South Florida

Legal feud, criminal probe ends at UM’s Bascom Palmer

The University of Miami's Bascom Palmer Eye Institute
The University of Miami's Bascom Palmer Eye Institute Miami Herald

A bitter legal feud between two superstar doctors who were once rivals at the nation’s No. 1 ranked eye institute in Miami has been resolved with a paltry $75,000 settlement.

The University of Miami, which operates Bascom Palmer Eye Institute, has agreed to pay $37,500 to settle a federal False Claims Act case brought by Dr. Philip Rosenfeld, a retinal specialist at the prestigious facility.

In the lawsuit, Rosenfeld accused his employer, UM, Bascom Palmer, and Dr. Timothy Murray, an oncology eye surgeon formerly with the institute, of submitting fraudulent bills for unnecessary surgical procedures to Medicare, the taxpayer-funded health insurance program for the elderly.

Rosenfeld will receive $10,875 of the settlement, as the whistle blower in the case, which was filed in 2012, while the U.S. government will collect $26,625 as its share under the law, though the Justice Department chose not to intervene on Rosenfeld’s behalf in his lawsuit.

Murray’s attorney said Friday that the small civil settlement — after expensive litigation — shows there was no merit to Rosenfeld’s claims.

“This is a good day for cutting-edge medicine and a complete vindication of Dr. Murray,” said Miami lawyer Jeff Marcus. “With the government declining to join Dr. Rosenfeld’s multimillion dollar claims or pursue any action against Dr. Murray, Dr. Rosenfeld has agreed to dismiss his case for a pittance with Dr. Murray paying nothing.”

UM’s lawyer issued a statement, asserting that its own physician’s claims were baseless.

“Six years later and after various reviews by third party experts, our initial findings have been confirmed and reconfirmed,” attorney Dan Gelber said. “With that in mind, we settled this matter without any admission of wrongdoing.

Rosenfeld’s lawyers declined to comment.

As part of the settlement, UM has also agreed to pay Rosenfeld an additional $37,500 to settle his claim that the university retaliated against him after he accused the school, Bascom Palmer and Murray of committing Medicare fraud — including providing information to a Miami Herald reporter for a 2014 story that Rosenfeld said was critical of him. Rosenfeld will receive all of that payout.

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Dr. Philip Rosenfeld, retinal specialist at Bascom Palmer Eye Institute Bascom Palmer

While the civil settlement was reached this week, a parallel criminal probe instigated by Rosenfeld against UM and Murray over the same allegations of Medicare fraud petered out months ago, according to federal authorities and attorneys familiar with the investigation.

Federal prosecutors in Miami and Washington, D.C., have chosen not to pursue the criminal case against UM and Murray after evaluating patient records, billing information and other evidence in the five-year-old probe, according to sources.

As part of the probe, several Bascom Palmer doctors testified before a grand jury in Miami federal court. Also, independent experts hired by both sides met with federal prosecutors to provide their medical opinions about the allegations.

The U.S. attorney’s office in Miami declined to comment about the civil lawsuit and criminal investigation.

In addition to those actions, Murray is a defendant in two medical malpractice cases involving the deaths of two children whom he treated for a rare eye cancer at Nicklaus Children’s Hospital.

In 2012, Rosenfeld blew the whistle on UM and Murray after Murray left the eye institute — though their rivalry began long before his departure. Rosenfeld accused his one-time colleague, along with Bascom Palmer and UM, of committing fraud by submitting false claims for dozens of surgical procedures billed to the Medicare program based on fabricated patient evaluations. His allegations: the eye procedures were unnecessary, didn’t benefit patients and may have been harmful to some.

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Dr. Timothy Murray, an oncology surgeon who formerly worked at the Bascom Palmer Eye Institute Timothy Murray

After Murray’s departure from Bascom Palmer, Rosenfeld brought evidence of alleged Medicare fraud to the U.S. attorney’s office and federal investigators.

While the criminal probe came to a halt this year, the parallel civil lawsuit filed by Rosenfeld in Miami federal court was heading toward a settlement, court records indicate.

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