TESTIMONY

OF

GEORGE O. KRIZEK, M.D.

AND

BLANKA H. KRIZEK


SUBCOMMITTEE ON COMNZRCIAL AND ADMINISTRATIVE LAW

COMMITTEE ON THE JUDICIARY

U.S. HOUSE OF REPRESENTATIVES


MAY7, 1998

Mr. Chairman, Members of the Subcommittee. My husband and I are 
honored to be invited here today to testify about events that 
have profoundly changed our lives forever. We have been fighting 
to establish the truth about my husband's medical practice for 
almost six years now. It has been a very difficult thing to do in 
this era where arcane and Kafkaesque administrative rules can and 
do result in the criminalization of medicine, in times when HCFA 
(the Health Care Financing Administration) and Medicare tell the 
country daily how many billions of dollars are wasted in fraud, 
yet the "fraud" involved is often nothing more sinister than a 
failure to interpret complex and confusing regulations in the 
same way the government does, or is simply the result of an 
honest error. The public is encouraged to participate in fraud-
hunting by calling a hotline number at HCFA, with the promise 
that if the doctor agrees to a monetary settlement, guilty or 
not, the informer may collect up to 30% of the resulting booty. 
Statistics show that the number of former patients, disgruntled 
employees, and even competing fellow physicians turned informers 
is growing daily. Most doctors accused of fraud are advised by 
the growing cadre of health-care -industry lawyers to settle with 
the government immediately.

Any lawyer in this field will tell you that, if you choose to 
fight even the most bizarre accusation, based even on regulations 
that seem to you to admit of only one interpretation, you will be 
in courts for years, your legal bills will ruin you, your 
colleagues and friends will desert you, and stories about your 
purported fraud will appear in the media. The pressure will be 
enormous: your life will become nothing but the lawsuit, and your 
health might fail under such abuses. "You will be destitute, 
anyway," one of our first lawyers said when we refused to offer 
our home up to settle a lawsuit, which alleged that we 
perpetrated an ~~ Medicare and Medicaid fraud on the government. 
That suit was filed by the U.S. Government against my husband and 
me almost six years ago, pursuant to the False Claims Act. We 
were terrified and with good reason, for soon we entered into an 
unimaginable nightmare.  We became convinced that we would lose 
our financial security and everything that we had worked so hard 
for in this country.

In 1863 Abraham Lincoln signed into law the False Claims Act in 
order to combat rampant fraud perpetrated on the Union Army 
during the Civil War and to punish cheating defense contractors.

This law was amended in 1986; the requirement to prove intent to 
defraud was eliminated, and the burden of proof was effectively 
shifted from the Government to the Defendant, who therefore is 
now guilty until proven innocent. Damages were raised from a 
multiple of two to a multiple of three, and potential penalties 
for each claim filed increased from $2,000 to $10,000. I think 
that Abraham Lincoln would be very surprised to see that this law 
is being used today to terrorize hard-working doctors. Instead of 
penalizing doctors for the truly inexcusable offense of bilking 
the government and thus abusing the public trust, the net of this 
law has been cast much wider by federal administrators to ensnare 
doctors who fail to interpret regulations properly or to keep 
records in the precise fashion that the government prefers, even 
though the regulations are far from clear. We used to think that 
the growth of government in America was benign because the 
American constitutional tradition could be expected to be a 
strong check on any abuses. We don't believe that anymore, and if 
President Lincoln were still alive today to see the monstrosity 
the government has become, with its hands in every pie, and more 
"law" than anyone could read in three lifetimes, law issued by 
unelected bureaucrats, he would agree with us.

HCFA obviously needed a good, "scandalous" medical billing case 
to start a series of prosecutions of doctors under the newly 
amended False Claims Act. It remains a secret who selected my 
husband, an exceptional, dedicated doctor, a specialist in 
psychiatry, for this thankless role. Under the Freedom of 
Information Act (FOIA), an important, but in this case unhelpful, 
check on the discretion of federal administrators, we were 
informed that we would not be given access to 110 pages of 
documents responsive to our request, ostensibly since they 
revealed the identity of the informers involved in our case. We 
do know, however, from the documents that we did get, that my 
husband was targeted for investigation as an individual, by name, 
and not through a "random audit," as HCFA claims.

