Niels Lauersen tends to the gynecological needs of the rich and famous. He has a swank private practice on Park Avenue, a Park Avenue apartment, and a Brooklyn townhouse. Lauersen also dates singer, socialite, and Clinton fundraiser Denise Rich (whose ex, Marc Rich, is the billionaire commodities trader who fled the country to avoid a tax rap in the ’80s).
All of which is to say he’s not the kind of guy you’d expect to see in a courtroom full of defendants in prison garb. Yet that’s just where the sandy-haired physician was a few weeks back, looking incongruous while being arraigned on 17 counts of mail fraud, health-care fraud, witness tampering, and other crimes. For years, federal investigators allege, the high-profile doc has been engaged in a sort of Robin Hood scheme—providing women with infertility treatments their insurance companies usually don’t pay for, then fudging paperwork in order to help his patients get reimbursed. According to the feds, Lauersen ripped off the HMOs and other insurers for upward of $1.5 million this way.
The government cites only a handful of patients in the charges. But it claims Lauersen—along, in some cases, with his anesthesiologist, Magda Binion—falsely billed eight insurance companies, including Empire, Oxford, GHI, and Travelers, for hundreds of surgeries over a 10-year period. If found guilty, Lauersen and Binion could each face up to 10 years in prison. Both have pled not guilty. Lauersen is being represented by a fittingly prominent attorney: Randy Mastro, who was until recently deputy mayor to Rudy Giuliani.
Lauersen’s arraignment, which happened to fall smack in the middle of national infertility awareness week, also comes as the first test-tube baby reaches 20. The field of assisted reproduction is booming; there are now numerous variations on in vitro fertilization, in which sperm and egg (either of which may be donated) first join in the lab before being implanted in the uterus. With more than 60,000 such procedures done each year at about $10,000 a pop, the infertility industry is awash in money, and the offices of experts, such as Lauersen, are filled with hopeful, sometimes desperate, women.
In a recent press release, Mastro issued a poignant plug for his client, calling Lauersen “a champion for so many women who had lost hope of conceiving a child. He not only gave them hope. He helped them achieve the miracle of birth, and for that he is being targeted by insurance companies.”
Saintly mission aside, such an investigation of a fertility specialist should come as no surprise to anyone familiar with the industry. Other types of doctors go to bat for their patients all the time, of course. There are the liberally applied mental-health diagnoses, for instance, and perhaps the occasional shifting of dates on bills to coincide with when a policy kicks in. But, with the sur geries at issue typically costing $7500, the stakes in the baby-making field are arguably higher than usual.
Only about one in four HMOs or traditional health insurers cover any type of infertility treatment. (The uninsured, of course, have virtually no hope of affording infertility treatments.) And, while a recent study estimates that covering all fertility treatments would add only $1.71 per person per month to the cost of a typical health insurance policy, whatever coverage plans do offer is often limited.
Fertility specialists are sometimes forced to work around such restrictions. Often insurers will pay for some fertility treatments but not others. “They’ll say, ‘If it’s a tubal blockage, we’ll pay for the surgery,”‘ according to Sean Tipton, spokesperson for the American Society for Reproductive Medicine. As a result, says Tipton, many fertility doctors end up doing the reimbursable procedure “even though what might be more appropriate—and less expensive—might be to do IVF,” which is less likely to be covered.
The beneficiaries are unlikely to object to these practices. Some infertility patients see paperwork maneuverings as inevitable— and justifiable—given the spotty insurance coverage for their problems.
Lauersen’s case “shows us the desperate need for coverage of infertility services,” says Pam Madsen, executive director of the New York chapter of Resolve, an infertility advocacy group. “Those poor people were just trying to have a family. How would people feel if doctors were forced to bill heart disease as indigestion?”
Lauersen says through his lawyer that a mere 10 percent of his patients see him for infertility treatment. But some insurance companies are now clamping down on all of his patients. According to Mastro, the doctor says both GHI and Empire Blue Cross Blue Shield are refusing to pay all claims involving his office. And Empire, which conducted its own investigation that helped lead to the current charges, has been refusing to pay Lauersen’s office for any procedures at all for a number of years.
One of those bills is for surgery Lauersen performed on Wendy Canfield almost three years ago. Canfield, a greeting-card artist and writer who was 27 at the time, sought out Lauersen in 1993 after coming across a book he had written on endometriosis, a disease in which tissue that usually lines the uterus ends up in other parts of the body, causing pain and fatigue. (Lauersen has penned more than half a dozen books about women’s health, only one of which focuses specifically on fertility problems.)
After several years in which Lauersen monitored her condition, Canfield’s symptoms worsened to the point that she “couldn’t even go over a pothole in a taxi without tears,” as she puts it. In February of ’96, Lauersen used lasers to remove all the painful growths he could find inside her—an operation that could also be done to increase the chances of getting pregnant if someone were trying to have a baby.
The operation was a success, as treatments for endometriosis go. (“Now my cramps don’t prevent me from doing what I need to do,” says Canfield.) But Canfield’s HMO, Empire Blue Cross and Blue Shield, refused to pay her $7620 claim for the surgery, sending her a form letter that read: “Based on the information provided to us, we find no medical necessity for this service.”
When recently contacted about Canfield’s case, an Empire spokesperson added, “The provider in this case was just indicted by a federal grand jury for committing health-care fraud. We believe the indictment speaks for itself.” But Canfield, who says she is on the pill and doesn’t want children for another few years if at all, insists that her surgery was absolutely necessary. To prove it, she repeatedly sent Empire voluminous evidence, including letters from two doctors other than Lauersen confirming the surgical diagnosis of her disease and a video documenting the growths inside her abdomen. Nevertheless, she has been unable to get the company to pay her bill.
According to the Endometriosis Association’s Mary Lou Balweg, Canfield is not alone in her predicament. “Whether or not women are pursuing fertility treatment, the insurance companies often say [endometriosis treatment] is just fertility treatment,” says Balweg.
And the gray area extends beyond endometriosis into a number of conditions. That’s because in the body—if not in the insurance policy handbook—gynecological health has everything to do with reproduction. So, like surgery for endometriosis, removing uterine fibroids could be done to improve a women’s fertility or for pain relief. The same could be said for removing adhesions left over from pelvic infections.
Even what might be considered run-of-the-mill gynecological care, such as treatment of a sexually transmitted disease or monitoring of an ovarian cyst, has direct implications for fertility down the road. If a patient happens to be trying to get pregnant when she seeks care for these kinds of problems, then the billing questions can get even murkier.
From Lauersen’s point of view, insurance companies have unfairly capitalized on this ambiguity. In a letter to Canfield this past April, the doctor wrote that “Blue Cross Blue Shield is attempting to deny payment for all procedures and services performed by this office, claiming that they are all fertility-related and thus not covered….Has anyone seen The Rainmaker, which features a very similar insurance scheme?”
With reference to the recent movie based on a John Grisham novel, Lauersen suggests insurers may be attending to the bottom line before health. But, of course, Lauersen’s not the only one suspecting treachery. The prosecutor has listed witness tampering among the other charges, accusing the doctor of urging patients to lie on his behalf in front of a grand jury. All those claims and counter claims are scheduled to be hammered out in a trial this May. Meanwhile, Lauersen’s office is open for business.