Justia Professional Malpractice & Ethics Opinion Summaries

Over seven years, Dr. Greenspan referred more than 100,000 blood tests to Biodiagnostic Laboratory, which made more than $3 million off these tests. In exchange, the Lab gave Greenspan and his associates more than $200,000 in cash, gifts, and other benefits. A jury convicted Greenspan of accepting kickbacks, 42 U.S.C. 1320a-7(b)(1)(A); using interstate facilities with the intent to commit commercial bribery, 18 U.S.C. 1952(a)(1), (3); honest-services wire fraud, 18 U.S.C. 1343, 1346; and conspiracy to do all of those things. The Third Circuit affirmed, characterizing the evidence of his guilt as overwhelming. The district court erred in instructing the jury that Greenspan had to “demonstrate” the prerequisites for an advice-of-counsel defense; in excluding as hearsay some of his testimony about that legal advice; in asking only Greenspan’s counsel, not Greenspan personally, whether he wished to speak at sentencing; and in limiting the scope of the defense to five particular agreements rather than all eight, but all of those errors were harmless. The court properly excluded evidence that the blood tests were medically necessary. That evidence was only marginally relevant and risked misleading the jury. View "United States v. Greenspan" on Justia Law

Ace, a licensed physician, and Lesa Chaney owned and operated Ace Clinique in Hazard, Kentucky. An anonymous caller told the Kentucky Cabinet for Health and Family Services that Ace pre-signed prescriptions. An investigation revealed that Ace was absent on the day that several prescriptions signed by Ace and dated that day were filled. Clinique employees admitted to using and showed agents pre-signed prescription blanks. Agents obtained warrants to search Clinique and the Chaneys’ home and airplane hangar for evidence of violations of 21 U.S.C. 841(a)(1), knowing or intentional distribution of controlled substances, and 18 U.S.C. 1956(h), conspiracies to commit money laundering. Evidence seized from the hangar and evidence seized from Clinique that dated to before March 2006 were suppressed. The court rejected arguments that the warrants’ enumeration of “patient files” was overly broad and insufficiently particular. During trial, an alternate juror reported some “concerns about how serious[ly] the jury was taking their duty.” The court did not tell counsel about those concerns. After the verdict, the same alternate juror—who did not participate in deliberations—contacted defense counsel; the court conducted an in camera interview, then denied a motion for a new trial. To calculate the sentencing guidelines range, the PSR recommended that every drug Ace prescribed during the relevant time period and every Medicaid billing should be used to calculate drug quantity and loss amount. The court found that 60 percent of the drugs and billings were fraudulent, varied downward from the guidelines-recommended life sentences, and sentenced Ace to 180 months and Lesa to 80 months in custody. The Sixth Circuit affirmed, rejecting challenges to the constitutionality of the warrant that allowed the search of the clinic; the sufficiency of the evidence; and the calculation of the guidelines range and a claim of jury misconduct. View "United States v. Chaney" on Justia Law

For five years, DeHaan, a licensed family‐practice physician working in the Chicago and Rockford areas, was affiliated with agencies providing medical services to homebound patients, and served as medical director of several home health agencies, assisted living facilities, and hospices. DeHaan billed Medicare at the highest levels for services to homebound patients that were ostensibly time‐consuming or complex, when in fact he had either conducted a routine, non‐complex patient visit or had not seen the patient at all on the occasion for which he was billing. At the behest of home health agencies, DeHaan certified as homebound patients whom he either knew did not meet Medicare’s criteria (42 U.S.C. 1395n(a)(2)(A)) for home care or as to whom he lacked meaningful knowledge. DeHaan pled guilty to two counts of a 23‐count indictment, admitting to overbilling and fraudulent certifications. The district court took evidence and found that he was responsible for fraudulently certifying the eligibility of least 305 individuals for home health care services, resulting in wrongful billings to Medicare of nearly $2.8 million. The Seventh Circuit affirmed, finding no error in the district court’s “conservative loss‐estimation methodology,” and upheld a within‐Guidelines sentence of 108 months in prison with an order to pay restitution of $2,787,054.58. View "United States v. DeHaan" on Justia Law

