Back in February, TDMR did an interview with Dr. Leonard Morse. Dr. Morse, a New York dentist who was one of that state’s top Medicaid billers, was accused of Medicaid fraud in 2006 and lost his entire practice. He fought back with a civil suit which, after almost 7 years, won him a $7.7 million judgment in February.
In this cautionary tale for Medicaid providers, Dr. Morse describes the political witchunt that targeted him, the corrupt methods used by the state’s attorneys to frame him, and his long struggle to finally vindicate himself.
Interviewer: Good morning, Dr. Morse. How are you today?
Dr. Leonard Morse: I’m actually in a very chipper mood. I’m relieved and exhilarated!
Int: Beautiful! Have you been filled in about TDMR?
Dr. Morse: My understanding is that Texas Dentists for Medicaid Reform is trying to counter all the bad publicity there’s been on this subject. You’re asking if it’s fair to say that just because somebody has a viable, large practice, that by definition they’re crooks. That the state shouldn’t shut them down and kill their cash flow based on their success. Is that the gist of it?
Int: You’re absolutely correct. In Texas, Medicaid funding did go up for orthodontia from 2007 to 2011 substantially. And according to the media, there were kids getting braces who shouldn’t have had them…
Dr. Morse: May I ask a question? I don’t know how orthodontics would be an approved service in Texas. In New York, you can’t have orthodontic care unless it’s been vetted by regulators. Whether they’re qualified to decide if a patient needs orthodontics or not is a separate issue. But a dentist in New York couldn’t just say “Okay, I’m slapping braces on.” They would need to get a pre-certification. Is that how it works in Texas?
Int: Absolutely. In Texas, there’s a private contractor working for the state — the Texas Medicaid and Healthcare Partnership — and they’re supposed to review the patient records, including something called the “HLD scoring index”. If the patient had a score of 26 or more, the child was supposed to be eligible for braces under Medicaid…
Dr. Morse: … and the HLD index is some sort of anatomic relationship of just how bad it is. The point being that just because you have one cockeyed tooth doesn’t mean you automatically get braces.
Dr. Morse: The severity of the disability, that’s the score?
Dr. Morse: So the people that are doing the screening are board certified orthodontists; they have expertise in this field, right? I’m asking you this question because I’ve got to give you a little background information.
Int: The providers are orthodontists; as far as the regulators, that’s a different story.
Dr. Morse: Well, I was the victim of a politically-motivated attack by Eliot Spitzer. I’d been practicing for thirty years. I’d been through four prior comprehensive audits. In 2002, the state did an audit; for me it was routine. They asked for 329 charts — I had all the charts. I’d never been accused of any wrongdoing; I’d never been cited for anything. Then all of a sudden in 2006, the political climate changed in New York; Spitzer was taking flak from his opponent, Tom Suozzi, who said Spitzer was the “sheriff of Wall Street” but turned a blind eye to Medicaid fraud.
The state prosecutors went after me. They created Excel spreadsheets of my billing, and they didn’t use my records — they eliminated the tooth numbers. Then they brought in an “expert dentist” who testified at this secret conclave, the grand jury. This was four years after my last audit — overnight, they got a grand jury. So they showed this expert dentist the Excel spreadsheets without tooth numbers, and she testified that, “This doctor’s triple billing. He’s doing the same procedures over and over every day. He’s bilking the system.”
But there was a big problem: all those procedures were done on different teeth! They kept the expert in the dark. She didn’t look at my real records, but at these fabricated records. And the expert herself wasn’t a Medicaid provider. She didn’t have a provider ID. She’d spent all of one day and three hours in the Medicaid system. She didn’t know the codes. She’d never billed anything. Basically, she really wasn’t an expert; she was a $75 per hour paid spokesperson for the Attorney General’s office.
So that’s why I’m saying, when regulators come in you’ve got to ask “who’s looking at it?” There are a lot of these things that are very subjective. Maybe they want to turn a blind eye to it if they’ve signed off on it and said “this patient should be eligible for services”, and the dentist or the orthodontist is legitimately providing those services. The question is, who caused the problem?
Int: Absolutely. The providers here have trouble defending themselves; they aren’t very well-organized. The TDA, the Texas Dental Association is not standing up for them. Because only 9% are…
Dr. Morse: … I can tell you that right here in New York, 5% of the dentists are registered for Medicaid. A lot of the people that are registered only have a Medicaid provider number because they’re teaching in a hospital setting and so they need it. There are very few active Medicaid providers. The Dental Society of the state of New York was basically uninterested in the problems associated with a Medicaid practice. They’d say, “That’s not what our members need. We’re worried about hygienists practicing without dentists’ supervision!” They’re there to support mid-level providers. Nobody ever supported me from the Dental Society.
