A New York City cardiologist with offices on Fifth Avenue and in New Jersey admits he intentionally misdiagnosed up to 80 percent of his patients with heart problems so he could collect millions in extra Medicare money. 

 Dr. Jose Katz, 68, pleaded guilty to falsifying charts diagnosing patients with angina and other heart ailments so he could prescribe extra tests and treatments when hundreds of patients did not need them.

See original story at NBCNewYork.com

Prosecutors said it was the largest fraud ever executed by a single doctor in New York or New Jersey. 

"After years of prominence in his field, Jose Katz will now be remembered for his record-setting fraud," said U.S. Attorney Paul Fishman.

In court Wednesday he agreed his actions could have caused "serious bodily harm" to his patients. He and his lawyer disagreed when prosecutors said some patients were at risk of death due to his actions.

In all, Katz admitted his scheme took in over $19 million. 

Katz's crimes went on from at least 2004 through 2012. His resume said he is affiliated with NewYork-Presbyterian Hospital, but a spokeswoman said he has not been linked there since 2003.

Fishman said many patients who were exploited went to Katz's clinics, called Cardio-Med Services in Union City, Paterson and West New York.  He also ran clinics called Comprehensive Healthcare in Manhattan and Queens. 

Katz said he performed many so-called EECP procedures based on false diagnoses to overbill Medicare and private insurers like Blue Cross and Aetna.   

In court, Katz told the judge as a doctor he had "done everything he could to help patients."  The judge told him he would have time to speak at sentencing set for July 23. After the court hearing, Katz and his attorney, Blair Zwillman, left the courthouse admitting mistakes were made but insisting Katz always cared for his patients.    

See court document on the case in PDF

Katz faces up to 10 years in prison on the conspiracy to commit health care fraud charges. He also admitted creating a no-show job in his office in order to rip off more than $250,000 in Social Security benefits. 

Katz was born in Cuba but is a U.S. citizen. Prosecutors said he spent $6 million advertising on Spanish-language television and radio to try to lure in patients. 

Fishman said investigators are attempting to contact all the patients affected by the fraud, who can also reach out to the New Jersey FBI or U.S. attorney's offices for additional information. 

Related story at NBCNewYork.com: 4 charged in alleged medical billing scam

This story was originally published on Wed Apr 10, 2013 3:47 PM EDT

Mark Wilson / Getty Images

From left, Sen. Lindsey Graham, R-S.C., Sen. Rand Paul, R-Ky., and Sen. Jim DeMint, R-S.C., Sen. Mike Lee, R-Utah, unveiled a Medicare reform plan in a news conference on Medicare reform on Capitol Hill March 15, 2012.

Updated at 5:23pm ET Running a political risk during an election year, Republicans continue to offer proposals to cut future Medicare outlays.

The latest offering came on Thursday from a quartet of fiscally conservative Republican senators. The group proposed replacing the current open-ended, fee-for-service Medicare with enrollment of seniors in the Federal Employees Health Benefits Plan (FEHBP) which offers an array of privately-run health insurance plans.

Members of the group include Rand Paul of Kentucky, Jim DeMint and Lindsey Graham of South Carolina, and Mike Lee of Utah.

“This will be the new Medicare,” Paul said at a Capitol Hill news conference. “Medicare will be the federal employee health care plan.”

DeMint described the plan as “beginning to privatize” Medicare, an all too familiar description for Democrats who use similar terms to stigmatize GOP Medicare reform plans.

Medicare covers 50 million older and disabled Americans. The program’s spending will nearly double in the next ten years, continuing to grow at a rate faster than the nation’s income, according to the Congressional Budget Office.

Paul said the plan “means-tests the benefits and gradually allows the age of eligibility to go up.” The current Medicare eligibility age is 65; his plan would gradually raise it to 70 by 2034. “There is means-testing in this -- and the reason you have to do that is: we’re spending more on Medicare than is coming in.”

Paul said the proposal would reduce Medicare costs by $1 trillion over ten years, but he acknowledged that adding older Americans to FEHBP would drive up the cost of the plans offered by FEHBP. He said the plan would include a high-risk pool “for really sick people” that get an additional subsidy. Paul added “they also still will have Medicaid,” the federal-state insurance plan for low-income people.

Recommended: Obama pushes back on gas production, prices

Democrats,  DeMint said, “know that a dependent voter is a dependable vote.” The proposal he and the other GOP senators were offering is “basically kryptonite to a Democrat – because it gives people choices, it gives them freedom … .”

