S. Michael McColloch PLLC | White Collar Criminal Defense | Dallas, TX | Ruling Underscores Limits on Liability in Health Care Fraud Cases
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  • Ruling Underscores Limits on Liability in Health Care Fraud Cases
    A recent federal appeals court decision demonstrates the boundaries of culpability for health care personnel in federal prosecutions under 18 U.S.C. § 1347, the catch-all health care fraud statute. Federal prosecutors routinely cast a wide net in these cases, attempting to charge as many doctors, managers and support personnel as they think the evidence can possibly support. Part of this is due to old-fashioned prosecutorial zeal, but much of it stems from DOJ’s habit of charging marginal participants in an effort to generate cooperating witnesses.  Every now and then an appellate court will slap the government down for overcharging, finding evidence insufficient and providing defense counsel with solid arguments to influence prosecutors’ charging decisions.
    Dr. Vanja Abreu was employed as the director of a community health center “partial hospitalization” program in Florida which, it turns out, was paying a “patient broker” for referrals of patients not eligible for services, falsifying patient charts to make the patients appear eligible in event of an audit, and billing Medicare for services not provided on behalf of these ineligible patients. Along with the owners and operators of the program Dr. Abreu was indicted as a co-conspirator for over $200 million in fraudulent Medicare billings. 
    Although the government presented plenty of circumstantial evidence of Dr. Abreu’s participation in the activities of the other indicted conspirators, the 11th Circuit scoured the record and found no direct evidence that she was ever told that the patients were ineligible or the patient charts were falsified. The lack of any substantial evidence of her actual knowledge of the illegalities, beyond flimsy inferences, left the case against her wanting. The court held the evidence insufficient to support her conspiracy conviction. 
    This case is a reminder that mere participation and presence in the midst of a health care fraud conspiracy is not sufficient to sustain a conviction. The government must prove actual knowledge and a willful decision to join the conspiracy, not merely conduct that could just as easily constitute unwitting participation in nefarious activities. The 11th Circuit decision can be cited to exonerate a significant number of targets, health care professionals and support personnel who should never be indicted in the first place.