Once I found out who the state’s dental expert was, I called up the American Dental Association. I asked, “What is the definition, the legal definition, of what it takes to call yourself — and be presented as — an ‘expert’?” Their answer to me was, “There is no definition of that, doctor. Don’t worry about it. When it goes to court, your expert will out-expert their expert. And the jury will see.” Then I said, “But this was a grand jury inquest. There was nobody to counter their expert, and now I’m indicted on a B-felony. I’m facing 25 years of jail time!” And their answer was, “We don’t get involved in those things, doctor. Get your own counsel.”
So that’s the support we got from organized dentistry: none.
Int: That parallels what’s happening in Texas. Right now, the legislature is meeting here. We’re talking to politicians, and unfortunately they’re being told by the regulators that there have been enormous levels of fraudulent billing, and the state is going to try to collect; and if they don’t collect, they’re going to bankrupt the dentists.
Dr. Morse: You mean “alleged fraud?”
Int: That’s right.
Dr. Morse: What they did in New York was the Office of the Medicaid Inspector General started auditing all the dentists. They came up with findings of ten or twenty thousand dollars of overpayment and they said, “Well, you can fight it or you can just cut us a check.” They picked a money amount such that it wouldn’t pay, financially, to hire an attorney. It was just a ploy to take money back.
Int: We were talking about your grand jury indictment…?
Dr. Morse: Right. It was all secret of course. We didn’t know what had happened in the grand jury until we started a civil suit against the prosecutors. The federal judge then ordered those documents released unredacted. We got the internal emails of the Attorney General’s Office; they were very revealing as to what was really going on behind the scenes. They were saying one thing and doing something very different. That really blew the lid off of the case. We got 20,000 documents; I spent three years in depositions and interrogatories. I had a great attorney so I decided that I wasn’t going to roll over and play dead. These people faked the records. What chance do you have if they’re using doctored documents? It was egregious.
Int: Sounds like it!
Dr. Morse: You wouldn’t believe the dirty tricks that these people pulled. I’d written a check every week from my business account for the dental materials and the laboratories. So I had $319,000 in checks for three years’ worth of dentistry. That proved that I had spent enough money to support all of my dental billings. So what they did is they culled out that middle year of the 3-year audit — they took those checks and they eliminated them from the mix. Then they made another one of these spreadsheets and jumbled the dates and the check numbers. So the grand jury saw a new spreadsheet that only had $200,000 worth of expenditures on my part. Then they got the auditor to come up and say, “I’ve looked through everything. These are the records, you stole $1 million.”
I had all of my vendor statements -– I saved everything for 30 years. I had impeccable records. I had 30,000 patients. I had 3 patients named Edwin Gonzales. I guess that would be a common name even in Texas. They then took these 3 different Edwin Gonzaleses and merged them into an avatar, into a fake Edwin Gonzales. They then claimed that I’d billed $2700 for this person!
They took another patient record with three lines of billing; they added on six additional lines, and claimed I’d billed for nine procedures! They made up evidence. That ended up a B-felony, which in New York State means you’re going to jail for 25 years. In 5 days they’d shut down my practice; I lost everything. Then for 17 months I had to wait for the criminal trial; I was facing not only the end of my business — I was going to jail! It doesn’t get any worse than that. Evildoers!
Int: Sounds outrageous!
Dr. Morse: It is! Yet these people think that it’s perfectly okay. They came to my civil trial and they brought their “dental expert” who said, “Oh, even if I had the tooth numbers, my testimony would have been the same.” The stuff they pulled was unbelievable. These are the slimiest pieces of you-know-what on the face of the earth.
It took 17 months from the date of my indictment for the criminal trial to begin. For 17 months the sword of Damocles was hanging over my head; I’ve got 6 kids and almost 9 grandchildren, and everybody was scared out of their gourd. The whole time I wasn’t making a penny and was possibly going to jail.
For the better part of 3 years after I was acquitted the Attorney General kept the story of my indictment on their official website. If anybody searched my name, the first story that came up was that I’d been accused, that I’d been indicted for stealing a million dollars from the Medicaid system. That trashed me, and they wouldn’t take the story down, even though it’d been three years since my acquittal.
Int: Yes, I understand that…
Dr. Morse: Then a month after my deposition in the civil trial, magically that story disappeared. They started to get the idea, “You know, somebody’s going to pay for this.” It dawned on them that they weren’t going to get away with this crap.
