Articles Posted in Health Care Fraud

We are seeing more and more federal criminal prosecutions for alleged medicaid fraud, here in Atlanta, throughout Georgia, and in other cases that take us to other parts of the country.  Whenever federal prosecutors bring up these kinds of charges, they almost always issue a press release.  The local media lap up these press releases like kittens at a bowl of milk.  Because of ethical and constitutional issues, these press releases always include a line to the effect that the indictment, issued along with bells and whistles and a press release, only “contains charges” and the public should remember that the charged persons are “presumed innocent.”  Here is a recent example of one such press release.

A lawyer handling the defense of a person accused of defrauding the medicaid system has a lot of work on his or her hands.  First, the law is complicated.  The facts are usually very complex.  The information is almost always voluminous.  The practice of medicine, providing mental health services, or selling products or drugs to be used in the medical field are all businesses that generate gigantic amounts of information and data.  We are regularly amazed at the volume of material we need to assess when representing our clients in one of these highly sophisticated types of federal criminal cases.

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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.

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.”

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.