John T. Floyd Law Firm
Houston Criminal Lawyer
"Serious Criminal Defense Throughout Texas"
Experienced Criminal Defense Lawyer
Trials, Sentencings and Appeals
Federal And State Criminal Defense
Phone # (713) 224-0101
Toll Free 1-866-374-1327
E-mail jfloyd@JohnTFloyd.com
Top Lawyers for the People - 2008 HTexas
Comments on Criminal Issues
August 6, 2007
MEDICARE/MEDICAID FRAUD:Criminal Defense Lawyers Defending Medicare and Medicaid Fraud
Fraud has been woven into the fabric of the federal health care programs, Medicare and Medicaid, since their inception. Congress in 1977 conducted a series of hearings to examine the infestation of theft and patient abuse prevalent in the Medicaid program. See, Medicare and Medicaid Fraud and Abuse § 6.11 (2007)[Alice G. Gosfield] {hereinafter MedFraud}.
Following these 1977 hearings, Congress created the state Medicaid Fraud Control Units (MFCU’s) to combat the flagrant criminal abuses in the nation’s health care delivery system. This congressional enactment was called the Medicare-Medicaid Anti-Fraud and Abuse Amendments, and they conferred sweeping authority upon the MFCUs to not only investigate but prosecute both fraud and abuse in the Medicaid program, including patient abuse and neglect of health care facilities receiving Medicaid funding. See, MedFraud § 6.11.
Most state MFCUs embraced the independent authority they enjoyed from other agencies that administered Medicaid programs. MFCUs are generally created within the state Attorney General’s office allowing them to be staffed by attorneys, investigators, and auditors “specially trained in the complexities of health care fraud.” Id. In addition to congressional legislation, the federal government created a litany of financial incentives designed to encourage states not only to set up MFCUs but to provide them with the support needed to vigilantly police Medicaid program expenditures. Id.
In 1980 Congress strengthened the MFCU programs with the Omnibus Reconciliation Act (OCA) that required each state to establish a MFCU as a prerequisite to receiving federal Medicaid funding. Congress created a provision that allowed a state to avoid the strict mandate of the OCA if it could establish that only a minimum amount of Medicaid fraud and abuse occurred in that state and that the state assured the federal government it could address these minor abuses through other effective means. All but three states have now established MCFUs since the enactment of the OCA. Id. Alice Gosfield explained the success of the MFCUs:
Important financial incentives encourage MFCUs to police the Medicaid programs aggressively. Increased Medicaid payments from the federal government are tied to each state's fraud and abuse recoveries. The costs and expenses of state MFCUs are also federally subsidized.
The state units execute the same investigatory functions on the state level as the OIG executes on a federal level. In 2003, state MFCUS collectively employed 1,507 staff members and received $119 million in federal support. Each state's MFCU varies in size in proportion to the size of its Medicaid program. The MFCUs have also developed uniform procedures to coordinate their efforts with those of their federal counterparts through the National Association of Medicaid Fraud Control Units (NAMFCU). These procedures have eased the resolution of Medicaid-related claims against interstate providers, and more recent cooperative efforts between state and federal investigators of health care fraud have resulted in large settlements.
The MFCUs are increasingly effective. In fiscal year 1997, the MFCUs collectively recovered over $147 million in court-ordered restitution, fines and penalties and achieved a total of 871 convictions. In fiscal years 1998 and 1999, the units amassed another 1,823 convictions and recovered $171 million. In FY 2001, there were 1,002 convictions and $106 million was recovered. In FY 2003, the MFCUS obtained 1,096 convictions and recovered over $268 million. In FY 2005, the MFCUS obtained 1,160 convictions and recovered $572 million. Id., at MedFraud § 6.11
Former President Bill Clinton in 1999 extended the authority of MFCUs to investigate Medicare fraud so long as the fraud was encountered by a MFCUs investigating Medicaid fraud. Under this legislation, “MFCUs are also permitted to investigate and prosecute patient abuse or neglect in non-Medicaid state-licensed ‘board and care’ facilities, such as certain mental health and assisted living facilities.” Id.