Dr. Paulus, a cardiologist at Ashland, Kentucky’s KDMC, was first in the nation in billing Medicare for angiograms. His annual salary was around $2.5 million, under KDMC’s per-procedure compensation package. In 2008, HHS received an anonymous complaint that Paulus was defrauding Medicare and Medicaid by performing medically unnecessary procedures, 42 U.S.C. 1320c-5(a)(1), 1395y(a)(1), placing stents into arteries that were not blocked, with the encouragement of KDMC. An anti-fraud contractor selected 19 angiograms for an audit and concluded that in seven cases, the blockage was insufficient to warrant a stent. Medicare denied reimbursement for those procedures and continued investigating. A private insurer did its own review and concluded that at least half the stents ordered by Paulus were not medically necessary. The Kentucky Board of Medical Licensure subpoenaed records and concluded that Paulus had diagnosed patients with severe stenosis where none was apparent from the angiograms. Paulus had retired; he voluntarily surrendered his medical license. A jury convicted Paulus on 10 false-statement counts and on the healthcare fraud count. It acquitted him on five false-statement counts. The court set aside the guilty verdicts and granted Paulus a new trial. The Sixth Circuit reversed. The degree of stenosis is a fact capable of proof. A doctor who deliberately inflates the blockage he sees on an angiogram has told a lie; if he does so to bill a more expensive procedure, then he has also committed fraud. View "United States v. Paulus" on Justia Law

Hannon, an attorney, represented Barber in litigation against the victim, Barber’s former domestic partner, Dr. Magno. In December 2006, the parties agreed that Barber would fund a college trust for their children. Barber paid $27,500.32 to Hannon as the trustee of the children’s funds and authorized Hannon to open a bank account. In February 2011, the victim became aware that the children’s funds had been misappropriated. Hannon may have used the money to cover legal fees owed by Barber. Charged with grand theft by embezzlement by a fiduciary (Pen. Code 487(a), 506), Hannon ultimately pled no contest to misdemeanor theft by embezzlement. The trial court placed him on probation for two years, ordered him to perform 240 hours of community service, and ordered him to pay $40,800 in restitution to the victim: $25,000 in attorney’s fees, $15,000 in lost wages, and $800 in mileage. The court of appeal rejected challenges to the restitution award and held that the victim was entitled to file a victim impact statement on appeal, pursuant to the Victims’ Bill of Rights Act of 2008 (Marsy’s Law, Proposition 9 (2008)), but may not raise present legal issues not raised by Hannon or facts not in the record below View "People v. Hannon" on Justia Law

In 1973, Doe organized his medical practice as a “professional association,” a type of corporation doctors are permitted to form under New Jersey law. Since its creation, Doe has operated his practice through that entity. As of 2011, the entity employed six people. The government alleges that Doe entered into an illicit agreement with OTE, a blood laboratory, whereby it paid him monetary bribes for referring patients to it for blood testing. A grand jury subpoena was served on the entity’s custodian of records, directing it to turn over documents, including records of patients referred to OTE, lease and consulting agreements, checks received by it for reasons other than patient treatment, correspondence regarding its use of OTE, correspondence with specified individuals and entities, and basic corporate records. The district court denied Doe’s motion to quash. Doe persistently refused to let the entity comply; the court found it in civil contempt. Meanwhile, the entity fired its employees and hired independent contractors, tasked with “[m]aint[aining] accurate and complete medical records, kept in accordance with HIPAA and Patient Privacy standards,” and assisting with billing practices. The Third Circuit affirmed, agreeing that Supreme Court precedent indicated that corporations may not assert a Fifth Amendment privilege, and that the subpoena was not overbroad in violation of the Fourth Amendment. View "In Re: The Matter Of The Grand Jury" on Justia Law

