Feds: Urbandale Surgeon Defrauded Medicare Out of Millions in Skin Cancer Billing Scheme
The U.S. Department of Justice is suing a central Iowa physician, alleging he used false invoices to overcharge Medicare by millions of dollars for skin cancer treatments. Dr. Eugene J. Cherny and his Urbandale practice, Heartland Plastic and Reconstructive Surgery, reportedly became one of the top billers in the nation for skin-substitute products by submitting inflated prices to the taxpayer-funded program.
How the Urbandale Medicare Billing Scheme Worked
According to the federal lawsuit, Cherny routinely and knowingly provided false information to a Medicare contractor regarding how much he actually paid for skin-substitute products. These are biologic or synthetic materials used to cover or treat persistent wounds, often tied to skin cancer.
The government alleges that Cherny purchased these products directly from manufacturers and a distributor. Sales representatives reportedly showed him how he could turn a substantial profit by using them on his Medicare Part B patients. The lawsuit claims Cherny closely tracked his profits, even keeping a logbook to monitor his return on investment.
He refused to use a skin-substitute product on Medicare Part B patients unless it yielded a significant profit, the lawsuit states.
Taxpayers Billed $20 Million in Two Years
Relying on allegedly false representations, Medicare reimbursed Cherny $20,167,426 for skin-substitute products between January 1, 2021, and December 31, 2022. The lawsuit does not state exactly how much of that total is directly attributed to fraudulent billing.
Cherny allegedly treated nearly all of his Medicare Part B patients who had specific wounds tied to skin cancer with these products, while only a few of his private-insurance patients received the same treatment. On average, the per-patient cost to Medicare for the first application of a skin substitute by Cherny was $13,000. A complete course of treatment averaged $57,000 per patient.
False Invoices Drove the Fraud, Lawsuit Claims
Soon after he began using skin-substitute products, Cherny became one of the most prolific billers of such products in the United States. In 2021, Medicare reimbursed him $13,142,219. In 2022, the reimbursement was $7,025,207.
The government claims Cherny often provided false information, including invoices reflecting prices he never actually paid. A skin-substitute distributor allegedly gave Cherny two invoices for each purchase: a falsified invoice showing the list price he never paid, and one showing the substantially lower price that Cherny actually paid. Cherny then used the higher list-price invoice to bill Medicare.
For example, the lawsuit states Cherny provided Medicare with invoices for $400 per unit of a particular product, even though he actually paid only $240 per unit.
What Happens Next in the Case?
The federal government says it has suffered actual damages that will be determined at trial. Under the False Claims Act, the government can recover three times the amount lost to fraud and impose a civil penalty of up to $23,331 for each instance of false billing.
Staff at Cherny's office said Thursday he was in surgery all day and no one else could comment on the allegations. State records show Cherny's Iowa medical license remains in good standing with the Iowa Board of Medicine, and he has no history of public disciplinary action.
Why Does Medicare Fraud Matter to Iowa Taxpayers?
Medicare fraud forces American taxpayers to foot the bill for inflated medical costs. When providers exploit the system with false billings, it drains critical resources from a program designed to support senior citizens and vulnerable populations. Cases like this highlight the ongoing need for strict oversight and accountability within taxpayer-funded healthcare programs to protect hardworking citizens from shouldering the burden of waste and abuse.
Who is Dr. Eugene J. Cherny?
Dr. Eugene J. Cherny is a central Iowa physician who operates Heartland Plastic and Reconstructive Surgery in Urbandale. He is currently being sued by the U.S. Department of Justice for allegedly defrauding Medicare through false billings for skin cancer treatments.
How much money is involved in the Medicare fraud lawsuit?
Between 2021 and 2022, Medicare reimbursed Cherny $20,167,426 for skin-substitute products. The exact portion attributed to fraudulent billing will be determined at trial, but the government is seeking triple damages under the False Claims Act.
What are skin-substitute products?
Skin-substitute products are biologic or synthetic materials used to cover or treat persistent wounds, including those related to skin cancer. They are billed to Medicare Part B when used on eligible patients.
