Anyone reading our website knows that there are “federal fraud” cases, and then there are sub-species of federal fraud.  Health Care Fraud is an especially dangerous and pernicious charge to defend against.  For starters, the wickedly complex Federal Sentencing Guidelines  make the potential sentences for Health Care Fraud even longer than what is suggested for regular run-of-the -mill fraud.  Certain “specific offense characteristics” bump up the scoring mechanism when prosecutors include an allegation that an accused person’s supposedly fraudulent conduct violated one of the Health Care Fraud laws that Congress has enacted over the years.

The accused person and his or her lawyer also need to be keenly aware that there are sub-sets of Health Care Fraud.  For example, there is an illegal “kickback”, which the Government defines as: “the knowing and willful payment of ‘remuneration’ to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients)”.  Anti-kickback cases are weirdly complicated with many people wondering why the Feds are interested in the normal back and forth payments that arise in many sectors of our economy.

Health Care Fraud cases are also  complicated by the fact that many accused individuals are licensed professionals such as medical doctors, nurses, physicians assistants and the like.  Regulatory bodies often work in tandem with federal prosecutors.  The federal criminal defense attorney handling such a matter also needs to be keenly aware of what might be happening in these regulatory proceedings which can result in the loss of the license for the health care professional who is under indictment or investigation.   On rare occasions a wily criminal defense lawyer can use these parallel proceedings to aid in the defense of the federal case, but that is a topic for another post down the road.

Finally, there is the fact that Health Care Fraud cases arise out of, well, Health Care!  Lawyers are not doctors, nurses or medical professionals.  We often need a quick tutorial about the medical issues that our clients are addressing in order to help the accused person defend against allegations that they violated federal criminal laws.  This means that the lawyer needs to be a quick study, needs to ask lots of questions, and needs to fully understand what his or her client was trying to accomplish when the Feds claim that fraud was afoot.

Federal Health Care fraud cases are complicated.  There are more and more of these cases being brought.  Anyone reading this should consult with a specialist if they, their friends or their family member are facing one of these cases.

Many businesses operate in a highly regulated environment.  For example, companies that provide services that are paid by Medicaid/Medicare or an insurance company almost always have to comply with lots of rules and regulations that in the end come out of the United States Department of Health and Human Services (“HHS”).

For a few years I’ve been working with some extremely honorable folks who operate several businesses that provided mental health and other services to poor people.  Sometimes, they even give free housing, transportation and food to the poor.  The payments for mental health services were provided from federal money that went to the State of Georgia.  All this federal money comes with lots of federal regulations that must be complied with.

As many folks may know, I represent lots of companies and individuals who are investigated or prosecuted for health care violations.  It turns out that someone (perhaps a whistleblower) claimed that these honorable people were improperly billing for these mental health services, and this claim resulted in a search warrant at their businesses.  The owners came to me, and I discovered that state and federal authorities had an ongoing criminal investigation.  Over the course of several years, I worked with these folks and finally got the prosecutors to see that my clients never intentionally did anything wrong.  Instead, it was their employees who improperly billed and took most of the money.  Additionally, I worked with the investigators and prosecutors to see if there was a way to fashion an overall civil settlement by which the companies would pay back to the State and HHS the improperly billed claims.

We are almost at the end.  We negotiated an overall civil settlement amount that is large, but one that my clients feel they can pay back.  In return for paying back, we got the criminal case to go away.  It has cost my clients a lot of anguish, time and money, but in the end they get to return to what they do best: helping the poor among us.  I have truly enjoyed representing these honorable people, and am glad to have helped.

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.

Not only is the lawyer’s task complicated by the very nature of these cases, the attorney also needs to figure out whether it makes any sense to fight back against the government’s press release that is only one side of the story.  There are some lawyers who will talk to just about any TV camera or reporter who asks them any question about any subject, mundane or serious. Other lawyers are highly reticent, refusing to talk except when in court or through the filing of legal pleadings.  I do not have a rule, for me each matter is different. Sometimes we do have to fight fire with fire, and talk to the media to remind them of our side of the story.  Other times, it is better to lay back and hold our fire until we are in the place that matters, in the courtroom where we have loads of experience.