Here was a European doctor whose escape from Communist 
Czechoslovakia in 1966, with his family following in 1967, was 
dramatic enough for a movie. A man whose father, a jurist, was 
decorated for bravery in both world wars. A man willing to leave 
his comfortable life in Prague, Czechoslovakia when pressed to 
conduct politically-motivated forensic psychiatric examinations 
and to enter the Communist party. He chose for his family a very 
dangerous escape to freedom, because he believed, like his father 
before him, in the American brand of democracy. Never once in his 
life was his honesty or integrity, both in his professional and 
personal life, questioned.
After nearly forty years with my husband, I am qualified to 
confirm that.

While Dr. Krizek, known at the Washington Hospital Center, during 
his quarter of a century there, as one of the most hard-working 
and respected doctors, continued to work his routine seven-day 
weeks, the HCFA "special agents" were already hard at work trying 
to destroy his reputation and his medical practice. It was just 
before Christmas in 1989, when, under the pretext of a "Christmas 
delivery," three investigators appeared at our door. They said 
that they came from Medicaid and had some questions to ask about 
our billing practices. I am still asked why I let them in, since 
they had no official identification. The simple answer is that, 
although the visit was unusual, we had nothing to hide and I 
believed in the fairness of our adopted country's system.

For the next three hours, in a performance designed to scare us 
to death, one of the agents screamed and yelled while the other 
two laughed at me and made fun of my accent. The agents accused 
me of billing for non-existent patients, billing patients of 
other doctors, of "doublebilling" both Medicare and Medicaid, and 
of "unjustly enriching" myself. For every patient named I could 
quickly find a file and proper documentation. But it became clear 
that these agents did not care and moreover were unfamiliar with 
billing procedures. What shocked me the most was when they told 
me that they had already rummaged through hundreds of Medicare 
and Medicaid patients files kept at the Washington Hospital 
Center. After this episode, our daughter, who is a lawyer, was 
assured that there was no evidence of wrongful billing found, and 
that the investigation was "routine." Dr. Krizek's contracts with 
Medicare and Medicaid specified that review of billing by these 
programs was permitted, so we accepted this version of events.

We never heard from the agents again until three years later, on 
Christmas Eve 1992, when a certified letter came from the U.S. 
Attorney's Office stating that we had falsely claimed "8,002" 
Medicare and Medicaid reimbursement claims, and that the 
Government was prepared to file a lawsuit against us. However, 
the letter said that the Government would be willing to resolve 
this matter without filing suit "in exchange for an appropriate 
cash settlement."  We made an appointment with the Assistant U.S. 
Attorney in charge of our case, in an attempt to find out what 
exactly we had done wrong. The response was simple: 'We are the 
Government, we don't have to show you anything -- you go home and 
find in your files what was wrong with your billing. Pay us 
hundreds of thousands of dollars and we won't file suit.' We felt 
that this was official extortion and resolved to fight.

The most outrageous aspect of the impending lawsuit was that my 
husband's Medicare and Medicaid contracts specified that the 
programs were obliged to notify a doctor if any problems with his 
billing were found and to educate him about proper billing 
methods. Obviously, the Government was now not honoring such 
contracts, and taking a "sue first, educate later" position. As 
our experiences indicate, the HCFA regulations and coding 
procedures are confusing enough -that lawyers could spend weeks 
arguing over how to interpret them.  Obviously, a medical 
practitioner who should, after all, spend most of his time 
helping his patients and ministering to them, should be treated 
differently than lawyers. Our experience in this case almost 
convinces us that the government is bent on turning everyone in 
the country into a lawyer, at least a part-time one, with the 
deluge of regulations that we are expected to comply with in 
order to function in modern society.

Only four days after our first meeting with the assistant U.S. 
Attorney, on January 11, 1993, at a hastily called press 
conference, then U.S. Attorney Jay Stevens told the media that as 
part of a "major health care fraud enforcement initiative," a 
lawsuit was being filed against local psychiatrist George 0. 
Krizek and his wife Blanka for submitting "8,002 fraudulent 
multiple billings for patients' psychoanalytic sessions," with 
potential fines of $81 million. All day long, the local 
television and radio stations carried the story. Several patients 
and friends called to tell us that they had seen the news report. 
In the complaint filed that same day, we were accused of 
"medically unnecessary" patient treatments, and of using the 
wrong billing codes to claim reimbursement for my husband's 
services.  There was still no explanation of where the 
Government's numbers came from, or the specific patients to which 
the government was referring.