The joint investigative and prosecutorial efforts of the federal and state governments have produced a tremendous volume of prosecutions under the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), which prohibits any person or entity from offering, making or accepting payment to induce or reward any person for referring, recommending or arranging for federally funded medical services, including services provided under the Medicare and Medicaid programs. The pertinent portion of that statute reads as follows:
(b) Illegal remuneration
* * * * * *
(2) whoever knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person--
(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
(B) to purchase, lease, order or arrange for or recommend purchasing, leasing or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program,
shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.
See, United States v. Rogan, 459 F.Supp.2d 692 (N.D. Ill. 2006).
Participants in the Medicare and Medicaid health care programs must agree to comply with the provisions of the Anti-Kickback statute as a prerequisite for payment under those programs. A violation of the statute can not only bar the offender from participation in the programs but subject the offender to civil monetary penalties of $50,000 per violation and three times the amount of remuneration paid. See, 42 U.S.C. § 1320a-7(b)(7) and 42 U.S.C. § 1320a-7a(a)(7). Accord: Rogan, supra, at 714,
Violations of the Anti-Kickback Statute can occur when payments for the to refer a service increase the legitimate costs of the transaction. See, United States v. Hancock, 604 F.2d 999, 1001-02 (7th Cir. 1979); Rogan, supra, at 714. The appeals court in Hancock found that payments to physicians in exchange for the physicians’ promises to refer patients to a particular facility quality as kickbacks. Id., at 1002 [“The defendants were able to open up or control the payment of federal funds to Chem-Tech by sending Medicaid patients tissue specimens to Chem-Tech …”]
The Seventh Circuit also found a Anti-Kickback Statute violation in a case where a druggist paid a monthly fee to nursing home owners for the opportunity to provide drugs and pharmaceutical services since the statute strictly prohibits the furnishing of fee, items, or services to an individual with payments that are made in whole or part out of federal funds under any plan approved for grants to state medical assistance programs. See, United States v. Ruttenberg, 625 F.2d 173 (7th Cir. 1980) [Even if payments made by the druggist had not been paid out of federal funds, but were merely gifts from druggist's profits, payments would still be "kickbacks" proscribed by the statute]. See also: United States v. Tapert, 625 F.2d 111 (6th Cir. 1980). The Seventh Circuit in United States v. Polin, 194 F.3d 863 (7th Cir. 1999) elaborated that the term “refer” in the Anti-Kickback Statute may apply to physicians or others who refer, recommend, turn over, select, or give business to a particular recipient. Id., at 866-67; Rogan, supra, at 714-15.
But the federal appellate courts have held that a mere hope, expectation, or belief that referrals may derive from “legitimate services” is not a violation of the Anti-Kickback Statute. See, United States v. McClatchey, 217 F.3d 823, 834-35 (10th Cir. 2000). The federal district courts have likewise been cautious to make sure that the Anti-Kickback Statute is not egregiously applied. A district court in Illinois held that while the statute regulates referrals between physicians and hospitals who participate in federal health care programs, it does not prohibit hospitals from acquiring medical practices, nor does it preclude seller-physician from making future referrals to buyer-hospital, provided there are no economic inducements for those referrals. Compliance with the Act is satisfied when the hospital simply pays fair market value for practice's assets. See, United States ex rel. Obert-Hong v. Advocate Health Care, 211 F.Supp.2d 1045 (N.D. Ill. 2002).
