trial and convicted of a count of health care fraud and 10 counts of making false statements. Bunning later tossed the verdict on legal grounds but the guilty verdict was subsequently reinstated by a federal appeals court.

Bunning, in imposing sentence Thursday, said he was doing so out of respect for the jury’s verdict, adding “the jury found your actions to be criminal.”

He also said he was aware that Paulus has suffered a great deal from the legal ordeal. The former doctor made millions at the hospital but subsequently resigned from his position at the hospital, surrendered his medical license and spent vast sums of his money on his legal defense, according to court proceedings. There was a reference during the court proceedings Thursday that Paulus now lives in an apartment in Ashland.

“You’ve given up a lot already,” the judge said. “You’ve suffered a lot already.”

Bunning imposed the 60-month sentence but allowed Paulus to remain out of custody until the Department of Prisons discerns where he will self-report to. He is expected to begin serving his sentence on June 24.

Assistant U.S. Attorney Kate Smith portrayed the former doctor as someone driven by ego. She said he was paid $2.5 million a year by the hospital as part of a compensation plan at the time that generated more money when more procedures were performed. The hospital, according to court proceedings, subsequently entered into a $40.9 million civil settlement.

Smith said Paulus overstated blockages and placed stents in patients, many who didn’t need them. She said several patients went back to Paulus again and again for such procedures.

“If this case had not been brought I have no doubt he would still be putting stents in people in Ashland,” Smith said, adding the number of procedures Paulus performed made him one of the most high volume physicians in the nation even though he was practicing in a small eastern Kentucky city in a region where many other cardiologists were practicing as well.

“You are putting a piece of metal into someone’s heart that they did not need,” Smith said.

Defense Attorney Bob Bennett said he was disappointed in the sentence and will appeal. Defense attorney Hilary LoCicero made an impassioned plea for leniency, saying Paulus’ life has been devastated by the case.

“This man has been punished so severely,” LoCicero said, adding “the decapitation is complete.”

Paulus declined to comment on the case to a reporter during a court recess.

Totals paid out for the patient encounters with Paulus related to his conviction approached $1.1 million, which was the approximate amount of restitution ordered. The exact amount of restitution was never specifically stated, however, in open court as the sentence was imposed.

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