In the Spring of 1994, we endured a three-week trial during which 
the Government lost on almost every part of its complaint against 
us. Based on the testimony of Dr. Krizek and other witnesses, no 
"medically unnecessary treatment," "upcoding" or "miscoding" were 
found by the Court. The Court criticized directly HCFA for 
interpreting its codes in a way that was incomprehensible to the 
medical community. About 50 doctors, nurses and social workers 
provided oral or written testimony about Dr. Krizek's exceptional 
care of patients, many of whom were seriously mentally ill, poor, 
and/or homeless. One patient testified that Dr. Krizek had 
repeatedly saved his life.

The Government had not found one patient who would testify 
against my husband. We were also able to prove that the 
Government's one medical expert witness, Dr. Harvey Resnik, had 
barely -read the patient charts that he was testifying about. The 
Government repeatedly tried to misuse -its own statistics. The 
HCFA fraud coordinator testified that my husband's use of 
psychotherapy code 90844 was the "most aberrant of them all." 
When the Court ordered HCFA to produce its own printouts, it was 
revealed that two-thirds of other Washington-area psychiatrists 
used the code more often than my husband for the same kinds of 
treatments.  While Dr. Krizek's income between 1986 and 1992 was 
about $100,000 a year and his total Medicare income for this 
period totaled about $250,000, the printouts revealed that some 
of his colleagues received up to five times more from the 
program. The HCFA investigators were found, in the Court's words, 
to be trying to "spin the Court" with its unfounded theories of 
the case, and the Court threatened to dismiss the lawsuit.

In fact, Washington Hospital Center records revealed that Dr. 
Krizek was one of the most cost-effective doctors for the 
Medicare and Medicaid programs, since he consistently had one of 
the shortest lengths of stay for admitted patients.  When 
confronted with its misuse of its own statistics, HCFA 
represented that it would soon bring lawsuits against the other 
doctors listed on its printouts.

When the Court finally issued its opinion, however, the case took 
a bizarre twist for us. Although the Court ruled against the 
Government on all the elements of the original complaint, the 
Court found liability on the novel theory that my husband would 
be "presumed liable" under the False Claims Act for all medical 
services provided in excess of nine working hours on any one day. 
Can you imagine? Under such an absurd standard, all of the 
professionals in Washington, including many, if not all, members 
of this Committee and their staffs, would be guilty of a quasi-
criminal act if they drew a portion of their paychecks from the 
Medicare and Medicaid program. In fact, the records produced in 
our case had documented that Dr. Krizek had often worked very 
long days at the 800-bed hospital with which he was affiliated, 
especially on days when he was on call or covering for other 
doctors who were on vacation or otherwise absent. Based on this 
new theory of liability, the Court ordered us to pay $47,000 for 
services rendered in excess of nine hours in the six-year period, 
plus an additional penalty of $10,000 per patient, per treatment 
involved. The -Washington Psychiatric Society attempted to 
intervene in the case to explain that hospital-based -
psychiatrists providing critical care sometimes had to work 
around the clock. But this was to no avail. It is our personal 
belief that the Court, while rejecting of necessity the lion's 
share of the government's claims felt obligated to throw the 
government a bone, especially after the government had invested 
so much in such a high-profile case.

Both we and the Government appealed the District Court's 
decision. We were outraged by the arbitrary amount of the 
judgment, while the Government felt that the judgment was too 
low, and demanded a total of $5,750,000 in damages.  The 
Association of American Physicians and Surgeons (AAPS) wrote an 
amicus curiae brief on our behalf at the Court of Appeals.  The 
Government's sole reason for appealing seemed to be to squeeze as 
much money out of our case as possible.  'Don't worry, Doctor,' 
one participant declared, 'we'll leave you enough to live 
comfortably in the old country.' Another participant asserted 
that because the Government had invested so much money and so 
many resources in our case, they would "never" be willing to walk 
away empty-handed.

