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Medical board alleges Austin surgeon took neuromonitoring kickbacks


Dr. Thomas Loftus appears to be the first Texas doctor accused of breaking laws with neuromonitoring deals.

Complaint: Loftus patients were responsible for up to $80,000 in monitoring costs not covered by insurers.

Doctor’s attorney says, “The allegations against Dr. Loftus are false and contain inaccurate information.”

An Austin neurosurgeon has been accused by the Texas Medical Board of misleading patients and violating a federal anti-kickback law by referring them to a company in which he allegedly had a financial interest for expensive surgical monitoring services.

A May 16 medical board complaint says those monitoring services cost patients of Dr. Thomas S. Loftus up to $80,000 more than their insurance covered. And Loftus failed to get signatures proving that he disclosed his financial interests to the patients, according to the complaint, which doesn’t disclose who made the original outcry.

Loftus’ attorney, Terri Harris, sent a statement to the American-Statesman contesting the accusations: “The allegations against Dr. Loftus are false and contain inaccurate information.”

Harris declined to provide details about inaccuracies, saying the case is pending.

The Statesman shed light on the possible pitfalls of doctors owning stakes in neuromonitoring firms in November 2015, at which time the medical board’s director said she couldn’t remember the board having disciplined a doctor for such conduct.

Loftus, who operates Austin Neurosurgical Institute on Park Bend Drive in Northwest Austin, appears to be the first, according to several industry watchers.

According to an organization chart released in the complaint, Loftus was a manager of Capitol Neurodiagnostics PLLC, a monitoring company that provided services to six of his patients.

But while Loftus is the only doctor facing a complaint of this kind from the medical board, people familiar with the neuromonitoring business say many physicians have similar financial relationships.

“This is the tip of the iceberg,” said Jeremiah Vance, president of Revolution Monitoring, a neuromonitoring company in Dallas. Vance said his company has lost significant business to physicians “who expected some sort of remuneration for the referral.”

A medical board spokesman cited state laws that keep investigations confidential and declined to say whether other doctors are being investigated in similar cases.

It’s unclear what triggered the medical board’s investigation, though Loftus’ attorney said she’s aware of someone sending anonymous letters to the board with allegations against the doctor. While findings are available to anyone through the medical board, ongoing investigations are kept under wraps.

“I do not know who this person is or what their motivation is to make such claims,” Harris said.

Loftus was given 20 days to respond to the medical board complaint, which he did on June 5, denying the allegations to the State Office of Administrative Hearings. Harris wrote: “Respondent denies he is required to disclose his ownership interest in Capitol Neurodiagnostics, PLLC, as such disclosure is not required by law. He also denies he has a financial interest in the other entities listed. He denies he failed to create and maintain adequate medical records.”

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Brain and spine surgery are among the operations that generally require nervous system monitoring. Surgeons, hospitals and surgery centers contract with companies that provide equipment and trained staff who place needle electrodes in the patient’s scalp, skin and muscles.

It is often difficult even for lawyers well-versed in health care law to say whether neuromonitoring-surgeon deals are legal because payment arrangements are often carefully crafted and must be fully dissected to understand how they work.

The medical board complaint says five health care companies are operated by Loftus or his associates, all of them based in Austin or San Antonio.

Others in the health care industry are watching Loftus’ case.

“I hope this is a sign that various regulatory agencies will aggressively continue to prosecute schemes that are improper or fraudulent,” said Paul Weller, senior counsel for the health care provider Aetna.

The medical board complaint also faults Loftus for failing to disclose a financial relationship with Scott LaRoque, who the document identifies as president of National Neuromonitoring Services of San Antonio and as president of Capitol Neurodiagnostics of San Antonio.

LaRoque issued a statement to the newspaper saying: “No physician has ever had any financial interest or ownership in National Neuromonitoring or any of its affiliates or subsidiaries. National Neuromonitoring does not pay any fees or remuneration amounts to any physicians.”

LaRoque added that to his knowledge the Texas Medical Board is not investigating him, his staff or any of his companies.

Loftus’ attorney said her client uses National Neuromonitoring for equipment and technical support but denied that he has financial interest or ownership in the company or any of its affiliates.

The six patients documented in the medical board complaint include a 20-year-old man, who was suffering from lower extremity radiculopathy, a nerve ailment. His insurer was billed $128,211 for surgery and technical services in December 2014. The complaint doesn’t state what portion of that bill went to Loftus or is suspect.

Another patient was a 72-year-old woman suffering from bilateral lower extremity radiculopathy. She was billed $80,000 in neuromonitoring charges that weren’t covered by her insurance, because, according to the complaint, the surgeon requested the monitoring rather than the patient. It’s unclear from the complaint how much of the bill the state believes is improper.

The amount of money physicians stand to make from neuromonitoring kickbacks can vary based on the type of insurance plan a patient carries, according to those in the industry. One owner of a neuromonitoring company, who doesn’t work with Loftus, told the newspaper that he rejected a proposal from a doctor who asked him for a reimbursement of $300 per patient for referrals, or 20 percent of the patient’s bill. He asked not to be named because he feared retaliation against his business.

A medical board spokeswoman said the board would consider punishment against Loftus based on how his case is resolved at the State Office of Administrative Hearings, either through mediation or a trial.

The board would have a full range of options, from dismissing the charges to revoking his medical license, she said.

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