Dermatologist Amir Bajoghli, MD

A Virginia dermatologist may have aggressively treated his patients for skin cancer, but he didn't perform unnecessary surgeries or bilk insurers by submitting false claims and fraudulent billings, a jury ruled Monday.

Amir Bajoghli, MD, was found not guilty of 41 charges of healthcare fraud following a federal trial that began in late October.

During the trial, prosecutors alleged that Dr. Bajoghli, 45, owner of the Skin & Laser Surgery Center in McLean, Va., diagnosed more than 80 healthy patients with cancerous lesions and performed extensive, unneeded skin surgeries in order to defraud Medicare and private insurers.

They also accused Dr. Bajoghli of outsourcing the pathological analysis of skin samples to an inexpensive provider, then billing payers himself to net the higher reimbursement, and of letting unlicensed medical assistants perform suturing and skin grafting.

Dr. Bajoghli's attorneys denied the government's charges and debunked its expert witnesses, arguing that they failed to prove he was engaged in fraudulent activities. Disagreements in diagnosing cancer from skin samples are common, they pointed out, and Dr. Bajoghli delivered the treatments for which he billed insurers.

Dermatologists outsource pathology "all the time, and are entitled to bill for it," says defense attorney Peter White. "If he billed it incorrectly, it was due to a misunderstanding of very complicated insurance and Medicare regulations." Keep in mind, however, that Medicare has in place an anti-markup rule that bars physicians from marking up the technical or professional components of anatomic pathology tests that are not performed in the same building (as defined by the Stark law) as the billing practice. (Back in 2011, we reported on an alleged kickback scheme between a dermatologist and a pathologist.)

As for the staff's role in surgery, "they were exceptionally well-qualified, were exceptionally well-trained by Dr. Bajoghli and did excellent work under his supervision," says Mr. White.

Defense attorney Kirk Ogrosky further criticized the prosecution's case as "vexatious, frivolous and in bad faith from the very beginning." It was sparked, he noted, when an FBI agent's wife complained about not receiving the results of a 2009 biopsy, and continued with the manufacturing of "bogus charges" and information from sources who'd stolen money and painkiller prescriptions from Dr. Bajoghli's practice. "This case should never have been brought," he said. "It is an example of the government just not doing their job and relying on assumptions."

In a statement, Dr. Bajoghli thanked the court and the jurors. "Throughout this case, I cooperated with the government in every way possible and they pursued me without regard for the truth," he said.

A representative for the U.S. Attorney's Office for the Eastern District of Virginia did not immediately respond to requests for comment.

David Bernard