Meanwhile, the battle continues between the medical community and 
HCFA to try to clarify the
use of the Byzantine HCFA billing codes. Doctors, tired of 
continuously changing definitions and a lack of explanation, want 
HCFA to come up with a system that they can use without being 
accused of fraudulent billing. After years of paying social 
workers more money than boardcertified doctors for submitting 
requests for reimbursement under the same psychotherapy code, 
90844, HCFA finally appears to be recognizing that doctors render 
greater services in that they medically diagnose and evaluate 
patients. Last year, more importantly, HCFA finally began 
accepting 24 codes, rather than the original four, to reflect the 
great range of services provided by a psychiatrist.  This year, 
implementation of further changes to the billing codes for 
psychiatrists were delayed, because both doctors and HCFA had to 
conclude that the new codes were still too contusing and too 
difficult for doctors to use. It is our deeply-held view that 
until these administrative problems are worked out, the 
government should concentrate its prosecutorial and enforcement 
resources on clear cases of fraud, instead of bringing cases like 
ours based on complicated theories and assumptions about how 
billing codes should have been, but are not, used by the medical 
community as a whole.

Our trial had a sad human aspect. For twenty years, until the 
fall of Communism, we had not been able to return to our 
homeland.  Ironically, although travel was now possible, when my 
husband's 87-year-old mother was dying in Prague, my husband 
could not be with her in her last days because of the trial. She 
died knowing that her son was being sued in his new country by 
the Government.

One year after the trial, pending appeal, the Government placed a 
freeze on all of our assets, including our home. In January 1996, 
Dr. Krizek was diagnosed with cancer and operated on. When our 
daughter tried to meet with the Assistant U.S. attorney to tell 
him about her father's critical illness and to request a removal 
of the freeze, the Assistant U.S. Attorney had her escorted out 
of the building by armed security guards.

In its sixth year, our case is now on remand back before the 
District Court. We still live and breath this nightmare daily. 
Although we have won victories along the way, we are no match for 
the Government, with its endless resources and apparent 
willingness to stay in the ring until we are exhausted and 
defeated and give up the fight. Because of this case, my husband 
has had to close his practice and has lost his health. Although 
we have both been intensely patriotic in our new country, we must 
now step back and question whether what we have experienced at 
the hands of Government investigators and prosecutors meets any 
possible definition of democracy or due process.

Having had many of its legal theories foreclosed by the Court of 
Appeals, the government is now back in court attempting to prove 
that of the 1,825 days it originally claimed my husband billed 
falsely for, violations of the law occurred on 5 of those days, 
three of which were spent working around the clock because my 
husband was covering for another doctor on vacation. We can only 
hope that the Court will see fit this time to reject the 
government's claim that my husband billed improperly for any of 
those 5 days, since this claim is based on making counterfactual 
assumptions -about how long particular treatments lasted. The 
treatments in question were often billed under codes that had no 
durations associated with them in the government's regulations. 
Thus, we find it hard to see how we can be found liable for 
submitting a false claim simply because the government wants to 
assume that these treatments lasted for a particular period of 
time. We can only hope these common-sense arguments prevail this 
time around.

My husband and I spent the first half of our lives first under 
the Nazi occupation and then under Communism in our native 
Czechoslovakia. Under Hitler and Stalin and even in Red China, 
the terror started by selecting average but ambitious young 
people who were taught how to hate others, how to use arms, and 
then to use these new and unchecked powers against their fellow 
citizens. That was how class struggle was fomented, through 
denouncing and informing on your neighbors, by instilling fear.  
Today, the armies of new "special agents" of the regulatory 
bureaucracy, driven by a bounty system, are apparently being 
trained in a seemingly less, but we think, even more dangerous 
way. The new way is insidious, more deliberate, cleverer, but the 
tyranny and the loss of liberty can often be as great.

The country should wake up. The uncontrolled use of the False 
Claims Act might be only the beginning, the first wave in an 
attempt to turn the misinterpretation of contusing regulations 
into massive civil liability, or even crimes. Democracy can be 
destroyed quickly if the system of checks and balances stops 
functioning.

My husband and I have been fighting for years, and we are 
exhausted. It is up to you, our lawmakers, to fight not only for 
us but also for other doctors unjustly prosecuted under this 
perverse law or otherwise subjected to abuses of administrative 
authority throughout the country. We can only put our trust in 
your integrity. Thank you.