In United States ex rel. Conner v. Salina Regional Health Center, Inc. the district court found that a hospital’s requirement that an ophthalmologist provide his own operating room staff in order to continue to receive privileges with hospital, including right to receive patient referrals from hospital's emergency room, did not constitute "kickback," for purposes of Medicare anti-kickback statute. The court noted that the manner of providing surgical support did not affect Medicare payments and that the agreement was permissible under state law. Id., 459 F.Supp.2d 1081 (D.Kan. 2006). See also: United States ex rel. Perales v. St. Margaret’s Hosp., 243 F.Supp.2d 843 (C.D.Ill. 2003) [Referrals made to hospital by nurse, who worked for physician who was under services agreement with hospital, were not in violation of Anti-Kickback Statute, since physician, as person who allegedly received inducement, was the person who would be prohibited from making referral to entity that offered remuneration, nurse was not contractually obligated to refer patients to hospital, and the two were not in collusion]; Polk County v. Peters, 800 F.Supp. 1451 (E.D. Tex. 1992) [AKS violation found where a doctor, as part of a recruitment agreement, referred patients to a hospital in exchange for the hospital providing him with free office space, rent and utilities subsidies, a limited–time guaranteed income, reimbursement for moving expenses and malpractice insurance].
In an effort to specify what kind of payments are not be subjected to criminal prosecution under the Anti-Kickback Statute, the United States Department of Health and Human Services promulgated what is known as “Safe Harbor” regulations. 42 C.F.R. § 1001.952. These regulations list the various circumstances under which a financial relationship between a provider and a referral source would not give rise to liability under the Anti-Kickback Statute. Payments to a physician under a personal service agreement must meet all of the following requirements in order to qualify for the Safe Harbor protection during the time period in question, 42 C.F.R. § 1001.952(d) (1991):
(1)The agency agreement is set out in writing and signed by the parties.
(2) The agency agreement specifies the services to be provided by the agent.
(3) If the agency agreement is intended to provide for the services of the agent on a periodic, sporadic or part-time basis, rather than on a full-time basis for the term of the agreement, the agreement specifies exactly the schedule of such intervals, their precise length, and the exact charge for such intervals.
(4) The term of the agreement is for not less than one year.
(5) The aggregate compensation paid to the agent over the term of the agreement is set in advance, is consistent with fair market value in arms-length transactions and is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or in part under Medicare or a State health care program.
(6) The services performed under the agreement do not involve the counseling or promotion of a business arrangement or other activity that violates any State or Federal law. 42 C.F.R. § 1001.952(d) (1991).
In November 1999 the Safe Harbor regulations were amended to add the seven requirements set forth below:
(1) The agency agreement is set out in writing and signed by the parties.
(2) The agency agreement covers all of the services the agent provides to the principal for the term of the agreement and specifies the services to be provided by the agent.
(3) If the agency agreement is intended to provide for the services of the agent on a periodic, sporadic or part-time basis, rather than on a full-time basis for the term of the agreement, the agreement specifies exactly the schedule of such intervals, their precise length, and the exact charge for such intervals.
(4) The term of the agreement is for not less than one year.
(5) The aggregate compensation paid to the agent over the term of the agreement is set in advance, is consistent with fair market value in arms-length transactions and is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or in part under Medicare or a State health care program.
(6) The services performed under the agreement do not involve the counseling or promotion of a business arrangement or other activity that violates any State or Federal law.
(7) The aggregate services contracted for do not exceed those which are reasonably necessary to accomplish the commercially reasonable business purpose of the services. 42 C.F.R. § 1001.952(d) (2000).
See: Rogan, supra, at 7l4-15.
Against the backdrop of these administrative protections, the courts have held that once the Government demonstrates proof of each element of a violation of the Anti-Kickback, the burden shifts to the defendant to establish that his conduct was protected by a safe harbor regulation or a statutory exception. The Government need not prove, as an element of its case, that defendant's conduct does not fit within a safe harbor or an exception. See, United States v. Shaw, 106 F.Supp.2d 103, 122 (D.Mass.2000).
The district court in Polk County, supra, discussed at length the history of the Anti-Kickback Statute which has been protracted:
In United States v. Porter, 591 F.2d 1048 (5th Cir.1979), a case of first impression, the Fifth Circuit Court of Appeals reversed a conviction for violation of the 1972 version of § 1395nn(b)(1). The Fifth Circuit's conclusion that the original version of § 1395nn(b) did not prohibit the alleged acts of the defendant was “strengthened, if not absolutely compelled” by subsequent events, which led to the enactment of the version of § 1395nn(b) that was in effect in 1985.
