No abuse of discretion pill mill trial procedure, sentencing vacated and remanded

The trial court did not abuse its discretion when it admitted expert testimony deemed admissible under Daubert, a federal appellate court has ruled. The testifying physician relied upon several sources that are generally accepted by the medical community when he reviewed the prescribing physician’s patient files, and he applied his methodology reliably. The court also did not err when it gave the pattern jury instructions on deliberate ignorance without tailoring the instruction to the facts of the case, nor when it refused to give the physician’s proposed jury instructions. However, the trial court did err when it applied the firearms increase in the course of sentencing the physician (U.S. v. Roland, June 14, 2018, per curiam).

Pill mill operations

In August 2014, an Atlanta-area physician was charged in a 22-count indictment with conspiracy to dispense controlled substances and related violations. All of the alleged activities arose from his and his co-conspirators’ participation in a “pill mill” scheme involving several pain management clinics in the greater Atlanta area. A jury convicted the physician on one count of conspiracy to distribute controlled substances and seven counts of unlawful distribution of controlled substances, in violation of 21 U.S.C. §841. The district court sentenced him to 130 months of imprisonment. On appeal, he challenged his convictions and his sentence.

Expert testimony

The government’s expert witness described the standards set forth in the Federation of State Medical Boards’ model policy for the use of controlled substances to treat pain (FSMB), and he also relied upon several other sources that are generally accepted by the medical community when he reviewed the physician’s patient files. The expert witness summarized each of the guidelines in order to analyze the physician’s prescribing practices, and he then individually compared 96 patients’ files to this analysis, pointing out instances where the physician failed to adhere to the guidelines’ standards. The appellate court found that by commenting on and making conclusions about the physician’s care for each patient based on the review criteria, the expert witness applied his methodology reliably and did so without relying exclusively on his own experience as a prescribing physician. Accordingly, they found that his expert testimony met the required standards, and that the expert testimony was properly admitted.

“Deliberate ignorance” jury instruction

The government had requested that the pattern jury instruction on deliberate ignorance be modified by adding a sentence that “in this example, you would treat the defendant as having knowledge that the package contained a controlled substance.” The physician requested that the district court omit the deliberate ignorance instruction entirely, arguing that the instruction did not make sense based on the theories presented at trial: his theory was that he was deceived by a co-conspirator and did not know that he was working at pill mills, while the government’s theory was that the physician possessed actual knowledge that the clinics were pill mills. Therefore, neither party had raised an argument as to deliberate ignorance. The district court denied both parties’ requests and gave the pattern deliberate ignorance instruction. The appellate court ruled that the trial court did not err in giving the deliberate ignorance jury instruction based on the fact that the evidence presented at trial warranted it because the physician had advised a co-conspirator to lie to the Georgia Composite Medical Board, and because he had explained to his patients that he needed to write the prescriptions in a certain way in order to avoid criminal liability.

Firearms increase at sentencing

The district court cited two reasons for the firearm increase: (1) the co-conspirator’s security guard possessed a firearm while monitoring the parking lots at the clinics; and (2) several firearms were found in the physician’s bedroom at his own clinic. However, the appellate court found that the district court erred in applying §2D1.1(b)(1) of the U.S. Sentencing Guidelines Manual, a firearm increase, for two reasons. First, the evidence showed that the co-conspirator alone hired the security guard, and the government presented no evidence that the physician ever interacted with the guard or knew he had a firearm; and second, because the physician was a licensed firearm instructor and his possession of so many firearms was simply a reflection of his hobby.

For the foregoing reasons, the physician’s convictions were upheld, but his sentence was vacated and the matter remanded for resentencing.

Kusserow on Compliance: Appealing exclusions–practical advice

Attorneys and consultants frequently have sanctioned clients desperately wanting to appeal and overturn the HHS Office of Inspector General (OIG) decision on exclusion, adding them to the List of Excluded Individuals and Entities (LEIE). The desperation is driven by the fact that exclusion is tantamount to putting them out of business. Few health care providers of services and products can function without access to federal health care programs and trying to continue servicing in that area after exclusion represents further violation of law with increased penalties.

