Guilty verdict reinstated for KY doctor accused of doing unneeded heart procedures

A panel of federal judges has reinstated the criminal conviction of an Ashland physician accused of performing unnecessary heart procedures in order to run up profits.

The appeals court decision left open the possibility that Richard E. Paulus, who retired after coming under investigation, could receive a new trial.

For years, Paulus was a high-profile cardiologist at King’s Daughters Medical Center in Ashland, at one point leading the nation in the total amount billed to Medicare for heart procedures, according to a court record.

King’s Daughters received more than $30 million for surgeries performed by Paulus from 2006 to 2012, and in turn paid him $10 million from 2010 through 2013, the court record said.

However, a federal grand jury indicted Paulus in 2015 on charges that he put false information in patients’ records to justify surgeries that the patients didn’t actually need, including putting in stents to open blocked arteries.

Paulus allegedly misrepresented how badly patients’ arteries were blocked and performed hundreds of unneeded procedures.

Prosecution witnesses testified that Paulus “systematically recorded severe blockages” when special X-rays called angiograms showed little or no blockages, the U.S. 6th Circuit Court of Appeals said in a decision.

Paulus denied wrongdoing, but a jury convicted him on 11 charges in October 2016.

U.S. District Judge David Bunning, who handled the trial, later set aside the verdict, acquitting Paulus.

Bunning ruled the evidence showed that in reading an angiogram, doctors can reach different conclusions about how badly a patient’s artery is blocked.

That means the degree of blockage, called stenosis, is a subjective medical opinion, not an objective fact that can be confirmed or contradicted, Bunning said.

As a result, a reasonable jury could not conclude Paulus made false statements about blockages in his patients’ arteries, Bunning said.

A three-judge panel of the 6th Circuit overturned Bunning’s ruling in a decision filed in late June, ruling that prosecutors had presented sufficient evidence to support a conviction by the jury.

The appeals court said Bunning improperly applied the law in ruling that angiogram interpretations can’t be false.

The appeals panel said that the degree of stenosis is a fact capable of being proven or disproven, meaning a doctor could be convicted for lying about it.

“A doctor who deliberately inflates the blockage he sees on an angiogram has told a lie; if he does so to bill a more expensive procedure, then he has also committed fraud,” the appeals panel said in its ruling. “Even state-of-the-art scientific measurements may sometimes be imprecise. But in these circumstances, it is up to the jury — not the court — to decide whether the government’s proof is worthy of belief.”

The appeals judges said that while they would not fault a doctor for misreading an angiogram, the issue in Paulus’ case was whether he lied, not whether he and other doctors disagreed on test results.

Bunning also conditionally ordered a new trial for Paulus.

The appeals court said Bunning did not adequately justify that decision. It sent the case back to him for further consideration.

If Bunning still believes the jury’s guilty verdict was not justified after reviewing the appeals court ruling, the appeals court said, he should provide a detailed explanation that could be reviewed.

Paulus will keep seeking an acquittal as the case continues, said his attorney, Robert S. Bennett.

“This has got a long way to go,” Bennett said.

In a separate federal case, King’s Daughters agreed in May 2014 to pay the government $40.9 million to settle claims that it knew Paulus and other doctors were performing surgeries that were not medically justified.

The hospital did not admit wrongdoing, but agreed to internal reforms and to increased monitoring of its claims to federal health care programs.