In 1977, Congress amended § 1395nn(b) and increased the penalties for violation of that statute to a fine of up to $25,000 or imprisonment for up to five years or both. At the same time, Congress completely changed the wording of the statute and made the description of the crime much more specific. The legislative history clearly indicated that the reason for this substantial alteration of the wording was the fact that Congress and many United States Attorneys believed “that the existing language of these penalty statutes [42 U.S.C. §§ 1395nn and 1396] is unclear and needs clarification.” H.R.Rep. No. 95-393(II), 95th Cong., 1st Sess. 53 (1977), reprinted in [19797] U.S.Code Cong. & Admin.News, pp. 3039, 3055 (emphasis added). Id. at 1054.
The Seventh Circuit took a broader view of the original statute and reached a different result in United States v. Hancock, 604 F.2d 999 (7th Cir.), cert. denied, 444 U.S. 991, 100 S.Ct. 521, 62 L.Ed.2d 420 (1979). Chiropractors who had received fees from labs that performed blood tests argued that amounts paid were legitimate handling fees for obtaining and delivering specimens and then interpreting the test result, but, although the phrase “any remuneration” had not yet been added to the statute, the fees were found to be “kickbacks.”
There are three published decisions, all criminal prosecutions, involving the version of § 1395nn(b) that was in effect in 1985. The leading case is United States v. Greber, 760 F.2d 68 (3rd Cir.), cert. denied, 474 U.S. 988, 106 S.Ct. 396, 88 L.Ed.2d 348 (1985). The defendant physician operated a diagnostic monitoring service for cardiac patients. He billed Medicare for the service and, when payment was received, forwarded 40 per cent of the Medicare fee to the referring physician. Although Defendant claimed that the payments were “interpretation” fees, he actually did the interpretation and the 40 per cent paid was more than Medicare allowed for interpretation. There was also testimony that Defendant had stated that “... if the doctor didn't get his consulting fee, he wouldn't be using our service.”
Affirming the conviction, the Third Circuit held that “if one purpose of the payment was to induce future referrals, the Medicare statute has been violated.” Id. at 69. Even if the referring physician does perform a service for the money received, the statute is aimed at the inducement factor. The court agreed with the Government's argument that Congress intended to combat financial incentives to physicians for ordering particular services patients did not require because such incentives present the potential for unnecessary drain on the system. “If the payments were intended to induce the physician to use Cardio-Med's services, the statute was violated, even if the payments were also intended to compensate for professional services.” Id. at 72.
Greber was followed in United States v. Kats, 871 F.2d 105 (9th Cir.1989), which upheld a conviction in which the jury instruction had allowed the jury to convict even if it found that the referral of services was not a material purpose for making kickback payments. The court held that conviction under the statute was proper unless payments are “wholly and not incidentally attributable to delivery of goods and services.”
The only other case located involving the pertinent version of § 1395nn is United States v. Bay State Ambulance, 874 F.2d 20 (1st Cir.1989). Citing Greber, the court upheld the convictions of the owner of an ambulance service and a hospital executive who had been instrumental in the award of an ambulance service contract to the company, which he served as a consultant. Defendants contended that cash and a car received by the executive were in fact reasonable amounts for actual services rendered. The court, however, held that the government need not show that the payments were not reasonable pay for actual work.
The gravamen of Medicare Fraud is inducement. Giving a person an opportunity to earn money may well be an inducement to that person to channel potential Medicare payments towards a particular recipient. Id. at 29. Id., 800 F.Supp. at 1454-55.
