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As insurance fraud cases go, the federal government's case against Dr. Niels H. Lauersen is far from typical.
Dr. Lauersen, a well-known Manhattan gynecologist and fertility expert, did not deal with Medicare or Medicaid, the government insurance programs that often attract fraudulent billing schemes. And prosecutors acknowledge that unlike doctors in most medical fraud cases, who bill for procedures that never took place or for patients who do not exist, Dr. Lauersen treated real patients for real conditions, treatments they were desperately seeking.
In what legal experts say is new territory for health care fraud cases, Dr. Lauersen is accused of billing insurance companies for routine gynecological procedures to cover for what he was really doing: fertility surgeries for women who could not otherwise get pregnant. Over the course of 10 years, law enforcement officials say, the doctor submitted hundreds of false bills amounting to roughly $4 million.
Fertility experts and gynecologists, as well as their patients, say that false billing is common among doctors who specialize in exacting and costly fertility procedures because insurance companies often do not pay for them. But legal experts say they know of no other case in which a doctor was criminally prosecuted over such practices.
"Everyone is paying attention to this case," said Pamela Madsen, the executive director of the American Infertility Association. "It is very upsetting to many patients when a doctor is, through their eyes, being persecuted for trying to help them."
But federal law enforcement officials, their power broadened by recent legislation governing health care fraud, are sending the message to doctors that efforts to dodge rules set by insurance companies will not be tolerated. The Clinton administration has made the prosecution of health care fraud a priority, as a cost-saving measure. Since 1995, health care fraud convictions have increased nearly 40 percent.
"The government has invested huge amounts of resources in health care fraud in the last four years," said Thomas W. Mayo, an associate professor of law at Southern Methodist University in Dallas. "Congress has clearly moved to lump all health care fraud together and is increasingly giving prosecutors tools to convict."
The trial, which begins tomorrow in Federal District Court in Manhattan, brings together several health care issues that have been hotly debated in the last few years. They include ethical and financial quandaries over who should pay for fertility treatments and conflicts over the types of health care issues that merit government intervention.
The case also illuminates the quiet but common practice by doctors in many areas of medicine who tweak their bills to get approval or payment for treatments they believe patients need but insurance companies do not reimburse. A recent study in the Archives of Internal Medicine showed that 57 percent of 169 doctors who were polled said they would use deception to secure approval for certain treatments.
Dr. Lauersen, who was indicted more than a year ago with his anesthesiologist, Magda Binion, is accused of billing insurers for procedures like cyst removals and treatments of fibroids, in place of the in vitro fertilization therapies that he was actually performing. According to the indictment, Dr. Lauersen told patients to lie about their care to investigators.
The patients in question were not among the wealthy or high-profile women who came through his office, who almost certainly paid cash for these fertility procedures, but rather middle- and working-class women who generally were insured by managed care companies.
Few states have laws that require insurance companies to pay for infertility treatments, and many lawyers and policy professionals concerned with women's health say the lack of such coverage is discriminatory. Dr. Lauersen's lawyers are almost certainly counting on a jury that is sympathetic to that point of view, whether or not he actually committed fraud.
"For over 30 years I have dedicated my life to helping women have healthy babies and to fighting those insurance companies that discriminate against women by refusing to pay for their health care," Dr. Lauersen said through his lawyer, Ted Wells. "It is ridiculous that insurance companies will pay for a man to have Viagra but refuse to pay for a woman to have fertility treatments. I am completely innocent, I have never committed insurance fraud and I am confident the jury will acquit me."
As a rule, gynecologists who are the subject of civil and even criminal cases tend to attract support from a wide range of patients, who often feel an emotional connection because the doctors helped bring their children into the world. This feeling is often magnified when a doctor has helped conceive a one-chance-only baby.
Dr. Lauersen was certainly this kind of hero to many of his patients, but his clinical history is not spotless. Last year, he resigned under pressure from Lenox Hill Hospital on the Upper East Side after a difficult delivery. He tried to deliver the baby with forceps, but the delivery ultimately ended with a Caesarean section, and Lenox Hill administrators found that he had not followed hospital procedures.
Dr. Lauersen, whose practice is on Park Avenue on the Upper East Side, now admits patients through St. Vincents Hospital and Medical Center in Greenwich Village.
A spokesman for the United States attorney would not comment on why the government chose to prosecute Dr. Lauersen. But in 1996, Congress enacted tough statutes intended to curtail health care fraud. In 1995, the federal government pursued 1,247 health care fraud cases and obtained 158 convictions, according to Department of Justice reports. In 1998, those numbers increased to 1,866 investigations and 219 convictions.
At the same time, there has been a flurry of legal activity around infertility procedures. In 1998, the Supreme Court ruled that reproduction was a "major life activity" and that when a person's ability to reproduce is medically hampered, she is protected under the Americans With Disabilities Act.
Although the case actually had little to do with infertility -- it was a complex legal strategy employed by a woman with AIDS who was denied dental treatment -- advocates of fertility coverage have tried to use that ruling to support their long-held contention that infertility is a disabling medical condition that should be covered by health insurance.
Earlier that year, the City of Chicago was ordered to cover $1.5 million in claims for fertility treatments for its employees after a case was filed by a police officer who had spent thousands of dollars to conceive her two children, none of it covered by the city.
Dr. Lauersen's lawyers have latched on to those cases as part of their defense. In documents submitted to the judge, the defense wrote: "The insurance companies allegedly victimized by this scheme were unlawfully discriminating against Dr. Lauersen's female patients by refusing to provide coverage for a 'disability' affecting a 'major life activity -- reproduction.' In so doing, these insurance companies violated fundamental civil rights protected by" the disabilities act.
Insurance companies say that they do not mean to discriminate against women, but that covering fertility treatments is too expensive.
Of the 13 states that mandate coverage of fertility procedures, only 6 have strong laws that force insurance companies to pay for them. Even in those states, there are limits, like restrictions on how many times a woman can undergo the therapies, or exclusions for health maintenance organizations. In New Jersey, Gov. Christine Todd Whitman vetoed such a law last week. In New York, insurance companies are required to pay for all gynecological problems deemed medically correctable, but not for procedures that are strictly used to get people pregnant, like in vitro fertilization.
Further complicating matters are the insurance companies that refuse to pay for therapies and surgeries that relate to fertility but are perhaps sought by women for other reasons. Fibroid tumors, for example, are often painful and debilitating, but insurers frequently reject claims for their removal if they see that treatment as related to fertility.
Dr. Lauersen's lawyers are likely to put his patients on the stand to try to sway the jury.
"This case is problematic for the government," said Leonard J. Nelson III, a professor at the Cumberland School of Law of Samford University in Birmingham, Ala., "because if you are dealing with middle-class people who really want children, it is compelling. It is still fraud. But there is a good chance that the jury will respond positively when they see real people up there."
If the government's goal is to set an example with Dr. Lauersen, however, a conviction, which almost surely carries prison time, may well have the desired impact, several legal experts said. "If you take out a high-profile person and nail them, that has a deterrent effect," Professor Nelson said.
Medical and legal experts on infertility will be watching the case closely; the number of infertility clinics has more than doubled in the last 10 years, as technology has improved and more older women have sought to have children.
"The government seems to be sending a message to physicians and patients in states without clear legal protections," said Susan Crockin, a lawyer in Boston who specializes in reproductive technology issues. "But it is interesting, because if infertility were treated as a medical condition, it wouldn't be the subject of criminal indictments."
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