Paul thanked Sen. John Kerry, D-Mass., for letting the group “borrow” the idea. Paul said the plan was part of Kerry’s campaign platform in 2004.

In fact, Kerry in 2004 proposed to allow uninsured people, not seniors, to enroll in FEHBP.

“Entitlements are broken,” said Paul. “It’s not Republicans’ fault; it’s not Democrats fault. I tell people, ‘It’s your grandparents’ fault for having too many kids and then your fault for not having enough kids.’ It’s a demographic problem.”

Graham said he hopes to solve the problems with Medicare before the election this year.

“What I would tell the person near retirement is don’t fear change, embrace it, because you’ll have more doctors available to treat you and your family,” Graham said. “Think about not just what happens to you … think about where we’ll be as a nation if something doesn’t change pretty quickly with these big programs.”

The quartet’s proposal follows one offered two weeks ago by Sen. Richard Burr, R- N.C., and Sen. Tom Coburn, R-Okla., which would also raise the Medicare eligibility age (to 67, not 70) and subsidize seniors so they could purchase private insurance plans.

Meanwhile House Budget Committee chairman Paul Ryan, R- Wisc., has altered a plan he offered last year and reached across the aisle to partner with Democratic Sen. Ron Wyden of Oregon. The Ryan-Wyden plans would allow seniors to stay in traditional Medicare or choose a private insurance plan.

Ryan is scheduled to give speeches next week at two conservative think tanks in Washington and is likely to address Medicare.

But Paul said on Thursday that the Ryan-Wyden option wouldn’t save the federal government any money. ”If you give people the inertia of staying where they are versus moving, they may not move,” Paul said.

The Ryan-Wyden plan says that for people who are now age 54 or younger, "we propose to strengthen Medicare by transitioning the current program toward a coverage-support plan with the choice of guaranteed coverage options -- including traditional Medicare -- on a Medicare exchange."

But critics of the Ryan-Wyden plan argue that it would not really preserve traditional Medicare since it would create a marketplace where future retirees would need to purchase coverage of either traditional fee-for-service Medicare or another plan, and it would limit future program growth to the Gross Domestic Product growth rate plus 1 percent.

President Obama, too, acknowledges that Medicare needs to be redesigned and wants some of those getting Medicare to pay more for their coverage.

Recommended: Biden names names; says GOP 'dead wrong' on auto bailout

In his Fiscal Year 2013 budget plan, Obama is calling for a variety of cost increases for people on Medicare, although perhaps it is no coincidence that Obama’s proposal would take effect only in 2017, after he would leave a second term in office.

Under Obama’s plan, in beginning in 2017, the Medicare premiums that higher-income people pay would increase by 15 percent. The higher premiums, co-pays and deductibles that Obama proposes would add up to about $33 billion over ten years.

That amount to only four-tenths of one percent of total Medicare outlays over the next ten years.

Nearly everyone in Washington agrees that the federal government can’t get control of its deficits and ever-increasing debt unless it curbs entitlement spending.

It was President Bill Clinton’s former budget director, Leon Panetta, now defense secretary, who chided the Senate Budget Committee a week ago: “You can’t meet the challenge that you’re facing in this country” by only cutting discretionary spending, the outlays on items like prisons and national parks, which is less than a third of spending.

“If you’re not dealing with the two-thirds that is entitlement spending, if you’re not dealing with revenues, and you keep going back to the same place, frankly you’re not going to make it, and you’re going to hurt this country’s security.”

But when leaders of either party do try to curb Medicare spending, the opposing side carpet-bombs them with TV ads playing on senior citizens’ fears.

In 2011, when Ryan offered his plan to raise the Medicare eligibility age to 67 and to do away with Medicare’s open-ended payments which cover almost all medical procedures, one Democratic group ran an ad showing a man -- presumably Ryan -- pushing a terrified elderly woman in a wheelchair off a cliff.

Democrats and Republicans agree: People with higher incomes must pay more. 

Democrats want upper-income people to pay more in taxes, but don’t want upper-income people to pay more for their Medicare benefits.

Republicans want upper-income people to pay more for their Medicare benefits, but don’t want them to pay more in income taxes.

A House-Senate conference committee is looking to upper-income people as it tries to find the money to offset the cost of a payroll tax cut package, which includes extended unemployment benefits.

A compromise that combines a bit of each (higher income taxes on the rich and higher Medicare premiums) seems unlikely.

For the Democrats, Sen. Bob Casey, D- Pa. has proposed a surtax on the rich to help pay for the payroll tax cut package.