Beyond the complexity of the case and the need to figure out if it makes sense to “go public”, medicaid fraud matters are further complicated by the collateral consequences for certain clients.  For example, there are many additional things to keep in mind when we represent a doctor, dentist, or any medical practitioner who has a license.  For example, even if we prevail and beat the criminal charges, the State licensing agency can use the same evidence to  say that our client can no longer practice medicine, dentistry and the like.  Also, there often are parallel civil lawsuits in which the State or Federal government tries to recoup money from our client, even if we win or resolve the criminal charges in the best way possible for our clients.

We are currently working on a number of medicaid fraud matters, both in the pretrial investigative stage and other matters in which the government has already indicted our client.  Each matter is different, but some parts in each case are similar.  The hardest part is to work through the facts, the law, and come up with the best solution for each client and his or her family.  That is why this kind of work is so difficult.

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.

We fought back against each of these allegations with some pretty good evidence of our own. Very importantly, we wanted to show that he really had “done the work.” Our client had paid a lot of money for a “peer review”, in which another board certified radiologist looked at a random sample of the reports in question. We wanted to use this report to enhance the argument that he really “did the work”. The peer reviewer came to the same conclusions as whoever issued the reports, thus furthering our argument.

This is when the famous “Daubert” case came into play. We knew that the prosecutors would likely try to exclude our peer review expert. They were able to convince both the very able U.S. Magistrate Judge and the District Judge that we should not be able to use the peer review. At trial, we therefore were hamstrung a bit in trying to show that our client really “did the work.”

I’ve done lots of appeals over the years. Many times, I’ve had the honor and privilege of participating in spirited oral arguments in the courts of appeals throughout the country. This appeal was one of the best I’ve ever been in. In ruling for us last Friday, that does not end the story. The prosecution has the option of requesting rehearing, or even asking the U.S. Supreme Court to look at the case. But for now, it is gratifying to know that all our hard work paid off.

Regular readers know how I like to give pats on the back to lawyers who don’t give up, who remember to make objections, and who continue fighting on behalf of their clients. That’s what led to this win, looking ahead, seeing that this was a good issue, and persevering. It’s not over yet, but at least we are now moving the doctor’s case in the right direction again.

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.

A few days before sentencing, the doctor paid $2,944,883 in full restitution. The Judge was obviously impressed and remarked that the chiropractor was the first Defendant that the Judge could recall who made such a large restitution payment prior to sentencing.

The very experienced Judge proceeded to discuss the rising costs of incarceration, citing a recent Georgia state commission formed to explore alternatives to prison for nonviolent criminals. The Judge alluded to the fact that the chiropractor would need time to pay off his fine and support his family. The Judge also hinted that if given extra time before sentencing, perhaps the doctor should perform public service. The Judge continued to express concerns over the rising costs of prison and suggested that a continuance would save “the court . . . at least $10,000 by not incarcerating the Defendant during this period.” The Judge, who has been on the bench since the early 1980’s, also noted that he had ordered a similar sentencing continuance for a “budding rock star,” which had yielded positive results. The Judge explained that when given the extra six months, the “budding rock star” made “hundreds of visits to young people” and had a positive impact on the community.

Over the following six months, the doctor made good on the opportunity given to him by the Judge. The Defendant performed 391 hours of community service. He visited various medical, nursing, and chiropractic schools and gave presentations on health care insurance fraud. He also provided 18 days of free chiropractic services at homeless shelters across Atlanta and painted a gym at an elementary school. At the second sentencing hearing, the Judge commended the doctor’s work during his six-month continuance. In light of the full restitution payment, the community service, and the rising costs of incarceration, the Judge sentenced the chiropractor to probation for the “time served” while awaiting his sentence.

The Court of Appeals decided that the sentence was simply too lenient. The opinion goes on for pages railing against the idea that “white collar” criminals somehow get a break by paying full restitution.

This case is highly disappointing. As kids we are taught that a person stealing something should pay back that which was taken. Then, when showing remorse, we are told that the person should say they are sorry, and demonstrate to others the wrongfulness of their conduct. Here, the three judges felt they knew better than the highly experienced Senior District Judge. These judges believed that it’s better to put a productive man in prison and spend tens of thousands of taxpayer dollars, even though the chiropractor paid back every penny. We sincerely hope this case does not show a trend of appellate judges reversing what they perceive to be unduly “lenient” sentences.