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Court: GI Doc On the Hook for $411,000 in Damages to Former Surgical Center

Doctor allegedly went behind his partners' backs when he struck a secret referral deal with their corporate partner.

Published: January 14, 2015

Ronald W. DeMasi, MDSometimes when you play both sides against the middle, you get burned, as a GI doctor who allegedly tried to double-cross his former physician-owners has found out. A bankruptcy court has ordered gastroenterologist Ronald W. DeMasi, MD, to pay his former surgery center more than $400,000 for hiding his financial interest in the ASC corporate partner that was managing the center (although some might call it mismanaging).

By ruling that the doctor must pay $411,000 in damages to his former partners, the bankruptcy court was evidently swayed more by Dr. DeMasi's acts of betrayal than by the fact that he declared bankruptcy last year. Here's a timeline from court records of how it all went down.

Dr. DeMasi and other surgeons built Gulf Coast Endoscopy Center of Venice (Fla.) in 1999. A year later, the center contracted with Surgical Synergies to provide management services, including billing and collections. In 2003, the center commissioned an audit that revealed discrepancies with Surgical Synergies' billings. Dr. DeMasi was put in charge of following up on the audit. However, Dr. DeMasi did not disclose the results of the audit, court records say, and instead reportedly told board members that Surgical Synergies was doing a good job.

Two years after lying to them, Dr. DeMasi allegedly went behind his partners' backs. First he contacted Surgical Synergies with the idea to start a subsidiary that would develop and manage endoscopy centers, court records say. The 2 agreed that Dr. DeMasi would receive money and other financial gains for referring centers to the management company or developing new practices under the subsidiary. That same year, Dr. DeMasi approached several other doctors at Gulf Coast Endoscopy Center to start another medical practice called Gulf Coast Digestive Health.

According to court documents, Dr. DeMasi hid his financial interest in Surgical Synergies from Gulf Coast Endoscopy Center of Venice and encouraged Gulf Coast Digestive Health to contract with Surgical Synergies by hiding any billing issues. Gulf Coast Digestive had problems with Surgical Synergies' performance, but when those issues were discovered, Dr. DeMasi reportedly worked to keep other members from terminating the contract. In one instance, court documents say that Dr. DeMasi threw a metal instrument at a doctor who suggested Gulf Coast Digestive terminate its contract.

Things began to unravel soon after doctors discovered the secret deal between Dr. DeMasi and Surgical Synergies. Gulf Coast Digestive Health claimed it suffered significant damages due to Surgical Synergies' billing discrepancies and sued Dr. DeMasi for fraud. Gulf Coast Endoscopy Center of Venice also sued the doctor. In 2012, records say that Dr. DeMasi was ordered to pay more than $411,000 in damages. Dr. DeMasi argued that because he never successfully referred a client to the subsidiary of Surgical Synergies, he never received compensation from the management company and therefore did not have a financial interest.

In 2014, Dr. DeMasi filed for bankruptcy. Gulf Coast Digestive Health argued that because the damages from the 2012 court case involved fraudulent activity, he was still on the hook for the money. A bankruptcy court agreed this month.

Gulf Coast Digestive's attorney Stuart Levine declined to comment due to pending litigation. Dr. DeMasi's attorney did not return a request for comment, and Surgical Synergies could not be reached for comment.

Kendal Gapinski

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