Last year Casey’s proposed 3.25 percent surtax on incomes over $1 million failed to get the 60 votes it needed to advance in the Senate. He has now lowered his threshold, calling for a 1 percent surtax on any income over $1 million, which he said would raise about $76 billion, offsetting almost half the cost of a payroll tax cut package.

“It’s a way to break some of the logjam we’re seeing here” on the conference committee, Casey said.

His surtax would affect roughly 250,000 out of more than 140 million total tax filers.

The bill which the conference committee is working on would keep the Social Security payroll tax at its lower 4.2 percent rate. It would also extend payments to the unemployed for another ten months, and prevent a scheduled 27 percent cut in payments to doctors who treat Medicare patients.

Led by House Ways and Means Committee chairman Rep. Dave Camp of Michigan, Republicans want upper-income people to help pay for the package by paying higher premiums for their Medicare coverage.

Adopting the proposal President Obama made last September to the deficit reduction “super committee,” Republicans want higher premiums to apply to Medicare Part B, which pays for visits to the doctor’s office, and Medicare Part D, which pays for prescription drugs.

Under current law, people on Medicare who have annual incomes over $85,000 (or $170,000 for couples filing jointly) must pay higher premiums.

If you have income of $85,000 or less, your Medicare Part B premium is $99.90 a month; the premium increases as your income goes up; the highest premium is $319.70 a month. The median income for people over 65 is about $25,000.

About 5 percent of Medicare beneficiaries now pay the higher premiums. But under the Obama proposal, which Republicans have adopted, by 2019, 25 percent of Medicare recipients would pay higher premiums.

What’s maybe most significant is why the Democrats now oppose the idea of making upper-income people pay more for Medicare benefits.

One possible reason: they may not want to impose another burden on Medicare recipients, who are mostly over age 65 and who -- one must recall in an election year – have a high likelihood of voting. In the 2008 election, 70 percent of people over 65 voted, compared to only 49 percent of those 18 to 24.

Referring to the part of the package that would prevent that 27 percent cut in Medicare payments to doctors, Senate Finance Committee Chairman Max Baucus said at Tuesday’s meeting of the conference committee, “It doesn’t make much sense to pay doctors more, but (then) to take it out of the hide of beneficiaries.”

Baucus added, “I don’t know if the American people would think it was fair” to ask higher-income people to pay more for Medicare benefits.

Other Democrats on the committee see the GOP proposal as a dire threat to the future of Medicare itself.

“This will end Medicare as we know it,” said Rep. Allyson Schwartz, D- Pa.

Sen. Ben Cardin, D- Md. pointed out that workers who earn more money pay more in Medicare taxes, right up to the last dollar of income they earn. Unlike the Social Security payroll tax, which applies only to the first $110,000 of earned income, the Medicare payroll tax applies to all earned income.

“We ask those who make more money to pay more -- for the same benefits,” Cardin explained. “Medicare benefits are comparable for all seniors, but we ask those who... have higher income to contribute more” by paying higher Medicare taxes while they’re working.

Cardin also noted a Medicare tax increase that Democrats rarely mention: Obama’s 2010 health care overhaul imposes an additional 0.9 percent tax on higher-income people starting next year and another 3.8 percent on tax on their investment income.

So, Cardin argued, if you add all that up, higher-income Americans are already paying enough for their Medicare benefits.

Medicare Part B is voluntary and “the more that we put these types of payment structures in place, the more that people who are well off will choose to not enter the Medicare Part B system,” Cardin said.

“This is a slippery slope,” changing Medicare into a means-tested safety net program, he warned. “I think that it is a dangerous path for us to go down.”

“When higher-income people decide to opt out (of Medicare Part B), rather than paying so much of their Part B premium out of their own pockets, they’ll go elsewhere and buy some private insurance policy,” said Rep. Henry Waxman, D- Calif.

“Those are the healthier, wealthier people. You’ll leave Medicare with the sicker, lower-income people and that means the whole Medicare system will increase in cost,” he said.

But Senate GOP Whip Jon Kyl rejected those arguments and, like Baucus, invoked “fairness” saying it “seems only fair that we ask some of the people at the very high end to be willing to pay a little bit more” for their Medicare benefits.

He said, “I thought we all agreed that high-income beneficiaries who are eligible for medical programs paid for by the taxpayers could afford to make some sacrifices here… in paying a little bit more for what they receive” from Medicare.

“This is not a new idea; this is something the president has proposed,” Kyl said. “I don’t know why all of a sudden people who want to put a surtax on millionaires don’t want them to have their Medicare benefit cuts at all.”