Doctor will get new trial in fraud case

ASHLAND— An Ashland doctor convicted of fraud last fall had his conviction vacated and will get a new trial.

On Tuesday, the U.S. District Court of Kentucky acquitted Dr. Richard Paulus of the charges and granted his motion for a new trial.

After a seven-week trial, Paulus, a cardiologist, was found guilty in October and was facing 25 years in prison for health care fraud and making false statements. In November, he filed a motion for a re-trial and was scheduled for sentencing in April.

He was accused of placing unnecessary coronary stents and performing unnecessary diagnostic catheterizations in patients while he was a physician at King’s Daughters Medical Center. He was accused of putting stents in more than 70 patients, who in some cases had very little blockage, and then falsifying information that they had 70 percent blockage so he could then bill Medicare, Medicaid and private insurers for a medically necessary procedure.

Several doctors testified that they had different opinions than Paulus’ regarding the seriousness of the heart condition of some of the patients.

In his ruling, Judge David L. Bunning wrote that while it appreciated the seriousness of the fraud allegations, “here, the government’s evidence failed to prove that stenosis estimates were subject to proof or disproof or that Dr. Paulus’s assessments constituted false statements. The evidence at trial proved only that there was a difference of opinion regarding the form of diagnosis or treatment.”

The ruling continued “the Government has failed to prove, beyond a reasonable doubt, that Dr. Paulus made a false statement and did so with fraudulent intent, and the evidence is insufficient to support the convictions for health care fraud, as well as the false statement counts.”

And because the government failed to produce sufficient evidence to sustain Paulus’s conviction, he was entitled to an acquittal.

And “the Court must also conclude that the jury’s verdict was against the manifest weight of the evidence. Therefore, Dr. Paulus is entitled to a new trial on all counts,” Bunning wrote.

Kerry B. Harvey, United States attorney for the Eastern District of Kentucky, said after the trial ended in October that according to evidence that was presented, from 2008 to 2013, Paulus performed numerous invasive heart procedures on patients who did not need them. In order to justify these unnecessary procedures, Paulus falsified patients’ medical records, to exaggerate their medical condition and to make it appear that the heart procedures were necessary and qualified for payment.

Harvey continued that from 2006 to 2012, Paulus billed Medicare for more heart procedures than any other cardiologist in Kentucky, and was number five in the nation in terms of amount paid by Medicare for stent procedures.

In May of 2014, King’s Daughters Medical Center agreed to pay the U.S. government $40.9 million to resolve civil allegations that it made millions of dollars by falsely billing federal health care programs for performing medically unnecessary heart procedures on patients.

Paulus retired in 2013 after 20 years with KDMC.