Health Care Fraud Blog | Not Guilty on All Counts (Part II)

Not Guilty on All Counts – Healthcare Fraud (Pt. II)

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In the first post, we discussed the nature of the charges and the history of chelation therapy in the United States. In this post, we will discuss the main issue at trial under count one and the legal principles at issue in a medical judgment case.

Battle of the Experts – Is Chelation Therapy Medically Necessary?

Under the Medicare guidelines, a doctor promises to bill for procedures that are medically necessary.  Medical necessity is defined as “Services or supplies that: are proper and needed for the diagnosis or treatment of your medical condition, are provided for the diagnosis, direct care, and treatment of your medical condition, meet the standards of good medical practice in the local area, and aren’t mainly for the convenience of you or your doctor.” See The Center for Medicare and Medicaid Services (CMS) Guidelines.

The prosecution alleged the use of chelation therapy to treat disease in patients with blood lead levels under 20 µg/dl was not medically necessary.  In their view, chelation therapy was not an accepted standard of care for patients absent acute lead poisoning.

The main issue was determining the medical necessity of chelation therapy to treat underlying diseases caused by the presence of lead in the patients’ blood.  This argument centered on the testimony of two experts from different areas of medicine.  Each having a unique view on chelation therapy as a treatment.

Government Expert

The government called a toxicologist to set the foundation for their case in count one.  Relying on standards promulgated by OSHA in the 1970’s, their expert stated she had never heard of using chelation therapy to treat any condition other than acute poisoning.  She had not read any of the studies over the last 20 years though many of these studies were published in reputable health journals in the United States.

The government’s expert essentially recited the OSHA standards and provided her view that chelation therapy is only appropriate for acute poisoning.  She could not define a blood lead level where treatment would be necessary but admitted the threshold would be far greater than the levels seen in the defendant’s patients (OSHA does not advise chelation therapy prior to 50-70 µg/dl.  The defendant treated patients from 2 to 20 µg/dl).

Defense Expert

The defense expert was an epidemiologist who graduated from Harvard University. He had a compelling work history including consulting with the United Nations and working with local governments during the lead event in Flint, Michigan.  The defense expert was well versed in the OSHA standards as well as the ongoing studies testing the efficacy of chelation therapy to treat various diseases.  The expert was a listed author in many of these studies.

Noting that the defendant’s actions were “cutting edge,” the expert laid out the history discussed previously in part I of this post. He was unwilling to state he would have performed chelation therapy on the defendant’s patients under the current science. However, he believed it was reasonable for a doctor to believe this therapy was necessary to treat patients in the Galveston region (highlighting the increased lead exposure history of the elderly in the Galveston area).

The Mens Rea of Fraud

The litigation seemed to center around a fight over the science.  Throughout trial, the government attempted to show that chelation therapy was not medically necessary or the accepted standard of care.  Though important, this fight failed to address the crux of the allegation.  Not every procedure performed, later determined as not medically necessary, constitutes criminal fraud.

This was not a civil case.  Fraud requires the government to show the defendant acted with the guilty mind necessary for criminal conviction.  Notably, the government must prove the defendant acted willfully and with the specific intent to defraud the Medicare system.  These mens rea terms boil down to one overarching principle – to commit fraud, the defendant must KNOW the procedure was not medically necessary when the claim was submitted. And in a criminal case, that fact must be proven beyond a reasonable doubt.

The case cannot be prosecuted effectively if the government focuses on proving the medical necessity of the procedure. The more time that is spent attacking that element, the more reasonable it seems the defendant honestly believed in his version of the science.  Put differently, if the defendant can force the government to defend their medical necessity position, their ability to show the mens rea required is greatly diminished.

The mens rea elements of fraud were the key to obtaining a not guilty in count one.  The district court believed there was science supporting the defendant’s use of chelation therapy and the defendant reasonably believed his actions were helping his patients.  When these elements are met, the correct answer is always not guilty.  Congress understood this principle when they enacted the health care fraud statute – “The Act is not intended to penalize a person who exercises a health care treatment choice or makes a medical or health care judgment in good faith simply because there is a difference of opinion regarding the form of diagnosis or treatment.” H.R. Report 104-736, July 31, 1996, page 258.)

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The Case Always Needed Deceit

Some medical necessity cases are simple to prove.  If a doctor is billing Medicare for wheel-chairs linked to patients with no ambulatory issues, it is obvious the claim was not medically necessary.  Likewise, billing Medicare for services that are not rendered is obvious fraud.  However, many cases, including the one above, are not that simple.  The close cases are those that involve medical judgment.  If the defendant honestly believes he is performing a medically necessary procedure, the government’s disagreement with that judgment should not lead to a conviction for fraud.  Of course, the reasonableness of his belief will be affected by the science that supports his position.

Medical judgment cases are prosecuted at a lesser rate than clear fraud schemes.  This has led to miniscule guidance from the Circuit Courts defining the sufficiency of evidence in medical judgment cases.  However, two circuits have addressed the sufficiency issue.  Successful prosecution requires deceit:

United States v. Rutgard, 116 F.3d 1270 (9th Cir. 1997)

In Rutgard, the defendant was charged with billing Medicare for unnecessary cataract procedures.  Each side produced experts with differing opinions on the usefulness of the procedures.  The Ninth Circuit found the evidence insufficient to support a conviction when there were no other indications of fraud, including no deception in the patient charts or oral lies to the patients.

United States v. McLean, 715 F.3d 129 (4th Cir. 2014)

In McLean, the defendant was charged with billing Medicare for medically unnecessary stent procedures.  The defendant argued on appeal the evidence was insufficient because the determination of a patients’ need for a stent is subjective and his error rate was within the national average.  The Fourth Circuit upheld the conviction noting the other indications of fraud distinct from medical judgment.  The fraud indicators were: 1) the defendant overstated blockage percentages in patient charts, 2) employee testimony stating the defendant placed a stent with no blockage “because it was easy”, 3) the defendant showed patients fabricated charts with blockage that did not exist, and 4) the defendant shredded files requested by the government.

All these factors cut against the defendant’s reasonable belief the procedures were medically necessary.  These signs of deception pushed the facts over the line drawn in Rutgard and supported by the Court’s verdict in our case.  The government’s argument was not merely a battle of scientific opinion.  McLean had taken numerous steps to deceive his patients and the government.  The mens rea for fraud can be met under such circumstances.

These cases lead to a general theme for medical judgment prosecutions.  The case law demands the government prove overt deceptions prior to meeting the elements of fraud.  Simply showing a procedure is not medically necessary is insufficient.  The fraud statute should not be used to review a physician’s judgment after the fact.  If the defendant runs a legitimate practice, advises his patients accurately, and takes no deceptive actions with the government, he should have a valid defense to the mens rea component of health care fraud.  This is true regardless of the fact finders’ opinion on the actual necessity of the procedure.  Though some scientific backing is likely needed.

Part I of this post can be found here.