Federal Criminal Lawyer BlogObservations On Notable Court Decisions, News And Developments Affecting Federal Criminal Practice

Articles Posted in Health Care Fraud

One of the white collar federal criminal cases me and my partner Carl Lietz have handled here in Atlanta involved a very successful local radiologist. The doctor came to see us after being represented by some other very accomplished attorneys. We took on his case, fought very hard, yet lost the trial in the summer of 2011. The doctor went to prison, but we kept fighting by asking the Court of Appeals to reverse his convictions. This past Friday morning, our efforts paid off, in that the Court of Appeals reversed each and every one of the 35 charges against the doctor. Here is a short version of the story, which should be a lesson for all lawyers and clients on how important it is to make long-range plans while in the middle of a hard-fought trial process.

The government’s basic allegation was that our client submitted tens of thousands of radiology “reports”, without himself or any other doctor actually looking at the x-ray or other image that was the subject of the report. Some staff members said it looked like he was doing that. Furthermore, the computer system logs only showed him accessing the associated images about 5000 times out or the 72,000 reports issued over his signature. The government’s case was made even better when they demonstrated that some reports were issued while he was on vacation or even on international airline flights.
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A decision from an Atlanta case that was issued last Friday once again demonstrates that sentencing hearings in federal criminal cases are amazingly complex, and can lead to surprises. In the case from last week, US v. Kuhlman, the Sentencing Guidelines called for a range of 57-71 months in custody. Prosecutors asked for 36 months. The Defendant paid almost $3 million in full restitution. The Judge continue the case for 6 more months, during which time the Defendant performed almost 400 hours of community service. At the next sentencing hearing, the Judge decided it made no sense to put the Defendant in prison, so he imposed a “time served” sentence. The prosecutors appealed, and the Court of Appeals agreed with them, reversing the probationary sentence and remanding for another sentencing hearing.

The Defendant was a local Atlanta area chiropractor who owned and operated a series of clinics. Beginning in January 2005, he began a five-year scheme, falsely billing health insurance companies for services he knew were not rendered to his patients. The Defendant was charged in a criminal information with one count of health care fraud in violation of 18 U.S.C. §§ 1347 and 2. He pleaded guilty pursuant to a plea agreement. At the plea hearing, the chiropractor admitted that he did not steal out of need-he was not in financial trouble and he did not have creditors breathing down his neck asking for money. Instead, he conceded that he simply pushed the envelope of billing practices.
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In a federal white collar criminal case originating out of the Northern District of Florida (Pensacola Division), the Eleventh Circuit recently affirmed life sentences for a pain management physician convicted of various federal offenses. Among other things, the federal indictment against Dr. David Webb alleged that he unlawfully dispensed controlled substances in violation of federal law (21 U.S.C. § 841), and engaged in health care fraud in violation of § 1347 by issuing prescriptions that were not medically necessary. In connection with both the unlawful dispensing charge, as well as the health care fraud charge, the indictment alleged that Dr. Webb’s prescriptions resulted in the death of three of his patients.

At trial, both the Government and Dr. Webb presented expert testimony concerning the legitimacy of the controlled substance prescriptions at issue. According to the Government’s expert, Dr. Webb: (1) gave inadequate initial evaluations, including failing to obtain prior medical records and sub-standard physical exams; and (2) failed to refer patients to specialists to help manage their pain. In addition, the Government’s expert also testified that Dr. Webb also ignored signs of drug dependency in his patients and continued to prescribe drugs even when patients were “out of control with their self-taking of the medicine.” Accordingly, based on these and other factors, the Government’s expert opined that Dr. Webb’s prescribing practices were “dangerous, absolutely incredible,” and “clearly inconsistent with the usual course of medical practice and for other than legitimate medical purposes.” At the conclusion of the trial, the jury returned guilty verdicts on all counts but one.

On appeal, Dr. Webb raised a number of arguments, seeking to vacate his three life sentences on the resulting in death counts, as well as the other counts for which he stood convicted. Most notably, Dr. Webb argued that the trial court erred in the instructions that it provided to the jury on the three death related counts.

In essence, Dr. Webb argued that the district court should have provided an instruction that would have required the jury to find that Dr. Webb’s conduct proximately caused the deaths or, at a minimum, that the deaths were reasonably forseeable to Dr. Webb. The Eleventh Circuit, however, disagreed.

With respect to the § 841 charges, the court held that § 841’s enhanced penalty requires only proof that the death resulted from the victim’s use of a controlled substance dispensed by the defendant. Likewise, with respect to the death charge pertaining to the health care fraud count, the Eleventh Circuit reached a similar conclusion; according to the Eleventh Circuit, the results in death language in each statute requires nothing more than a causal connection factually. In other words, under both statutes, the Government is not required to prove proximate cause or reasonable forseeability.

