This document presents a method to improve the detection of microaneurysms (MA) and hemorrhages (HMA) in retinal images affected by exudates using image processing techniques. The semi-automated hessian-based candidate selection algorithm often produces false negatives when detecting lesions near exudates. The proposed false removal algorithm applies neighborhood thresholding to eliminate falsely detected lesions, improving the true positive rate from 0.28 to over 0.90. Simulation results on retinal images demonstrate the proposed method is effective at removing errors caused by exudates and produces more accurate detection of diabetic retinopathy lesions.