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.

$55M fraud scheme earns 84 months in prison

Involvement in a $55 million health fraud scheme earned a medical clinic owner 84 months in prison. She pleaded guilty in October 2015 to using her two Brooklyn, New York-based clinics, Prime Care on the Bay LLC and Bensonhurst Mega Medical Care PC to submit false and fraudulent claims to Medicare and Medicaid.

Scheme

According to the guilty plea, the owner and various co-conspirators paid kickbacks to induce patients to come to the clinics. She then submitted false claims for services induced by these kickbacks or provided by unlicensed staff. She also wrote checks from the clinics’ accounts to third-party companies that were ostensibly vendors, but were actually not providing services. These payments were used to generate cash for the kickbacks. The owner was ordered to forfeit over $29 million.

Several other co-conspirators have pleaded guilty to their part in the scheme. These include the former medical directors of both clinics, six therapists, three drivers, a former patient who received kickbacks, and the owner of several of the vendor companies used to launder funds.

Fraud perpetrators receive lengthy prison sentences for false claims, kickbacks

Two health care fraud scheme perpetrators in separate cases successfully prosecuted by the Department of Justice (DOJ) have been sentenced for their crimes. A physician who accepted kickbacks and committed tax fraud received a sentence of seven years in prison. A Detroit medical biller received a sentence of 50 months in prison for her role in billing $7.3 million in fraudulent claims to Medicare and Medicaid.

Physician

A Pennsylvania physician was sentenced to 84 months in prison with three years’ supervised release, 60 months of which run concurrently with a sentence imposed by a Florida district court. The DOJ presented information to the court showing that the physician, who practiced anesthesiology and pain management, owned and operated pain management clinics. The physician conspired to receive kickbacks from a drug testing lab in exchange for referring patients to the lab, totaling over $2.3 million. Medicare and Medicaid paid the lab over $4.5 million based on the physician’s referrals. The physician also failed to remit employment taxes for a corporation of which he was a 100-percent shareholder.

Medical biller

At trial, the DOJ showed that the medical biller submitted fraudulent bills on behalf of a physician for services that she knew could not have been rendered or were not rendered as billed as part of a $7.3 million fraud scheme. She received 6 percent of the total billings received from Medicare. She was sentenced to 50 months in prison with one year of supervised release and ordered to pay restitution of $3.2 million jointly and severally with co-defendants.