Although it may not help Dr. Webb, at least one judge on the three judge panel disagreed with the court’s decision concerning the resulting in death language in the federal health care fraud statute. As the dissenting judge recognized, the majority’s decision on this issue directly conflicts with the Sixth Circuit’s decision in United States v. Martinez. According to the Sixth Circuit, “proximate cause is the appropriate standard to apply in determining whether a health care fraud violation ‘results in death.'”

In a previous post, we have discussed how federal prosecutors in the Atlanta area are ramping up investigations and prosecutions involving physicians that practice in the area of pain management. And as lawyers that have handled federal cases involving similar allegations before, we were disappointed by the Eleventh Circuit’s decision to reject the Sixth Circuit’s analysis in Martinez. Because of the conflicting decisions between the Sixth and Eleventh Circuits that we now have on the issue, however, we are hoping that the Supreme Court takes Dr. Webb’s case (or a similar one) to resolve this Circuit conflict.

The Eleventh Circuit’s opinion in Webb can be found here.

Earlier this year, the United States Attorney’s Office for the Northern District of Georgia announced that federal prosecutors and federal agents are ramping up criminal investigations and prosecutions of so-called “pill-mills” in metro Atlanta. The statement (which was reported in the Atlanta Journal Constitution) was made during a “summit” on prescription drug abuse held here in Atlanta back in March.

Since that “summit”, federal prosecutors in Atlanta have secured indictments against doctors and others, claiming that these individuals have violated federal controlled substance laws. Indeed, as recently as last month, federal prosecutors indicted doctors, managers, and owners of “Atlanta Medical Group”, charging these individuals with a number of federal offenses. According to the press release issued in connection with the federal indictment, these individuals operated a “pill-mill”, illegally distributing oxycodone in violation of federal law.

There is no doubt that prescription drug abuse is a serious problem that needs to be addressed. However, it is equally true that chronic pain is also a serious problem in the United States. Indeed, just last week, the New York Times published an article discussing a sweeping review on this issue that was recently released by the Institute of Medicine – the medical branch of the National Academy of Sciences. According to that review, it is “estimated that chronic pain afflicts 116 million Americans, far more than previously believed.” The article goes on to describe that “[t]he toll documented in the report is staggering[,]” leading the chief of pain management at the Stanford School of Medicine (Dr. Sean Mackey) to conclude that number of people suffering from chronic pain “is more than diabetes, heart disease and cancer combined.”

The article goes on to note that “[f]or patients, acknowledgment of the problem from the prestigious Institute of Medicine is a seminal event. Chronic pain often goes untreated because most doctors haven’t been trained to understand it. And it is isolating: Family members and friends may lose patience with the constant complaints of pain sufferers. Doctors tend to throw up their hands, referring patients for psychotherapy or dismissing them as drug seekers trying to get opioids.”

As I mentioned in an earlier post, we have represented a number of doctors in alleged over-prescribing cases, and in those cases, we learned a lot about this unique area of the law. Typically, the federal government prosecutes doctors under the same federal statute that it uses to prosecute cocaine dealers and other alleged drug offenders. In federal cases against doctors, however, the government has to prove that the prescriptions at issue were written “outside the usual course of professional practice and without legitimate medical purpose.” Not surprisingly, the resolution of this important issue often depends upon expert testimony and the experts that the Government uses, quite often, take a very conservative view of what legitimate pain management physicians should be permitted to prescribe. That view, however, is not the only view. As the New York Times article quoted above recognized, the “proper use of the drugs early in a pain cycle can resolve pain problems sooner, and . . . opioids are also particularly useful for pain management near the end of life.”

We will continue to follow developments in this interesting area of federal law. For those of you that may be interested, the full New York Times article can be found here.

Last week the Eleventh Circuit Court of Appeals issued its decision in United States v. Mateos, a Medicare fraud case in which the Court held that exclusion of an exculpatory videotape was harmless error. This case is an important reminder to all trial lawyers to remain as well-versed as possible in the law of evidence to best represent our clients.

The defendants were employees of a clinic that purported to treat HIV patients. The clinic’s two doctors saw 70 patients per week, each of which was paid to complain about bleeding disorders. Every patient received either saline or a diluted dose of an expensive and medically unnecessary drug, and then the clinic billed Medicare for full treatments. The clinic received more than $8 million from Medicare during the five months that it was open.

Doctor Alvarez’s defense at trial was that she had not known about the fraud. She tried to introduce a video in which a member of the conspiracy assured her that the clinic was not involved in fraud to show that she had not been aware, but the video was excluded as inadmissible hearsay. The Eleventh Circuit held that the video was not hearsay because it was offered for a purpose other than the truth of the matter asserted. However, the Court held that the error was harmless because the defense had elicited the exculpatory content of the video through testimony.

The Court also upheld an upward departure in sentencing, noting that, under the new healthcare laws, the sentence would have been within the guidelines range had the fraud been committed today. Because sentences within the guidelines are presumptively reasonable and because the sentencing judge named numerous reasons for its upward departure, the Court held that a 30-year sentence was not an abuse of discretion, despite sentencing disparities.

The full opinion is available here.