Blood and Money


Over 1 million division

Submitted by

Wyatt Buchanan
Investigative Editor
The Arizona Republic /


Blood and Money
Judges’ login and password information: Login: Password: bawE42Ya Modern Vascular, a Phoenix area chain of medical clinics focused on clearing arterial blockages in the lower leg, took advantage of a loophole in federal anti-kickback legislation to expand rapidly across the country. But together with its star doctor – Scott Brannan – the profit-driven chain lost sight of the Hippocratic oath and left a trail of maimed and dead patients in its wake. Published in The Arizona Republic, “Blood and Money” revealed that Modern Vascular solicited investments from podiatrists and other referring doctors and paid them dividends. It collected six-figure rebates from a device manufacturer, strategized on choosing a Medicare billing code to pump up revenues, and — at least at one clinic — pressed for half of the patients who came for a consultation to get an expensive procedure. The investigation was later quoted in a civil complaint filed by the Department of Justice against Modern Vascular, which largely corroborated reporter Andrew Ford’s findings: “As Modern Vascular Corporate’s Chief Medical Officer Steve Berkowitz told a reporter for the Arizona Republic, ‘If you run a pizza joint and you’re not selling enough pizzas, you’re not going to stay in business.’” After Ford’s investigation was published, Modern Vascular shuttered more than two thirds of its clinics. Where there used to be 17 advertised on its website, there are now only five. And in May, Modern Vascular’s parent company was forced to seek bankruptcy protection. The reason: Medicare payments made up a large portion of the company’s revenue. An email circulated by the company’s new chief executive, Patrick F. Santore Jr., last month said that Medicare was “presently suspending all payments pending the outcome of the DOJ investigation.” Blood and Money started with Ford insisting a bio about his employment at The Arizona Republic include a call for story ideas. Ford got a tip that plunged him into Brannan’s disturbing past. Raised in a trailer park in Cottonwood, Arizona, Brannan was arrested for pistol whipping and nearly killing a man he suspected was with his girlfriend. He was later sent to prison for his role in a marijuana smuggling ring that moved hundreds of pounds of pot. But Brannan managed to round up enough powerful political and legal backers to get his sentence commuted by the governor. He then went on to get a medical degree from a Central American university that ceased to exist the day he graduated. From there, Ford picked up on a trail of death and destruction from documents filed in state and federal courthouses. Brannan was sued three times for allegedly harming patients. In a fourth incident where a patient died, he headed off a malpractice claim with a $10,000 under-the-table payment. Brannan was once fired for having too many patient complications and for hostility in the workplace. His divorce case is littered with claims of steroid-induced rage that caused him to punch holes in a wall, kick and shatter a mirrored bathroom drawer, bang a child’s tennis racquet so hard it disintegrated, tear the playroom door from its hinges and slam steel gates until they broke. The state medical board recently voted to censure Brannan, but he's free to keep practicing. His corporate attorney told him not to talk to a reporter, but Ford interviewed him for more than 16 hours. “I'm coloring way outside the lines," Brannan said. Brannan found a perfect partner in his employer, Yury Gampel. A chiropractor by trade, Gampel had faced an allegation of fraud and made investments in a condo tower notorious for money laundering. In Brannan, he saw a way to make millions off a new surgery that opened up clogged arteries in the lower leg. To funnel patients into the business, Gampel deployed a scheme to give referring podiatrists a share of the profits. Kickbacks in the medical industry are illegal. So Modern Vascular tried to get around federal regulations with a business plan to engage referring podiatrists as investors. Ford proved this arrangement was dodgy by getting doctors – both on and off the record – to explain how the system worked. His reporting was then backed up by a lawsuit joined by the Department of Justice that was unsealed around the same time. By diving into Medicare data, Ford also was able to show that Modern Vascular doctors charged more per patient than their peers across the U.S — pointing to the fact that patients were directed to undergo expensive, invasive surgeries. Ford’s reporting proved that Modern Vascular patients were getting surgeries they did not need, and at least two patients who Ford interviewed – Victoria Garcia and Mike Bonebrake – lost their legs as a result. In a follow up story, Ford showed how the state of Arizona shields the documented problems of doctors like Scott Brannan from the public. Under state law the Arizona Medical Board is not permitted to post online advisory letters admonishing doctors for mistakes that include: removing a patient’s ovaries without consent, inadequate removal of a brain tumor, operating on the wrong knee, failing to treat a patient exposed to gonorrhea, recommending an angiogram for a patient who didn’t need one, trying to prescribe drugs for euthanasia, failing to take time to check instruments before a circumcision, failing to follow standards for sterilization, failing to promptly report a DUI, being impaired while on-call, and showing up to work under the influence of alcohol. Those misdeeds needed to be made public so patients can decide whether they want to subject themselves to doctors like Scott Brannan. It is because of Ford’s reporting and because the initial story was told in narrative format that we believe Blood and Money merits consideration for this year’s EPPY Award.
  • Best business/finance blog (1 million or more unique visitors)
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Andrew Ford – The Arizona Republic