The Polk County court noted that while the case before it was one of “first impression” because it involved a physician recruitment by a hospital and the physician’s referral of surgical patients to that hospital rather than a classic monetary “kickback,” the court was nonetheless convinced a violation of the KSA had occurred. See: Harvey L. Timkin, Medicare Fraud and Abuse, 62 Wis.L.J. 13 (1989 [Incentive programs directly or indirectly aimed at inducing doctors to refer patients to a hospital violate the anti-kickback statute since the hospital provides a benefit to the doctor, therefore satisfying the remuneration requirement, in return for inducing referrals]; Francis J. Hearn, Curing the Health Care Industry: Government Response to Medicare Fraud and Abuse, 5 J.Contemp.Health L. & Policy 175 (1989) [“If any form or remuneration is given to the recruited physician, then technically the recruitment program has violated the medicare anti-kickback provision.”]. Id., at 1455. The court then applied these principles to the physician’s recruitment agreement:
It is undisputed that the hospital agreed to and did provide remuneration to Defendant in the form of an interest free loan. It is also undisputed that the hospital agreed to provide free office space, rent and utility subsidies, and reimbursement for malpractice insurance. It is clear that these remunerations were subject to Defendant's referral of patients to the hospital absent exceptional circumstances. Furthermore, no effort beyond the Tom Gilbert letter was made to collect the money due under the Agreement until years after the due date, when Defendant had become embroiled in other litigation with the hospital. Finally, the Court takes judicial notice of its own records in Peters v. Lake Livingston, et al., cause no. L-88-179-CA. P.Ex. 181, D.Ex. 81: The hospital's original stated reason for termination of Defendant's medical staff privileges was his failure to utilize it as his “primary hospital.”
While the hospital may well have been motivated to a greater or lesser degree by a legitimate desire to make better medical services available in the community, there can be no doubt that the benefits extended to Defendant were, in part, an inducement for him to refer patients to the hospital. The Court must, therefore, find that the Agreement made the basis of this action violates 42 U.S.C. § 1395nn(b).
In conclusion, it follows under the applicable Texas law that the Agreement, being illegal, is void and unenforceable. See E.G. Segal v. McCall, 108 Tex. 55, 184 S.W. 188 (1916); David Gavin Co. v. Gibson, 780 S.W.2d 833 (Tex.Civ.App. Houston 14 1989); Savin Corp. v. Copy Distributing Co., 716 S.W.2d 690 (Tex.Civ.App-Corpus Christi, 1986). Indeed, the policy against aiding in the enforcement of an illegal contract is such that a party that has inserted an illegal provision for its own benefit may nevertheless defend against a suit for breach of contract on the basis of the illegality. Elray, Inc. v. Cathodic Protection Service, 507 S.W.2d 570, (Tex.Civ.App. 14 1974). Id., at 1455-56.
Being part of the MFCU program, the State of Texas generally prosecutes an individual who perpetrates a Medicaid fraud under the Human Resources Code § 36.002 which provide:
A person commits an unlawful act if the person:
(1) knowingly makes or causes to be made a false statement or misrepresentation of a material fact to permit a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized;
(2) knowingly conceals or fails to disclose information that permits a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized;
(3) knowingly applies for and receives a benefit or payment on behalf of another person under the Medicaid program and converts any part of the benefit or payment to a use other than for the benefit of the person on whose behalf it was received;
(4) knowingly makes, causes to be made, induces, or seeks to induce the making of a false statement or misrepresentation of material fact concerning:
(A) the conditions or operation of a facility in order that the facility may qualify for certification or recertification required by the Medicaid program, including certification or recertification as:
(i) a hospital;
(ii) a nursing facility or skilled nursing facility;
(iii) a hospice;
(iv) an intermediate care facility for the mentally retarded;
(v) an assisted living facility; or
(vi) a home health agency; or
(B) information required to be provided by a federal or state law, rule, regulation, or provider agreement pertaining to the Medicaid program;