You’ve got to sue them. If you think these folks are going to say, “You know what doctors? You’re right, this really isn’t what it appears to be. We’ve been overly zealous.”
Int: So they actually falsified records on you?
Dr. Morse: Yes! It wasn’t a subjective disagreement. They were creating the evidence. But the sick part about it is that a prosecutor could actually knowingly create false evidence to use in a grand jury, knowingly take that false evidence that he’s generated, bring it to your criminal trial, get you convicted and you, as a victim, have no recourse whatsoever. He has absolute immunity from any consequence of those actions. The only reason we won this lawsuit was that we were able to have the jury vote on when those fake documents were fabricated. And the jury voted nine to zero that those fake documents were created during the investigative phase. And during the investigative phase, the prosecutor and the government officials did not have immunity.
Dr. Morse: I think I’m probably about the only person on the face of the earth who was actually able to get a prosecutor into a federal courthouse, let alone win a monetary award as a result of their misconduct. Early on I bought the seminal textbook on this by an attorney out of Philadelphia named Joseph Lawless. That’s a great name for an attorney! The book, Prosecutorial Misconduct, is a 2000 page volume; it reviews the last 50 years of all the bad things that prosecutors have done in America. Not one of the people in the book ever got a prosecutor to court.
About a year and a half ago USA Today did a front page story about prosecutorial misconduct and actually quoted the book by Joseph Lawless. They went through maybe a dozen cases -– horrible things these lawyers have done to people. People are incarcerated, knowingly, falsely. They come out of jail and they try to sue the prosecutor, or the office of the prosecutor, but it goes nowhere! It gets thrown out. They get a summary judgment dismissal of the lawsuit. So I feel tremendously empowered; prosecutors in America now have to look over their shoulder and say, “Whoa, if I’m doing bad deeds, maybe I should think twice because I’m going to have a problem.” Rightfully so!
Besides me personally, it means a lot to everybody and to dentists in particular. You’ve got a thing called due process in this country. I was out of business in 5 days. They sent me a 5-day notice and they shut me down. I appealed it based on my 30 years of pristine practice; they had 45 days to respond to that appeal. They said, “No, Doctor, you’re going to stay out of business until your day in court,” which as I said was 17 months later. By that time, I was destroyed; I had nothing left of my practice, I was liquidated. And then for $10, you get a note from the court saying, “This whole thing was a mistake, it should never have happened.” You, as a matter of law, should be restored to your position in society. I had nothing left.
Int: Sounds familiar.
Dr. Morse: I lost my house, I lost my practice, I lost my reputation. It was over for me. How am I going to be restored to what took me 30 years to build? And they didn’t give a rat’s you-know-what about this. They came to 3 years of depositions — we had 50 hours of depositions. They just thumbed their noses at us and said, “We’ve got immunity, man. You can’t do anything to us.” They just sat there and laughed it off.
When the jury asked for a calculator one hour into deliberations, the prosecutor was sitting behind me with his attorney, and he said, “Well, what does this mean?” It was the best thing that could’ve happened in the world! The prosecutor was now going to be liable for almost 8 million dollars in damages and New York State was on the hook.
Int: That’s an incredible story. Incredible!
Dr. Morse: They’d stoop to anything. I’m a member of the international college of dentists. I had taught in three major New York hospitals over the years; I was very involved in hospital dentistry. I had won the “Attending Dentist of the Year Award” three times. Spitzer’s attorney had the nerve to pull out a page that I’d written on hospital stationary to try to get a job and say to the jury, “do you have permission, Doctor, to use hospital stationary?” They insulted me, they told the jury that I was a lazy bones, that I liked to sue people, that I’m a good-for-nothing person — every personal attack possible, because they had nothing to show that a dime was actually taken out of the system.
They claimed the documents they’d faked weren’t faked! They said, “That wasn’t the problem. These documents were just misinterpreted at the grand jury,” full well knowing that anything done under the grand jury is protected. They aren’t about to apologize for anything, so I’m as happy as can be to publicize this. I want it everywhere.
In my view, Eliot Spitzer was the one who orchestrated this. I think he’s the one who made that phone call and said, “Listen, you get somebody indicted for a B-felony.” I didn’t do anything; for them to fake records and faking billing records is basically criminal. These people should be in jail.
