Doctor charged in Medicare probe

A prominent Boston dermatologist was arrested yesterday on charges he defrauded the federal government of $5.4 million by falsifying diagnoses of patients so he could get reimbursements for treating them with expensive immune-boosting therapy.

The federal indictment accuses Dr. Abdul Razzaque Ahmed, 56, of mixing blood samples of patients who had a rare, potentially life-threatening skin disease covered by Medicare and of those who had a less serious disease not eligible for Medicare, the federal program that pays for health care for seniors and the disabled.

But his lawyer presented a much different picture of the doctor, who does research at the Harvard School of Dental Medicine and owns the private Clinic for Blistering Diseases in Boston.

Ahmed was trying to help patients afford needed treatment, the lawyer said, and conducted research that helped persuade Medicare in 2002 to cover the therapy that the government says he illegally collected reimbursements for providing.

''All he did was save people's lives," said Boston lawyer Richard Egbert. He said many patients did not have insurance coverage and could not afford the intravenous immunoglobulin treatment, which can cost more than $100,000.

But the 24-count indictment on mail fraud, healthcare fraud, obstruction of justice, and money laundering charges, unsealed yesterday in US District Court, alleges that Ahmed made a significant profit on the treatments from 1997 to 2001. At the time, Medicare reimbursed at a rate of $90 a gram, though the cost of the drug could be half to two-thirds that amount.

The indictment alleges that Ahmed filed false claims in which he indicated that 24 of his patients had the more severe pemphigus vulgaris, when they actually had pemphigoid. Both are blistering skin diseases that can affect the immune system. The patients were given the correct diagnosis. The common treatment for both diseases is steroids, but from 1997 to 2001 Medicare in New England paid for immunoglobulin for pemphigus patients but not for those with pemphigoid.

Ahmed, an associate professor of oral medicine, infection, and immunity at Harvard, sought the help of a company specializing in infusion therapy to set up treatments in his office in 1997, the government said.

In return for supplies of the drug, equipment, nursing services, and billing, he paid the company 50 percent of the profit, the indictment said.

The treatment was ''extremely profitable" for Ahmed, according to the indictment. Assistant US Attorney Jeremy Sternberg said Ahmed also engaged in ''deceit, fraud, and obstruction of justice" in order to stop the investigation.

Prosecutors are seeking forfeiture of $5.4 million from the doctor, including his house in Brookline and other assets.

Ahmed, who was born and raised in India and became a US citizen after emigrating in the mid-1970s, was arrested in the driveway of his home yesterday. A specialist in allergies as well as dermatology, he is on staff at New England Baptist Hospital.

Ahmed is known nationally as an advocate of intravenous immunoglobulin treatment for a cluster of disfiguring skin diseases and drew patients from many states. The treatment is much less harsh on patients than steroids such as prednisone, on which other doctors typically rely.

''When we had patients who were having trouble with Medicare . . . we sent them to Dr. Ahmed, and he seemed to have the ability to do it," said Sal Capo, president and executive director of the California-based Pemphigus & Pemphigoid Society.

''This is heartbreaking to the patients," Capo said yesterday.

In 2001, Ahmed petitioned Medicare to pay for the intravenous immunoglobulin treatments for patients nationwide with several types of pemphigus and pemphigoid who failed to respond to standard treatment or suffered serious side effects from that treatment. He submitted a dozen articles on research that he or other scientists had conducted.

Medicare officials decided in early 2002 to cover short-term treatment with immunoglobulin for patients who had failed other treatments or who were so sick they could not wait to try other treatments.

Other specialists in treating the skin diseases said Ahmed was an impassioned proponent of the treatment. But they were waiting for more proof of its usefulness.

''He seemed sincere in arguing that this was helping his patients," said Dr. Kari Connolly, associate professor of dermatology and medicine at the University of California at San Francisco. ''All of us wanted to see better evidence that this worked in [clinical] trials because it is so expensive."

She said IV immunoglobulin costs about $10,000 a dose, and patients typically get a monthly dose for up to a year. She said she uses it sparingly.

The prosecutor urged a judge to hold Ahmed without bail, arguing that he might flee if released. ''He could be on a plane to India, or anywhere else in the world, and start anew somewhere else," said Sternberg.

But Egbert noted that Ahmed had been aware of the investigation since his records were subpoenaed five years ago, and had made no effort to flee or move his assets.

Egbert also said Ahmed is a diabetic who takes daily insulin injections, suffers from heart and kidney problems, and recently underwent knee surgery.

Citing Ahmed's health, US District Magistrate Judge Judith G. Dein released the doctor yesterday on a $5 million unsecured bond, and an electronic bracelet, with orders to return to court Monday for a hearing on whether he should be detained.

Shelley Murphy can be reached at shmurphy@globe.com. Alice Dembner can be reached at Dembner@globe.com.