(5) except as authorized under the Medicaid program, knowingly pays, charges, solicits, accepts, or receives, in addition to an amount paid under the Medicaid program, a gift, money, a donation, or other consideration as a condition to the provision of a service or product or the continued provision of a service or product if the cost of the service or product is paid for, in whole or in part, under the Medicaid program;
(6) knowingly presents or causes to be presented a claim for payment under the Medicaid program for a product provided or a service rendered by a person who:
(A) is not licensed to provide the product or render the service, if a license is required; or
(B) is not licensed in the manner claimed;
(7) knowingly makes a claim under the Medicaid program for:
(A) a service or product that has not been approved or acquiesced in by a treating physician or health care practitioner;
(B) a service or product that is substantially inadequate or inappropriate when compared to generally recognized standards within the particular discipline or within the health care industry; or
(C) a product that has been adulterated, debased, mislabeled, or that is otherwise inappropriate;
(8) makes a claim under the Medicaid program and knowingly fails to indicate the type of license and the identification number of the licensed health care provider who actually provided the service;
(9) knowingly enters into an agreement, combination, or conspiracy to defraud the state by obtaining or aiding another person in obtaining an unauthorized payment or benefit from the Medicaid program or a fiscal agent;
(10) is a managed care organization that contracts with the Health and Human Services Commission or other state agency to provide or arrange to provide health care benefits or services to individuals eligible under the Medicaid program and knowingly:
(A) fails to provide to an individual a health care benefit or service that the organization is required to provide under the contract;
(B) fails to provide to the commission or appropriate state agency information required to be provided by law, commission or agency rule, or contractual provision; or
(C) engages in a fraudulent activity in connection with the enrollment of an individual eligible under the Medicaid program in the organization's managed care plan or in connection with marketing the organization's services to an individual eligible under the Medicaid program;
(11) knowingly obstructs an investigation by the attorney general of an alleged unlawful act under this section; or
(12) knowingly makes, uses, or causes the making or use of a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to this state under the Medicaid program.
See: Crenshaw v. State, Not Reported in S.W.3d, 2006 WL 2473976 (Tex.App.-Corpus Christi). In Crenshaw a jury found the defendant guilty of three counts associated with Medicaid fraud: 1) execution of a document by deception in violation of Tex. Pen. Code Ann. § 32.46 (Vernon Supp. 2006); 2) theft in violation of Tex. Pen. Code Ann. § 31.03 (Vernon Supp. 2006); and 3) medicaid fraud in violation of Tex. Hum.Res.Code Ann. § 36.002(1)(A)(Vernon 2006). The defendant was sentenced to concurrent terms of fifteen, fifteen, and ten years.
On appeal the defendant argued that the trial erred by denying his motion to have the State elect to try him for either theft or medicaid fraud. The defendant argued on appeal that Section 36.131(c) of the Human Resources Code provides for prosecution of either theft or medicaid fraud but not for both offenses. See, Tex.Hum.Res.Code Ann. § 36.131(c), repealed by Act of May 23, 2005, 79th Leg., R.S. ch. 807, § 19, Tex. Gen. Laws 2789. In a footnote, the appeals court noted that while Section 36.131 was repealed, conduct that occurred “before the effective date of [the] Act is governed by the law in effect at the time the conduct occurred, and that law is continued in effect for that purpose.” See, WL at 2.
The court of appeals agreed with defendant, saying:
Section 36.131(c) of the Texas Human Resources Code provides:
If conduct constituting an offense under this section also constitutes an offense under another provision of law, including a provision in the Penal Code, the actor may be prosecuted under either this section or the other provision.
Tex. Hum. Res.Code Ann. § 36.131(c). We look to the literal text of the statute for its meaning, and we ordinarily give effect to that plain meaning, unless application of the statute's plain language would lead to absurd consequences that the legislature could not possibly have intended, or if the plain language is ambiguous. Boykin v. State, 818 S.W.2d 782, 785 (Tex.Crim.App.1991); Bunton v. State, 136 S.W.3d 355, 363 (Tex.App.-Austin 2004, pet. ref'd); see State v. Webb, 12 S.W.3d 808, 811 (Tex.Crim.App.2000).