Tom Herrmann, J.D., served over 20 years in the Office of Counsel to the Inspector General and as Appellate Judge for the Medicare Appeals Counsel and is frequently engaged to assist in Medicare appeals. He explained that there is, indeed, a process for appeal on exclusion to an HHS Administrative Law Judge (“ALJ”), the HHS Departmental Appeals Board (“DAB”), and ultimately the federal courts.  However, he warns that trying to appeal exclusions imposed by the OIG is not generally advisable, in that they are rarely overturned.  This is because most exclusion actions, both mandatory and discretionary, are derivative of a prior official action, whether it is court conviction or licensure board revocation.  Upon appeal, the underlying predicate action for exclusion may not be challenged through the established administrative and judicial review process.  The governing regulations provide further that an ALJ may not “review the exercise of discretion by the OIG to exclude an individual or entity under section 1128(b) of the Act, or determine the scope or effect of the exclusion.”   Moreover, the ALJ is prohibited from setting “a period of exclusion at zero, or reduce[ing] a period of exclusion to zero, in any case where the ALJ finds that an individual or entity committed an act described in section 1128(b) of the Act.”

Furthermore, an excluded party can affect entities with who affiliated. Should a provider permit an excluded party to be involved in services, it will create a liability to that organization.  As a condition of participation in Medicare/Medicaid, it is the affirmative duty and responsibility of the organization to ensure that any provider of services or products that is included in claims submitted for payment to those programs are licensed, qualified and NOT excluded.  To engage excluded parties places in jeopardy the entity’s status as a provider.  Furthermore, it is the OIG’s position that all claims submitted that include anything from a sanctioned provided may be considered false and potentially fraudulent.  Providers should take steps to avoid being poisoned by excluded parties.  Sanction screening can be a challenge because of multiple exclusion databases and variations of names and data.

Practical tips

Organizations should consider the following:

  • The fact that most exclusions arise from court or licensing agency actions underscores the importance of sanction screening and conducting background investigations prior to engaging employees, contractors, and vendors, to ensure they have not been subject to adverse actions by these authorities.
  • Screen parties before engaging them and thereafter periodically (e.g. monthly) against the LEIE or relevant State sanction lists.
  • Ensure data used in screening is accurate and up to date. Frequently, sanctioned parties disguise their exclusion with a name change (e.g. spouse surname), variations on name (particularly significant in the case of names that are transliterated).
  • Include on any application for employment or for medical privilege a statement that they are not under investigation and have not been subject of adverse action by any duly authorized enforcement agency.
  • Check the enrollment and exclusion status of physicians and other non-physician practitioners that routinely order or prescribe, as any services ordered or prescribed by an excluded health care practitioner will not be eligible for program payments.
  • If a party is verified to be on an exclusion list, take immediate action to terminate the party; determine the monetary exposure of the services involving that party that was billed to Federal health care programs; and disclose the findings to the OIG.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.

Recipients of cost-sharing reductions seek to intervene in House v. Burwell

Two recipients of cost-sharing reductions under section 1402 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), concerned that the House Republicans might alter their position after the inauguration of President-elect Donald Trump (R), sought permission to intervene in the pending appeal in House of Representatives v. Burwell.

House v. Burwell

The Department of Treasury has been reimbursing insurers for their payment of reductions under section 1402 from the permanent appropriation in the Internal Revenue Code (31 U.S.C. §1324). The U.S. House of Representatives filed suit against the Secretaries of HHS and the Treasury claiming that the payments are not authorized by section 1324. The district court entered an injunction barring the payments (see Court sides with House Republicans, finds no appropriation for cost-sharing reductions, Health Law Daily, May 18, 2016) and the Secretaries appealed. On December 5, 2016, the D.C. Circuit granted the House’s motion to hold the appeal in abeyance until February 21, 2017 (see Court puts cost-sharing appeal on hold, awaits possible Trump policy, Health Law Daily, December 7, 2016).

Possible about-face

According to the movants, their interests were aligned with those of the Executive Branch, which advocated for a construction of section 1324 that permits the continued payment of cost-sharing reductions to insurers. However, statements in the House’s motion suggest that it could change position after Trump’s inauguration and enter into an agreement to dismiss the appeal or otherwise agree that the injunction should take effect—for example, that the House and the incoming Administration are “discussing possible options for resolution” of the appeal other than to “continue prosecuting” it. To defend their interest in continued payment of the cost-sharing reimbursement, the recipients asked to intervene in the case.

Potential for harm

The motion noted that if cost-sharing reimbursement payments stop, recipients of cost-sharing reductions who purchased insurance policies for 2017 will likely face early termination of those policies because the government will allow insurers to leave the exchanges. Even if the insurer remained in the market until the end of 2017 without government reimbursement for cost-sharing reductions, it would “surely exit the marketplace at the end of the plan year in order to shed any obligation to provide cost-sharing reductions.” All of this, say the movants, would drastically increase their costs for insurance.