Nayak owned outpatient surgery centers and made under-the-table payments to physicians that referred patients to his centers, including cash payments and payments to cover referring physicians’ advertising expenses. Nayak instructed some of his collaborators not to report these payments on their tax returns. Nayak was charged with honest-services mail fraud, 18 U.S.C. 1341 and 1346, and obstruction of the administration of the tax system, 26 U.S.C. 7212(a). Although the indictment a alleged that Nayak intended “to defraud and to deprive patients of their right to honest services of their physicians” through his scheme, there was no allegation that Nayak caused or intended to cause any sort of tangible harm to the patients in the form of higher costs or inferior care. After denial of his motion to dismiss, Nayak entered a conditional guilty plea, reserving his right to appeal denial of his motion to dismiss the mail fraud charge. On appeal he argued that tangible harm to a victim is a necessary element of honest-services mail fraud, at least in cases not involving fraud by a public official. The Seventh Circuit affirmed, holding that actual or intended tangible harm is not an element. View "United States v. Nayak" on Justia Law

In 2009, Sheth, a cardiologist, pled guilty to a single count of healthcare fraud, 18 U.S.C. 1347. As agreed by Sheth, the district court entered an order of criminal forfeiture for cash and investment accounts then valued at $13 million plus real estate and a vehicle. The government represented that the forfeited assets represented the proceeds of Sheth’s fraud, calculated to be about $13 million. Sheth’s plea agreement specifies that forfeited assets would be credited against the amount of restitution, which the district court had determined to be $12,376,310. In 2012, before the government had liquidated all of the forfeited assets or disbursed any of the proceeds, it sought more of Sheth’s assets to apply to restitution. Sheth objected. Without resolving the factual dispute, the district court ordered turnover of the assets, which were held by third parties. The Seventh Circuit vacated, holding that the court erred by ordering turnover of the assets without first allowing for discovery and holding an evidentiary hearing. View "United States v. Sheth" on Justia Law

In the late 1990s, people who had taken the prescription diet-drug combination Fen-Phen began suing Wyeth, claiming that the drugs caused valvular heart disease. A 2000 settlement included creation of the Fen-Phen Settlement Trust to compensate class members who had sustained heart damage. Claims required medical evidence. Attorneys who represented certain claimants retained Tai, a board-certified Level 2-qualified cardiologist, to read tests and prepare reports. Tai read 12,000 tests and asserted that he was owed $2 million dollars for his services. Tai later acknowledged that in about 10% of the cases, he dictated reports consistent with the technicians’ reports despite knowing that the measurements were wrong, and that he had his technician and office manager review about 1,000 of the tests because he did not have enough time to do the work. A review of the forms Tai submitted found that, in a substantial number of cases, the measurements were clearly incorrect and were actually inconsistent with a human adult heart. Tai was convicted of mail and wire fraud, 18 U.S.C. 1341 and 1343, was sentenced to 72 months’ imprisonment, and was ordered to pay restitution of $4,579,663 and a fine of $15,000. The Third Circuit rejected arguments that the court erred by implicitly shifting the burden of proof in its “willful blindness” jury instruction and applying upward adjustments under the advisory Sentencing Guidelines for abuse of a position of trust and use of a special skill, but remanded for factual findings concerning whether Tai supervised a criminally culpable subordinate, as required for an aggravated role enhancement. View "United States v. Tai" on Justia Law

Chhibber, an internist, operated a walk‐in medical office on the south side of Chicago. For patients with insurance or Medicare coverage, Chhibber ordered an unusually high volume of diagnostic tests, including echocardiograms, electrocardiograms, pulmonary function tests, nerve conduction studies, carotid Doppler ultrasound scans and abdominal ultrasound scans. Chhibber owned the equipment and his staff performed the tests. He was charged with eight counts of making false statements relating to health care matters, 18 U.S.C. 1035, and eight counts of health care fraud, 18 U.S.C. 1347. The government presented witnesses who had worked for Chhibber, patients who saw him, and undercover agents who presented themselves to the Clinic as persons needing medical services. Chhibber’s former employees testified that he often ordered tests before he even arrived at the office, based on phone calls with staff. Employees performed the tests themselves with little training, and the results were not reviewed by specialists; normally, the tests were not reviewed at all. Chhibber was convicted of four counts of making false statements and five counts of health care fraud. The Seventh Circuit affirmed, rejecting challenges to evidentiary rulings. View "United States v. Chhibber" on Justia Law