Dr. Morse: Besides the monetary judgment we won, they should have empaneled a special grand jury to investigate these folks and have them jailed. That’s my view on it; of course Eliot Spitzer’s position is, “I have nothing to do with this.” All of his henchmen fell on their swords, but this was for his benefit. It benefited nobody else. He didn’t like to see a bad story in the newspaper about him turning a blind eye to Medicaid fraud, so he was out to get someone.
It wasn’t about me personally; the only reason this happened was that I had the fifth largest practice in New York State. We weren’t that big because we were cheating; it was just that we’d spent 30 years building the practice. I never even advertised. I didn’t have a PR agent. What we did was quality, compassionate dentistry for people that needed it. Nobody else was taking care of them.
The thing that really tore my heart out was that I really cared about the patients. I cared about my office. I never had a malpractice suit against me, I never had a complaint against me. And out of the blue, all of a sudden, I was indicted for a million-dollar theft! All so that Spitzer and his gang could have a nice newspaper story. He sent that story everywhere; he translated it into foreign languages, he sent it to every state in the union. He just trashed me. It’s disgusting, like stepping on somebody’s bones.
It’s almost like Richard Nixon and Watergate. Spitzer was winning the election, just like Nixon, Nixon was fine. But neither one could stand any negative publicity. As soon as Spitzer saw his political opponents saying “He’s soft on healthcare fraud,” he was hell-bent on getting somebody charged and getting the story he wanted in the newspaper.
Int: Again, it’s an incredible story.
Dr. Morse: They literally had no evidence. There was a statement at the end of the Daily News article that the billing records showed $3000 in theft; that’s not correct. What happened was that they had 3 patients come to my criminal trial, none of whom I’d actually treated. They were all legitimately treated in my office, just not by me.
When they’d started the trial, the prosecutor said to the judge, “I’m going to prove Morse stole $1 million.” By the end, he asked for the judge to consider a $3000 theft, because that was the only work that could be shown to have actually been done. They asked those patients, “Do you recognize this man?” meaning me. And the patients said “No”, because I had never seen them! My associate had treated them.
So, I did not steal $3000 from the system. That’s the only thing I disagree with in the press coverage I got.
Int: My goodness!
Dr. Morse: They made me out to be a criminal. They took the records and they made a statistical projection. They had an auditor — they didn’t use a CPA, they didn’t use a statistician. We got everybody’s work records in discovery as part of our lawsuit. They had an auditor who was a newbie in the attorney general’s office. Do you know what job he had right before he went to work for the Attorney General investigating a million dollar theft? He was the headwaiter at a golf course for $15 an hour.
Just like they had a dentist who wasn’t a dentist, they had an auditor who had no qualifications at all. Yet he got in front of the grand jury and said that his statistical analysis showed that I stole million dollars. It’s infuriating.
Int: I’m actually speechless. I don’t know what to say.
Dr. Morse: I couldn’t say anything for 7 years. If you’ve got the attorney general and Eliot Spitzer saying that you stole $1 million and you should be in jail for 25 years, what voice do you have? This was the ultimate David and Goliath battle. I am nobody, absolutely nobody. I’m just a little thorn in their side. The take away from this is that Joe Nobody can really stick it back to the government when the government has stuck it to him.
The prosecutor at my civil trial said, “Theoretically he could have gone to jail for 15 years.” They testified that there were 100 investigations of Medicaid fraud over the years. Ten of those had gone on to the grand jury; I was the only person who’d gone to trial, who wouldn’t cop a plea. I wouldn’t cop a plea because I didn’t do it! Even if it meant getting falsely convicted, I was hell-bent on having my day in court, both criminal court and civil court, to shine a bright light on all these evil doings. I stood my ground, I didn’t roll over and play dead.
You know who’s thrilled about this? When I went back to the hospital, I got a standing ovation from the hospital staff. I went to dinner last night with my 6 kids and my 8 grandkids and our attorney and got another standing ovation. They said, “You know what? You’re a role model. Despite what you suffered, all these incalculable losses, days of woe and misery, you stood up to these people. You had a backbone; you didn’t back away from the challenge.”
I’m really proud of that. That’s the message for my family, for my patients, for my hospital associates. Don’t take this garbage! It’s going to be a long, painful process, but hopefully at the end of it, the light and the truth are going to shine. And that’s what I’m most proud of.
Do I like the fact that I got money? I’m thrilled. I lost everything. The jury actually compensated me up to the last day of my lease. I had signed a 21-year lease at a medical center that I owned. Spitzer’s attorney got up and said, “Well, the doctor was indicted when he was 59,” like my career was over, implying that I’d probably be dead by age 62.
