Federal Health Care Fraud Convictions Affirmed and Show How Crazily Complicated These Cases Are

Although I am in Atlanta and tend to handle federal criminal cases here in Georgia and nearby states, I also work on cases throughout the country when asked to do so.  As a result, I also try to keep up with federal criminal matters arising in other “circuits.”  Yesterday a Federal Court of Appeals (the Sixth Circuit) that deals with cases out of Kentucky affirmed some health care fraud convictions for doctors and others who operated labs that tested patient urine samples.  The case is called United States v. Bertram.  18-5002-2018-08-20.  This decision is yet another lesson as to how complicated these cases can be, and how issues can be missed by even the best lawyers and judges.

The Defendants were some small-town doctors and business people who were in an area where the opioid scourge has caused so much pain and agony.  A couple of the doctors operated addiction clinics and needed labs to test patient urine samples for drug use and other information.  They formed their own test lab, but test samples began to back up when the equipment did not operate at first.  The samples were frozen for up to 10 months before being tested.  The lab then sent requests for payment to private insurance companies.  The government said this was health care fraud, because the lab operators failed to disclose that they had waited up to 10 months to test the frozen urine samples, and this constituted a “scheme to defraud.”  The jury rejected most of the prosecutors’ case, but each Defendant was found guilty of some charges related to bills submitted to Anthem Insurance.  The judge imposed what to my eye seemed to be rather modest sentences, ranging between 13-21 months.  Reading the case yields two observations.

First, the sentencing part of the case is exceedingly similar to my recent securities fraud matter where we had the two-day sentencing hearing, whittling down the Guideline range from close to 30 years to point where the judge imposed 10 years on my client.  Federal criminal sentencing proceedings for these white collar criminal matters often involve the same common issues: calculation of “loss,” whether to bump the Defendant’s score up for “sophisticated means”, did the Defendant abuse a “position of trust”, and what was his or her “role in the offense.”  Anyone facing such a case needs an attorney well-versed in these complex sentencing subjects.

Second, even exceedingly talented lawyers miss issues in these highly complex matters.  The decision by the Court of Appeals notes that the trial judge apparently used the wrong part of the Sentencing Guidelines.  Everybody, defense lawyers, the prosecutors, the Probation Officer, and even the trial judge, thought it was OK to use the part of the Guidelines that applies to“Federal Health Care Offenses Involving Government Health Care Programs”.  It was the Court of Appeals that noticed that the entire case involved bills submitted to a private insurance company, and not a Government Health Care Program.  It turns out this likely did not make a difference, but the fact that very talented lawyers all missed this shows how complicated this area of the law truly is.  Reminds me that I need to start from “square one” whenever I get a new federal criminal case to try and make sure I do not miss anything.