Health Law Daily Evidence sufficient to support health care fraud conspiracy conviction
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Thursday, September 10, 2020

Evidence sufficient to support health care fraud conspiracy conviction

By Elena Eyber, J.D.

Evidence supported conspiracy conviction when the director of a non-profit agency voluntarily joined a referral of specimens scheme knowing that it was wrongful to receive kickbacks and defraud Medicare.

The Eighth Circuit affirmed the judgment of the district court convicting the director of a non-profit agency of conspiracy to violate federal health care laws and eleven counts of health care fraud. The director argued the evidence was insufficient to support the jury’s verdict. The Eight Circuit disagreed with the director and held that the evidence fully supported a finding that the director voluntarily and intentionally participated in the conspiracy with knowledge that it was unjustifiable and wrongful to receive kickbacks and defraud Medicare (U.S. v. Goodwin, September 8, 2020, Grasz, L.).

Procedural history. A grand jury returned an indictment charging the director of a non-profit agency with crimes related to health care fraud involving a laboratory that provided medical testing of blood, urine, andother specimens. The indictment charged that in violation of federal anti-kickback legislation, 42 U.S.C. §1320a-7b(b), the laboratory entered into a contract with the non-profit under which the laboratory would pay a percentage of the moneyreceived from Medicare to the non-profit for referrals of specimens for testing. The non-profit solicited and used doctors who would attach their names to the tests without examining or having information about the patients. The laboratory paid the non-profit over $100,000 in exchange for referred specimens. The jury convicted the director on all counts. The director appealed, challenging the sufficiency of the evidence supporting the jury’s verdict.

Conspiracy. The director challenged the sufficiency of the evidence supporting his conviction for conspiracy in violation of 18 U.S.C. §371. To convict the director for conspiracy, the jury needed to find beyond a reasonable doubt that there was a conspiracy with an illegal purpose, the director was aware of the conspiracy, and he knowingly became part of the conspiracy. The director argued that because the conspiracy charge’s criminal objectives all require a heightened mens rea, the government needed to establish he knew his conduct was wrongful and he intended to further the criminal objectives. The director maintained the government did not meet its burden because the evidence did not establish that he knew his conduct was wrongful or that he intentionally participated in the plan with the intent to further any of its criminal objectives.

The appeals court disagreed with the director and held that the director voluntarily and intentionally participated in the conspiracy with knowledge that it was unjustifiable and wrongful to receive kickbacks and defraud Medicare. The evidence of the director’s significant experience with federal health care program reimbursements, his attestation that he would comply with federal anti-kickback laws, and his collection of specimens without a doctor’s orders, was collectively enough evidence to support a conclusion that the director knew the arrangement with the laboratory was unjustifiable and wrongful when he voluntarily joined the conspiracy. Thus, the appeals court affirmed the jury’s decision to convict the director.

Attorneys: Kyle Timothy Bateman, U.S. Department of Justice, for the United States. Reuben F. Goodwin, pro se.

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