It was disgusting. The whole thing –- I wish I had a videotape so you could see what they did at trial. The transcript alone really wouldn’t bring it to life.
Int: Thank you for telling your story.
Dr. Morse: I’m just a good dentist that loves his patients and they knew that; I did the right thing for them for 30 years. To have me ripped out of the system when I’m the dental lifeline for these people is also disgusting. The government couldn’t care less.
Int: We had a clinic fold up in Austin just like that couple of weeks ago; they were actually dealing with 22,000 kids. They got put on 100% payment hold and were shut down the next day.
Dr. Morse: Well, I had five days. 95% of my practice was Medicaid reimbursement. They sent me a five-day notice. They interviewed — 2 or 3 more things and I’ll let you go…
Int: Sure, sure. Go ahead.
Dr. Morse: I had 329 patients. So how did they decide whether these patients got the services that I billed for? Well, they did an interview. They interviewed ten of the patients over the phone. They called ten people up. The patients didn’t even know who they were talking to; for a number of these patients English was not their primary language. They asked each of these people, “Do you have a denture?” Do you know what a denture is?
Dr. Morse: It’s a complete replacement, either upper or lower, of all your teeth. It’s a big appliance, and these patients said, “No,” because they have partial dentures. Some of them are missing one tooth. They would never say they have dentures because they still have a lot of their God-given teeth. So when they said, “No, I don’t have that,” the investigators just dismissed them, because supposedly it “proved” that I didn’t do that work.
Int: My goodness.
Dr. Morse: It is infuriating!
Now we’ve given them the biblical smoting that I was waiting seven years to give them. But at the last moment they had a trick question on the verdict sheet as to whether these fake documents were for the investigation or for grand jury purposes. We were really scared out of our guts! We thought, “Oh my God, the jury’s going to say ‘Sure, it was made for grand jury purposes’,” which is the wrong answer. Because as I explained before, if it’s grand jury material, the prosecutors and investigators are absolutely immune. But these 9 lovely folks off the street, these jurors saw through it and said, “No! They’re railroading this guy. We are NOT going to give them immunity.”
They’re going to appeal it now, but we’ve got a 9 to 0 jury verdict that says that they shouldn’t have immunity…
Dr. Morse: They’ll need a miracle to win their appeal. Let them do whatever they want to do. I think we proved beyond a shadow of a doubt who was the victim in this case.
Dr. Morse: I wish you guys in Texas good luck. Don’t think for a moment that anything good is coming from these people, because it’s not. What they’re trying to do is tar and feather everyone. “Oh, Medicaid, you must be a crook, you have to be a thief.” That’s what this is all about.
Certainly there are some providers who are doing things they shouldn’t be doing. I’m a realistic person. But you can’t take that and apply it to every single case and say every single doctor doing Medicaid is cheating the system. There’s a core of really good people out there who care about their patients, who want to provide quality care under very difficult circumstances and under extremely reduced fee schedules. Why knock these people out? Nobody’s coming around to replace us. You’re just leaving the patients high and dry. It is just disgusting.
Int: Well sir, I thank you. I don’t think I have any more questions.
Dr. Morse: Okay.
I really think your people should pay attention. I had a basic, core naïveté — and I teach this in the hospital — towards record-keeping, towards oral diagnosis. As the Section Chief for restorative dentistry, I was always of the belief (or misbelief) that you’re a professional, you’re a doctor, you know? Nobody’s going to treat you like I’ve been treated. You’re going to have a chance to come down and have due process, to explain your side of whatever might be misunderstood.
No way! No way! Don’t think that for a minute! When these people start with you, you’ve got to call out Homeland Security, the Air Force and the Marines on your side. Don’t be lulled into a false sense of security that these regulators are your friends. These are your foes. They’re out to kill you, they’re out to take your blood and your livelihood away from you.
Hear this warning well. I did nothing wrong. Yet even having done nothing wrong, even with having complete records, these folks were able to doctor it and get me arrested, charged with a million dollar theft and facing 25 years in jail.
It’s a very, very sad story. But it’s one that you should pay attention to. Keep your eyes wide open. Don’t close your eyes and don’t be fooled by these folks. This is what their agenda is.
Int: Well, sir, again, thank you very much.
Dr. Morse: Good luck because part of my heart is in Texas. I’ve got my kid, my daughter-in-law and two grandchildren in Austin; it’s a good place. I’ve been there a few times. It’s a fun place.
Int: Great, sir. Congratulations again.
Dr. Morse: Thank you again. Stay well.