The conduct that is the subject of counts 2 and 3 is as follows. Appellant ran a business called Behavioral Concepts. Appellant's business was an after-school program, which provided at-risk children tutoring and homework help. Although appellant never provided any individual counseling for mental disease or deficiency, he billed the Medicaid program for such services, and was paid in excess of $100,000. Such conduct constitutes an offense under both the human resources code and the penal code. See Tex. Hum. Res.Code Ann. § 36.002(1)(A) (Vernon Supp.2006); Tex. Pen.Code Ann. § 31.03 (Vernon Supp.2006).
A literal reading of section 36.131(c) is that appellant may be prosecuted under either section 36.002 of the human resources code or section 31.03 of the penal code, but not both. If the legislature intended the possibility of prosecution under both provisions, it could have easily provided language allowing for prosecution under both as it has in other statutes. See, e.g., Tex. Pen.Code Ann. § 38.04(d) (Vernon 2003) (providing that "[a] person who is subject to prosecution under both this section and another law may be prosecuted under either or both this section and the other"). Thus, the State was not authorized to seek convictions for both offenses. The proper remedy is to reform the judgment by vacating the lesser conviction and sentence. See Ochoa v. State, 982 S.W.2d 904 (Tex.Crim.App.1998). Appellant's second issue is sustained. Id., WL at 2-3.
In other Medicaid fraud cases the State may elect to prosecute the defendant under the theft statute. For example, in Tita v. State, 2007 Tex. App. LEXIS 5771 (Tex.App.-Houston [14th] the defendant was charged in an indictment with aggregated theft by a government contractor of over $200,000. See, Tex. Penal Code Ann. § 31.03(f)(2) (Vernon Supp. 2006). Following a guilty verdict rendered by a jury, the defendant was sentenced to 23 years in the state penitentiary and fined $10,000. See, Lexis at 1. The appeals court then established the factual basis for the indictment:
The evidence shows appellant was a pharmacist who fraudulently submitted over $ 600,000 in Medicaid reimbursement claims to the Texas Department of Health and Human Services between June 1998 and October 31, 2000. Appellant falsely alleged he had supplied expensive medications to patients covered by Medicaid insurance. The Texas Department of Health and Human Services paid these claims until the theft was discovered when a patient disputed a medication on her explanation of benefits. Id., at Lexis 1-2.
The defendant on appeal argued that the evidence was insufficient to support his conviction because the State failed to show the offense occurred within the period of limitations. Id., Lexis at 8. The appeals rejected the argument, interestingly pointed out that the defense had not properly raised the defense before the jury:
The record reflects that appellant filed a motion to dismiss the indictment. One ground contained in the motion was that the prosecution was barred by limitations. At a hearing on the motion, the State's attorney asked the trial judge to take judicial notice of previous indictments filed in his court that were obtained prior to the expiration the limitations period and which served to toll the statute of limitations. The trial judge apparently granted the request because he subsequently denied appellant's motion to dismiss.
On appeal, appellant contends the evidence is insufficient because (1) the State never introduced the prior indictments into evidence for the jury to consider and (2) the court never included an appropriate tolling instruction in its jury charge. However, appellant apparently never raised the issue before the jury. Appellant has not cited, and we have not found, any place in the record where he asserted or raised the defense of limitations before the jury. Accordingly, the State was not put to its burden of proof regarding the tolling of the limitations period. Cf. Hernandez v. State, 161 S.W.3d 491, 499 (Tex. Crim. App. 2005) (declaring that State has no burden to disprove entrapment defense until it is raised before the jury); Kearney v. State, 181 S.W.3d 438, 444 (Tex. App.--Waco 2005, pet. ref'd) (stating that State has no burden of showing voluntariness of a confession until defendant raises an issue of voluntariness). Appellant's second point of error is overruled. Id., Lexis at 8-9.
Tita is particularly significant for two reasons: first, the state will frequently pursue a Medicaid fraud case under the state’s theft statute because its elements are more efficiently established; and, second, a criminal defense attorney must always raise every available defense before a jury, not for the first time on appeal.
[ Back to top ]
