A grand jury indicted a New Jersey surgeon, his office manager and the surgeon's Center for Lymphatic Disorders, accusing them of defrauding Medicare, Medicaid and private insurers for $8.5 million in bogus services, according to state legal officials.

Between 2002 and 2007, Dr. Khashayar Salartash is accused of using false billing to collect millions on behalf of the treatment center he owns in Egg Harbor Township. The office manager, Farah Iranipour Houtan, was also listed in the indictment, which charges second-degree conspiracy, three counts of second-degree health care claims fraud and two counts of third-degree Medicaid fraud.

The center's allegedly fraudulent billing included $4.7 million from Medicare, $3.3 million from private carriers and $593,363 from Medicaid, according to information released July 14 by the state criminal-justice division. Most of the instances are said to have involved exaggerated billing of treatment from the doctor when, in fact, the treatment involved only a physical therapist. Also, the doctor and center are accused of billing for treatment periods lasting between a year and three years when typical lymphedema treatment lasts a month. The center was opened to treat patients with lymphedema, which is a blockage of lymph vessels. The center closed in 2006, but had opened four more offices in Atlantic City, Manahawkin, Haddon Heights and Galloway Township.

The case was investigated by the FBI, New Jersey's Medicaid Fraud Control Unit of the Office of Insurance Fraud Prosecutor and by the Office of Inspector General at the U.S. Department of Health and Human Services.

"It's outrageous that a doctor would fraudulently take millions of dollars from programs that pay for medical care for the elderly and those who can't afford health insurance," New Jersey Attorney General Anne Milgram said in a statement.

"When doctors commit fraud, it is particularly disturbing," said Acting Insurance Fraud Prosecutor Riza Dagli in a statement. She said that "the integrity of the health care claims process depends on the trustworthiness of the licensed professionals involved."

(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)